AUSTRALIA – MEASURES AFFECTING THE IMPORTATION OF APPLES FROM NEW ZEALAND
Document: Report of the Panel
Date: 9 August 2010
Document codes: WT/DS367/R
Complainant: New Zealand
Respondent: Australia
Third parties: Chile, EU, Japan, Pakistan, Taiwan, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, 8, Annex C  Sanitary and Phytosanitary Measures (SPS)

AUSTRALIA – MEASURES AFFECTING THE
IMPORTATION OF APPLES FROM NEW ZEALAND

Report of the Panel

I. INTRODUCTION
A. REQUEST FOR CONSULTATIONS
1.1 On 31 August 2007, New Zealand requested consultations with Australia pursuant to
Article XXII of the General Agre ement on Tariffs and Trade 1994 ("GATT 1994"), Article 4 of the
Understanding on Rules and Procedures Govern ing the Settlement of Disputes ("DSU") and
Article 11 of the Agreement on the Applicati on of Sanitary and Phytosanitary Measures
("SPS Agreement"), concerning measures imposed by Australia on the importation of apples from
New Zealand.1 Consultations were held in Geneva on 4 October 2007, but did not lead to a resolution
of the dispute.2
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL
1.2 On 6 December 2007, New Zealand requested the Dispute Settlement Body ("DSB") to
establish a panel pursuant to Article 6 of the DSU, with standard terms of reference as set out in
Article 7.1 of the DSU.3 At its meeting on 21 January 2008, th e DSB established a Panel, pursuant to
the request of New Zealand, in accordance with Article 6 of the DSU (WT/DSB/M/245).
1.3 The Panel's terms of reference are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by New Zealand in document , the matter referred to the DSB by
New Zealand in that document, and to ma ke such findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in those
agreements."
1.4 On 3 March 2008, New Zealand requested the Di rector-General to determine the composition
of the panel, pursuant to paragraph 7 of Article 8 of the DSU. On 12 March 2008, the Director-
General composed the Panel as follows:
 Chairman: Mr P.J.A. (Attie) Swart

 Members: Mr William Ehlers
 Ms Kirsten Hillman

1.5 Chile, the European Communities
4, Japan, Pakistan, Chinese Taipei and the United States
reserved their rights to participate in the Panel proceedings as Third Parties.

1 Australia – Apples, Request for Consultations (WT/DS367/1), 4 September 2007.
2 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report. Australia's first written submission, para. 33.
3 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report.
4 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty
establishing the European Community (done at Lisbon, 13 December 2007) entered into force. On
29 November 2009, the World Trade Organization received a Verbal Note (WT/L/779) from the Council of the
European Union and the Commission of the European Communities stating that, by virtue of the Treaty of
Lisbon, as of 1 December 2009, the European Union replaces and succeeds the European Community.

C. P
ANEL PROCEEDINGS
1. Adoption of the Working Procedures and the timetable
1.6 On 14 March 2008, the Panel circulated two set s of draft working procedures and timetables
to the Parties. 5 In order to obtain the Parties' views, one version of the documents was prepared
assuming that the Panel would consult scientific e xperts, while the other version was prepared
assuming no such expert consultation. The Panel held an organizational meeting on 19 March in
order to consult the Parties on the proposed work ing procedures and timetables. Both Parties
expressed their views during the meeting; the Pane l invited them to submit in writing and no later
than by 20 March any additional comments, including on the question of whether a full transcript of
questions and answers should be included in the fina l report. In response to the Panel's invitation,
both Parties submitted written comments on a number of organizational questions raised during the
meeting; New Zealand did so on 19 and 20 March 6 and Australia on 20 March. 7 On 26 March, the
Panel notified the Parties of the adopted Working Procedures. 8 The Panel sent a revised draft
timetable to Parties on 4 April for their comments. 9 On 8 April, the Panel notified the Parties of the
adopted timetable.10 On the same date, Third Parties were notified of the Working Procedures and the
timetable adopted by the Panel. 11 Having noted the views expressed by the Parties, the Working
Procedures and timetable adopted by the Panel provided for expert consultation.
2. Request for a preliminary ruling raised by Australia
1.7 On 13 March 2008, Australia raised a prel iminary procedural question concerning the
consistency of New Zealand's request for the establishment of the Panel (WT/DS367/5) with
Article 6.2 of the Dispute Settlement Understanding. 12 In response to an invitation from the Panel 13,
on 17 March both Parties submitted preliminary reac tions to Australia's request for a preliminary
procedural ruling, including on whether this requ est should affect the timing of the organizational
meeting.14 After the organizational meeting, New Ze aland and Australia made written submissions
regarding Australia's request for a preliminary procedural ruling on 7 and 14 April, respectively. 15
New Zealand submitted an additi onal unsolicited letter on the issue on 16 April in reference to
Australia's submission of 14 April.16
1.8 On 18 April 2008, the European Communities requ ested that, in the event the Panel intended
to address Australia's request for a preliminary ruling prior to the date set in the timetable for Third
Party written submissions, the Panel should allow an opportunity for Third Parties to separately
comment on Australia's request. 17 On 22 April, the Panel proposed a procedure and calendar to
address the European Communities' request and invited the Parties to comment. 18 In their respective

5 Electronic communication from the Panel to the Parties, 14 March 2008.
6 Electronic communications from New Zealand to the Panel, 19 and 20 March 2008.
7 Communication from Australia to the Panel, 20 March 2008.
8 Communication from the Panel to the Parties, 26 March 2008.
9 Electronic communications from the Panel to the Parties, 3 and 4 April 2008.
10 Communication from the Panel to the Parties, 8 April 2008.
11 Electronic communication from the Panel to the Parties and Third Parties, 8 April 2008.
12 Communication from Australia to the Panel: Request for a preliminary procedural ruling in relation
to the consistency of New Zealand's panel request with Article 6.2 of the DSU, 13 March 2008.
13 Electronic communication from the Panel to the Parties, 14 March 2008.
14 Electronic communications from New Zealand and Australia to the Panel, 17 March 2008.
15 Communications from New Zealand and Australia to the Panel, 7 and 14 April 2008, respectively.
16 Communication from New Zealand to the Panel, 16 April 2008.
17 Electronic communication from the European Communities to the Panel, 18 April 2008.
18 Electronic communication from the Panel to the Parties, 22 April 2008.

responses of 23 and 24 April, New Zealand and Au stralia expressed no objections to the Panel's
proposal.19
1.9 Noting the request made by the European Communities and the lack of objections from the
Parties, the Panel invited Third Parties to prov ide comments on Australia's preliminary procedural
request.20 Two Third Parties filed submissions: the European Communities on 30 April 2008,
followed by Chile on 2 May. 21 On 9 May, New Zealand and Australia made comments on the Third
Party submissions.22
1.10 The Panel issued its preliminary ruling on th e procedural question raised by Australia on
6 June 2008.23 After consultation with the Parties, the c ontent of the Panel's preliminary ruling was
circulated by the Panel to the Dispute Settlement Body.24
3. Revisions of the timetable
1.11 In view of the time that had been granted for Third Parties to comment on the preliminary
issue raised by Australia, and for Parties to comme nt on any Third Parties' comments, on 7 June 2008
the Panel proposed extending the deadlines granted to Parties to file their respective first written
submissions and to Third Parties to file their Third Party submissions. 25 After having heard the
Parties' views on the matter26, on 13 June the Panel modified the timetable, extending by two working
days the deadlines granted to Parties to file their fi rst written submissions and to Third Parties to file
their own submissions; the rest of the timetable was not modified.27
1.12 On 15 July 2008, the United States requested a two-week extension for itself (and other Third
Parties, if interested) to file their Third Party submission, because of the length and complexity of
New Zealand's first written submission and the mini sterial meeting taking place in Geneva during the
same week the Third Party submissions were due. 28 In response to an invitation from the Panel 29,
New Zealand expressed a preference that no extensi on be granted for Third Party submissions or,
alternatively, that any extension be no longer than one week. 30 Australia supported extending the
deadline by one week. 31 Chinese Taipei supported the United States' request 32; Chile, the European
Communities, Japan and Pakistan expressed no objection to the request. 33 Having noted the views
expressed by the Parties and Third Parties, on 18 Ju ly the Panel extended the deadline granted to

19 Electronic communications from New Zealand and Australia to the Panel, 23 and 24 April 2008,
respectively.
20 Electronic communication from the Panel to the Parties and Third Parties, 24 April 2008.
21 Communications from the European Communities and Chile to the Panel, 30 April and 2 May 2008,
respectively.
22 Communications from New Zealand and Australia to the Panel, 9 May 2008.
23 Communication from the Panel to the Parties, 7 June 2008.
24 Australia – Apples , Communication from the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008.
25 Communication from the Panel to the Parties, 7 June 2008.
26 Communications from New Zealand to the Panel, 11 and 12 June 2008; Communications from
Australia to the Panel, 11 and 13 June 2008.
27 Communication from the Panel to the Parties, 13 June 2008; communication from the Panel to the
Third Parties, 16 June 2008.
28 Communication from the United States to the Panel, 15 July 2008.
29 Electronic communication from the Panel to the Parties and Third Parties, 15 July 2008.
30 Communication from New Zealand to the Panel, 16 July 2008.
31 Communication from Australia to the Panel, 16 July 2008.
32 Electronic communication from Chinese Taipei to the Panel, 16 July 2008.
33 Electronic communication from the European Communities to the Panel, 15 July 2008; Electronic
communications from Chile, Japan and Pakistan to the Panel, 16 July 2008.

Third Parties to file their written submissions by one week; the rest of the timetable was not
modified.
34
1.13 On 19 September 2008, the Panel informed the DS B that, due to the nature and scope of the
dispute, including the Panel's decision to seek sci entific and technical expert advice pursuant to
Article 11 of the SPS Agreement and Article 13 of th e DSU, it would not be able to issue its report
within six months from the date that the Panel had been composed. The Panel also informed the DSB
that it expected to issue its final report to the Parties by July 2009, as envisaged in the timetable
adopted after consultations with the Parties.35
4. First written submissions by the Parties and Third Party submissions
1.14 New Zealand and Australia filed their first writte n submissions on 20 June and 18 July 2008,
respectively. In accordance w ith the Working Procedures adopted by the Panel, both Parties
submitted an executive summary of their respect ive first written submissions. The European
Communities filed its Third Party submission on 31 July. Chile, Japan, Chinese Taipei and the
United States filed their own Third Party submis sions on 1 August. The European Communities,
Japan, Chinese Taipei and the United States submitted an executive summary of their respective Third
Party submissions.36
5. Second request for a preliminary ruling raised by Australia
1.15 On 22 August 2008, Australia requested the Panel to issue a preliminary ruling that
New Zealand's claim under Article 8 and Annex C( 1)(a) of the SPS Agreement in its first written
submission, that the " process for considering New Zealand's request for access for New Zealand
apples to the Australian market" had been unduly dela yed, was outside the scope of this dispute.
Australia asked the Panel to rule on this matter, pref erably during the course of the first oral hearing
on 2-3 September, or as soon as possible thereafter.37 On 25 August, the Panel invited both Parties, as
well as Third Parties, to express in their statements during the course of the first substantive meeting
to be held on 2-3 September, their views on the i ssue raised by Australia in its letter of 22 August. 38
On 26 August, New Zealand sent a letter to the Pane l, expressing its view that there was no reason for
the Panel to make a preliminary ruling on the issue of New Zealand's undue delay claim.39
1.16 On 8 September 2008, the Pane l notified the Parties that it would address New Zealand's
claim regarding Article 8 and Annex C(1)(a) of the SPS Agreement in its final report, together with
the other claims advanced by New Zealand, si nce it had found no good cause to issue a second
preliminary ruling at that point.40

34 Electronic communication from the Panel to the Parties and Third Parties, 18 July 2008.
35 Communication from the Panel to the DSB, 19 September 2008. See, Australia – Apples ,
Communication from the Chairman of the Panel (WT/DS367/8), 23 September 2008.
36 Under paragraph 12 of the Panel's Working Procedures, Parties and Third Parties were asked to
provide an executive summary of their respective submissions or stat ements. Executive summaries were not to
exceed ten pages in length in the case of those provided by Parties and thr ee pages for those provided by Third
Parties. No executive summaries were required for submis sions or statements shorter than ten pages for Parties
and three pages for Third Parties.
37 Communication from Australia to the Panel, 22 August 2008.
38 Electronic communication from the Panel to the Parties and Third Parties, 25 August 2008.
39 Communication from New Zealand to the Panel, 26 August 2008.
40 Communication from the Panel to the Parties, 8 September 2008.

6. Unsolicited letter from an Australian private entity
1.17 On 26 August 2008, the Panel received an unso licited letter from an Australian private entity
(Apple and Pear Australia Ltd , APAL). 41 On 27 August, the Panel invited both Parties, as well as
Third Parties, to express their views on how the Panel should deal with this unsolicited
communication in their statements during the course of the first substantive meeting to be held on
2-3 September 2008. 42 During the substantive meeting, the Parties expressed no objection to the
Panel accepting the unsolicited letter. 43 On 8 September, the Panel notified the Parties that it had
decided to accept the unsolicited communication r eceived from APAL, and would inform that entity
accordingly. The Panel also told the Parties that it would include in the list of written questions after
the first substantive meeting an invitation for th e Parties to comment on the substance of that
unsolicited communication. 44 On 18 September, APAL was informed by the Panel that its
communication had been accepted by the Panel, noting at the same time that this decision did not
prejudge on the content of the communication.45
7. Substantive meeting of the Panel with the Parties and the Third Parties
1.18 During the organizational meeting held by the Panel on 19 March 2008, both Parties
expressed their wish that the Panel's substantive me etings with the Parties and the Third Parties be
open to viewing by the public, preferably by means of closed-circuit television broadcast to a separate
room. On 9 July, New Zealand and Australia sen t a joint message to the Panel reiterating their
preference for the public being allowed to view th e proceedings of the substantive meeting through
closed-circuit television broadcast.46 Having noted the Parties' preference, on 10 July the Panel sent a
message to the Parties asking for their views regard ing the possible format for the Panel's substantive
meeting and for the registration process for interested persons. 47 On 15 July, the Panel received a
joint response from New Zealand and Australia to the questions posed by the Panel.48 On 23 July, the
Panel sent to the Parties a set of draft procedures fo r the first substantive meeting and the Third Party
session.49 On 28 July, New Zealand expressed its accep tance of the proposed draft procedures. 50
Australia made observations on specific aspects of the draft procedures on 29 July. 51 New Zealand
commented on Australia's observations on 31 July 52 and Australia commented on New Zealand's
comments on 1 August. 53 On 4 August, Parties and Third Pa rties were notified of the rules of
procedure adopted by the Panel for the first substantive meeting.54
1.19 The Panel held its first substantive meeting with the Parties on 2 and 3 September 2008.
It met with the Third Parties on 3 September 2008. At the request of the Parties, these meetings were
open for public viewing from a separate room via closed-circuit television broadcast.
On 10 September, the Panel sent written questions to the Parties and to the Third Parties. On the same

41 Communication from Apple and Pear Australia Ltd to the Panel, 26 August 2008.
42 Electronic communication from the Panel to the Parties and Third Parties, 27 August 2008.
43 This was subsequently confirmed in the Parties' respective responses to a question posed by the
Panel after the first substantive meeting. See New Zealand's reply to Panel question 147 after the first
substantive meeting, para. 307, and Australia's reply to Panel question 147 after the first substantive meeting.
44 Communication from the Panel to the Parties, 8 September 2008.
45 Communication from the Panel to Apple and Pear Australia Ltd, 18 September 2008.
46 Electronic communication from New Zealand and Australia to the Panel, 9 July 2008.
47 Electronic communication from the Panel to the Parties, 10 July 2008.
48 Electronic communication from New Zealand and Australia to the Panel, 15 July 2008.
49 Electronic communication from the Panel to the Parties, 23 July 2008.
50 Electronic communication from New Zealand to the Panel, 28 July 2008.
51 Electronic communication from Australia to the Panel, 29 July 2008.
52 Electronic communication from New Zealand to the Panel, 31 July 2008.
53 Electronic communication from Australia to the Panel, 1 August 2008.
54 Communications from the Panel to the Parties and Third Parties, 4 August 2008.

date, Australia sent a number of written questions to New Zealand and to the United States.
On 23 September, the Panel received responses to questions from New Zealand, Australia, the
European Communities, Japan, Chinese Taipei and the United States.
8. Agreement regarding one of the measures identified by New Zealand
1.20 On 19 December 2008, New Zealand and Australi a addressed a joint communication to the
Panel indicating that they had reached an agreem ent regarding one of the measures identified by
New Zealand in its Panel request, i.e., the requireme nt that an orchard/block be suspended for the
season on the basis that any evidence of pruning or other activities carried out before the inspection
could constitute an attempt to remove or hide sy mptoms of European canker (listed as the twelfth
bullet point in New Zealand's Panel request). The Parties informed the Panel that, based on
Australia's confirmation that it does not impose su ch a requirement, New Zealand would not pursue
its claim in relation to this point. The Parties fi nally noted that they inte nded to copy the joint
communication to Third Parties and to make it publicly available.
55 On 2 February 2009, the Panel
asked the Parties' confirmation on whether Third Parties had already received a copy of the agreement
reached by New Zealand and Australia and whether th e agreement had been made publicly available.
The Panel also offered to ask the Secretariat to circulate the Parties' joint communication as a
document in the WT/DS367 series, related to the dispute. 56 On 4 February, Australia replied that it
would be sending a copy of the 19 December joint co mmunication to Third Parties on that same date.
Australia added that, while it had not made the jo int communication public yet, it intended to do so. 57
On 6 February, New Zealand informed the Pa nel that Australia, in consultation with
New Zealand, had provided Third Parties with a courtesy copy of the 19 December joint
communication. New Zealand also confirmed th at it had not yet made the joint communication
publicly available, but it intended to publish it on the website of the Ministry of Foreign Affairs and
Trade.58
9. Expert consultation process
(a) Selection of experts and preparation of questions
1.21 During the organizational meeting held by the Panel on 19 March 2008, New Zealand
expressed its view that expert advice would be an important assistance for the Panel in addressing the
matter in this dispute. Both Parties indicated that , if the Panel decided to consult experts, it should
consult them on an individual basis, rather than as a single expert group. Australia also expressed its
preliminary view that the experts used by the panel in the Japan – Apples dispute would not be
acceptable.
1.22 In response to an invitation by the Panel duri ng the first substantive meeting, both Parties
submitted additional views on how the Panel should c onsult experts; Australia submitted its views on
4 September and New Zealand on 11 September 2008. In its communication, Australia stated that
due to the completely different biologies of the th ree pests at issue, the Panel should seek separate
expert advice on fire blight, European canker and apple leafcurling midge and that, should the Panel
consider it necessary, it could also consult risk analys is experts. Australia indicated that there should
be at least two experts for each of the three pests at issue, in order to ensure that a sufficiently diverse
range of views was available to the Panel, and th at experts should confine their advice to subjects

55 Communication from New Zealand and Australia to the Panel, 19 December 2008.
56 Electronic communication from the Panel to the Parties, 2 February 2009.
57 Electronic communication from Australia to the Panel, 4 February 2009.
58 Electronic communication from New Zealand to the Panel, 6 February 2009. The letter was
published at http://www.mfat.govt.nz/downloads/treaties-an d-international-law/pruning-letter.pdf, consulted on
14 September 2009.

within their field of expertise. Australia added th at it would be appropriate for the Panel to consult
relevant international bodies on appropriate experts. Finally, Australia confirmed its preliminary view
that the experts used by the panel in Japan – Apples would not be acceptable.59 In turn, New Zealand
stated that, if the Panel thought that this woul d be useful, it would be supportive of the use
of scientific experts in the specific areas of fire blight, European canker and apple leafcurling midge.
New Zealand indicated that one expert, or no more th an two for each of the pests at issue, would be
adequate, and that it agreed with Australia that experts should confin e their advice to their areas of
expertise. New Zealand added that the International Plant Protection Convention (IPPC) would be the
logical international organization to approach fo r suggestions for names of experts. Finally,
New Zealand noted that it saw no basis for excluding from consideration the experts used by the panel
in Japan – Apples.60
1.23 In a communication dated 15 September 2008, th e Panel notified the Parties that, having
considered the views expressed by the Parties, it ha d decided to seek expert advice in four fields:
(a) Erwinia amylovora (fire blight), including its potential spread through trade in apples and the
phytosanitary measures to be applied to control its spread; (b) Neonectria galligena (European
canker), including its potential spread through tr ade in apples, the climatic conditions for its
establishment, and the phytosanitary measures to be applied to control its spread; (c) Dasineura mali
(apple leafcurling midge), including its potential sp read through trade in apples and the phytosanitary
measures to be applied to control its spread; and, (d) pest risk assessment, including the use of semi-
quantitative methodologies.61
1.24 Pursuant to the Working Procedures adopted by the Panel and the views expressed by the
Parties, on 15 September 2008 the Panel requested the IPPC Secretariat to recommend names of
candidate experts in the relevant fields. 62 On 23 September, the IPPC Secretariat provided a first list
of ten expert names. 63 The Panel subsequently contacted these experts to enquire about their
availability and possible conflicts of interest. Only four of the ten experts confirmed their interest and
availability to participate in the proceedings. In its communication of 23 September, the IPPC
Secretariat indicated that, with more time to resear ch, it could provide add itional names of relevant
experts.64 In light of the limited number of available experts from the initial list, the Panel allowed for
a delay in order to receive additional expert name s from the IPPC. The IPPC submitted a second list
of 12 expert names on 29 and 30 October. 65 The Panel contacted the new suggested experts, and four
of them confirmed their interest and availability to participate in the proceedings, while the other
suggested experts declined due to potential conflicts of interest, lack of directly relevant expertise or
other commitments.
1.25 On 13 November 2008, the Panel sent a set of doc uments to the Parties detailing the names,
nationalities, curricula vitae and preliminary conflict of interest statements of the eight available
experts.66 The document package also contained the co mplete list of 22 experts who, until then, had
been contacted by the Panel. The Parties were given the opportunity to comment on each available
expert and to provide any compelling objections to any particular expert be ing chosen to provide
advice to the Panel in this dispute. Since, at th at point in the selection process, none of the experts

59 Communication from Australia to the Panel, 4 September 2008.
60 Electronic communication from New Zealand to the Panel, 11 September 2008.
61 Electronic communication from the Panel to the Parties, 15 September 2008.
62 Communication from the Panel to the IPPC, 15 September 2008.
63 Electronic communication from the IPPC to the Panel, 23 September 2008.
64 Ibid.
65 Electronic communications from the IPPC to the Panel, 29 and 30 October 2008.
66 Communication from the Panel to the Parties, 13 November 2008. This group of eight available
experts included four of the experts that were ultimatel y selected by the Panel: Dr Tom Deckers, Dr Bernardo
Latorre, Dr Jean-Pierre Paulin and Dr Gritta Schrader.

suggested by the IPPC with expertise on ALCM ha d confirmed their availability, the Panel solicited
names of potential experts in this area from the Parties.
67
1.26 In a letter dated 20 November 2008 New Zeal and provided comments on the list of eight
available experts and expressed its objections to the appointment of two of the proposed experts. 68
New Zealand reiterated that it saw no basis for Austra lia's objection to experts consulted by the panel
on Japan – Apples. New Zealand also identified one potentia l ALCM expert, as well as an additional
expert in European canker. 69 On the same date, Australia noted that it had compelling objections to
the appointment of three of the proposed experts. 70 Australia added that it was unable to suggest any
ALCM experts at that stage, because it had not been able to identify experts who were not citizens of
New Zealand or who did not, in Australia's opinion , have close connections with the New Zealand
government and industry. Australia suggested that the Panel contact the Council for International
Congresses of Dipterology (CICD), which might be able to provide names of ALCM experts.
Australia stated that, given the disagreemen t between the Parties on the semi-quantitative
methodology used in the IRA, it was essential that at least one of the risk assessment experts
appointed by the Panel should have expertise in the use of semi-quantitative methodologies and that
none of the proposed experts appeared to have such an expertise. Australia finally noted that, in the
interest of minimizing any further delays in the dispute settlement process, the Panel could ask the
Parties to suggest the names of additional possible experts.
71
1.27 In light of the Parties' comments and sugges tions, as well as the limited number of available
experts, on 21 November 2008 the Panel invited the Par ties to suggest experts in all of the four areas
that had been identified, and particularly in the areas of European canker and pest risk assessment.
The Panel informed the Parties that it would contact the two experts suggested by New Zealand and,
as suggested by Australia, it would also contact the CICD for names of experts in the area of
ALCM.72
1.28 Following Australia's recommendation, the Panel se nt a letter to the Chairman of the CICD
on 25 November 2008 seeking assistance in identifying the names and contact details of scientific
and/or technical experts suitably qualified to provide advice to the Panel on ALCM. 73 O n
26 November 2008, the Chairman of the CICD informed the Panel of one potential expert in the field
of ALCM. The Chairman of the CICD also noted th at this ALCM scientist would be able to suggest
names of additional experts on behalf of the CICD. 74 After having been contacted by the Panel, the
ALCM expert suggested by the CICD replied that he would be unable to attend the Panel meeting
with experts, but identified two experts in Dasineura mali taxonomy and biology.
1.29 In a letter dated 27 November 2008, and in res ponse to the Panel's invitation, New Zealand
rejected the objections made by Australia on 20 November to one of the experts proposed by the
Panel; in this respect, New Zealand stated that past participation as an expert in a WTO dispute
should not of itself create a conflict of interest. 75 New Zealand also suggested the names of two
possible experts in the area of European canker, as well as one on ALCM and one on pest risk

67 Communication from the Panel to the Parties, 13 November 2008.
68 Communication from New Zealand to the Panel, 20 November 2008. New Zealand's objections did
not refer to any of the experts that were ultimately selected by the Panel.
69 Communication from New Zealand to the Panel, 20 November 2008.
70 Communication from Australia to the Panel, 20 November 2008. Australia's objections did not refer
to any of the experts that were ultimately selected by the Panel.
71 Communication from Australia to the Panel, 20 November 2008.
72 Communication from the Panel to the Parties, 21 November 2008.
73 Communication from the Panel to the CICD, 25 November 2008.
74 Electronic communications from the CICD to the Panel, 26 November 2008.
75 This expert was ultimately not selected by the Panel.

assessment.76 New Zealand finally stated that there w as nothing in the Panel's Working Procedures,
nor in the guidance by the Appellate Body in prior cases, that would require the Panel to appoint more
than one expert for each of the different areas. 77 On the same date, Australia suggested the names of
two possible experts in the area of Europ ean canker and two on pest risk assessment. 78 It also
reiterated its objections to the appointment of one of the proposed experts.79
1.30 On 5 December 2008, the Panel sent a second set of documents to the Parties (supplementing
the one sent on 13 November) detailing the names, nationalities, curricula vitae and preliminary
conflict of interest statements of four additional av ailable experts; this br ought the list of available
experts to a total of twelve. This second package also contained the complete list of the 34 experts
who had been suggested thus far by the IPPC, th e CICD, Australia or New Zealand. The Panel
invited Parties to comment on the new available experts. 80 On 9 December, the Panel sent a third set
of documents to the Parties regarding three additional available experts that had been suggested by the
Parties on 27 November; this brought the list of available experts to a total of fifteen.81
1.31 On 9 December 2008, New Zealand expressed comp elling objections to two of the suggested
experts on ALCM. 82 New Zealand added that, in its view, in light of the extremely limited pool of
experts on ALCM, one expert would be sufficient. 83 On the same date, Australia expressed
compelling objections to two of the suggested experts on ALCM 84, expressed its objection to a third
expert on ALCM if he could not participate in a m eeting with the Panel, and ratified the objections it
had raised earlier to another expert in fire blight and pest risk assessment. 85 Australia reiterated its
view that the experts used by the panel in the Japan – Apples dispute would not be acceptable.86
1.32 On 11 December 2008, the Panel received add itional comments from both Parties relating to
the available experts. New Zealand reiterated its objection to one of the suggested experts on
ALCM.87 New Zealand also responded to some of the objections made by Australia. In
New Zealand's view, Australia's objection to one of the suggested experts on ALCM because he had
collaborated in ALCM research with Ne w Zealand experts, was without basis. 88 New Zealand also
rejected the objection raised by Australia to one of the suggested experts on fire blight because he had
participated as an expert in the Japan – Apples dispute.89 In turn, Australia argued that two of the
proposed experts for European canker were generalist plant pathologists and should only be appointed
if a specialist European canke r expert was also appointed. 90 Australia also raised compelling

76 None of these four experts was ultimately selected by the Panel.
77 Communication from New Zealand to the Panel, 27 November 2008.
78 Communication from Australia to the Panel, 27 November 2008. Two of these experts (Dr Ricardo
Sgrillo and Dr Terence Swinburne) were ultimately selected by the Panel.
79 Ibid. This expert was ultimately not selected by the Panel.
80 Communication from the Panel to the Parties, 5 December 2008.
81 Electronic communication from the Panel to the Parties, 9 December 2008.
82 None of these experts was ultimately selected by the Panel.
83 Communication from New Zealand to the Panel, 9 December 2008.
84 Communication from Australia to the Panel, 9 December 2008. Australia's objections included
Dr Jerry Cross, one of the experts who was ultimately selected by the Panel. Australia noted that Dr Cross had
recently participated in joint rese arch projects and publications w ith researchers fro m HortResearch
New Zealand, an organization that was funded by the New Zealand Government.
85 Ibid. This expert on fire blight and pest risk assessment was ultimately not selected by the Panel.
86 Ibid.
87 Communication from New Zealand to the Panel, 11 December 2008. This expert on ALCM was
ultimately not selected by the Panel.
88 This expert, Dr Jerry Cross, is one of the experts who was ultimately selected by the Panel.
89 Communication from New Zealand to the Panel, 11 December 2008. This expert on fire blight was
ultimately not selected by the Panel.
90 Communication from Australia to the Panel, 11 December 2008. None of these experts on European
canker was ultimately selected by the Panel.

objections to one of the suggested experts on fire blight.
91 Australia indicated some constraints in the
dates by which it would be available to provide comments on proposed questions for experts. Finally,
Australia requested that, as originally set out in the Working Procedures, the expert selection process
be completed prior to the Panel providing proposed expert questions to the Parties for comments.
92
1.33 On 15 December 2008, the Panel informed the Parties that, having considered their comments
on the proposed experts, as well as the objections expressed by the Parties, the Panel had selected the
following experts:
• Dr Jerry Cross, Research Leader, En tomology, East Malling Research, Kent,
United Kingdom;
• Dr Tom Deckers, Head, Department of Pomo logy, Research Station of Fruit Growing,
PCFruit (former Royal Research Station of Gorsem), St.Truiden, Belgium;
• Dr Bernardo Latorre, Full Professor, Facultad de Agronomía e Ingeniería Forestal,
Pontificia Universidad Católica de Chile, Chile;
• Dr Jean-Pierre Paulin, Director of Res earch, Institut National de la Recherche
Agronomique (INRA), Angers, France;
• Dr Gritta Schrader, Scientific Collaborator, Ju lius Kühn-Institut, Federal Research Centre
for Cultivated Plants, Institute for National a nd International Plant Health, Braunschweig,
Germany;
• Dr Ricardo Sgrillo, Researcher, Cocoa Research Center (CEPLAC/CEPEC) - Ministry of
Agriculture, Brazil;
• Dr Terence Swinburne, Professor and Plant pathology researcher, former Governor of
Hadlow College, Kent, United Kingdom.
1.34 The Panel noted that in three of the areas of e xpertise identified, it selected two experts, while
in the area of apple leafcurling midge, in light of the very limited number of relevant and available
experts, as well as the comments and objections of the Parties, it had selected only one expert. On the
same date, the Panel notified the Parties of its pr oposed questions to the experts, inviting them to
comment on those questions and to suggest additional ones. The Panel also commented on Australia's
argument that the expert selection process should be completed before Parties were provided the
proposed expert questions for their comments, and noted that it found no provision in the Working
Procedures that would establish any necessary sequence between the Panel selecting the experts and
the Parties commenting on the proposed questions to experts.
93
1.35 When expressing their availability, all experts we re asked by the Panel to provide preliminary
statements regarding the absence of conflicts of inte rest, which were forwarded to the Parties. On
16 December 2008, the Panel contacted the identified experts to ask them to undergo a more detailed
disclosure procedure. The experts were asked to sign the disclosure form included in Annex 3 of the
Rules of Conduct for the Understanding on the Rul es and Procedures Governing the Settlement of
Disputes. Furthermore, the Panel directed the experts to Section VI of the Rules of Conduct ( Self-
Disclosure Requirements by Covered Persons ) and asked them, if necessary, to expand on the
information that they had already provided by disclosing any facts which, in their view, would be

91 This expert on fire blight was ultimately not selected by the Panel.
92 Communication from Australia to the Panel, 11 December 2008.
93 Communication from the Panel to the Parties, 15 December 2008.

likely to affect their independence or impartiality as experts, or give rise to justifiable doubts in that
regard. In particular, the Panel noted that it was interested in any relevant information regarding
previous work for any of the Parties in relation to the matter at issue in this dispute or, more generally,
regarding any of the items exemplified in the illustra tive list of information to be disclosed, contained
in Annex 2 of the Rules of Conduct. 94 On 18 December 2008, the experts' replies and disclosure
forms were forwarded to the Parties.95
1.36 In a letter dated 19 December 2008, New Z ealand provided its comments on the Panel's
proposed questions to the experts and s uggested a number of additional questions. 96 O n t h e s a m e
date, Australia provided its comments on the Panel's pr oposed questions to the experts. Australia also
reiterated its compelling objection to one of the e xperts selected by the Panel (Dr Jerry Cross) and
reaffirmed its strong preference that two ALCM experts be appointed to assist the Panel.97
1.37 On 18 December 2008, the Panel informed the Parties that, in accord ance with the Working
Procedures, it intended to send to the selected expert s on a confidential basis the submissions filed by
the Parties and the accompanying exhibits. The Panel added that, unless New Zealand raised any
objections, it would include in the material the exhi bits submitted by New Zealand that were marked
"business in confidence". Having received no objecti ons from the Parties, on 23 December, the Panel
sent the submissions and the accompanying exhibits to the experts.98
1.38 After considering the Parties' comments and re vising the draft questions, on 16 January 2009
the Panel sent 142 written questions to the selected experts. 99 Parties received a copy of the questions
sent to the experts on the same date. 100 The Panel requested that the experts provide their written
replies to the questions by 23 February 2009. 101 As a result of the amendments to the timetable made
by the Panel on 2 February 2009, and in the light of the request of some experts, the deadline given to
experts to provide their written replies to questions was extended to 9 March; Parties were also
allowed to provide to the experts – through the Pane l – some factual clarifications that the experts
found necessary for preparing some of their responses. 102 On 9 and 10 February, the Panel relayed to
the Parties a number of requests for factual clarifications received from the experts. 103 O n
17 February, the Parties made those factual clarifications in separate communications. 104 Factual
clarifications were sent by the Panel to the experts on 18 February.105
1.39 Written replies from the experts to questions posed by the Panel were received on
9 March 2009.106 On 10 March, the Panel relayed the expert s' written replies to the Parties for their
comments.107 The Parties provided their comments on the experts' replies on 25 March. 108 O n
9 April, the Parties submitted comments on each other's comments on the experts' replies.109

94 Electronic communications from the Panel to the selected experts, 16 December 2008.
95 Communication from the Panel to the Parties, 18 December 2008.
96 Communication from New Zealand to the Panel, 19 December 2008.
97 Communication from Australia to the Panel, 19 December 2008.
98 Communications from the Panel to the selected experts, 23 December 2008.
99 Electronic communications from the Panel to the selected experts, 16 January 2009.
100 Communication from the Panel to the Parties, 16 January 2009.
101 A compilation of the experts' written replies is attach ed to this report as Annex B-1, and is available
only electronically.
102 Communication from the Panel to the Parties, 2 February 2009.
103 Communications from the Panel to the Parties, 9 and 10 February 2009.
104 Communications from New Zealand and Australia to the Panel, 17 February 2009.
105 Electronic communication from the Panel to the experts, 18 February 2009.
106 A compilation of the experts' written replies is attach ed to this report as Annex B-1, and is available
only electronically.
107 Communication from the Panel to the Parties, 10 March 2009.

(b) Due process concerns raised by Australia
1.40 In its comments on the experts' replies of 25 March 2009, Australia raised procedural
concerns regarding the expert consultation process, including some that were qualified by Australia as
due process concerns. Some of these concerns had already been raised by Australia on 19 December
2008, when providing its comments on the Panel's proposed questions to the experts, although at the
time those concerns had not been qualifie d by Australia as "due process concerns".
110 Likewise, in its
comments of 9 April on New Zealand's comments on the experts' replies and in its rebuttal submission
of 21 April, Australia reiterated some of these concer ns and raised some other ones. In the course of
the Panel's second substantive meeting with the Parties, the Panel asked Australia a number of
questions regarding the concerns it had raised. In particular, the Panel asked Australia to identify the
nature of its due process concerns and to explain in what manner its rights had in its view been
impaired. Similar written questions were posed to Australia by the Panel after the second substantive
meeting.111 New Zealand was invited by the Panel to comment on these points. Both New Zealand
and Australia offered their views in response to the Panel's questions.
(c) Additional revisions of the timetable
1.41 Because of the long time needed to identify available experts in th e areas selected by the
Panel, on 21 October 2008 the Panel informed the Pa rties that it would not be possible to send the
proposed list of experts and questions to the Parti es on 22 October, as originally scheduled in the
timetable adopted on 8 April 2008. The Panel added that it hoped to be in a position to propose new
dates for the following steps in the proceedings as soon as new information on experts became
available, and no later than during the first week of November. 112 In a communication sent on 24
October, Australia asked the Panel to take into account the constraints of a key member of its
delegation from 23 March to 3 April 2009, in case the second substantive meeting was rescheduled.113
Australia also asked the Panel to sp ecify, in an eventual revised time table, the date in which Parties
would receive responses from the selected experts, and to allow Parties at least two weeks, or possibly
longer, to comment on the experts' replies.
1.42 On 31 October 2008, the Panel informed the Par ties that, because of the delay in identifying
possible experts, the meetings with the experts a nd the second substantive mee tings with the Parties,
originally scheduled to take place on 3 to 5 Ma rch 2009 in accordance with the timetable adopted on
8 April 2008, would need to be postponed. 114 The Panel added that it expected to contact the Parties
again with a proposed new timetable, taking into acc ount the Parties' preferences expressed thus far,
in the course of the following week.
1.43 On 11 November 2008, the Panel sent to the Parties a proposed revised timetable; this
proposal included a delay in the dates originally scheduled, and identified th e date on which Parties
would receive responses from the selected expe rts in accordance with Australia's request. 115 Parties
commented on the proposed revision to the timetable on 12 November; New Zealand had no
objections to the new dates proposed by the Panel
116, while Australia requested that more time be
granted to Parties to reply to the Panel's ques tions after the second substantive meeting and to

108 Communications from New Zealand and Australia to the Panel, 25 March 2009.
109 Communications from New Zealand and Australia to the Panel, 9 April 2009.
110 Communication from Australia to the Panel, 19 December 2008.
111 See, in particular, Panel questions 20 to 26 after the second substantive meeting.
112 Electronic communication from the Panel to the Parties, 21 October 2008.
113 Electronic communication from Australia to the Panel, 24 October 2008.
114 Electronic communication from the Panel to the Parties, 31 October 2008.
115 Communication from the Panel to the Parties, 11 November 2008.
116 Electronic communication from New Zealand to the Panel, 12 November 2008.

comment on each other's replies. 117 After having considered the Parties' comments, on 14 November
the Panel informed the Parti es of the revised timetable. 118 On 9 December 2008, the Panel informed
the Parties of a delay in finalizing the list of proposed questions to the experts. 119 As noted above 120,
the Panel sent to the Parties its list of proposed questions to the experts on 15 December 2008; in
accordance with the revised timetable adopted on 14 November, Parties were given four working days
to comment on the proposed questions.
1.44 On 23 December 2008, the Panel informed the Pa rties that, because of the nature and the
number of comments made by the Parties on the pr oposed questions to the experts on 19 December,
the Panel would not be in a position to send the ques tions to experts before the end of the year, as
intended. The Panel proposed revising the timetable for the upcoming steps in the expert consultation
process, indicating that the dates for subsequent steps would remain as indicated in the revised
timetable that had been adopted on 14 November. 121 On 6 January 2009, Australia commented on the
Panel's proposed revised timetable. Australia re quested that the date for submitting the Parties'
rebuttals be extended by one week as had been proposed by the Panel for other steps.122 New Zealand
made no comments on the Panel's proposed revised timetable.
1.45 On 8 January 2009, the Panel informed the Parties that, because of the extensive comments on
the draft questions to the experts received from the Parties, the Panel would be able to send those
questions to the experts only by the end of the follo wing week. In the light of this delay, the Panel
intended to propose a new revised timetable to the Parties. 123 On 12 January, New Zealand expressed
its hope that any delays in the proceedings would be kept to an absolute minimum so that the dispute
could be addressed in a timely fashion. 124 On 16 January, the Panel sent to the Parties a proposed
revised timetable for the proceedings. 125 On 21 January 2009, New Zealand commented on the
Panel's proposed revised timetable. New Zealand s uggested alternative dates for the Panel's second
substantive meeting and indicated some constraints w ith regard to the dates that it would be available
to participate in that meeting. 126 On the same date, Australia made its own comments on the Panel's
proposed revised timetable; Australia indicated some time constraints, because some members of its
delegation would not be available to participate in the preparation of its rebuttal submission, and
consequently requested that the date for submitting the Parties' rebuttals be extended by two weeks
and that the dates for the Parties' replies to qu estions and comments on replies be extended by one
week in order to take account of the significant travel times after the Panel's second substantive
meeting.127 After having considered the Parties' comme nts, taken into account the constraints that
were expressed, and confirmed the experts' availab ility, on 2 February the Panel informed the Parties
of the revised timetable.128
1.46 On 22 June 2009, the Panel informed the DSB that, as a result of the time required for the
expert consultation process, including the time needed to identify and select experts, to prepare the
questions for the experts in consultation with the Pa rties, the time required by the experts to prepare
their responses and the time provided to the Par ties to comment on these responses, the Panel would
not be able to issue its report by July 2009 as it had previously informed the DSB. The Panel also

117 Electronic communication from Australia to the Panel, 12 November 2008.
118 Communication from the Panel to the Parties, 14 November 2008.
119 Electronic communication from the Panel to the Parties, 9 December 2008.
120 See para. 1.34 above.
121 Communication from the Panel to the Parties, 23 December 2008.
122 Communication from Australia to the Panel, 6 January 2009.
123 Electronic communication from the Panel to the Parties, 8 January 2009.
124 Electronic communication from New Zealand to the Panel, 12 January 2009.
125 Communication from the Panel to the Parties, 16 January 2009.
126 Electronic communication from New Zealand to the Panel, 21 January 2009.
127 Communication from Australia to the Panel, 21 January 2009.
128 Communication from the Panel to the Parties, 2 February 2009.

informed the DSB that it expected to issue its fina l report to the Parties by January 2010, as envisaged
in the revised timetable adopted after consultations with the Parties.
129
10. Written rebuttal submissions by the Parties
1.47 Following their comments on experts' responses, New Zealand and Australia filed their
written rebuttal submissions on 21 April 2009. In accordance with the Working Procedures adopted
by the Panel, both Parties submitted an executive summary of their respective written rebuttals.
11. Second substantive meeting of the Panel with the Parties and Panel's meeting with the
experts
1.48 Having noted the Parties' wish that the Panel's substantive meetings with the Parties be open
to viewing by the public, on 27 April 2009 the Pane l sent a message to the Parties asking for their
views regarding the possible format for the Pa nel's second substantive meeting and the Panel's
meeting with the experts. 130 On 5 May, the Panel received a response from New Zealand. 131 On the
same date, Australia provided its ow n response, together with a number of questions to the Panel in
relation to the Panel's meeting with the experts and the second substantive meeting.132
1.49 On 3 June 2009, the Panel sent to the Parties a set of draft procedures for the second
substantive meeting and for the Panel's meeting with the experts. As noted by the Panel in its
communication, the draft procedures were prepared w ith the intention of providing the Parties with a
useful guideline for the meetings, especially regard ing the purpose of the Panel's meeting with the
experts, the focus of the discussions, the subject ar eas in which the discussion would be organized, as
well as on the nature and form in which questions should be posed to the experts. 133 On 9 June,
New Zealand expressed its acceptance of the proposed text. 134 On the same date, Australia made a
number of comments on the draft procedures and request ed some clarifications from the Panel, while
generally agreeing to the proposed text. 135 On 11 June, Parties were notified by the Panel of the rules
of procedure adopted for the second substantive meeting and for the Panel's meeting with the
experts.136
1.50 The Panel met with the designated experts on 30 June 2009, in the presence of the Parties.
The meeting provided an opportunity for the Panel and the Parties to ask questions to the experts and
for the experts to clarify points that they had ma de earlier in their written responses to questions.
Following a request from the Parties, the Panel deci ded to make publicly available a compilation of
the experts' written responses and a transcript of the Panel's meeting with experts.137
1.51 The Panel held its second substantive meeting with the Parties on 1 and 2 July 2009. Both the
Panel's meeting with the experts and the Panel' s second substantive meeting were open for public
viewing from a separate room via closed-circuit tele vision broadcast. In the course of the meeting,

129 Communication from the Panel to the DSB, 22 June 2009. See Australia – Apples, Communication
from the Chairman of the Panel (WT/DS367/9), 29 June 2009.
130 Electronic communication from the Panel to the Parties, 27 April 2009.
131 Electronic communication from New Zealand to the Panel, 5 May 2009.
132 Communication from Australia to the Panel, 5 May 2009.
133 Communication from the Panel to the Parties, 3 June 2009.
134 Communication from New Zealand to the Panel, 9 June 2009.
135 Communication from Australia to the Panel, 9 June 2009.
136 Communication from the Panel to the Parties, 11 June 2009.
137 The List of replies from the scientific experts to questions posed by the Panel and the Transcript of
the Panel's meeting with the scientific experts are part of this report. Both do cuments are available only
electronically. See Annex B-1 and Annex B-2 of this report.

New Zealand submitted evidence contained in th ree exhibits (NZ-135, NZ-136 and NZ-137);
Australia stated that it had no objections to these exhibits becoming part of the record.138
1.52 On 10 July 2009, the Panel sent written questi ons to the Parties. On the same date,
New Zealand and Australia each sent a number of writte n questions to the other Party. On 24 July,
the Panel received responses to questions from New Zealand and Australia. On 31 July, both
New Zealand and Australia submitted comments on the other Party's responses to questions.
12. Issuance of the report
1.53 The descriptive (factual and argument) sections of the Panel's draft report were issued to the
Parties on 2 October 2009. On the same date, Chile, the European Comm unities, Japan, Chinese
Taipei and the United States were sent excerpts fro m the descriptive sections containing the summary
of their respective arguments. New Zealand a nd Australia submitted comments to the descriptive
sections of the Panel's draft report on 16 October. On the same date, th e European Communities,
Japan, Chinese Taipei and the United States expressed they had no comments to the relevant excerpts.
1.54 The Panel issued its interim report to the Par ties on 31 March 2010. As noted in the interim
review section of the report, on 15 April, in accordance with Article 15 of the Dispute Settlement
Understanding (DSU) and paragra ph 14 of the Panel's Working Procedures, New Zealand and
Australia submitted written comments and requested the Panel to revise precise aspects of the interim
report. On 22 April, New Zealand and Aust ralia submitted written comments on each other's
comments and requests for interim review. Neither Party requested an interim review meeting with
the Panel.
II. FACTUAL ASPECTS
A. PESTS AT ISSUE
1. Fire blight
2.1 Fire blight is a plant disease caused by the bacterium Erwinia amylovora (or E. amylovora).
In apple trees, fire blight infects flowers, young leaves, stems a nd fruits. Symptoms of infection of
host plants depend on the parts infected. Infected flowers droop, wither and die, becoming dry and
darkened in colour. Infected shoots and twigs with er, darken and die. As shoots and twigs wither,
they bend downwards resembling a shepherd's crook. Infected leaves become curled and scorched.
Infected fruit fail to develop fully, turning br own to black, and becoming mummified, frequently
remaining attached to the limb. 139 Limbs and trunks of trees may also develop cankers (sunken areas
surrounded by cracked bark) which, if disease development is severe, may result in tree death.140
(a) Host plants
2.2 The fire blight disease affects numerous host plants of the Rosaceae family, including both
cultivated and native wild plants. Fruit tree hos ts include apples, pears, quince, and loquats. 141

138 Australia subsequently clarified that its acceptan ce of these three new exhibits being made part of
the record was a separate question of how they should be treated by the Panel. In Australia's view, in
accordance with paragraph 11 of the Panel's working proc edures, these new exhibits may not contribute to the
making of New Zealand's prima facie case, as only materi al necessary for rebuttal purposes may be exhibited in
the latter stage of panel proceedings. Australia's reply to Panel question 7 after the second substantive meeting,
paras. 33-42.
139 Australia's IRA, Part B, p. 52; New Zealand's first written submission, para. 3.47.
140 New Zealand's first written submission, para. 3.47.
141 Australia's IRA, Part C, p. 105; New Zealand's first written submission, para. 3.46.

Within each genus, there are species or cultivars that may show a high level of resistance under
natural conditions or ar tificial inoculations.
142 There are several plant sp ecies of the Rosaceae family
in Australia. According to the IRA, hosts include Amelanchier spp.; Aronia spp.; Chaenomeles spp.;
Cotoneaster spp.; Crataegus spp.; Cydonia spp.; Dichotomanthes spp.; Docynia spp.; Eriobotrya sp.;
Heteromeles sp.; Malus spp.; Mespilus sp.; Osteomeles sp.; Peraphyllum spp.; Pyracantha spp.;
Pyrus spp.; Rhaphiolepis spp.; Sorbus spp.; and Photinia spp.143
(b) Life cycle
2.3 Fire blight bacteria ( E. amylovora) overwinter exclusively in infected host plants, mainly in
the previous season's cankers. 144 In the presence of warm, wet conditions in spring, the disease cycle
commences when cankers on infected trunks and s hoots become active and exude a bacteria-laden
ooze, which is the inoculum for primary infection in the spring time.145
2.4 Cankers become inactive during the growing season, especially in warmer, drier months. The
cankers generally cease ooze production during the ho t summer months and remain inactive until the
following spring when they reactivate and the disease cycle begins again.146
(c) Spread
2.5 The bacteria may spread within host plants, infecting blossoms, fruits, spurs, twigs, branches,
and leaves, and form new cankers on infected branches and twigs. 147 With appropriate environmental
conditions, inoculum may then be exuded from infected shoots, canke red bark, and infected fruitlets
and blossoms. Infection may also occur when host plants produce sporadic, late blossoms ("rattail
bloom").148 Rain, insects, wind and pruning tools are th e main methods of spreading inoculum of
E. amylovora.149 Bees are the primary agents for secondary sp read of inoculum from infested flowers
to newly opened ones.150
2.6 Depending on orchard conditions, fruit can be infested with low levels of E. amylovora .151
This occurs when small populations of bacteria are present on the developing flower parts. An
infested flower can develop into a mature apple, but bacteria are localized in the calyx (remnant of the
blossom) in small numbers. 152 In orchards with fire blight symptoms, bacteria can also be present in
low numbers on the surface of the apple, for example when rain transfers bacteria from another part of
a tree to fruits. Such external populations would not multiply and would tend to diminish over
time.
153

142 Australia's IRA, Part C, pp. 105-106.
143 Australia's IRA, Part C, p. 106.
144 Australia's IRA, Part B, p. 51, and Part C, p. 110; New Zealand's first written submission,
para. 3.48.
145 Australia's IRA, Part C, p. 111; New Zealand's first written submission, para. 3.48.
146 New Zealand's first written submission, para. 3.49.
147 Australia's IRA, Part C, pp. 109-110; New Zealand's first written submission, para. 3.50.
148 New Zealand's first written submission, para. 3.50.
149 Australia's IRA, Part B, p. 51, and Part C, p. 110.
150 Australia's IRA, Part B, p. 51; New Zealand's first written submission, para. 3.48.
151 Compilation of expert replies, paras. 44 and 53. Regarding fruit infestation, see also Australia's
IRA, Part B, pp.52, 55-65; Part C, pp.117-119; Ne w Zealand's first written submission, paras. 4.13-4.16.
"Infestation" refers to the presence of an organism (e.g. bacteria, fungus, insect) on the outside of a host plant
(including the fruit), without any implication that an infection has occurred.
152 Australia's IRA, Part B, p. 52; New Zealand's first written submission, para. 3.51.
153 Compilation of expert replies, paras. 44, 53 and 62; Transcript of the Panel's meeting with experts,
paras. 230 and 395,

(d) Geographical distribution
2.7 Fire blight is thought to be native to Nort h America. The earliest known observation and
description of the disease was reported in New York St ate in the United States in 1793. By the early
1900s, fire blight had been reporte d in Canada from Ontario to Britis h Columbia, in northern Mexico,
and in the United States from the East Coast to Ca lifornia and the Pacific Northwest. Fire blight has
been identified across northern and western Europe , the Mediterranean region and several Central
European countries, although it remains localized in France and Switzerland and is restricted to
certain spots in Spain, Italy, and Austria. Portuga l and Finland are fire blight-free and Norway has an
eradication programme underway. Most recently fire blight has been reported in Latvia, Morocco and
Syria. Latin America and substantial parts of Africa and Asia apparently remain fire blight-free.154
2.8 Fire blight was first reported in New Zealand in 1919. Its establishment and spread around
the country is thought to be associated with th e movement of infected rootstocks and nursery
material.155 In 1997 fire blight was detected in Austra lia in the Melbourne Royal Botanic Gardens,
but eradication efforts were undertaken and no further outbreaks have been reported.156
2. European canker
2.9 European canker is a plant disease caused by the fungus Neonectria galligena (or
N. galligena). The primary symptom of infected plants is the production of cankers on limbs and
trunks. The fungus can infect fruit and cause lesions that develop into "fruit rots", mainly under
conditions of high summer rainfall.157
(a) Host plants
2.10 Hosts of this fungus include tree species in the genera Acer (maple), Aesculus (horse
chestnut), Alnus (alder), Betula (birch), Carya (h ickory), Cornus (dogwood), Corylus (hazel), Fagus
(beech), Fraxinus (ash), Juglans (walnut and butter nut), Liriodendron tulipifera (tulip tree), Malus
(apple), Populus (aspen), Prunus (cherry), Pyrus (pear ), Quercus (oak), Salix (willow), Sorbus (rowan
tree), Tilia (American basewood) and Ulmus (elm).158
(b) Life cycle
2.11 N. galligena produces two types of spores: asexual spores (called "conidia") and sexual
spores (called "ascospores"). 159 Conidia are produced from tree cankers during humid conditions,
mainly in late summer, autumn and spring. 160 Conidia also may be produced on infected fruit
showing visible rot symptoms. Ascospores are produced in fruiting bodies called "perithecia",
produced by the sexual stage of the fungus. Perith ecia only occur in regions with a climate conducive
to their development. Perithecia produce asco spores mainly during late winter and spring. 161

154 New Zealand's first written submission, paras. 3.52-3.53.
155 New Zealand's first written submission, para. 3.54.
156 Australia's first written submission, para. 77; Aust ralia's IRA, Part C, p. 107; New Zealand's first
written submission, para. 3.55.
157 Australia's IRA, Part C, pp. 100 and 102; New Z ealand's first written submission, paras. 3.56-3.57.
See also Compilation of experts replies, paras. 305, 311,348, 356, 435, 438.
158 Australia's IRA, Part B, p. 117; New Zealand's first written submission, para. 3.56.
159 Australia's IRA, Part C, p. 100; New Zealand's first written submission, para. 3.58.
160 Australia's IRA, Part C, p. 100; New Zealand's first written submission, para. 3.59.
161 Australia's IRA, Part C, p. 100; New Zealand's first written submission, para. 3.60.

Perithecia and ascospores have occasionally b een reported on fruit overwintered under specific
conditions.
162
2.12 European canker infection 163 occurs when spores (conidia or ascospores) that have been
deposited on the surface of a host plant enter the plant through wounds in the plant surface. The
infection process requires wetness on the plant surface. 164 Leaf scars (that result from leaf fall in
autumn) are the most important site of infecti on. Wounds arising from orchard practices or from
natural cracks in tree branches also provide infec tion sites for both conidia and ascospores at times
other than leaf fall. 165 Infection of the fruit can take place through the open calyx, lenticels and scab
lesions, or wounds caused by insects.166
2.13 After infection, the fungus grows within the plan t and remains latent for a period of weeks to
months, depending on temperature. 167 Eventually, disease symptoms appear as cankers on wood or
lesions on fruit. In regions where the climate is conducive to fruit infection a proportion of the
infections may remain latent within the fruit at the ti me of harvest. However, not all latently infected
fruit will express rot symptoms.168
2.14 After a period of wood canker or fruit lesi on growth (weeks to months, depending on
temperature), conidia may be produced on cankers or lesions. After a further period, which generally
includes a winter, perithecia may be produced on wood cankers or on mummified fruit.169
(c) Spread
2.15 As mentioned above, European canker is transmitte d by spores. Conidia are spread mainly by
rain splash over relatively short distances, while ascospores are spread mainly by wind. 170 Sever a l
factors influence spore production, spore survival a nd infection, but the most important is climate. 171
The Parties disagree about the climatic conditions conducive to the spread of European canker.
2.16 The pattern of European canker infection varies in different parts of the world. In Northern
Ireland, where rainfall occurs in all seasons, inoculum is available all year round, spring and summer
are a critical period for infection, and ascospores play an important role. In California, in contrast,
which has pronounced dry periods over the summer m onths, infection occurs in the winter rainy
season, and conidia are considered to play the major role in infection.172

162 Australia's IRA, Part C, pages 100-101; New Zealand's first written submission, para. 3.60.
163 Infection refers to the process by which an organism (e.g., N. galligena) enters into a host plant and
establishes a pathogenic relationship with the host.
164 New Zealand's first written submission, para. 3.62; Transcript of the Panel's meeting with experts,
Annex 2, pp. 247-250.
165 Australia's IRA, Part C, page 101; New Zealand's first written submission, para. 3.61.
166 See, Swinburne, "European Canker of Apple ( Nectria galligena )" (1975), in Exhibit NZ-9;
Australia's IRA, Part C, p. 102.
167 If an infection gets into trees through nurseries, it can remain symptomless for 3-4 years. See,
Australia's IRA, Part C, p. 102.
168 New Zealand's first written submission, para. 3.62.
169 Australia's IRA, Part C, pp. 100-101; New Zealand's first written submission, para. 3.63.
170 Australia's IRA, Part C, p. 101; New Zealand's first written submission, para. 3.64; Compilation of
experts replies, paras. 365 and 398.
171 New Zealand's first written submission, para. 3.66.
172 Australia's IRA, Part C, p. 101, New Zealand' s second written submittion, paras. 2.201-2.202;
Compilation of experts replies, paras. 396, 416; Transcript of the Panel's meeting with experts, para 525.

(d) Geographical distribution
2.17 European canker is present in large parts of Europe, North America, South America, the
Middle East, and South Africa. 173 The worldwide distribution of European canker appears to
correspond to major apple and pear growing regions, although its occurrence is restricted to those
areas and occasions when suitable climatic conditions occur.174
2.18 European canker was first reported in New Zealand in 1905. 175 Due to climatic factors,
European canker is not found everywhere in Ne w Zealand. Most apple export production in
New Zealand takes place in areas where European ca nker has either never been recorded or the
disease occurs only sporadically in very wet seasons. 176 In Australia, the disease was identified in
1954 in four orchards in Spreyton, Tasmania, but was eradicated by 1991.177
3. Apple leafcurling midge
2.19 The apple leafcurling midge (ALCM), or Dasineura mali, is a small fly, 1.5–2.5 mm long,
with dusky wings covered in fine dark hairs. 178 The ALCM has four life stag es: adult, egg, larva (or
maggot) and pupa.179 Both the adult male and female have wings and are able to fly.180 ALCM larvae
feed on the unfurling young leaves of apple trees causi ng the leaf margins to curl or roll. This can
result in reduced shoot and tree growth.181
(a) Host plants
2.20 Apple trees (including crab-apple) are the only hosts of ALCM.182
(b) Life cycle
2.21 ALCM reproduce sexually.183 They have a short life span. According to the IRA, laboratory
evidence indicates that adult ALCM live for 2-6 days. 184 New Zealand indicates that adults live
3-4 days under laboratory conditions, and that males live only 1-2 days in the field. 185 Eggs are laid
by mated females on soft new unfurling apple leaves at the tips of shoots and branches. These eggs
hatch to produce larvae, which are legless red maggots. Being legless, the larvae are essentially
immobile and do not move far from the egg-laying site. The larvae develop by feeding on the
unfurled leaf causing marginal leaf rolling, which then prevents the leaf from unfurling normally, or
results in a curled margin on the leaf.186
2.22 When ready to pupate, the mature larvae drop, or crawl, from the leaves to the ground to find
a pupation site below the surface of the ground. Pupation is instigated by rainfall. A small proportion

173 Australia's first written submission, para. 83.
174 New Zealand's first written submission, para. 3.67.
175 Ibid.
176 Australia's IRA, Part B, p. 121; New Zealand's first written submission, para. 4.56 and Annex 3.
177 Australia's IRA, Part B, p. 117; New Zealand' s first written submission, paras. 3.68 and 4.93,
Exhibit NZ-13.
178 Australia's IRA, Part B, p. 157; New Zealand's first written submission, para. 3.69.
179 Australia's IRA, Part C, p. 121; New Zealand's first written submission, para. 3.72.
180 Australia's IRA, Part B, p. 177; New Zealand's first written submission, para. 3.77.
181 Australia's IRA, Part C, p. 122; New Zealand's first written submission, para. 3.70.
182 Australia's IRA, Part C, p. 121; New Zealand's first written submission, para. 3.69.
183 Australia's IRA, Part B, p. 157; New Zealand's first written submission, para. 3.71.
184 Australia's IRA, Part B, p. 157.
185 New Zealand's first written submission, para. 3.71.
186 New Zealand's first written submission, para. 3.72. See also, Australia's IRA, Part C, p. 122.

of the pupating larvae may also lodge and pupate on the tree, often in cracks in the bark or sometimes
on the calyx or stalk ends of fruit. Pupating larvae spin a white silken cocoon.
187
2.23 The cocoons of the emerging adults remain wher e they were formed, i.e. in the soil, on the
trunk, or on the calyx of fruit. In spring and summer, after the required pupation period, adult ALCM
emerge leaving their cocoons empty. Males emerge from their pupae earlier than females. In late
summer and autumn ALCM pupating in cocoons ente r an "overwintering" state called "diapause."
188
Their development and emer gence is not completed until the following spring. 189 The life cycle of
ALCM (mating, egg-laying, larval growth, pupation and adult emergence) is usually repeated several
times a year. New Zealand mentions four , sometimes five generations per year 190, while Australia
indicates that in the north of New Zealand, there are 6-7 generations annually, and that the number of
generations completed each year decreases from north to south in New Zealand.191
(c) Spread
2.24 Movement of ALCM happens by a mixture of a dult flight and the transportation of infested
apple trees.192 The dispersal of ALCM appears to have been little studied. 193 Both Parties refer to
studies by Suckling et al. (2007) which found that mated female ALCM flew about 30 metres 194, but
Australia also refers to evidence that male ALCM can fly 50 metres to a pheromone source.195 One of
the experts, Professor Cross, indicates that "[t]here is no study that shows how far the midge can fly.
There is no definitive flight range. So, it's rather difficult to establish what the flight range should be.
Obviously the midge is a weak flier. In my view , it is unlikely to be able to fly long distances." 196
Professor Cross also indicated "[i]t would be unlikely that [the midge] could fly many hundreds of
metres. But I felt that the 200 metres distance was no t totally unreasonable. It doesn't seem to me to
be an impossible distance for this midge to fly."
197
(d) Geographical distribution
2.25 ALCM are presumed to be native to Europe, wh ere they are widespread. They are found in
countries with cool to moderate temperate appl e producing regions. The species also occurs in
North America and New Zealand.198 ALCM were first recorded in New Zealand in 1950. 199 ALCM's
establishment and spread around the country is associat ed with the movement of infested rootstocks
and nursery material.200 Australia reports that it is free from ALCM.201

187 Australia's IRA, Part C, p. 122; New Zealand's first written submission, para. 3.73.
188 A period of suspension of development in some insects.
189 Australia's IRA, Part C, p. 122; New Zealand's first written submission, para. 3.74.
190 New Zealand's first written submission, para. 3.75.
191 Australia's IRA, Part C, p. 123.
192 Australia's IRA, Part C, p. 125; New Zealand's first written submission, paras. 3.78-3.79.
193 Australia's IRA, Part C, p. 125.
194 Australia's IRA, Part B, p. 171; Australia's first written submission, paras. 802-804; New Zealand's
first written submission, para. 3.77.
195 Australia's first written submission, paras. 802-80 8; Exhibits AUS-95 and AUS-96; Australia's
IRA, Part B, pp. 171 and 177 Compilation of expert replies, para. 530; Transcript of the Panel's meeting with
experts, paras. 582-584.
196 Transcript of the Panel's meeting with experts, para. 584.
197 Transcript of the Panel's meeting with experts, para. 586.
198 Australia's IRA, Part C, p. 121; New Zealand's first written submission, para. 3.78.
199 Australia's IRA, Part C, p. 125; New Zealand's first written submission, para. 3.79.
200 Australia's IRA, Part C, p. 125; New Zealand's first written submission, para. 3.79.
201 New Zealand's first written submission, para. 3.80.

B. THE FINAL IRA REPORT
2.26 The Final Import Risk Analysis Report for Apples (IRA) from New Zealand was issued by
Biosecurity Australia in three parts in November 2006: Part A contains a summary of the import risk
analysis; Part B contains the full detail of the anal ysis; and Part C contains technical details on the
full range of pests considered. The IRA is a large document, comprising about 600 pages altogether.
2.27 The scope of the risk analysis is the importation of mature apple fruit free of trash, either
packed or sorted and graded bulk fruit from New Zealand. 202 In addition to fire blight, European
canker and apple leafcurling midge, the IRA includes assessments of eight other pests.203
2.28 From October 2001 onwards, preparation of th e IRA was carried out by a seven-member
import risk analysis team (IRA Team, initially known as Risk Analysis Panel), including two officials
from Biosecurity Australia; an official from South Australia's Department of Primary Industries and
Resources; an official from CSIRO (Commonwealth Scientific and Industrial R esearch
Organisation) Sustainable Ecosystems 204; a fruit production specialist from Australia; and an owner
and manager of an apple production business in Australia.205
2.29 At various stages of the preparation of the IRA, stakeholders made comments on the
successive drafts. 206 Biosecurity Australia maintains a regist er of stakeholders to assist effective
consultation and communication. Stakeholders comprise government agencies, individuals,
community or industry groups or organisations, in Australia and overseas, including the proponent or
applicant for a specific proposal, having an interest in the subject matter of an IRA. 207
1. Chronology
2.30 Australia banned the importation of New Zealand apples in 1921, following the entry and
establishment of fire blight in Auckland in 1919. 208 In 1986, 1989 and 1995 New Zealand applied for
access to the Australian apple market.209 In each case its application was rejected.210
2.31 In 1996 the Australian Quarantine and Insp ection Service (AQIS) commenced a risk
assessment that was released in 1998. 211 Following a new request fo r access to the Australian market
filed by New Zealand in January 1999, the Aust ralian Quarantine and Inspection Service (AQIS)
initiated the import risk analysis for New Zeala nd apples which is the subject of this dispute. 212
Biosecurity Australia (then a part of AQIS) issued a first draft of the risk analysis in October 2000. 213
In November 2000, the Committee on Rural and Regi onal Affairs and Transport Legislation of the

202 Australia's IRA, Part B, p. 9.
203 These other pests are: garden featherfoot, grey -brown cutworm, leafrolle rs, apple scab or black
spot, codling moth, mealybugs, Oriental fruit moth and oystershell scale.
204 CSIRO (Commonwealth Scientific and Industrial Research Organisation) is Australia's national
science agency.
205 Australia's IRA, Part B, p. 10; New Zealand's First Written Submission, paras. 3.21-3.22.
206 Australia's IRA, Part A, pp. 3 and 21, and Part B, pp. iii and 6-10.
207 Import risk analysis handbook (Canberra, 2003) in Exhibit AUS-10, p. 9.
208 Australia's IRA, Part B, p. 7. See also New Zealand's first written submission, para. 3.1.
209 Australia's IRA, Part B, p. 7. See also New Zealand's first written submission, para. 3.2-3.6.
210 Australia's IRA, Part B, p. 7.
211 Australia's IRA, Part B, pp. 7-8. See also New Zealand's first written submission, paras. 3.4-3.6 and
p. 212.
212 Australia's IRA, Part B, pp. 8-9. See also Australia's first written submission, para. 66;
New Zealand's first written submission, para. 3.7.
213 Australia's IRA, Part B, p. 8. See also Australia's first written su bmission, para. 67; New Zealand's
first written submission, para. 3.12.

Australian Senate launched a first inquiry into the assessment of apple imports from New Zealand by
Australia's quarantine agencies.
214 The Committee's interim report, including recommendations, was
delivered in July 2001.215
2.32 A revised draft risk assessment was issued by Biosecurity Australia in February 2004 and was
followed by a comment period. 216 The Australian Senate Committee launched a second inquiry in
March 2004.217 In August 2004, an Eminent Scientists Group was created to independently examine
all final draft IRAs before their release and to en sure that technical submissions from stakeholders
were properly taken into account. 218 Biosecurity Australia was made a prescribed agency (financially
independent from the Department of Agriculture, Fisheries and Forestry) in October 2004, and the
Australian Government decided that Biosecurity Au stralia would review and reissue draft IRAs in
progress at that time, including the one on New Zealand apples. 219 The Australian Senate
Committee's report on the importation of apples from New Zealand was issued in March 2005. 220
After reviewing stakeholder comments, Biosecurity Australia issued another revised draft import risk
analysis in December 2005, again providing a comment period.
221 The Final IRA was issued in
November 2006.222
2.33 The IRA requires New Zealand to prepare a doc umented standard operating procedure (SOP)
describing the phytosanitary procedures for each quarantine pest of concern and the responsibilities of
the parties. The SOP must be approved by AQIS befo re exports start and is subject to AQIS audits.
The SOP would be based on a work plan to be developed between Aust ralia and New Zealand. 223
Australia and New Zealand have not been able to agree on an SOP.224
2. Methodology
2.34 The technical component of an import risk analysis for plants or plant products is called a pest
risk analysis (PRA). Australia's IRA carries out the PRA in three stages:
(a) Initiation of the PRA;
(b) pest risk assessment; and,
(c) pest risk management.225
(a) Process of pest risk assessment
2.35 In describing its process for pest risk assessment, the IRA identifies four interrelated steps:226

214 New Zealand's first written submission, para. 3.15.
215 New Zealand's first written submission, para. 3.19.
216 Australia's IRA, Part B, p. 8. See also Australia's first written submission, para. 69.
217 New Zealand's first written submission, para. 3.27.
218 Australia's first written submission, para. 70 and Annex 1; New Zealand's first written submission,
para. 3.28.
219 Australia's IRA, Part B, p. 8. Australia's first written submission, para. 70 and Annex 1;
New Zealand's first written submission, paras. 3.28-3.29.
220 New Zealand's first written submission, para. 3.30.
221 Australia's IRA, Part B, p. 8. See also Austra lia's first written submission, para. 71 and Annex 1;
New Zealand's first written submission, para. 3.31.
222 Australia's IRA, Part B, cover page. Australia's first written submission, para. 72 and Annex 1;
New Zealand's first written submission, para. 3.34.
223 Australia's IRA, Part B, pp. 313-314; New Zealand's first written submission, para. 3.35.
224 Australia's first written submission, Annex 1, p. 336; Australia's reply to Panel questions 27-31
after the first substantive meeting; New Zealand's first written submission, paras. 3.36-3.38.
225 Australia's IRA, Part B, p. 11.

(a) Pest categorization;
(b) the assessment of the probability of entr y, probability of establishment, and the
probability of spread;
(c) the assessment of consequences; and,
(d) combining the probability of entry, establis hment and spread with the estimate of
consequences to estimate the unrestricted risk.227
2.36 For the three pests at issue, Australia has characterized the approach taken in the IRA as
combining a quantitative assessment of the probabilit y of entry, establishment and spread with a
qualitative assessment of the consequences. This semi-quantitative approach is elaborated below.
(b) Pest categorization
2.37 According to the IRA, the purpose of pest categor ization is to identify whether or not a pest
should be considered a quarantine pest, thereby reducing the number of pests that have to be
examined in a risk assessment. 228 Based on the International Sta ndards for Phytosanitary Measures
(ISPM) No. 11 adopted by the International Plant Protection Convention, Pest risk analysis for
quarantine pests, including analysis of environmental risks and living modified organisms , the IRA
carries out its pest categorization in six steps:
(a) Compilation of species lists;
(b) presence or absence within Australia;
(c) potential for being on the pathway;
(d) potential for establishment or spread;
(e) potential for consequences; and,
(f) final categorization.229
2.38 As a result of the pest categorization, the IR A concludes that the following ten species (eight
insects, one bacterium and one fungus) require cons ideration for the whole of Australia: Apple
leafcurling midge ( D. mali); Garden featherfoot ( S. horticola); Grey-brown cutworm ( G. mutans);
Brownheaded leafroller (C. herana); Brownheaded leafroller (C. obliquana); Greenheaded leafroller
(P. excessana ); Greenheaded leafroller ( P. octo Dugdale); Native leafroller ( P. plagiatana ); Fire
blight (E. amylovora); and, European canker (N. galligena).230
2.39 The IRA additionally concludes that the follo wing six species (five insects and one fungus)
require consideration for Western Australia only: Codling moth (C. pomonella); Mealybug (P. mali);
Citrophilus mealybug ( P. calceolariae ); Oriental fruit moth ( G. molesta ); Oystershell scale
(D. ostreaeformis); and, Apple scab (V. inaequalis).231 The IRA notes in this regard that:

226 Australia's IRA, Part B, p. 13.
227 Australia's IRA, Part B, pp. 13-14.
228 Australia's IRA, Part B, p. 14. See also, Australia's IRA, Part A, p. 4.
229 Australia's IRA, Part B, p. 14.
230 Australia's IRA, Part B, pp. 47-48. See also, Australia's IRA, Part A, pp. 11-12.
231 Australia's IRA, Part B, pp. 47-48. See also, Australia's IRA, Part A, pp. 11-12.

"Western Australia has a pest and disease stat us that, in some respects, is different
from other areas of Australia. This regional freedom from pests or diseases that
might already be present in other locations in Australia is recognised in the risk
assessment."
232
(c) Assessment of the probability of entry, establishment and spread
(i) Probability of entry
2.40 The IRA describes the probability of entry as "the probability that a quarantine pest will enter
Australia as a result of trade in a given commodity, be distributed in a viable state to an endangered
area, and subsequently be transferred to a suitable host." 233 The probability of entry is "based on
pathway scenarios depicting necessary steps in th e sourcing of the commodity for export, its
processing, transport and storage, its utilization in Australia, and the generation and disposal of
waste."234 Each pathway is made up of several of the different importation steps identified by
Australia.
(ii) Importation steps and biological pathways
2.41 The importation steps used in the IRA are an approximation of the trade in apples sufficient to
estimate the proportion of fruit that will be infected/infested. 235 Each importation step represents a
point on the importation pathway along which apples will travel from the orchard in New Zealand to
arrival in Australia. An estimate is made of the proportion of apples which will be infected/infested at
each point.
• Importation step 1 (Imp1) represents the "proportion of [New Zealand] orchards in which
the pest is present";
• Importation step 2 (Imp2) represents the "proportion of fruit coming from an infected or
infested orchard [in New Zealand] that is infected or infested" with the pest;
• Importation step 3a (Imp3a) represents the "proportion of clean fruit from infected or
infested orchards [in New Zealand] that is contaminated [by the pest] during picking and
transport to the packing house";
• Importation step 3b (Imp3b) represents the "proportion of clean fruit from uninfected or
uninfested orchards [in New Zealand] that is contaminated [by the pest] during picking
and transport to the packing house";
• Importation step 4 (Imp4) represents the "propo rtion of infected or infested fruit that
remains infected or infested [by the pest ] after routine processing procedures in the
packing house";
• Importation step 5 (Imp5) represents the "proportion of clean fruit that is contaminated
[by the pest] during processing in the packing house";

232 Australia's IRA, Part A, p. 14.
233 Australia's IRA, Part B, p. 17.
234 Ibid.
235 Australia's IRA, Part B, p. 21.

• Importation step 6 (Imp6) represents the "propo rtion of infected or infested fruit that
remains infected or infested [by the pest ] during palletization, quality inspection,
containerization and transportation to Australia";
• Importation step 7 (Imp7) represents the "proportion of clean fruit that is contaminated
[by the pest] during palletization, quality insp ection, containerization and transportation"
to Australia;
• Importation step 8 (Imp8) represents the "propo rtion of infected or infested fruit that
remains infected or infested [by the pest] after on-arrival minimum border procedures for
the unrestricted analyses".236

2.42 The IRA describes how different combinations of importation steps represent a biological
pathway "or ordered sequence of steps undertaken in sourcing, processing and exporting a commodity
up to the point where it is released from quarantine by the importing country".
237 This is also referred
to as an importation scenario. 238 In each importation scenario, the initiating step "is the sourcing of
apples from orchards in New Zealand and the end-point is the arrival in Australia of infected or
infested fruit or packaging materials."239 Since the pathways include the possibility for contamination
of clean fruit, the importation scenario is not a simple sequence from importation steps 1 to 8.240
2.43 Figure 1 of Part B of the IRA illustrates various import scenarios. 241 Table 4 of Part B of the
IRA outlines step-by-step the ten different pathways considered for each pest. 242 The probability that
an imported apple will be infected or infested having followed a certain pathway was obtained by
multiplying the probabilities associated with each im portation step in that pathway. The overall
probability that an imported apple is infected or in fested when it arrives in Australia (probability of
importation) is the sum of the proportions (or probabi lities) associated with each of the ten individual
pathways.243
2.44 Once the probability of importation was estimat ed, the IRA establishes the likelihood that
major handlers and users of apples (utility points) w ould be located sufficiently close to pest hosts
(exposure groups) for transfer of pests from apples to host plants to take place (proximity). The IRA
identifies and quantifies different pathways of di stribution, utilization, and waste generation and
disposal, illustrated in Figure 2 of Part B of the IRA. 244 Each of these distribution pathways includes
several utility points (orchard wholesalers; ur ban wholesalers; retailers; food services; and
consumers) at which apples are distributed or u tilized and where waste will be generated. The
characteristics of these utility points have different implications for the likelihood of exposure.245
2.45 Exposure is the likelihood of transfer of a p est from an infected or infested apple to a
susceptible host plant. The IRA analyses the key steps that are required for successful exposure,
including viability of the pest, survival, transfer mechanism(s), host recep tivity and environmental

236 Australia's IRA, Part B, p. 21. See also Australia's first written submission, para. 95.
237 Australia's IRA, Part B, p. 19.
238 Ibid.
239 Ibid.
240 Ibid.
241 Australia's IRA, Part B, p. 20.
242 Australia's IRA, Part B, p. 24.
243 Australia's IRA, Part B, p. 23.
244 Australia's IRA, Part B, pp. 25-26; Australia's first written submission, para. 100.
245 Australia's IRA, Part B, p. 25; Australia's first written submission, para. 101.

factors.
246 It then categorizes susceptible host plants in Australia into different exposure groups for
which the likelihoods of exposure and the impact of a pest are different. The exposure groups are:
susceptible commercial fruit crops; susceptible nur sery plants; susceptible household and garden
plants, including weed species; and susceptible wild and amenity plants.247
2.46 The IRA's assessment is based on a projected vol ume of trade in New Zealand apples for one
year, taking into account that apples might be impor ted in packed cartons for table consumption, but
also in bulk bins for repacking or for processing in to fruit juices or other products. Australia assumed
that the volume of apple imports from New Z ealand would be between 50 million and 400 million
apples per year, with a most likely value of 150 m illion. These values equate to approximately 5 per
cent, 40 per cent and 15 per cent of domestic fresh fruit, or 2.5 per cent, 20 per cent and 7.5 per cent
of Australia's total average apple production, respectively.248
(iii) Probability of establishment and spread
2.47 The IRA describes the probability of estab lishment and spread as encompassing the
"biological factors associated with the likelihood that a pest will successfully propagate on or in
[a suitable] host, and disperse from there to other populations of susceptible hosts." 249 T h i s
probability "is obtained from an examination of biologic factors associated with compatibility of the
host and environment, and the availability of necessary mechanisms for dispersal." 250 Its calculation
"involves examination of the factors relevant to the successful colonisation of a susceptible host, and
to the subsequent establishment and spread within the larger population of susceptible hosts."251
2.48 In analysing the probability of establishment, the IRA compares the following factors in the
source country and in the PRA area for each exposure group:
• Availability of suitable hosts, alternate hosts and vectors in the PRA area;
• suitability of the environment;
• cultural practices and control measures; and,
• other characteristics of the pest affecting the probability of establishment.252
2.49 For each exposure group, the IRA also derives the probability of spread by comparing the
following factors in the source country and in the PRA area:
• Suitability of the natural and/or managed environment for natural spread of the pest;
• presence of natural barriers;

246 Australia's IRA, Part B, p. 27.
247 Australia's IRA, Part B, pp. 28-29.
248 Australia's IRA, Part B, pp. 17-19. See also Australia's first written submission, paras. 98-99.
New Zealand has contested these estimates. In New Zealand's view, the most likely value of 150 million apples
per year estimated by Australia "bears no relationship to the reality of likely Australian demand for
New Zealand apples or New Zealand's capacity to supply that demand". New Zealand's first written
submission, para. 4.196. According to New Zealand, "the lower value on Australia's range, 50 million apples
per annum, is in fact the 'most likely' value". New Zealand's second written submission, para. 2.360.
249 Australia's IRA, Part B, p. 17.
250 Ibid.
251 Australia's IRA, Part B, p. 29.
252 Australia's IRA, Part B, p. 30.

• potential for movement with commodities or conveyances;
• intended use of the commodity;
• potential vectors of the pest in the PRA area; and,
• potential natural enemies of the pest in the PRA area.253
2.50 For arthropod pests, including apple leafcur ling midge, the IRA used a slightly different
methodology to take into account that the midge is a flying insect, which has implications for spread,
distribution and establishment.254
2.51 After obtaining the "partial" probabilities for each exposure group, the IRA calculates the
overall annual probability of entry, establishment and spread of each pest.255
(d) Assessment of consequences
2.52 In assessing the consequences for potential pests imported on New Zealand apples, the IRA
conducts separate assessments for ea ch pest. These are carried out in two steps. First, the IRA
evaluates the "magnitude of impact of a pest on each of the direct and indirect criteria". 256 Second,
the IRA combines the "magnitude of impact obtained for each of the direct and indirect criteria ... to
give an overall (qualitative) estimate of the consequences of establishment or spread."257
2.53 Referring to ISPM No. 11, the IRA cites the following examples of criteria in assessing the
direct consequences of a pest.
• Criteria that could be considered for the di rect consequences on plant life or health:
known or potential host plants; types, amount and frequency of damage; crop losses, in
yield and quality; biotic factors (e.g., adapta bility and virulence of the pest) affecting
damage and losses; abiotic factors (e.g., climate) affecting damage and losses; rate of
spread; rate of reproduction; control measures (including existing measures), their
efficacy and cost; effect of existing production practices; and, environmental effects.
• Human life or health, as a factor that is not directly relevant, but may need to be
considered as part of a comprehensive risk analysis of the proposed import.
• Other aspects of environmental effects: reduc tion of keystone plant species; reduction of
plant species that are major components of ecosystems and endangered native plant
species; significant reduction, displacement or elimination of other plant species.
 258
2.54 The IRA defines "indirect criteria" or "indirect consequences" as "the costs resulting from
natural or human processes associated with the incursion of a pest." 259 Referring to ISPM No. 11, the
IRA cites the following examples.

253 Australia's IRA, Part B, p. 31.
254 Australia's IRA, Part B, pp. 24, 33-35; Australia's first written submission, para. 105.
255 Australia's IRA, Part B, pp. 31-33.
256 Australia's IRA, Part B, p. 39.
257 Ibid.
258 Australia's IRA, Part B, p. 36.
259 Ibid.

• Indirect consequences on eradication, control, etc.: changes to producer costs or input
demands, including control costs; feasibility and costs of eradication or containment;
capacity of the pest to act as a vector for othe r pests; and resources needed for additional
research and advice.
• Indirect consequences on domestic and international trade: effects on domestic and
export markets, including particular effect s on export market access; and changes to
domestic or foreign consumer demand for a product resulting from quality changes.
• Indirect consequences on the environment: e nvironmental and other undesired effects of
control measures; social and other effects; significant effects on plant communities;
significant effects on designated environmenta lly sensitive or protected areas; significant
change in ecological processes and the structur e, stability or processes of an ecosystem;
and costs of environmental restoration.
• Indirect consequences on communities.
260
2.55 The IRA estimates the effect of pests on the dir ect and indirect consequences criteria at four
levels: local; district; regional; and national. 261 The values derived were translated into qualitative
scores: unlikely to be discernible; of minor significance; significant; or highly significant. 262 After
obtaining an impact score for each direct and indirect criterion, the IRA Team determined whether the
overall consequences of a pest incursion were considered negligible, very low, low, moderate, high, or
extreme.263
(e) Unrestricted risk
2.56 The IRA presents an estimate of unrestricted ri sk by combining the probabilities of entry,
establishment and spread with the consequences ass essments for pests entering via apples. The IRA
defines unrestricted risk as the "unrestricted annual risk associated with ea ch pest if apples were
imported from New Zealand for 12 months without phytosanitary measures."264
2.57 Probabilities and consequences are combined usi ng the risk estimation matrix contained in
Table 11 of Part B of the IRA. 265 The vertical axis of this matrix refers to likelihood 266 of entry,
establishment and spread; the horizontal axis refers to consequences; and the cells of this matrix
describe the product of likelihood and consequences, or risk, in qualitative terms. For example, a high
likelihood of entry, estab lishment and spread combined with negligible consequences results in
negligible risk; a low probability of entry, establishment and spread combined with low consequences
result in very low risk; and a negligible likelihoo d of entry, establishment and spread combined with
extreme consequences also results in very low risk.
3. Risk management measures and Australia's appropriate level of protection
2.58 Following the assessment of the unrestricted risk for each pest of quarantine concern, the IRA
deals with pest risk management, which is "the process of identifying and implementing measures to
mitigate risks so as to achieve Australia's appropria te level of protection (ALOP), or tolerance for

260 Australia's IRA, Part B, p. 37.
261 Australia's IRA, Part B, p. 38. See also Australia's first written submission, para. 111.
262 Australia's IRA, Part B, pp. 38-39. See also Australia's first written submission, para. 112.
263 Australia's IRA, Part B, pp. 39-40. See also Australia's first written submission, para. 113.
264 Australia's IRA, Part B, p. 40.
265 Australia's IRA, Part B, pp. 4 and 41. See also Australia's first written submission, para. 114.
266 The terms "probability" and "likelihood" are used interchangeably.

loss, while ensuring that any negative effects on trade are minimised." 267 In determining whether risk
management measures are required, the IRA compares the unrestricted risk associated with each pest
to its ALOP. When the unrestricted risk of a pest was found to exceed the ALOP, the IRA concludes
that measures are required. The risk assessment process described above was also used by the IRA to
assess the effect of potential risk management measures.268
2.59 Australia's ALOP is expressed in the IRA as "providing a high level of sanitary or
phytosanitary protection aimed at reducing risk to a very low level, but not zero". 269 This ALOP is
not specific to apples imported from New Zealand; it is rather part of Australia's general biosecurity
policy.270 Using the risk estimation matrix, any combination of the likelihood of entry, establishment
and spread and consequences that resulted in "neg ligible" or "very low" risk was found to meet
Australia's ALOP and was considered acceptable. In such a situation, risk management measures
would not be justified. If, however, the unrestricted risk was "low", "moderate", "high" or "extreme",
it would be found to exceed Australia's ALOP and risk management measures were required.271
2.60 The specific risk management measures that are at issue in this dispute will be discussed in
detail below.
4. The IRA's semi-quantitative approach
2.61 As indicated above, the IRA uses a semi-quan titative approach to assess the risk associated
with the three pests at issue in th is dispute. For some of the othe r pests evaluated in the same IRA,
Australia applied a qualitative approach. The IRA states:
"Like most quarantine agencies, Biosecurity Australia generally undertakes pest risk
analyses using a qualitative approach where the likelihoods of various events are
considered and evaluated using descriptiv e terms that are linked to probability
intervals".272
2.62 However, "in responding to issues raised by some stakeholders", Biosecurity Australia used a
semi-quantitative approach for the 2004 draft version of the IRA, "to reinforce the transparency and
objectivity of the analysis wherever possible". 273 The final version of the IRA maintains this
approach, with some adjustments.
2.63 According to Australia, the semi-quantitative approach in the IRA combines a quantitative
estimation of the probability of entry, establishment and spread of a pest with a qualitative evaluation
of the consequences. 274 The IRA assigns a probability range and mathematical distribution on a per
apple basis for each importation step of the importation scenario and the different pathways of
distribution, utilization, waste generation and disposal of apples in Australia.
275 F o r s o m e i n p u t
values, a point value (e.g., a probability of 1, or 100 per cent) was used.

267 Australia's IRA, Part B, p. 41.
268 Ibid.
269 Australia's IRA, Part B, p. 4. See also, Australia's IRA, Part A, p. 3.
270 Import risk analysis handbook (Canberra, 2003) in Exhibit AUS-10 , p. 5. Australia's first written
submission, para. 20.
271 Australia's IRA, Part B, p. 41. See also, Austra lia's IRA, Part A, p. 7. Australia's first written
submission, para. 116.
272 Australia's IRA, Part B, p. 11.
273 Ibid.
274 Australia's first written submission, paras. 90 and 110.
275 Australia's first written submission, paras. 90-92; New Zealand's first written submission,
para 4.171.

2.64 The probabilities were then combined with the projected volume of imports of apples from
New Zealand in a computer programme called @Ris k (Palisade Corporation, 2007), to provide an
estimate of the overall probability of entry, establishment and spread for each pest.
276 A Monte Carlo
stochastic (random) simulation model was used w ith @Risk, based on random sampling from the set
of values.277 The @Risk software selected a number from within each probability range, taking into
account the shape of the range, to represent the likelihood of an event occurring; it did this thousands
of times to produce an output in the form of a distribution representing the annual probability of entry,
establishment and spread. The 5 per cent, median and 95 per cent values of the range were included
in the Final IRA Report.
278
2.65 In most cases, the IRA Team chose one of a set of probability ranges suggested in Biosecurity
Australia's 2001 draft Guidelines for import risk analysis 279, although the IRA Team was not
constrained by these pre-defined ranges.280 Table 12 of Part B of the IRA sets out the "[n]omenclature
for qualitative likelihoods, corresponding sem i-quantitative probability intervals". 281 For example,
this table shows that a "negligible" likelihood co rresponds to the qualitative descriptor "[t]he event
would almost certainly not occur", a probability interval of 0 to 10 -6 (zero to one in one million), and a
midpoint (if uniform distribution used) of 5 x 10 -7 (0.5 in one million, or one in two million).
Table 13 of Part B of the IRA provides "[a] matrix of rules for combining descriptive likelihoods".282
2.66 The IRA Team used uniform, triangular and Pert probability distributions. 283 A uniform
distribution has a minimum and a maximum value. Any value contained in the range between the
minimum and maximum values occurs with equal probability. The IRA states that a uniform
distribution was used where insufficient information w as available to determine the most likely value.
A triangular distribution has a minimum, maximum and a most likely value. It is not necessarily
symmetric, but can be skewed. According to the IR A, this distribution was used when information
(such as literature and expert opinion) on the most li kely value was available. The Pert distribution
also has three parameters: a minimum value, a ma ximum value, and a most likely value, but it has a
different, more rounded shape than a triangular distri bution. The Pert distribution was used in the
IRA to estimate the volume of apples likely to be imported.
 284
2.67 The IRA notes that the IRA Team "considered caref ully whether they were confident that the
range they had chosen would contain the actual valu e and that the chosen distribution reflected their
beliefs".285 The IRA additionally states that values were chosen "taking into account relevant
scientific information and expert opinion". 286 The IRA Team appears to have worked by consensus,
although Appendix 1 of the IRA on the involvement of the Bureau of Rural Sciences in the IRA
process states that the "issue of expressing dive rgent opinions was also discussed and different
approaches to handling divergence of opinion were canvassed".287

276 Australia's first written submission, paras. 90 and 106; New Zealand's first written submission,
paras. 4.168-4.169.
277 Australia's first written submission, para. 90 and footnote 96.
278 Australia's IRA, Part B, pp. 43-44; New Zealand's first written submission, para. 4.190;
Compilation of experts replies, paras. 787-789.
279 Guidelines for import risk analysis , Draft September 2001 (Canberra, Australia, Agriculture,
Fisheries and Forestry) in Exhibit AUS-17.
280 Australia's IRA, Part B, p. 42.
281 Australia's IRA, Part B, p. 43.
282 Ibid. Australia's first written submission, para. 115.
283 Australia's first written submission, paras. 93-94 and 99.
284 Australia's IRA, Part B, p. 42.
285 Ibid.
286 Australia's IRA, Part B, p. 44.
287 New Zealand's first written submission, para. 4.468; Australia's IRA, Part B, p. 332.

C. RELEVANT INTERNATIONAL STANDARDS, GUIDELINES AND RECOMMENDATIONS
2.68 A number of provisions of the SPS Agreement ma ke reference to "international standards,
guidelines and recommendations". Annex A:3(c) of the SPS Agreement indicates that for plant
health, the relevant international standards, guidelines and recommendations are those developed
under the auspices of the Secretariat of the Inte rnational Plant Protection Convention (IPPC) in
cooperation with regional organizations operating within the framework of the IPPC.
1. The IPPC
2.69 The IPPC is an international treaty to secure action to prevent the spread and introduction of
pests of plants and plant products, and to promote appropriate measures for their control. It is
governed by the Commission on Phytosanitary Measures (CPM) which adopts International Standards
for Phytosanitary Measures (ISPMs). The Conventi on has been deposited with the Director-General
of the Food and Agriculture Organization of the United Nations (FAO) since its initial adoption by the
Conference of FAO at its Sixth Session in 1951. The New Revised Text of the IPPC was approved in
1997. It entered into force on 2 October 2005.
288 Both Australia and New Zealand have signed and
ratified the International Plant Protection Convention and are Contracting Parties to the IPPC.
(a) IPPC standards on risk analysis: ISPM No. 2 and ISPM No. 11
2.70 In the context of their arguments on risk assessment, the Parties refer to ISPM No. 2,
Guidelines for pest risk analysis, adopted in 1995 and revised in 2007 and renamed as Framework for
pest risk analysis ; and ISPM No. 11 on pest risk analysis for quarantine pests, adopted in 2001 and
revised in 2003 and 2004.289
2.71 ISPM No. 2 provides general guidance for pest risk analysis (PRA), whereas ISPM No. 11
establishes guidelines for conducting a risk analysis for quarantine pests.290 The two standards are
related and present the same general framework for conducting a pest risk assessment, consisting of
three stages: (i) initiation; (ii) pest risk assessme nt; and (iii) pest risk management. ISPM No. 2
provides detailed guidance on PRA stage one (i nitiation), summarizes PRA stages two (risk
assessment) and three (risk management), and addresses issues generic to the entire PRA process.
ISPM No. 11 addresses stages two and three in more detail for quarantine pests.
2.72 The aim of stage one, the initiation stage, is to identify the pest(s) and pathways which are of
concern and should be considered for risk analysis in relation to the identified PRA area. Stage two
(risk assessment) begins with the categorization of individual pests to determine whether the criteria
for a quarantine pest are satisfied, and continues with an evaluation of the probability of pest entry,
establishment, and spread, and of their potentia l economic consequences. Stage three (risk
management) involves identifying management options for reducing the risks identified at stage two.
These are evaluated for efficacy, feasibility and impact in order to select those that are appropriate.
2.73 According to ISPM No. 11, the pest risk assess ment process can be broadly divided into three
interrelated steps: (i) pest categorization; ( ii) assessment of the probability of introduction and
spread; and, (iii) assessment of potential economic consequences (including environmental impact).

288 International Phytosanitary Portal (IPP), http s://www.ippc.int/IPP/En/default.jsp, consulted on
22 July 2009.
289 Framework for pest risk analysis , 2007 (ISPM No. 2, FAO, Rome); and Pest risk analysis for
quarantine pests, including analysis of environmental risks and living modified organisms , 2004 (ISPM No. 11,
FAO, Rome, submitted as Exhibit AUS-6).
290 The IPPC defines a quarantine pest as: "[a] pest of potential economic importance to the area
endangered thereby and not yet present there, or present but not widely distributed and being officially
controlled." Glossary of phytosanitary terms, 2009 (ISPM No. 5, FAO, Rome).

Pest introduction is composed of both entry and establishment. Assessing the probability of
introduction requires an analysis of each of the pathways with which a pest may be associated from its
origin to its establishment in the PRA area. I PSM 11 identifies the following broad issues which
should be considered when evaluating the proba bility of introduction and spread, and provides
detailed guidance under each heading:
(a) Probability of the pest being associated with the pathway at origin;
(b) probability of survival during transport or storage;
(c) probability of pest surviving existing pest management procedures;
(d) probability of transfer to a suitable host;
(e) probability of establishment;
(f) availability of suitable hosts, alternate hosts and vectors in the PRA area;
(g) suitability of environment;
(h) cultural practices and control measures;
(i) other characteristics of the pest affecting the probability of establishment; and,
(j) probability of spread after establishment.
2.74 ISPM No. 11 recognizes that the estimation of the probability of introduction of a pest and of
its economic consequences involves many uncertainti es since it is an extrapolation from the situation
where the pest occurs to the hypothetical situation in the PRA area. It emphasizes the importance of
documenting the areas of uncertainty and the degree of uncertainty in the assessment, and to indicate
where expert judgement has been used, since this is necessary for transparency and may also be useful
for identifying and prioritizing research needs.
2.75 The conclusions from pest risk assessment are us ed to decide whether risk management is
required and the strength of measures to be used. ISPM No. 11 recognizes that zero-risk is not a
reasonable option. The guiding principle for risk management should be to manage risk to achieve
the required degree of safety that can be justified and is feasible within the limits of available options
and resources. According to this standard, pest risk management (in the analytical sense) is the
process of identifying ways to react to a perceive d risk, evaluating their efficacy, and identifying the
most appropriate options. The uncertainty noted in the assessments of economic consequences and
probability of introduction should al so be considered and included in the selection of a pest
management option. The ISPM lists examples of me asures classified into broad categories that relate
to the pest status of the pathway in the country of origin. These include measures:
(a) Applied to the consignment;
(b) applied to prevent or reduce original infestation in the crop;
(c) to ensure the area or place or site of production or crop is free from the pest;
(d) for other types of pathways (such as to curb natural spread);
(e) within the importing country;

(f) concerning the prohibition of commodities; and,
(g) phytosanitary certificates and other compliance measures.
2.76 According to ISPM No. 11, the whole PRA proc ess from initiation to pest risk management
should be sufficiently documented so that when a review or a dispute arises, the sources of
information and rationale used in reaching the management decision can be clearly demonstrated.
(b) IPPC standards on pest free areas and areas of low pest prevalence: ISPM No. 4, ISPM
No. 10 and ISPM No. 22
2.77 In the context of discussions on pest free areas and areas of low pest prevalence, the Parties
have referred to: ISPM No. 4, Requirements for the establis hment of pest free areas ; ISPM No. 10,
Requirements for the establishment of pest free pl aces of production and pest free production sites ;
and ISPM No. 22, Requirements for the establishment of areas of low pest prevalence.291
2.78 The IPPC defines a "pest free area" (PFA) as "[a]n area in which a specific pest does not
occur as demonstrated by scientific evidence and in which, where appropriate, this condition is being
officially maintained".292 According to ISPM No. 4, the establishment and use of a PFA by a national
plant protection organization provides for the expor t of plants, plant products and other regulated
articles from the exporting country to the importing country without the need for application of
additional phytosanitary measures when certain requireme nts are met. Thus, the pest free status of an
area may be used as the basis for the phytosanitary certification of plants, plant products and other
regulated articles with respect to the stated pest(s). It also provides, as an element in pest risk
assessment, the confirmation on a scientific basis of the absence of a stated p est from an area. The
PFA is then an element in the justification of phytosanitary measures taken by an importing country to
protect an endangered area.
2.79 Although the term "pest free areas" encompasses a whole range of types (from an entire
country which is pest free to a small area which is p est free but situated in a country where that pest is
prevalent), it has been found to be convenient to discuss the requirements of PFAs by defining three
categories: an entire country; an uninfested part of a country in which a limited infested area is
present; an uninfested part of a country situated with in a generally infested area. In each of these
cases, the PFA may, as appropriate, concern all or part of several countries.
2.80 A pest free place of production is defined as a "[p]lace of production in which a specific pest
does not occur as demonstrated by scientific evidence and in which, where appropriate, this condition
is being officially maintained for a defined period". 293 A pest free production site is "[a] defined
portion of a place of production in which a specific pest does not occur as demonstrated by scientific
evidence and in which, where appropriate, this cond ition is being officially maintained for a defined
period and that is managed as a separate unit in the same way as a pest free place of production".294
2.81 ISPM No. 10 uses the concept of "pest freedom " to allow exporting countries to provide
assurance to importing countries that plants, plant products and other regulated articles are free from a

291 Requirements for the establishment of pest free areas, 1996 (ISPM No. 4, FAO, Rome);
Requirements for the establishment of pest free places of production and pest free production sites, 1999 (ISPM
No. 10, FAO, Rome); Requirements for the establishment of areas of low pest prevalence, 2005 (ISPM No. 22,
FAO, Rome). The descriptions of each standard in th is section closely follow the "Outline of Requirements"
which appears at the beginning of each ISPM.
292 Glossary of phytosanitary terms , 2009 (ISPM No. 5, FAO, Rome, 2008 version of ISPM No. 5
submitted as Exhibit AUS-164), p. 12.
293 Ibid.
294 Ibid.

specific pest or pests and meet the phytosanita ry requirements of the importing country when
imported from a pest free place of production. In circumstances where a defined portion of a place of
production is managed as a separate unit and can be main tained pest free, it may be regarded as a pest
free production site. The use of pest free places of production or pest free production sites is
dependent on the use of criteria concerning the biology of the pest, the characteristics of the place of
production, the operational capabilities of the producer , and the requirements and responsibilities of
the national plant protection organization.
2.82 Similar to the requirements for PFAs stated in ISPM No. 4, requirements for the
establishment and maintenance of a pest free place of production or a pest free production site as a
phytosanitary measure by the national plant protection organization set out in ISPM No. 10 include:
• Systems to establish pest freedom;
• systems to maintain pest freedom;
• verification that pest freedom has been attained or maintained; and,
• product identity, consignment integrity and phytosanitary security.
Where necessary, a pest free place of production or a pest free production site also includes the
establishment and maintenance of an appropriate buffer zone.
2.83 Administrative activities required to support a pest free place of production or pest free
production site involve documentation of the syst em and the maintenance of adequate records
concerning the measures taken. Review and a udit procedures undertaken by the national plant
protection organization are essential to support assuran ce of pest freedom and for system appraisal.
Bilateral agreements or arrangements may also be needed.
2.84 The concept of the pest free place of production is distinct from that of the PFA. The PFA
has the same objective as the pest free place of production but is implemented in a different way.
Every distinction between a pest free place of pr oduction and a PFA applies equally to a pest free
production site. A PFA is much larger than a place of production, includes many places of production
and may extend to a whole country or parts of several countries. A PFA may be isolated by a natural
barrier or an appropriate buffer zone. A PFA is generally maintained over many years without
interruption, whereas the status of a pest free place of production may be maintained for only one or a
few growing seasons. A PFA is managed as a whole, by the national plant protection organization
(NPPO) of the exporting country, i.e., the official se rvice established by the government to discharge
the functions specified by the IPPC. A pest free place of production is managed individually by the
producer, under the supervision and responsibility of the NPPO. If the pest is found in a PFA, the
status of the whole area is called into question. If it is found in a pest free place of production, that
place loses its status but other places of production in the area operating the same system are not
directly affected. These distinctions may not alwa ys apply in particular cases. A place of production
lying in a PFA may satisfy, by that fact, the requi rements for a pest free place of production, although
the importing country may require verification.
2.85 According to ISPM No. 22, the establishment of an area of low pest prevalence is a pest
management option used to maintain or reduce a pe st population below a specified level in an area.
An area of low pest prevalence may be used to facilit ate exports or to limit pest impact in the area. A
specified low pest level should be determined ta king into consideration the overall operational and
economic feasibility of establishing a programme to meet or maintain this level, and the objective for
which an ALPP is to be established.

2.86 In determining an area of low pest prevalence, a national plant protection organization should
describe the area involved. Areas of low pest pr evalence may be established and maintained for
regulated pests or for pests regulated by an importing country only.
2.87 Surveillance of the relevant pest should be conducted according to appropriate protocols.
Additional phytosanitary procedures may be required to establish and maintain an area of low pest
prevalence. Once established, the area of low pest prevalence should be maintained by the
continuation of the measures used for its est ablishment and the necessary documentation and
verification procedures. In most cases an offi cial operational plan which specifies the required
phytosanitary procedures is needed. If there is a change in the status of the area of low pest
prevalence, a corrective action plan should be initiated.
(c) Other ISPMs
2.88 The Parties also refer to ISPM No. 1, Phytosan itary principles for the protection of plants and
the application of phytosanitary measures in internat ional trade; ISPM No. 14, The use of integrated
measures in a systems approach for pest risk management; ISPM No. 20, Guidelines for a
phytosanitary import regulatory system; ISPM No. 23, Guidelines for inspection; and ISPM No. 31,
Methodologies for sampling of consignments. ISPM No. 5 contains the Glossary of phytosanitary
terms.295
2.89 In addition, the Parties refer to the IPPC's Participant Manual for Pest Risk Analysis
Training.296 The manual was developed as a basic introduction to pest risk assessment for biological
scientists, plant pest risk assessors, plant pest risk analysts and phytosanitary policy makers working
in the field of international phytosanitary regula tion. The material in the manual explains the
international context for pest risk assessment a nd outlines the pertinent international standards and
resources available for pest risk assessment, pest ri sk management and pest risk communication. The
Manual itself, however, is not an international standard, guideline or recommendation.
D. MEASURES AT ISSUE
1. The measures at issue are limited to 17 specific measures
2.90 As explained above297, on 6 June 2008 the Panel issued a preliminary ruling 298 in response to
Australia's request regarding the consistency of Ne w Zealand's panel request with Article 6.2 of the
DSU. In its ruling, the Panel reviewed inter alia whether New Zealand's panel request had identified
the measures at issue in a manner consistent with the requirements of Article 6.2 of the DSU.
The Panel found that "its terms of reference are li mited to the 17 measures specifically identified by
New Zealand in its panel request [by bullet points] and do not encompass other measures that may be

295 Phytosanitary principles for the protection of plants and the application of phytosanitary measures
in international trade, 2006 (ISPM No. 1, FAO, Rome); Glossary of phytosanitary terms , 2009 (ISPM No. 5,
FAO, Rome, 2008 version of ISPM No. 5 submitted as Exhibit AUS-164); The use of integrated measures in a
systems approach for pe st risk management, 2002 (ISPM No. 14, FAO, Rome, submitted as Exhibit AUS-14);
Guidelines for a phytosanitary import regulatory system, 2004 (ISPM No. 20, FAO, Rome, submitted as Exhibit
AUS-170); Guidelines for inspection, 2005 (ISPM No. 23, FAO, Rome); Methodologies for sampling of
consignments, 2008 (ISPM No. 31, FAO, Rome, submitted as Exhibit AUS-30).
296 Pest Risk Analysis Training Participant Manual, 2007 (FAO, Rome). Page 37 of this document has
been submitted as Exhibit NZ-95; Pp. 1, 36 and 37 as Exhibit AUS-16.
297 See para. 1.10 above.
298 As explained above (see para. 1.10 above), the pr eliminary ruling was made publicly available on
23 June 2008. Australia – Apples, Communication from the Chairman of th e Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report.

contained in Australia's FIRA, but which were not identified with sufficient precision in the panel
request."
299
2. The 17 specific measures and their relationship to the three pests at issue
2.91 The 17 specific measures identified by bullet point s in New Zealand's panel request fall into
four categories according to their relationship to the three pests relevant for this dispute. For ease of
reference, the Panel has chosen to number these 17 measures consecutively, in the order that they
appear in the bullet point list in New Zealand's panel request:
(a) Measures 1-8, addressed in the first eight bullet points of New Zealand's panel
request, relate to "fire blight":300
(i) "The requirement that apples be sourced from areas free from fire blight
disease symptoms."301
(ii) "The requirement that orchards/blocks be inspected for fire blight disease
symptoms, including that they be inspect ed at an inspection intensity that
would, at a 95% confidence level, detect visual symptoms if shown by 1% of
the trees, and that such inspections take place between 4 to 7 weeks after
flowering."
302
(iii) "The requirement that an orchard/block inspection methodology be
developed and approved that addresses i ssues such as visibility of symptoms
in the tops of trees, the inspection tim e needed and the number of trees to be
inspected to meet the efficacy level, and training and certification of
inspectors."
303
(iv) "The requirement that an orchard/bl ock be suspended for the season on the
basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of fire
blight."304
(v) "The requirement that an orchard/bl ock be suspended for the season on the
basis of detection of any visual symptoms of fire blight."305
(vi) "The requirement that apples be subj ect to disinfection treatment in the
packing house."306
(vii) "The requirement that all grading and packing equipment that comes in direct
contact with apples be cleaned and disinfected (using an approved
disinfectant) immediately before each Australian packing run."
307

299 Australia – Apples , Communication from the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 9.
300 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1.
301 Ibid.
302 Ibid.
303 Ibid.
304 Ibid.
305 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2.
306 Ibid.

(viii) "The requirement that packing houses registered for export of apples process
only fruit sourced from registered orchards."308
(b) Measures 9-13, addressed in the subsequent five bullet points of New Zealand's panel
request, relate to "European canker":309
(ix) "The requirement that apples be sour ced from export orchards/blocks free of
European canker (pest free places of production)."310
(x) "The requirement that all trees in expo rt orchards/blocks be inspected for
symptoms of European canker, includi ng that orchards/blocks in areas less
conducive for disease are inspected for symptoms by walking down every
row and visually examining all trees on both sides of each row, and that areas
more conducive to the disease are in spected using the same procedure
combined with inspection of the upper limbs of each tree using ladders (if
needed), and that such inspections take place after leaf fall and before winter
pruning."311
(xi) "The requirement that all new planti ng stock be intensively examined and
treated for European canker."312
(xii) "The requirement that an orchard/bl ock be suspended for the season on the
basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of
European canker."313
(xiii) "The requirement that exports from an orchard/block be suspended for the
coming season on the basis of detec tion of European canker and that
reinstatement would require eradi cation of the disease, confirmed by
inspection."314
(c) Measure 14, addressed in the subsequent bu llet point of New Zealand's panel request,
relates to "apple leafcurling midge":315
(xiv) "The requirements of inspection and tr eatment for apple leafcurling midge,
including:
the option of inspection of each lot on the basis of a 3000
unit sample selected at random across the whole lot for
apple leafcurling midge, symptoms of quarantineable
diseases, quarantineable pests, arthropods, trash and weed
seeds, with detection of any live quarantineable arthropod
resulting in appropriate treatment or rejection for export;

307 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2.
308 Ibid.
309 Ibid.
310 Ibid.
311 Ibid.
312 Ibid.
313 Ibid.
314 Ibid.
315 Ibid.

the option of inspection of each lot on the basis of a 600
unit sample selected at random across the whole lot for
symptoms of quarantineable diseases, trash and weed seeds,
plus mandatory appropriate treatment of all lots."
 316
(d) Measures 15-17, addressed in the last thr ee bullet points of New Zealand's panel
request, were described by New Zealand as "general"317 measures:
(xv) "The requirement that Australian Quar antine and Inspection Service officers
be involved in orchard inspections for European canker and fire blight, in
direct verification of packing house procedures, and in fruit inspection and
treatment."
318
(xvi) "The requirement that New Zealand ensure that all orchards registered for
export to Australia operate under standard commercial practices."319
(xvii) "The requirement that packing hou ses provide details of the layout of
premises."320
2.92 In its first written submission, New Zealand expl ains that Measures 15-17, i.e. the "general"
measures are "applicable to all three pests (fire blight, European canker and apple leafcurling
midge)."321 Australia agrees, and notes that "these [gen eral] requirements are also relevant to the
other pests examined in the Final IRA Report which [however] are not at issue in this dispute."322
2.93 In their responses to the Panel's questions after the first substantive meeting, the Parties
confirm that they consider that each of Measures 15, 16 and 17 as a whole relates to all three pests at
issue.323 At the same time, the Parties adopt a more nuanced approach as regards how the various
elements of Measure 15 relate to those three pests. New Zealand argues that some of the elements of
Measure 15 relate to only some and not all of the three pests:
"Australia indicated that [M]easure 15 is an cillary to the inspections for fire blight
and European canker, and the orchard in spection component of the measure only
relates to those two diseases. New Zealand understands that 'direct verification of
packing house procedures' primarily relates to chlorine dipping and disinfection of
machinery as part of the fire blight management system but, as fruit inspection is also
carried out in the packing house, 'direct verification of packing house procedures'
may also therefore apply to all three pest s. New Zealand understands that 'fruit
inspection' applies to all three pests and to any other quarantine pest that may be
present (see measure 14). New Zealand assumes that 'treatment' refers only to any
fumigation that may be necessary for ALCM as a result of detecting ALCM during
the 3000 fruit inspection or routinely after the 600 fruit inspection. However,

316 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2.
317 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
318 Ibid.
319 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2.
320 Ibid.
321 New Zealand's first written submission, para. 3.82.
322 Australia's reply to Panel question 45 after the first substantive meeting.
323 New Zealand's reply to Panel question 44 after the first substantive meeting and Australia's reply to
Panel question 45 after the first substantive meeting.

chlorine dipping is also a 'treatment' and New Zealand notes the ambiguity around the
use of the term in this instance."324
2.94 Likewise, Australia responds to the Panel that the various elements of Measure 15 are not
necessarily related to all three pests at issue, alt hough Australia establishes slightly different linkages
between the various elements of Measure 15 and the pests at issue:
"[Measure 15] is ... aimed at verifying and operationalising the principal risk
reduction measures set out in the Final IRA Report. In particular, the AQIS audits of
orchard inspections and packing house proce dures serve to verify that the principal
orchard inspection and disinfection measures for fire blight and European canker are
appropriately fulfilled. Verification of fru it inspection processes is aimed at ensuring
the appropriate level of efficacy is ach ieved for the principal fruit inspection
requirements for ALCM, as well as the more general fruit inspection
requirements."
325
2.95 Although the Parties might have different views on the exact relationship of some of the
elements of Measure 15 to some of the three pests at issue, the Panel does not consider it necessary to
elaborate on this matter. The Parties agree th at, through its various elements, Measure 15 has a
linkage to all three pests, and that – similar to Measures 16 and 17 – Measure 15 as a whole relates to
all three pests at issue.
3. The Parties' agreement on Measure 12
2.96 As explained above
326, on 19 December 2008 the Parties advised the Panel that "they have
reached agreement on the requirement listed as the twelfth bullet point in New Zealand's panel
request"327, i.e. Measure 12. Further to the Parties' request 328, the Panel records this agreement as
follows:
"The Panel noted Australia's submission th at it does not impose '[t]he requirement
that an orchard/block be suspended for th e season on the basis that any evidence of
pruning or other activities carried out be fore the inspection could constitute an
attempt to remove or hide symptoms of Eu ropean canker' referred to in the twelfth
bullet point of New Zealand's panel request . The Panel also noted New Zealand's
advice that, based on Australia's confirmation that it does not impose such a
requirement, it will not pursue its claim in relation to the twelfth bullet point of its
panel request. In view of this, the Panel concluded that there was no need for it to
rule on this aspect of New Zealand's claim."
329
4. The remaining 16 specific measures at issue spelt out in the IRA
2.97 The Parties agree that the remaining 16 specific measures at issue, namely Measures 1-11 and
13-17, are spelt out in the IRA. In its first wr itten submission, New Zealand links each of the
measures to a specific part of the IRA. 330 In turn, Australia refers to "the reasonable measures

324 New Zealand's reply to Panel question 44 after the first substantive meeting.
325 Australia's reply to Panel question 45 after the first substantive meeting. See also, Australia's replies
to Panel questions after the first substantive meeting, Annex A.
326 See para. 1.20 above.
327 Joint Communication from New Zealand and Australia to the Panel, 19 December 2008.
328 Ibid.
329 Ibid.
330 New Zealand's first written submission, para. 3.83.

recommended in the Final IRA Report"
331, and argues that "[t]he Final IRA Report provides the basis
for Australia's measures".332 Likewise, the Panel's preliminary ruli ng refers to "the items contained in
Australia's Final import risk analysis report for apples from New Zealand (FIRA) and identified by
bullet points in New Zealand's request".333
2.98 In addition to the IRA, New Zealand's pa nel request mentions another instrument,
the Biosecurity Australia Policy Memorandum 2007/ 07 of 27 March 2007. This Biosecurity
memorandum determines that the "[i]mportation of apples [from New Zealand] can be permitted
subject to the Quarantine Act 1908, and the application of phytosanitary measures as specified in the
Final import risk analysis report for apples from New Zealand, November 2006."334
2.99 Further, New Zealand argues that:
"According to the IRA the measures [at issu e] are to be implemented in practice
through a Work Plan and 'Standard Oper ating Procedures'. Under the IRA these
instruments are required to be developed by New Zealand and approved by Australia
before trade can take place."335
2.100 Indeed, at the parts referenced by New Zealand, the IRA provides:
"It is a requirement that MAFNZ or the registered agency prepare a documented
standard operating procedure (SOP) or ma nual that describes the phytosanitary
procedures for each of the pests of quaran tine concern for Australia and the various
responsibilities of all parties involved in meeting this requirement. The operating
procedure must be approved by AQIS befo re exports commence and will be subject
to audit by AQIS.
A draft work plan will be develope d between DAFF and MAFNZ following the
finalisation of this IRA.
The work plan procedures may include, but are not limited to operational details on:
• inspection and sampling methodology
• pre-clearance arrangements
• maintenance and supply of records
• storage segregation and identification of lots, and
• dealing with rejected lots.
• details on standard commercial practice."336
2.101 In response to a question by the Panel following the first substantive meeting,
in September 2008 both Parties confirm that they ha ve not been able to agree on the SOP and the

331 Australia's opening oral statement at the first su bstantive meeting of the Panel with the Parties,
para. 16.
332 Australia's opening oral statement at the first substantive meeting of the Panel with the Parties, p. 3.
333 Australia – Apples , Communication from the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 13(a).
334 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1. See also, New Zealand's first written submission,
para. 3.81.
335 New Zealand's first written submission, para. 3.81 (footnote omitted). See also Australia's reply to
Panel question 1 after the first substantive meeting.
336 Australia's IRA, Part B, pp. 313-314.

work plan.337 The Panel has not received any indication of such an agreement having been concluded
since then.
2.102 In any event, the Parties agree that it is the IRA, not the SOP or the work plan, that spells out
the measures at issue in this dispute. The refere nce in New Zealand's panel request to Biosecurity
Australia Policy Memorandum 2007/07 of 27 March 200 7 explicitly refers to "measures ... specified
in the Final import risk analysis report for apples from New Zealand, November 2006."338 As regards
the SOP and the work plan, New Zealand explains that one of the reasons for it not being able to agree
on the SOP and the work plan was that "in the cour se of [its] discussions [with Australia] concerning
the SOP and the work plan it became clear that this process would not result in any significant
departure from or amelioration of the requirements of the IRA." 339 New Zealand adds that "[g]iven
that the measures at issue in this dispute … mirro r those set out in the IRA, and that the SOP and
work plan must conform with the IRA … the IRA se ts out the exact conditions of New Zealand apple
exports to Australia." 340 Australia notes "that the SOP and work plan do not form part of the
New Zealand's panel request and are therefore outside the Panel's terms of reference."341
5. Disagreements on some of the 16 specific measures at issue
2.103 While the Parties agree that the 16 remaining sp ecific measures at issue are spelt out in the
IRA, they disagree on the actual nature of some of those 16 measures. From the outset of this dispute
Australia argues that "New Zealand's description of [Measures 1, 4, 11 and 15] … is flawed" 342, which
New Zealand has contested throughout the proceedi ngs. The Panel turns to these contested measures
in the order of the numbers assigned to them.
(a) Measure 1
2.104 As noted above, New Zealand's panel request id entifies Measure 1 as "[t]he requirement that
apples be sourced from areas free from fire blight disease symptoms." 343 In its first written
submission, New Zealand references page 106 of Part B of the IRA in regard to this measure. 344
This page of the IRA contains a part entitled "Areas free from disease symptoms", and provides inter
alia:
"Areas free from disease symptoms, as distinct from pest free areas, could be
established and maintained following the guidelines described in ISPM No. 4:
Requirements for the establishment of pest free areas (FAO, 1996b), ISPM No. 10:
Requirements for the establishment of pest free places of production and pest free
production sites (FAO, 1999) and ISPM No. 22: Requirements for the establishment
of areas of low pest prevalence (FAO, 2005). An area free from disease symptoms
could be a place of production (an orchard managed as a single unit) or a production

337 Australia's reply to Panel questions 27-31 after the first substantive meeting, and New Zealand's
reply to Panel questions 27-32 after the first substantive meeting.
338 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1. See also, New Zealand's first written submission,
para. 3.81.
339 New Zealand's reply to Panel question 31 after the first substantive meeting.
340 New Zealand's reply to Panel question 29 after the first substantive meeting.
341 Australia's reply to Panel question 27 after the first substantive meeting.
342 Australia's first written submission, p. 67.
343 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1.
344 New Zealand's first written submission, para. 3. 83, footnote 78. New Zealand's reply to Panel
question 35 after the first substantive meeting.

site (a designated block within an orchard), for which freedom from fire blight
symptoms is established, maintained and verified by MAFNZ.
The literature on infestation and infection of fruit with E. amylovora has been
reviewed extensively in the section on Im p2 above. Endophytic infection of fruit has
been recorded in immature fruit sourced from infected orchards (van der Zwet et al.,
1990), but it has not been recorded in orchards free from symptoms of fire blight in
New Zealand. Endophytic populations of E. amylovora were not recovered from
mature fruit at harvest (Dueck, 1974a; Roberts et al., 1989; Roberts, 2002). On the
basis of the work reviewed in Imp2 the IRA team concluded that endophytic infection
was not a risk factor for fruit sourced from orchards free from symptoms.
In assessing the risk of calyx and surface inf estation the IRA team took note of the
literature on infestation rates for apples sourced from orchards with few or no
symptoms. For example, studies conducted in New Zealand by Clark et al. (1993),
using a specific DNA hybridisation method with a detection level of about 10
2 cfu per
calyx, 60,000 immature apple fruit were test ed from orchards free of fire blight
symptoms, but E. amylovora was not detected. Such fruit, when mature would not
have bacteria present in the calyces but may carry E. amylovora on the surface if the
disease has been active in the orchard near to harvest time. There are many other
studies that show that infestation of fruit is undetectable or the number of fruit
infested is very small when fruit is sour ced from orchards with few or no visible
symptoms of fire blight (see Imp2 above). The IRA team concluded that 'freedom
from visible symptoms' provided a firm b asis for risk reduction by substantially
reducing the likelihood that picked fruit is infected or infested."
345
2.105 The IRA continues on the same page by turning to Measure 2:346
"The IRA team acknowledged that it would be extremely difficult to confirm absolute
freedom from symptoms using visual inspection of orchards. The IRA team
concluded that a practical inspection regime should be specified as free from visual
symptoms at an inspection intensity that would, at a 95% confidence level, detect
visual symptoms if shown by 1% of th e trees. This inspection should take place
between 4 to 7 weeks after flowering wh en conditions for fire blight disease
development are likely to be optimal."347
2.106 The subsequent page of the IRA addresses the re sulting risk reduction, in particular in the
context of importation steps 2, 3a and 5 348, and finds that the resulting "restricted annual likelihood of
entry, establishment and spread [would] remain ... at 'very low' range". 349 The IRA explains that
"[w]hen these values are combined with the estimate of consequences of 'high' for fire blight, the
restricted risk for this pest [would] ... be 'l ow', which [would] still exceed ... Australia's ALOP." 350

345 Australia's IRA, Part B, p. 106.
346 In its panel request, New Zealand describes Measure 2 as "[t]he requirement that orchards/blocks be
inspected for fire blight disease symptoms, including that they be inspected at an inspection intensity that would,
at a 95% confidence level, detect visu al symptoms if shown by 1% of the trees, and that such inspections take
place between 4 to 7 weeks after flowering." Australia – Apples , Request for the Establishment of a Panel by
New Zealand (WT/DS367/5), 7 December 2007, attached as Annex A-1 to this report, p. 1.
347 Australia's IRA, Part B, p. 106.
348 Australia's IRA, Part B, p. 107.
349 Ibid.
350 Ibid.

The IRA concludes that "[t]he use of areas free from visible fire blight symptoms for sourcing export
apples would not be a sufficient risk management measure by itself."351
2.107 In its first written submission, Australia argu es that "New Zealand has mischaracterized"
Measure 1.352 Australia notes that New Zealand's first written submission refers to Measure 1 also as
a requirement of "area freedom". 353 However, Australia argues, the concept of "'area freedom' is
analogous to the pest free area concept in ISPM No. 4 – that is, 'an area in which a specific pest does
not occur as demonstrated by scien tific evidence and in which, wher e appropriate, this condition is
being officially maintained'. 354"355 Australia points out that "the Final IRA Report notes 356 [that] the
concept of an 'area free of disease symptoms', is [a lso] distinct from 'pest free areas' and the similar
'pest free places of production' (ISPM No. 10)."357 Australia adds that "ISPM No. 10 is a sub-category
of ISPM No. 4."358
2.108 Australia argues further that "[its] precise requirement is that New Zealand apples be sourced
from areas free from visible symptoms of fire blight during the period between 4 to 7 weeks after
flowering."
359 Australia adds that "[it] is prep ared to tolerate the existence of E. amylovora in the
areas from which New Zealand apples are sourced up to the period where the disease symptoms are
visible in the period between 4 to 7 weeks after flowering." 360 Australia contends that "[t]his
requirement reflects the concept of 'low pest prevalence'"361, spelt out in ISPM No. 22 as follows:
"The establishment of an area of low pest prevalence (ALPP) is a pest management
option used to maintain or reduce a pest population below a specified level in an area.
An ALPP may be used to facilitate exports or to limit pest impact in the area.362"363
Australia requests the Panel to "bear in mind the dis tinction between an orchard that is 'free' of the
bacteria, E. amylovora, and an orchard that is merely 'free' of fire blight symptoms."364
2.109 In response to a question by the Panel followi ng the first substantive meeting, New Zealand
contends that "[it] has correctly characterised the relevant measure at issue (Measure 1) in its Panel
request as the requirement that apples be sourced from areas free from fire blight disease
symptoms."
365 New Zealand also confirms that "[b]y 'area freedom', [it] refers [also] to
Measure 1"366, and stated that Measure 1, "which requir es that apples be sourced from areas free from
fire blight disease symptoms" 367, "does not equate to freedom from the pathogen, E. amylovora."368
At the same time, New Zealand points out that "there is no reference in the IRA to 'tolerance' of the

351 Australia's IRA, Part B, p. 107.
352 Australia's first written submission, p. 69.
353 Australia's first written submission, para. 157, fo otnote 140, referencing New Zealand's first written
submission, paras. 4.33 and 4.39.
354 (footnote original) ISPM No. 4, p. 37.
355 Australia's first written submission, para. 157.
356 (footnote original) Final IRA Report, Part B, p. 106.
357 Australia's first written submission, para. 157.
358 Australia's reply to Panel question 36 after the first substantive meeting.
359 Australia's first written submission, para. 158.
360 Australia's first written submission, para. 159.
361 Australia's first written submission, para. 158.
362 (footnote original) ISPM No. 22, p. 265.
363 Australia's first written submission, para. 158.
364 Australia's first written submission, para. 159.
365 New Zealand's reply to Panel question 33 after the first substantive meeting.
366 New Zealand's reply to Panel question 34 after the first substantive meeting.
367 Ibid.
368 Ibid.

presence of E. amylovora and [it] rejects Australia's post facto attempt in its First Written Submission
to link Measures 1 and 2 to the concept of low pest prevalence."
369
2.110 In its response to a question from the Panel, Ne w Zealand also argues that the requirement for
"areas free from disease symptoms under Measure 1 (fire blight) is similar to the requirement for "pest
free place of production" under Measure 9 (European canker). 370 The reason for this, according to
New Zealand, is that:
"Both [Measures 1 and 9] require visual inspections for symptoms of the disease and
result in exclusion of an orchard in the event of the detection of any symptoms.
The inspection requirement reflects the fact that a detection of disease symptoms is
the logical and practical way to detect the presence of the disease."
371
2.111 New Zealand adds that Measures 1 and 9 "shoul d be distinguished from the term 'pest free
area', as defined in IPSM No 4" because "[a]ppli cation of a measure requiring that product be sourced
from a 'pest free area' would require systems to be put in place by MAFNZ to establish, maintain and
verify that the pathogens E. amylovora or N. galligena did not occur in that area."372
2.112 Conversely, in its response to a question fro m the Panel following the first substantive
meeting, Australia distinguishes Measures 1 and 9, ar guing that its "measures for fire blight are based
on ISPM No. 22 and its measures for European canker are based on ISPM No. 10." 373 Australia adds
that while "[i]n respect of fire blight, [it] re quires an 'area of low pest prevalence' ... [(and]
New Zealand occasionally uses the term 'area freedom' to refer to this requirement)" 374, "[i]n respect
of European canker, [it] requires 'pest free places of production'." 375 Australia reiterates its earlier
distinction between pest freedom and symptom freedom:
"The concepts of 'pest free areas' and 'p est free places of production' both relate to
freedom of a particular geographic location from a pest in its entirety. By contrast,
an 'area of low pest prevalence' assumes that a certain level of the pest may be present
in the geographic area – but that it exists at a specified level. In the case of
Australia's fire blight measure, the area of low pest prevalence is determined by the
absence of any symptoms detected during visual inspection."
376
2.113 The Panel does not consider it necessary to establish which ISPM Measure 1 might
correspond to or should be distinguished from. No r is it necessary for the Pa nel to assess whether the
Parties have been using the term "area freedom " correctly when describing Measure 1 in their
submissions, or whether, as New Zealand argues, Measures 1 and 9 are similar.
2.114 The issue before the Panel is whether the essen ce of Measure 1 is a requirement for freedom
from E. amylovora, or freedom from the symptoms of fire blight, and whether New Zealand describes
this correctly in its panel request.

369 New Zealand's reply to Panel question 33 after the first substantive meeting.
370 New Zealand's reply to Panel question 35 after the first substantive meeting. In its panel request,
New Zealand describes Measure 9 as "[t]he requirement that apples be sourced from export orchards/blocks free
of European canker (pest fre e places of production)." Australia – Apples , Request for the Establishment of a
Panel by New Zealand (WT/DS367/5), attached as Annex A-1 to this report, 7 December 2007, p. 2.
371 New Zealand's reply to Panel question 35 after the first substantive meeting.
372 Ibid.
373 Australia's reply to Panel question 36 after the first substantive meeting (footnotes omitted).
374 Ibid. (footnotes omitted).
375 Ibid. (footnotes omitted).
376 Ibid. (footnotes omitted).

2.115 As to the first aspect of this issue, there can be no doubt that the IRA requires freedom from
symptoms, not freedom from E. amylovora. In fact, at the part referenced by New Zealand, the IRA
describes Measure 1 as a requirement for "areas/an area free from disease symptoms" 377, and defines
such an area as "a place of production (an orchard managed as a single unit) or a production site (a
designated block within an orchard), for which free dom from fire blight symptoms is established,
maintained and verified by MAFNZ."378 Other references in the IRA to the same requirement are also
explicit about symptom freedom. 379 The IRA's description of Measure 2, immediately following the
description of Measure 1, also makes clear that the inspection requirement related to Measure 1
involves an inspection for symptom freedom, not pest freedom.380
2.116 The Panel notes that the IRA distinguishes sy mptoms from pests. In the context of the
definition of the term "symptomless", the IRA equate s symptoms to "any visible indication of disease
by reaction of the host, e.g. canker, leaf spot, wilt."381 In turn, the IRA defines "pest" as:
"The collective term used for insect pests, plant diseases, viruses, bacteria and fungi
that could harm plants. The formal de finition used is the one provided in the
International Plant Protection Convention (IPPC ): any species, strain, or biotype of
plant, animal or pathogenic agent injurious to plants of plant products."382
2.117 The Parties accept that symptom freedom and pe st freedom are distinct concepts in the
context of fire blight.383 The experts also confirm the validity a nd importance of this distinction. The
experts explain that pest freedom and symptom free dom are two distinct concepts in the context of
fire blight and apple orchards because at specific moments in time fire blight bacteria could be present
in an orchard (or on neighbouring hosts) without there being visible symptoms of the fire blight
disease.384
2.118 As Australia argues, a corollary of a requirement for symptom freedom, as distinguished from
a requirement for pest freedom, is that symptom freedom implies a certain tolerance for the pest in the
orchard in question. Dr Paulin explains that, logi cally, the IRA has to provide for such tolerance in
regard to fire blight:
"The IRA indicates that no area can be proved to be without fire blight in apple
production zones in New Zealand. If this is correct, the requirements are made on the
assumption that there is not any orchard from which apples are exported which is
(or has ever been in the 50 last years) wit hout fire blight: therefore the IRA provides
a certain level of tolerance."
385

377 Australia's IRA, Part B, p. 106.
378 Ibid.
379 See Australia's IRA, Part B, pp. 110-116 and 316.
380 Australia's IRA, Part B, p. 106. See also, ibid., p. 316.
381 Australia's IRA, Part B, p. 346.
382 Australia's IRA, Part B, p. 340.
383 See New Zealand's reply to Panel question 34 after the first substantive meeting, Australia's first
written submission, para. 157, and Australia's reply to Panel question 36 after the first substantive meeting.
384 Reply of Dr Deckers to Panel question 8, in List of Replies from the scientific experts to questions
posed by the Panel, para. 64; Reply of Dr Paulin to Panel question 8, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 65-71.
385 Reply of Dr Paulin to Panel question 8 in List of Replies from the scientific experts to questions

2.119 In fact, in the context of importation step 1, the IRA provides that:
"[F]ire blight caused by E. amylovora is widespread in New Zealand and ... the
bacterium would be present in all orchar ds throughout the major production areas.
Therefore the IRA team decided to represent Imp1 [i.e. importation step 1] as 1."
386
2.120 Continuing, the IRA makes a clear distinction between symptom freedom and pest freedom,
and explains that importation step 1 relates to the latter:
"One stakeholder has indicated that the above value cannot be justified and asserted
that orchards selected for the export of fruit to Japan in 1994-95 were free of
E. amylovora. While these orchards may have been free of symptoms this does not
mean that E. amylovora was absent. Imp1 concerns the presence of E. amylovora not
disease symptoms."387
2.121 Further, before spelling out Measure 1 specifi cally, the IRA explicitly provides for tolerance
of E. amylovora in New Zealand orchards:
"Sourcing apples for export from areas establis hed, maintained and verified free from
E. amylovora ('pest free areas'), in accordance with the guidelines outlined in ISPM
No. 4: Requirements for the establis hment of pest free areas (FAO, 1996b) would
reduce the likelihood of several of these step s to 'negligible' and thereby mitigate the
risks. However, this option was not considered feasible, given that E. amylovora is
widely distributed in apple-growing areas of New Zealand and there is no feasible
way to verify if bacteria are present in orchards or not.
However, individual apple orchards in New Zealand can be maintained free from fire
blight disease symptoms ('areas free from disease symptoms') through the use of
various management practices. Such orch ards are known to have lower levels of
bacteria associated with fruit than orchards where symptoms are evident. Similarly,
treatments with chlorine and cold storage of apples have been reported to reduce
bacterial numbers. Therefore the following options were evaluated to mitigate the
risk of fire blight:
• Source apples for export from individual orchards free from fire blight disease
symptoms (areas free from disease symptoms)
• Disinfest apples for export with 100 ppm chlorine for one minute at pH 5–6
(chlorine treatment) or other suitable disinfection treatment.
• Store apples for export at a temperature of 0°–4°C for six weeks (storage)
• Combinations of areas free from disease symptoms , chlorine treatment or storage
(systems approach)."388
2.122 New Zealand's description of Measure 1 in its panel request also talks specifically about
"free[dom] from fire blight disease symptoms"389, and not freedom from E. amylovora.

386 Australia's IRA, Part B, pp. 53-54.
387 Australia's IRA, Part B, p. 55.
388 Australia's IRA, Part B, pp. 105-106 (emphasis added).
389 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1.

2.123 In light of the above, as a factual point, the Panel agrees with Australia that the essence of
Measure 1 is a requirement for freedom from fire blight symptoms, not freedom from E. amylovora.
Hence, the Panel also agrees with New Zealand th at "New Zealand has correctly characterised the
relevant measure at issue (Measure 1) in its Panel request as the requirement that apples be sourced
from areas free from fire blight disease symptoms."
390
(b) Measure 4
2.124 In its panel request New Zealand refers to Measure 4 as "[t]he requirement that an
orchard/block be suspended for the season on the basis that any evidence of pruning or other activities
carried out before the inspection could constitute an attempt to remove or hide symptoms of fire
blight."391 In its first written submission New Zealand li nks Measure 4 to page 316 of Part B of the
IRA392, which provides in relevant part that "[a]ny evidence of pruning or other activities carried out
before the inspection that could constitute an attempt to remove or hide symptoms of fire blight would
result in the suspension of the orchard/block for the season."393
2.125 Australia argues that "New Zealand has misunders tood the fire blight requirement in respect
of pruning". 394 Australia points out that the above-cited passage from the IRA contains the word
"that", which does not figure at the relevant part of New Zealand's description of Measure 4.
Australia contends that "New Zealand's omission of the word 'that' changes the nature of this
requirement":395
"Australia's requirement is not that any evidence of pruning before the inspection will
be taken by Australia as an attempt to remove symptoms of fire blight, resulting
automatically in suspension of that orchar d/block for the season. An orchard/block
would only be suspended on evidence of pruning before the inspection if AQIS
officers believe that the pruning in that in stance may have been an attempt to hide
symptoms of fire blight."396
According to Australia, Measure 4 is not a "requi rement not to prune", as New Zealand argues;
"[t]he only requirement is that pruning is not used to hide symptoms of fire blight in orchards."397
2.126 New Zealand agrees that the description of the measure in the IRA includes the word "that",
but it disagrees that the inclusion of this word resu lts in any change in the meaning of the measure. 398
New Zealand argues that pruning can also have leg itimate purposes: it is a good agricultural practice
and necessary for good orchard hygiene, as well as being an important method for managing fire
blight disease.
399 Accordingly, "it is not possible to determine the purpose of pruning by visually
inspecting an apple tree":400

390 New Zealand's reply to Panel question 33 after the first substantive meeting.
391 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1.
392 New Zealand's first written submission, para. 3.83, footnote 81.
393 Australia's IRA, Part B, p. 316 (emphasis added).
394 Australia's first written submission, p. 70.
395 Australia's first written submission, para. 163 (footnote omitted).
396 Ibid. (original emphasis; footnote omitted).
397 Australia's reply to Panel question 39 after the first substantive meeting.
398 New Zealand's reply to Panel question 37 after the first substantive meeting. See also
New Zealand's reply to Panel question 38 after the first substantive meeting.
399 New Zealand's first written submission, para. 4.38.
400 New Zealand's reply to Panel question 39 after the first substantive meeting.

"[T]he requirement under the IRA amounts to an automatic suspension on discovery
of evidence of pruning. This is reinforced by the permissive ' could constitute an
attempt to remove or hide symptoms of fire blight'."
401
2.127 Australia concurs that "it is not possible to determine through visual inspection, per se ,
whether pruning ... has been done 'in an attempt to remove or hide symptoms of fire blight or for
orchard management purposes."402 Australia argues, however, that "i t is possible to form a view that
an attempt to remove or hide symptoms of fire blight may have been made if pruning has occurred
that is not consistent with good orchard practice."403
2.128 New Zealand takes this statement by Australia as a "concession" that "it is not possible to
determine through visual inspection whether pruning of an apple tree has been done 'in an attempt to
remove or hide symptoms of fire blight' or for orchard management purposes."404
2.129 In their responses to the Panel, the experts expl ain that pruning is a standard procedure in the
winter or dormant period. Dr Paulin notes that "winter-pruning is a standard procedure in tree
management"405, and Dr Deckers refers to "standard pruni ng measures that are made during dormant
season."406
2.130 As regards pruning in the growing season, Dr Deckers explains that:
"Pruning out the fire blight infections during growing season is a control measure that
is taken in many countries to keep the fire blight situation under control in an orchard.
It should not be regarded as a way to hide the fire blight infections because this
pruning out of the fire blight infectio ns during season can easily be distinguished
from the standard pruning measures that are made during dormant season."407
2.131 Dr Deckers concludes that "[s]uspension of the export when recent fire blight pruning in an
orchard has been observed seems to be a logic measure in the IRA."408
2.132 Dr Paulin provides a more nuanced response as regards pruning during the growing season.
Dr Paulin does not state explicitly wh ether or not it is easy visually to distinguish pruning to hide fire
blight symptoms from other pruning. In fact, he refers to Measure 4 as a "ban of pruning". 409
Nevertheless, Dr Paulin sees some logic to Measure 4, but only "as soon as [the IRA] limits the ban of
pruning, for export orchards to the pruning which takes place after the beginning of the blossom
period."410 Dr Paulin adds that "the suspension of export is soundly based on the evidence of this late
pruning"411, implying that "the evidence of this late pruning" can be distinguished from other, more

401 New Zealand's reply to Panel question 38 after the first substantive meeting.
402 Australia's reply to Panel question 39 after the first substantive meeting.
403 Ibid.
404 New Zealand's reply to Panel question 68 afte r the second substantive meeting. See also
New Zealand's comments on Australia's reply to Panel question 68 after the second substantive meeting.
405 Reply of Dr Paulin to Panel question 9, in List of Replies from the scientific experts to questions
406 Reply of Dr Deckers to Panel question 9, in List of Replies from the scientific experts to questions
407 Ibid.
408 Ibid.
409 Reply of Dr Paulin to Panel question 9, in List of Replies from the scientific experts to questions
410 Ibid. (original emphasis).
411 Reply of Dr Paulin to Panel question 9, in List of Replies from the scientific experts to questions

standard types of pruning. Dr Paulin explains the ra tionale for this in terms of the annual cycle of the
development of fire blight and its symptoms in apple orchards:
"[S]ymptoms of fire blight develop in sp ring and early summer, associated with the
presence of blossoms and then actively growi ng shoots. The main infection period is
the blossom period. If an orchard is infected in spring or early summer,
the development of symptoms will stop in summer and autumn. If the trees are
trimmed for suppression of symptoms, it could well be that the orchard looks
symptomless when actually it has shown activity of the disease (and hence production
of ooze with bacteria), which could have consequences on fruit infestation.
In addition, it remains possible that a re newal of activity of the disease takes place
after the inspection, but before cropping."
412
2.133 Commenting on the experts' responses, New Zealand points out that "Dr Deckers' response is
that pruning out infections is a standard pr actice consistent with good orchard management." 413
As regards the other points of Dr Deckers's relevant response, New Zealand argues that "Dr Deckers'
answer ... does not address the real issue, which is whether it is possible to ascertain from a visual
inspection whether pruning of an apple tree has been done 'in an attempt to remove or hide symptoms
of fire blight' or whether it has been done for orchard management purposes.'"
414 I n f a c t ,
New Zealand considers that "whether 'pruning out of the fire blight infections during [growing]
season can easily be distinguished from the standard pruning measures that are made during dormant
season' would depend on when the inspection took place."
415 In light of Australia's alleged concession
cited above, New Zealand adds that "Australia has [not] adequately articulated how ... [M]easure [4]
could be implemented."416
2.134 Conversely, Australia agrees with Dr Deckers "that pruning out of fire blight infection during
the season, particularly before inspection, is dis tinguishable from standard pruning measures used by
growers in the 'dormant' season." 417 Australia adds that "[t]he IRA Team took this into account" 418,
and it refers to page 114 of the IRA 419, which provides that "the purpose of the inspection was to
ensure that fire blight was not active in the or chard at the early stage of fruit development and
therefore reduce the likelihood that E. amylovora would be present in the calyces of mature apples."420
The same page of the IRA also explains the origin of Measure 4:
"Removal of infected plant material immediately prior to the inspection was a
concern highlighted by some stakeholders. They have suggested that any grower
resorting to the practice of pruning off inoc ulum before the inspection should be not
be [sic] allowed to be in the export program. The IRA team agrees that successful
removal of all visually infected material before inspection could result in orchard
blocks passing inspection when they should have failed. The IRA team doubts that
given the labour costs it would be commercia lly viable to undertake this task but
nevertheless has modified the risk management framework to deal with this issue."
421

412 Reply of Dr Paulin to Panel question 9, in List of Replies from the scientific experts to questions
413 New Zealand's reply to Panel question 68 after the second substantive meeting.
414 Ibid.
415 Ibid.
416 Ibid.
417 Australia's reply to Panel question 68 after the second substantive meeting.
418 Ibid.
419 Ibid., footnote 328.
420 Australia's IRA, Part B, p. 114.
421 Ibid..

2.135 Australia points out that, in fact:
"[T]he fundamental issue relating to pruning does not concern the dormant season.
The relevant issue is the capacity to hide symptoms of fire blight by pruning
symptomatic material out during the early growth phase, just prior to orchard
inspection."
422
2.136 As regards the measure not being sufficiently sp ecific, Australia explains that the IRA was
not intended to set out all the details of the operation of Measure 4:
"[T]he operational details as to how the different types of pruning can be
distinguished would form part of the sta ndard operational procedures and work plans
to be developed by New Zealand and approved by Australia.
Australia considers that there are severa l procedures that could deal with this
situation. These could include requirement s on timing of pruning or that pruned
cuttings be left under trees to allow them to be examined at inspection."423
2.137 Commenting on these arguments by Australia, New Zealand agrees "that the fundamental
issue relating to Australia's pruning measure does not concern the dormant season."424
2.138 In establishing the nature of Measure 4, a nd whether New Zealand has misunderstood it,
the Panel needs to look at the relevant passage from the IRA, referenced also by New Zealand:
"Any evidence of pruning or other activities carried out before the inspection that
could constitute an attempt to remove or hide symptoms of fire blight would result in
the suspension of the orchard/block for the season."425
2.139 New Zealand is right that, by merely looking at this language, it is not possible to tell if the
word "pruning" is qualified by the term "carried out before the inspection that could constitute an
attempt to remove or hide symptoms of fire blight ", or whether this latter term only qualifies "other
activities". It is even possible, although again impo ssible to tell with certainty from the mere wording
of this passage in the IRA, that the term "ca rried out before the inspection" relates only to
"other activities", and that the term "that could consti tute an attempt to remove or hide symptoms of
fire blight" qualifies both "pruning" and "other activities carried out before the inspection". The Panel
also agrees with New Zealand that the use of the word "could" in " could constitute an attempt to
remove or hide symptoms of fire blight" increases the latitude of the inspector as well as the scope of
Measure 4.
2.140 Nevertheless, the Panel notes that the above passage in the IRA spelling out Measure 4
follows immediately the IRA's description of Measure 1 ("The detection of any visual symptoms of
fire blight would result in the suspensi on of the orchard/block for the season"). 426 In turn, this
description follows immediately the language in the IRA spelling out the inspection requirement
under Measure 2:
"Orchards will be inspected at an inspection intensity that would, at a 95% confidence
level, detect visual symptoms if shown by 1% of the trees. This inspection should

422 Australia's reply to Panel question 68 after the second substantive meeting.
423 Ibid.
424 New Zealand's comments on Australia's reply to Panel question 68 after the second substantive
meeting.
425 Australia's IRA, Part B, p. 316 (emphasis added).
426 Ibid. (emphasis added).

take place between 4 to 7 weeks after flowering when conditions for development of
fire blight disease are likely to be optim al. MAFNZ must provide details of the
proposed inspection methodology, including an analysis showing that the
methodology will achieve the required effi cacy, in advance of commencement of
exports. This analysis must address practical issues such as visibility of symptoms in
the tops of trees, the inspection time needed and the number of trees to be inspected
to meet the efficacy level, and training a nd certification of inspectors. The proposed
system will need to be approved before the commencement of trade.
One stakeholder has claimed that the propo sed inspection regime would mean that
only 300 trees would be inspected. The IRA team notes that this may well be the
case if the inspection efficacy for each tree is 100% but would not be the case if the
efficacy was less than this. MAFNZ must provide details of the inspection regime and
an analysis of how this regime achieves the required overall efficacy (see above)."
427
2.141 As the title of the relevant part of the IRA ("Fire blight symptoms" 428) indicates, these
passages, and hence the measures they spell out, are closely related among themselves through their
shared concern for fire blight symptoms. Measure 4 is concerned with hiding fire blight symptoms by
the exporter, since that could undermine the inspec tion under Measure 2 as well as the suspension of
orchards where visual symptoms of fire blight ar e detected during the inspection (Measure 1). As the
IRA explains, "successful removal of all visually in fected material before inspection could result in
orchard blocks passing inspection when they should have failed."429
2.142 Accordingly, the Panel finds it reasonable to conclude, as a factual point, that the word
"pruning" in the IRA's passage spelling out Measure 4 is qualified by the term "that could constitute
an attempt to remove or hide symptoms of fire blight."430
2.143 Likewise, "pruning" is qualified by the term "ca rried out before the inspection". Measure 4 is
closely related to Measure 2: the IRA explains that the "[r]emoval of infected plant material
immediately prior to the inspection was a concern" shared by the IRA Team.431
2.144 The IRA explicitly rejects a concern expressed by a shareholder during the development of
the assessment in regard to fire blight infections in previous growing seasons (which would be pruned
in the winter season immediately preceding the current growing season):
"[T]he purpose of the inspection was to ensure that fire blight was not active in the
orchard at the early stage of fruit development and therefore reduce the likelihood
that E. amylovora would be present in the calyces of mature apples. In this regard the
past fire blight history of the orchard is irrelevant as long as the inspection process
shows that fire blight is not active in the orchard at the critical time for E. amylovora
infestation to occur in the calyx."
432

427 Australia's IRA, Part B, p. 316.
428 Ibid.
429 Australia's IRA, Part B, p. 114.
430 Australia's IRA, Part B, p. 316 (emphasis added).
431 Australia's IRA, Part B, p. 114.
432 Ibid.

Thus, the IRA also confirms the irrelevance of any pruning during the dormant season for Measure 4,
an issue on which both Parties have agreed.
433
2.145 In line with this purpose of the inspection unde r Measure 2, the timing of the inspection is
also rather well defined by the IRA. On the same page and in the same section as that spelling out
Measure 4, the IRA determines the basic elements of Measure 2, in particular its specific timing:
"Orchards will be inspected at an inspection intensity that would, at a 95% confidence
level, detect visual symptoms if shown by 1% of the trees. This inspection should
take place between 4 to 7 weeks after flowering when conditions for development of
fire blight disease are likely to be optimal."
434
2.146 As Australia argues, the IRA does not specify all elements of Measure 4 and, within the limits
set out in its text, the IRA leaves a certain margin of discretion to New Zealand in proposing how to
implement Measure 4 in detail:
"MAFNZ must provide details of the proposed inspection methodology, including an
analysis showing that the methodology will achieve the required efficacy, in advance
of commencement of exports. This analysis must address practical issues such as
visibility of symptoms in the tops of trees, the inspection time needed and the number
of trees to be inspected to meet the efficacy level, and training and certification of
inspectors. The proposed system will need to be approved before the commencement
of trade."
435
As indicated above, the requirement in the IRA that New Zealand develop an operating manual and
work plan encompasses "operational details on … inspection … methodology." 436
2.147 Although the IRA does not specify every detail of Measure 4, it does set out certain key
aspects of Measure 4. Importantly, the IRA makes it clear that it is not concerned with all pruning, or
with pruning as such. The IRA does not consider pruning prior to the growing season problematic or
relevant. In fact, the IRA took into account the following existing "[o]rchard management" 437
practices in New Zealand:
"According to the Integrated Fruit Production Program Manual (MAFNZ, 2005a),
standard commercial practice involves a co mbination of measures recommended for
management of fire blight in New Zealand, including:
- pruning out infected shoots and cankers in the winter

The orchard management practices listed are aimed at eliminating or reducing the
inoculum before the onset of favourable conditions for spread of fire blight. Failure to
adhere to a combination of the above me asures could result in increased incidence
and severity of fire blight which could aff ect fruit quality and cause yield reductions.

433 See paras. 2.135 and 2.137 above. Australia's reply to Panel question 68 after the second
substantive meeting; New Zealand's comments on Australia's reply to Panel question 68 after the second
substantive meeting.
434 Australia's IRA, Part B, p. 316.
435 Ibid.
436 Australia's IRA, Part B, p. 314.
437 Australia's IRA, Part B, p. 54.

Therefore these procedures are likely to be undertaken by export orchards for
commercial reasons."438
2.148 Also, the IRA explains in general terms in the context of the "[c]ontrol" 439 of fire blight,
"[r]outinely most orchardists remove as much infected limbs as possible during the dormant season
with the aim of reducing the primary inoculum and also to maintain a high proportion of fruiting
wood and to control the tree size and shape."
440
2.149 As regards pruning during the growing season, a car eful reading of the IRA sheds light on the
IRA's underlying key concern with the "successful rem oval of all visually infected material before
inspection could result in orchard blocks p assing inspection when they should have failed" 441, and the
ensuing focus of the IRA on pruning in the specific period of "the early stage of fruit development" 442,
prior to the inspection "tak[ing] place between 4 to 7 weeks after flowering."443
2.150 The IRA notes New Zealand's following pruning practice in the growing season under the
above-mentioned Integrated Fruit Production Program Manual of MAFNZ:
"[F]requently inspecting the orchard; es pecially from blossoming to mid-summer for
signs of infected blooms or shoots, pruning and burning any infected material upon
detection (Note that removal of infected material before the proposed inspection for
fire blight will not be permitted in regist ered export orchards – see later section on
risk management and operational framework)."444
2.151 As regards visual inspection, the experts c onfirm the viability of distinguishing, through
visual inspection, "pruning … that … could constitute an attempt to remove or hide symptoms of fire
blight" from standard pruning in the dormant season. As to the viability of making a similar
distinction in the context of pruning during the growing season through visual inspection taking place
between 4 to 7 weeks after flowering, the Panel c onsiders that this is not directly an issue for
establishing the exact nature of the measure under review in this dispute as Measure 4. That issue is
more closely related to Measure 2, New Zeala nd's description of which Australia has not been
contesting. In the context of Measure 4, the issue of the viability of visual inspection is more related
to whether Measure 4 itself is viable and can be obj ectively justified. Accordingly, the Panel will
address it in the findings section of this report, if necessary. At this point, the Panel notes only that
the feasibility of distinguishing, through visible insp ection, pruning that could constitute an attempt to
hide symptoms of fire blight would in part de pend on the actual inspection modalities to be agreed
upon by the Parties as part of the operating manual and work plan.
(c) Measure 11
2.152 In its panel request, New Zealand refers to Measure 11 as "[t]he requirement that all new
planting stock be intensively examined and treated for European canker." 445 In its first written
submission, New Zealand links Measure 11 to page 154 of Part B of the IRA.446

438 Australia's IRA, Part B, p. 54.
439 Australia's IRA, Part C, p. 119.
440 Ibid.
441 Australia's IRA, Part B, p. 114.
442 Ibid.
443 Australia's IRA, Part B, p. 316.
444 Australia's IRA, Part B, p. 54.
445 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2.
446 New Zealand's first written submission, para. 3.83, footnote 88.

2.153 Australia refers to the following passage on the same page of the IRA, arguing that it shows
that "New Zealand has mischaracterised the Euro pean canker requirement in respect of planting
stock":
447
"All new planting stock must be intensiv ely examined, and appropriate cultural
practices and fungicide sprays used to minimise the likelihood of canker
infections."448
2.154 Following the first substantive meeting, th e Panel asked "Australia [to] explain how
'intensively examined and treated for European canker', as described in New Zealand's panel request,
differs from 'intensively examined, and appropriate cultural practices and fungicide sprays used to
minimise the likelihood of canker infections' as appare ntly described in Australia's IRA at page 154,
Part B."449 In response, Australia explains that,
"[T]here may be no substantive differen ce between New Zealand's and Australia's
respective understandings of this requirem ent. However, Australia considers it
important for the Panel to examine and make findings in respect of the precise
measure that Australia actually imposes as set out in the relevant section of the Final
IRA Report. This is the reason for Australia's clarification.
New Zealand's version of the measure refe rs generically to the 'treatment for
European canker' of planting stock. Mo re precisely, what Australia requires is
'appropriate cultural practices and fungicide sprays used to minimise the likelihood of
canker infections'. For example, 'appropriate treatment' may mean no treatment at all
such as where nursery stock has been sourced from areas that can be verified as free
from European canker."
450
2.155 The Panel notes that Australia acknowledges "t hat there may be no substantive difference
between New Zealand's and Australia's resp ective understandings of this requirement" 451, and that
Australia requests the Panel "to examine and make findings in respect of the precise measure that
Australia actually imposes as set out in the relevant section of the Final IRA Report."452
2.156 If there is any difference between the Parties c oncerning Measure 11, it relates to whether all
new planting stock would need to be treated for European canker or whether some planting stock,
verified to originate from areas free from European canke r, would not be required to the be treated at
all.
2.157 The relevant section of the IRA report setti ng out Measure 11 applies unconditionally to
"[a]ll new planting stock" 453, and is not limited to planting stoc k sourced from areas not verified as
free from European canker. It requires " appropriate cultural practices and fungicide sprays" 454,
without however specifying that in certain cas es "appropriate cultural practices and fungicide
sprays"455 could involve no cultural practice or fungicide sprays at all. Also, the requirement for
"appropriate cultural practices and fungicide sprays" 456 serves "to minimise the likelihood of canker

447 Australia's first written submission, p. 80.
448 Australia's first written submission, para. 165, referring to IRA, Part B, p. 154.
449 Panel question 41 after the first substantive meeting.
450 Australia's reply to Panel question 41 after the first substantive meeting.
451 Ibid.
452 Ibid.
453 Australia's IRA, Part B, p. 154.
454 Ibid. (emphasis added).
455 Ibid.
456 Ibid.

infections"457, not to minimise verified canker infections proper. All this demonstrates the
unconditionality of Measure 11 with regard to the treatment of new planting stock.
2.158 While the IRA spells out Measure 11 in regard to "[a]ll new planting stock" 458,
the immediately preceding sentence in the IRA refe rs to "[i]nfected nurser y stock[, which the IRA
considers] presents a pathway for the establishmen t and spread of European canker into places of
production."459 The difference between the two neighbouring sentences underscores the
unconditionality of Measure 11.
2.159 Further on the same page, the IRA briefly refe rs to Measure 11 in a similarly unconditional
manner as New Zealand's panel request, namely as th e "requirement for New Zealand to examine and
treat nursery plants."460
2.160 In the expert consultation process, the Panel asked the experts the following specific question:
"Based on Australia's IRA, what is your understanding as to what might be the
'appropriate cultural practices and fungicide sprays used to minimise the likelihood of
[European] canker infections'? In practice, could this encompass no treatment at all
where nursery stock has been sourced from areas verified as free from European
canker?"
461
2.161 In response to the first question, the experts sp ecify various usual cultural practices applied to
control European canker. In regard to fungicide treatment, they explain that such treatment would
also normally take place at the end of the growi ng season – according to Dr Latorre, in a preventive
manner, i.e. before any infection has resulted in symp toms. Dr Latorre states that "cultural practices
should be integrated with chemical control using specific fungicides, preventively sprayed ( pre-
infection) in late November or early December to reduce inoculum production and fruit infection." 462
Dr Swinburne refers to "the app lication of fungicides at vulnerable periods such as leaf fall or bud
burst."463 Also, Dr Deckers explains that one "important period ... for fungicide applications with the
aim to reduce NG infections ... is the leaf fall peri od at the end of the season because the leaf scars
form a preferred infection pathway for a NG infection."464
2.162 As to the Panel's second question, the expert s provide conflicting responses. Dr Deckers
answers that "[e]xclud[ing] the treatments complete ly when the nursery stoc k has been sourced from
areas verified free from European canker can be risky." 465 Conversely, Dr Swinburne explains that
"[a]ppropriate cultural methods specifically for the control of European canker are obviously required
only where the pathogen is present." 466 Dr Latorre states, on the one hand, that "[t]he program would
involve no treatment where summer rainfalls are non-existent and where disease trees (cankered trees)

457 Australia's IRA, Part B, p. 154 (emphasis added).
458 Ibid.
459 Ibid.
460 Ibid.
461 Panel question 53 to scientific experts.
462 Reply of Dr Latorre to Panel question 53, in List of Replies from the scientific experts to questions
posed by the Panel, para. 339 (emphasis added).
463 Reply of Dr Swinburne to Panel question 53, in List of Replies from the scientific experts to
questions posed by the Panel, para. 341.
464 Reply of Dr Deckers to Panel question 53, in List of Replies from the scientific experts to questions
465 Reply of Dr Deckers to Panel question 53, in List of Replies from the scientific experts to questions
466 Reply of Dr Swinburne to Panel question 53, in List of Replies from the scientific experts to
questions posed by the Panel, para. 341.

have not been detected."
467 However, Dr Latorre adds that "tr eatments should be considered in areas
highly prone to disease development."468
2.163 The Panel believes that these answers by the experts explain more directly some normal or
ideal situation, rather than what is specifically required by the IRA. In fact, none of the experts
referred specifically to the IRA on this point. Also , perhaps since the Panel's first question was not
specific about new planting stock ("Based on Australia 's IRA, what is your understanding as to what
might be the 'appropriate cultural practices and fungicide sprays used to minimise the likelihood of
[European] canker infections'?"
469), most of the responses related to the treatment of apple trees in
orchards in general. Only the following sentence by Dr Deckers deals specifically with the treatment
of new planting stock "[e]xclud[ing] the treatme nts completely when the nursery stock has been
sourced from areas verified free from European canker can be risky." 470 Accordingly, the Panel
accords limited relevance to most of these responses in regard to interpreting how the IRA spells out
the treatment requirement under Measure 11 in the context of new planting stock.
2.164 In addition to the treatment requirement, as the first part of Measure 11, the IRA requires in a
rather unconditional fashion that "[a]ll new pl anting stock must be intensively examined". 471 At the
same time, the IRA does not explain whether su ch intensive examination would involve an
identification of nursery stock infected with Europ ean canker, which seems to be what the IRA is
concerned with, or the identification of nursery stock originating in areas verified (or not) for freedom
from European canker. Nor does the IRA specify the consequences of such examination or the
relationship of the two parts of Measure 11, namely examination and treatment. In practical terms,
does examination serve to identify potentially dangerous nursery stock that would be required to be
treated, or would all nursery stock need to be treated independently of the outcome of the
examination?
2.165 In light of the above, the Panel finds as a f actual point, in the context of the treatment
requirement under Measure 11, that the IRA allows for the possibility that New Zealand would need
to treat all new nursery stock independently of th e outcome of the examination under Measure 11.
The actual modalities of the treatment in question would need to be agreed upon by the Parties at a
later stage 472, and the Panel cannot exclude that they might be linked to the outcome of the
examination.
2.166 The Panel finds further support for this conclu sion in the potential latency of nursery stock
infection indicated in the IRA:
"There are no restrictions on the movement of planting material between districts in
New Zealand and this could present a pa thway for introducing new inoculum.
A study in the United Kingdom called the 'M illennium trial' (McCraken et al., 2003b)
concluded that approximately 6% of canke r infection in new orchards could be
associated with movement of infected nursery plants, although this figure increased
significantly under favourable climatic conditions. N. galligena can remain latent in

467 Reply of Dr Latorre to Panel question 53, in List of Replies from the scientific experts to questions
468 Ibid.
469 Panel question 53 to scientific experts.
470 Reply of Dr Deckers to Panel question 53, in List of Replies from the scientific experts to questions
471 Australia's IRA, Part B, p. 154.
472 Australia's IRA, Part B, pp. 313-314.

infected plants for up to 3 to 4 years, expressing only when climatic conditions are
conducive for disease development (McCraken et al., 2003b)."473
2.167 The IRA points out also that, in a similar vein, "CABI (2003) reports that trees can be
infected in the nursery shortly after, or during, propagation and may not express disease symptoms for
up to three or four years (Berrie et al., 2000; L ovelidge, 2003; McCraken et al., 2003a; McCraken et
al., 2003b)."474
2.168 Such a long period of European canker latenc y in infected nursery stock would make it
necessary to treat all planting stock, not just those showing symptoms of European canker infection.
This is underscored by the finding of the Millenium Report referenced in the IRA that "there is no
cost effective method for detecting the pathogen in symptomless wood which makes it difficult to get
a handle on the size of the problem".475
2.169 In fact, according to the IRA, even treat ment of nursery stock might not prevent the
dissemination of European canker:
"MAFNZ (2003a) states that one of the larg er nurseries in the Waikato area routinely
applies fortnightly copper sprays to stock plants and dip tools, and applies
carbendazim (benzimidazole) and captan to some cuttings. In spite of these
measures, the disease is thought to have arrived in Nelson on trees imported from
Waikato (Murdoch, 2002). Therefore, there is a continual threat of new pathogen
inoculum being introduced into disease-free districts and remaining latent for up to 3
to 4 years."
476
(d) Measure 15
(i) The Parties' arguments
2.170 In its panel request, New Zealand identifies Measure 15 as:
"The requirement that Australian Quarantine and Inspection Service officers be
involved in orchard inspections for European canker and fire blight, in direct
verification of packing house procedures, and in fruit inspection and treatment."
477
2.171 In its first written submission, New Zealand links Measure 15 to page 314 of the IRA 478,
within the part entitled "Risk mana gement and operational framework" 479 and, more specifically, to
the section entitled "Requirement for pre-clearance" . This section includes language similar to the
one contained in New Zealand's panel request:
"It is recommended that, at least for the initial trade, the quarantine measures operate
through a standard pre-clearance arrangement with AQIS officers being directly
involved. The need for pre-clearance w ould be reassessed after experience had been
gained following significant trade.

473 Australia's IRA, Part B, p. 119. See also IRA, Part B, p. 152, and IRA, Part C, p. 102.
474 Australia's IRA, Part B, p. 143.
475 Australia's IRA, Part C, p. 102.
476 Australia's IRA, Part B, p. 119.
477 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
478 New Zealand's first written submission, para. 3.83, footnote 92.
479 Australia's IRA, part B, p. 313.

Under these arrangements AQIS officers would be involved in orchard inspections for
European canker and fire blight, in direct verification of packing house procedures,
and in fruit inspection. The involvement of AQIS officers in pre-clearance would
also facilitate a rigorous audit of ot her arrangements including registration
procedures, standard commercial practice, traceability, and handling export fruit in a
secure manner.
Under the pre-clearance arrangement, on-arrival procedures would provide
verification that the consignment received was the pre-cleared consignment and that
the integrity of the consignment had been maintained."
480
2.172 In the context of its claim under Article 5. 5 of the SPS Agreement, New Zealand further
describes Measure 15 as "[t]he requirement that AQI S be involved in orchard inspections, packing
house procedures and fruit inspections." 481 In regard to orchard inspections in particular,
New Zealand argues that, "[i]n a ddition to applying very prescriptive inspection requirements for
New Zealand apples, Australia also requires that AQIS officials be involved in all such
inspections."482 In the context of fire blight, New Zeala nd argues more generally that "a multitude of
measures have been applied to New Zealand apples, affecting all stages of th e exportation of the fruit
from the orchard to the packing house, including th e requirement that AQIS be involved in all these
steps."483 As for European canker, New Zealand argu es that "again multiple measures have been
applied to New Zealand apples, including the requ irement that 100% of registered orchards be
inspected for the disease before normal winter pruning, with AQIS involvement in those
inspections."484 New Zealand contends that the IRA "require[s] the involvement of AQIS officials in
all [such] inspections."485
2.173 In the context of Article 5.6 of the SPS Agreem ent, New Zealand refers to Measure 15 as the
"requirement ... that AQIS officers be involved in in spection for European canker and fire blight, in
direct verification of packing house procedures, and in fruit inspection and treatment". 486
New Zealand argues that "[t]here is an altern ative, less trade restrictive measure reasonably
available[:] ... simple auditing by AQIS officers of New Zealand systems applicable to the import of
apples to Australia from New Zealand."487 According to New Zealand:
"Auditing of New Zealand systems by AQIS officials would simply require
occasional visits under normal circumstances, or targeted visits in the event that non-
compliance was to be detected during routine procedures. Audit visits normally
assess the range of certification processes associ ated with the commodity in question
from any required field procedures to expor t inspections, and storage and handling
procedures. In the first few years of trad e such visits are often annual but frequency
tends to reduce to rare or ad hoc as th e importing country gains confidence in the
exporting country's systems. In past pr actice between Australia and New Zealand,
audit visits have generally been limited to the first year of trade and are ad hoc
thereafter. The AQIS 'involvement' proposed under the IRA goes beyond any other
inspection regime currently in place for New Zealand exports to Australia."
488

480 Australia's IRA, part B, p. 314 (emphasis added).
481 New Zealand's first written submission, para. 4.449.
482 New Zealand's first written submission, para. 4.447 (original emphasis).
483 New Zealand's first written submission, para. 4.458.
484 New Zealand's first written submission, para. 4.459.
485 Ibid.
486 New Zealand's first written submission, para. 4.524.
487 New Zealand's first written submission, para. 4.525.
488 New Zealand's first written submission, para. 4.527.

2.174 New Zealand also argues that AQIS involvemen t would double the number of inspectors and
more than double the cost of orchard and packing house inspections as New Zealand would have to
bear, not only the time costs of the AQIS inspectors involved, but all other expenses as well (such as
their international and domestic travel, accommodation and living expenses).489
2.175 Australia calls into question New Zealand' s understanding of Measure 15, arguing that
"New Zealand has misunderstood the nature of AQIS involvement in orchard inspections." 490
Australia puts forward that Measure 15 "does not require the involvement of AQIS officials in all
orchard inspections and packing house operations." 491 While "acknowledg[ing] that the level and
precise nature of 'AQIS involvement' was not defined in the Final IRA Report" 492, Australia adds that
"AQIS clarified the ... requirements [involved in Measure 15] on a number of occasions during
bilateral discussions on the standard operating procedures (SOP) in 2007 and early 2008."493
2.176 Australia also recognizes that the text in New Zealand's panel request describing Measure 15
"is taken from the section entitled 'Requirement fo r pre-clearance' on page 314 of Part B of the
IRA ..."494 At the same time, Australia links Measu re 15 to the following section entitled "Audit",
which starts on the same page of the IRA. The section of the IRA entitled "Audit" states:
"The New Zealand apple production and certification system is subject to audit by
AQIS. Audits may be conducted at the discretion of AQIS during the entire
production cycle and as a component of any pre-clearance arrangement. AQIS field
audits will measure compliance with orchard registration, block identification,
pest/disease management/monitoring, records management, and the administration of
the area freedom and accreditation requirements.
Audits will be conducted to measure comp liance with packing house responsibilities,
traceability, labelling, segregation and product security, and MAFNZ/Agency
certification processes.
Participants in pre-clearance arrangements will be audited by AQIS during the season
to verify that requirements such as the following continue to be met:
• There is an effective approved documented system in operation, including product
identification and labelling at each facility to ensure that pre-cleared and non pre-
cleared products are kept separate.
• At any time pre-cleared product is moved, the transport systems used maintains the
integrity of the pre-cleared product.
• Appropriate records are maintained for all pre-cleared product in storage."
495
2.177 Australia supports the relevance of the "A udit" section for Measure 15 with the following
arguments:

489 New Zealand's first written submission, para. 4.535.
490 Australia's first written submission, p. 67. See al so Australia's closing oral statement at the first
substantive meeting of the Panel with the Parties, p. 9.
491 Australia's first written submission, para. 151. See also Australia's reply to Panel question 49 after
the first substantive meeting.
492 Australia's first written submission, para. 151.
493 Australia's first written submission, para. 155.
494 Australia's reply to Panel question 48 after the first substantive meeting.
495 Australia's IRA, Part B, pp. 314-315.

"'Pre-clearance' means that the normal on-arrival verification requirements are
undertaken outside Australia and may include fruit inspection.
Accordingly, the reference to orchard in spections and verification of packing house
procedures in [Measure 15] should be take n to be linked to auditing requirements
which AQIS officials may separately undertake while present in New Zealand to
conduct pre-clearance."
496
2.178 Australia considers that "both [the 'Requirement of pre-clearance arrangement' and the
'Audit'] sections [of the IRA] are relevant to understanding the involvement of AQIS officials in
systems audits relating to the export of apples from New Zealand to Australia." 497 According to
Australia, "audits form a component of the pre-clearance arrangement." 498 Australia argues in
particular that:
"The 'Audit' section states clearly that New Zealand's 'apple production and
certification system' is to be subject to audit by AQIS. The section provides that
'[a]udits may be conducted at the discre tion of AQIS during the entire production
cycle and as a component of any pre-clearance arrangement'.
499 The section then
goes on to elaborate on the scope of audits. The reference made to pre-clearance
arrangements recognises the efficiency an d cost-effectiveness of AQIS officials
engaged in pre-clearance in New Zealand also conducting audits. To do otherwise
would require other AQIS officials to trav el to New Zealand to conduct audits at
further cost to New Zealand exporters. Wh erever possible, significant elements of
the auditing requirements would be unde rtaken by utilising the presence of AQIS
officers already involved in pre-clearance.
... Australia explained that 'pre-clearance' means that activities are undertaken outside
Australia to meet Australia's usual on-a rrival verification requirements, which are
separate to auditing requirements. AQIS o fficials present in New Zealand to conduct
pre-clearance will separately conduct systems audits."500
2.179 Australia adds that:
"In the Final IRA Report, the distinction between 'pre-clearance' and 'audit' is made to
indicate that AQIS officers' involvement in orchard inspections for European canker
and fire blight, in direct verification of packing house procedures and in fruit
inspection is mandatory. Audit of othe r components of the New Zealand apple
production and certification system may be conducted at the discretion of AQIS."
501
2.180 Referencing the "Audit" section of the IRA, Australia describes Measure 15 as requiring
systems audits by AQIS:
"Rather, AQIS activities are to be by way of systems audits. 502 F o r o r c h a r d
inspections, the audit would include 100% of survey teams in the field, and the

496 Australia's reply to Panel question 48 after the first substantive meeting (original emphasis).
497 Australia's reply to Panel question 47 after the first substantive meeting.
498 Australia's reply to Panel question 101 after the second substantive meeting.
499 (footnote original) Final IRA Report, Part B, p. 314.
500 Australia's reply to Panel question 47 after the first substantive meeting.
501 Australia's reply to Panel question 101 after the first substantive meeting.
502 (footnote original) This is explained in the Final IRA Report as follows: "AQIS field audits will
measure compliance with orchard registration, block identification, pest/disease management/monitoring,

intensity of audits would be adjusted ove r time based on performance. For packing
houses, all relevant packing houses would be audited in their first year of trade."503
2.181 Australia argues that:
"'[A] 100% audit of survey teams' sugg ests that auditors will apply auditing
techniques, 'questioning, listening, observa tion, documentation', to each and every
member of each of the survey teams. 504 By contrast, the statement that '[t]he audit
would include 100% of survey teams' signals Australia's intention to audit each
survey team by applying audit techniques, 'questioning, listening, observation,
documentation', to sufficient members of each team to satisfy the auditors that
the team is meeting the requirements outlined in the Final IRA Report.
With audits of packing houses, a '100% audit of packing houses' means that each
packing house will be audited by AQIS o fficers while they are present undertaking
fruit inspections for pre-clearance. Du ring the Australian officials visit to
New Zealand in June 2007, a New Zealand o fficial expressed a view that, at least
initially, there was likely to be one, pe rhaps two packing houses in each apple
production region that specialise in packing apples for Australia. If this view is
correct, a maximum of six and a minimum of three packing houses would be subject
to an AQIS audit."
505
2.182 As regards fruit inspections, Australia points out that the exact details of AQIS involvement
are to be determined in the SOP and that, depe nding on how New Zealand intends to operationalize
the requirements of the IRA,506 options may be available to reduce costs and avoid duplication.507
2.183 In response to the Panel's questi on on the exact nature of Measure 15, Australia reiterates that
"it is difficult to be specific until such time as New Zealand has completed Standard Operating
Procedures and a Work Plan that describes the phytosanitary pro cedures for each of the pests of
concern and the various responsibilities of all pa rties involved in meeting this requirement." 508
Nevertheless, Australia offers the following more detailed explanations:
"AQIS will conduct system audits and verifi cations in the first year of trade to
confirm that the New Zealand system as described in the Standard Operating
Procedures and Work Plan is in place and operating effectively.
There are three key periods when audits would be conducted. These would be
May/June/July (European canker surveys), October/November (Fireblight surveys),
and January/February (packhouse manage ment systems and treatments).
AQIS' initial audit will examine complia nce with the European canker survey

records management, and the administration of the area freedom and accreditation requirements." (Final IRA
Report, Part B, p. 314.)
503 Australia's first written submission, para. 151. See also Australia's reply to Panel question 49 after
the first substantive meeting.
504 (footnote original) Exhibit AUS-118: AQIS (2007), New Zealand Summerfruits Export to Western
Australia: Audit Plan (November 2007).
505 Australia's reply to Panel question 52 after the first substantive meeting.
506 (footnote original) See: Final IRA Report, Part B, p. 313.
507 Australia's reply to Panel question 102 after the second substantive meeting. See also Australia's
IRA, Part B, p. 313.
508 Australia's reply to Panel question 105 after the second substantive meeting. See also Australia's
reply to Panel question 106 after the second substantive meeting.

requirements, and also audit NZMAF compliance with all the administrative
arrangements, reporting structures, and the responsibilities of the various parties.
Orchard Surveys

European canker surveys are to be conducted after leaf fall (May/June/July) while the
trees are dormant.
The audit teams will comprise senior, experienced AQIS inspectors/auditors and
technical experts with experience in det ecting European canker symptoms. Audit
teams will attend a percentage of orchard surveys in all growing districts. AQIS
understands that the main areas will be Ha wkes Bay (Napier/Hastings) and Nelson.
Data supplied by NZMAF in May 2007, indicated 200 potential participating
orchards. Of these, 75% of orchards will be located in Hawkes Bay, 20% in Nelson,
and 5% Otago/other.
The percentage of surveys attended will be dependent upon the number of survey
teams/IVAs/accredited agencies operating in each district. There will be no
requirement to observe every survey unde rtaken by New Zealand. Based on the May
2007 data it is likely that 10% of orchard surveys would be attended by AQIS audit
teams, e.g 15 in Hawkes Bay, five in Nelson, two in Otago/other.
The AQIS audit team will verify that survey personnel are trained and accredited to
perform the survey task. AQIS will observe survey activities during orchard visits
and will directly question (including 's how me') survey personnel about their
activities including the process of detecting and identifying disease symptoms on
trees. The audit will include reporting arrangements for survey teams including
records of surveys and outcomes, identif ication arrangements for suspect disease
material. There will be concurrent veri fication of orchard registration, block
identification, pest/disease management monitoring.
Fire blight surveys must be conducted four to seven week after flowering. AQIS will
discuss audit plans with NZMAF to enable AQI S to attend a percentage of surveys in
each district. Audit teams will include tec hnical experts with experience in detecting
fire blight symptoms. The percentage of surveys attended in each growing district
will be dependent upon the number of su rvey teams/IVAs/accredited agencies
operating in each district.
Packing house Verification Audits
An audit of packing house management systems and the mandatory treatment
requirements will be conducted prior to issuance of an import permit. Ongoing
verification of packing house management systems and treatments will be conducted
by AQIS pre-clearance inspectors during their visits for fruit inspections."509
2.184 As regards survey teams, Australia adds that:
"[B]ased upon discussions with New Zeala nd officials in Wellington in June 2007,
Australia understands that discrete survey teams will operate in each of the main
apple production areas. These teams may be operated by, and trained by, different
accredited agencies. Given this, Australia considers it would be necessary, at least in

509 Australia's reply to Panel question 105 after the second substantive meeting.

the initial year, to audit each survey team to be confident that they are meeting
Australia's requirements.
A 'survey team' is considered by Australia to be a group (or team) operating under the
direction of a single entity, such as an accredited agency in an apple production
district such as Hawkes Bay. There may be a number of such groups in each district,
or only one in each district. If these survey teams split into smaller sub-teams, then
AQIS would audit a sample of the teams under each entity in each district."
510
2.185 In response to a question by the Panel, Aust ralia also confirms that "100% of survey teams
may be audited."511 However, Australia argues that it "does not consider it conceivable that 100% of
survey team members would be audited."512
2.186 Referring to the section of the IRA entitled "Review of import conditions", Australia adds that
"its import requirements for apples from New Zeal and, including the AQIS audit requirements, are
subject to review after the first year of trade. 513"514 The "Review of import conditions" section of the
IRA provides in relevant part that:
"It is recommended that Biosecurity Australia and AQIS in consultation with
MAFNZ, will review the import requirements after the first year of trade. Further
reviews will occur if circumstances or information warrant such action."515
2.187 Australia contends that "New Zealand's description of such systems audits 516 accords with
Australia's view of its requirement and accordingl y there is no live dispute with respect to this
measure."517
2.188 In response, New Zealand points out that "any type of AQIS involvement in orchard
inspections for European canker and fire blight, in direct verification of packing house procedures,
and in fruit inspection and treatment for ALCM is without scientific support, and accordingly there is
very much a live dispute between the parties."518 New Zealand adds that:
"AQIS involvement is contrary to Article 2.2 because that involvement is aimed at
verifying requirements that are themselves inconsistent with Article 2.2 – for example
in this case, orchard inspections for fire blight and European canker, and the
requirements on packing houses for fire blight imposed by the IRA. As the
underlying measures are inconsistent with the SPS Agreement, it follows that any type
of AQIS involvement in or supervision of those measures would also be inconsistent
with the SPS Agreement. No amount of redefining of the measure by Australia can

510 Australia's reply to Panel question 106 after the first substantive meeting.
511 Australia's reply to Panel question 110 after the second substantive meeting, para. 488.
512 Ibid.
513 (footnote original) Final IRA Report, p. 325.
514 Australia's closing oral statement at the first substantive meeting of the Panel with the Parties,
para. 34.
515 Australia's IRA, Part B, p. 325.
516 (footnote original) See: New Zealand's first written submission, para. 4.527.
517 Australia's first written submission, para. 166. S ee also Australia's opening oral statement at the
first substantive meeting of the Panel with the Parties, 22.
518 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 27.

change this. Accordingly, there is very much a live dispute with respect to ...
[M]easure [15]."
519
2.189 New Zealand also adds that it "does not agree with Australia's characterisation of
'AQIS involvement' and its attempt to equate th is with a systems audit within New Zealand's
understanding of the term." 520 As regards systems audits, New Zealand states that "[a] systems audit
involves an official coming from the country's quarantine agency to New Zealand to audit
New Zealand systems, including policies, procedures and actual site visits." 521 New Zealand argues
that "a 100% audit of survey teams and packing houses in the first year by the officials of an
importing country does not conform to any notion of a systems audit as understood by
New Zealand."
522
2.190 In contrast to Australia, New Zealand consider s that the "Audit" section of the IRA is not
related to Measure 15:
"The requirement that AQIS officers be i nvolved in orchard inspections for European
canker and fire blight, in direct verification of packing houses and in fruit inspection
is set out under the heading 'requirement fo r pre-clearance'. This is separate from the
section of the IRA entitled 'audit'. These are two different sections and neither
mention 'systems audits'."
523
New Zealand adds that "there was no refe rence to a 'systems audit' in the IRA" 524 at all, and argues
that that "the AQIS involvement measure appears to be based on an assumption that the usual auditing
systems will be insufficient to meet the risk posed by New Zealand apples."525
2.191 New Zealand also contests whether "there has been clarification around the level of AQIS
involvement [as] [n]either the draft work plan nor the SOP provides further clarity on the level of
involvement of AQIS officers." 526 New Zealand points out that "Australia itself conceded in its first
written submission 'the level and precise nature of "AQIS involvement" was not well defined in the
Final IRA Report.'527"528
2.192 Accordingly, New Zealand confronts the rele vant portions of the IRA with Australia's
subsequent explanations during these proceedings:
"[W]hereas Australia's first written submissi on now refers to an audit of '100% of
survey teams in the field,' 529 the IRA referred to '[AQIS involvement] in orchard

519 New Zealand's reply to Panel question 46 after the first substantive meeting. See also,
New Zealand's second written submission, p. 13.
520 New Zealand's reply to Panel question 46 after the first substantive meeting. See also,
New Zealand's second written submission, para. 2.22.
521 New Zealand's first written submission, para. 4.526, footnote 446.
522 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 27.
523 New Zealand's reply to Panel question 46 after the first substantive meeting. See also
New Zealand's second written submission, para. 2.23.
524 New Zealand's second written submission, para. 2.23.
525 New Zealand's reply to Panel question 109 after the second substantive meeting.
526 New Zealand's reply to Panel question 50 after the first substantive meeting.
527 (footnote original) Australia's first written submission, para 151. See also ARPQ, Q 47, p. 36 which
stated that "elements [of the measure] required clarification".
528 New Zealand's second written submission, para. 2.23.
529 (footnote original) Australia's first written submission, para. 151.

inspections for European canker and fire blight.' 530 Rather than an audit of 'all
relevant packing houses,' 531 the IRA referred to '[AQIS involvement] in direct
verification of packing house procedures, and in fruit inspection' 532 and 'supervision'
by AQIS officers of procedures in the packing house, including fumigation
treatments.
533 Further, although Australia's first written submission now suggests that
with respect to audits of survey teams the level of scrutiny may decline from 100%
over time 'based on performance' 534, the IRA was entirely silent on this point.
New Zealand also notes that there is no explicit clarification in Australia's first
written submission in relation to performan ce-based audits of New Zealand packing
houses.
535"536
New Zealand adds that "[t]he lack of clarity in the IRA with respect to this requirement is also
reflected in the varied views of the experts as to what exactly 'AQIS involvement' might entail.537"538
2.193 New Zealand also disagrees with Australia as regards equating pre-clearance arrangements
with standard on-arrival border procedures. New Zealand argues that, in the context of other fruit:
"Current standard pre-clearance arrangements are voluntary on the part of
New Zealand fruit export industries, which i nvite and pay for AQIS officers to come
to New Zealand to perform their sta ndard on-arrival border inspections on
New Zealand certified product. 539 However, the suggestion that the 'standard pre-
clearance arrangements' be extended beyo nd the on-arrival border procedures to, for
example, involvement in field inspections for European canker and fire blight, is
entirely novel."540
2.194 New Zealand argues that:
"None of the explanations suggest less than 100% intensity for the AQIS inspections.
... In New Zealand's view a 'systems audit' has never involved an audit of each survey
team, even in the first year. New Zealand al so notes that Australia is not prepared to
rule out audits of 100% of survey teams in subsequent years."
541

530 (footnote original) IRA, p. 314.
531 (footnote original) Australia's first written submission, para. 151.
532 (footnote original) IRA, p. 314.
533 (footnote original) In respect of ALCM, under "Option 1: Inspection with Treatment", the IRA
stipulates at p. 320 that "Under pre-clearance arrangements AQIS would be involved in the supervision of these
procedures" (emphasis added). "These procedures" includes the requirement that, "where any live
quarantinable arthropod is found the lot must be subjected to an appropriate treatment (for example,
fumigation) or rejected for export." (Emphasis added.)
534 (footnote original) Australia's first written submission, para. 151.
535 (footnote original) Australia's first written submission, para. 151.
536 New Zealand's second written submission, para. 2.23.
537 (footnote original) Experts' RPQ [responses to Panel questions], Qs 4, 5.
538 New Zealand's second written submission, para. 2.24.
539 (footnote original) As required for all exports, the product is inspected by MAF approved inspectors
and, if appropriate, issued with a phytosanitary certificate. Following this, the product is inspected by AQIS
officials as per their normal post-border procedures (as if it had arrived in Australia).
540 New Zealand's reply to Panel question 51 after the first substantive meeting.
541 New Zealand's comments on Australia's reply to Panel questions 105-106 after the second
substantive meeting.

2.195 New Zealand also notes "Australia's ... reluctance in its comments on experts' replies to rule
out the possibility that the aud itor 'may observe and question an entire survey team to satisfy
themselves that there was an appropriate level of competence'.
542"543
2.196 New Zealand argues that "[a]udits of 100% of survey teams and packing houses in the first
year are not systems audits within New Zealand' s definition of the term, nor with international
practice"544, and it makes reference to a document concerning ISPM 20:
"[The] IPPC, 'Explanatory Document 1 on International Standard for Phytosanitary
Measures No. 20 (Guidelines for a Phytosanitary Import Regulatory System)', p 8
states:
'Audit and compliance checking by the NPPO of the country of import should
thus be considered a verification pr ocess, confirming that procedures are
appropriate, effective, and being pr operly applied. This should not
necessitate 100% inspection either of individual consignments or of all
consignments in a particular trade but rather some form of sampling process.
As confidence grows in the procedures related to, for example, a particular
trade the intensity of inspection should be reduced.'"
545 New Zealand adds
that "ISPM 20 … support[s] … its view that an audit requires 'some sort of
sampling process' of relevant systems."
546
2.197 In response to New Zealand, Australia argues th at its explanation of its measure concerning
"AQIS involvement" was provided in goo d faith and should thus be accepted. 547 Australia also
comments that it does not believe any of the experts have the knowledge to assist the Panel on this
matter.548
2.198 As regards ISPM No. 20, Australia argues that its "explanations of the systems audits that will
be conducted by AQIS officers cannot be interpre ted to amount to 100% inspection of individual
consignments or of all consignments, as New Zealand has implied." 549 Also, Australia quotes ISPM
No. 20 and argues that "New Zealand fails to acknowledge that ISPM No. 20 itself specifically
recognises that 'audit of procedures in the exporti ng country' may be required in the context of
measures to address phytosanitary risks. 550"551 Accordingly, Australia considers that its requirement
pertaining to "AQIS involvement" falls within the scope of what is envisaged by ISPM No. 20.552

542 (footnote original) ACER [Australia's comments on experts' responses], para 283.
543 New Zealand's comments on Australia's reply to Panel question 110 after the second substantive
meeting.
544 New Zealand's reply to Panel question 52 after the first substantive meeting (footnote omitted). See
also New Zealand's reply to Panel question 46 after the first substantive meeting.
545 New Zealand's reply to Panel question 52 after the first substantive meeting, footnote 50.
546 New Zealand's comments on Australia's reply to Panel questions 105-106 after the second
substantive meeting (footnote omitted).
547 Australia's second written submission, para. 722. See also Australia's first written submission,
paras. 150-151, 962 and 1107; Australia's reply to Panel's questions 47, 48, 49, 50, 51 and 52 after the first
substantive meeting; Australia's comments on the experts' replies, paras. 281-286; Australia's second written
submission, p. 218.
548 Australia's second written submission, para. 722.
549 Australia's second written submission, para. 724.
550 (footnote original) Exhibit AUS-170: IPPC, Guidelines for a Phytosanitary Import Regulatory
System (2004), (ISPM No. 20), p. 236.
551 Australia's second written submission, para. 725.
552 Ibid.

(ii) The Panel's analysis
2.199 At the outset of its analysis, the Panel notes as a factual point that there continues to be an
ongoing dispute between the Parties on Measure 15. Th is is illustrated by the Parties' repeated
exchanges of arguments throughout these proceedings on the exact nature of Measure 15. But even if
the Parties had been able to agree on the nature of Measure 15, a dispute would remain between them
with regard to the justification of that measure. In fact, as New Zealand – the complainant – indicates,
there is an ongoing dispute independently of the exact nature of Measure 15:
"Any type of AQIS involvement in orchard inspections for European canker and fire
blight, in direct verification of packing house procedures, and in fruit inspection and
treatment for ALCM is without scientific support, and accordingly there is very much
a live dispute between the parties."
553
New Zealand adds that the underlying measures them selves are inconsistent with the SPS Agreement,
so any AQIS involvement in, or supervising of, thos e measures would also be inconsistent with the
SPS Agreement and "[n]o amount of redefining of the measure by Australia can change this."554
2.200 As regards the nature of Measure 15, the Pa nel's obvious starting point is New Zealand's
panel request, which determines the Panel's terms of reference, including the measures under review.
New Zealand's panel request identifies Measure 15 as:
"The requirement that Australian Quarantine and Inspection Service officers be
involved in orchard inspections for European canker and fire blight, in direct
verification of packing house procedures, and in fruit inspection and treatment."
555
2.201 New Zealand challenges this measure (and the other measures at issue) as spelt out in the
IRA.556 In fact, New Zealand makes reference to the section of the IRA entitled "Requirement for
pre-clearance"557, which contains specific language identical to New Zealand's description of
Measure 15, save as regards New Zealand's reference in its panel request to the word "treatment" at
the end. In its pre-clearance section, the IRA pr ovides that "under the[] [pre-clearance] arrangements
AQIS officers would be involved in orchard inspections for European canker and fire blight, in direct
verification of packing house procedures, and in fruit inspection."558
2.202 Australia does not call into ques tion the description of Measure 15, including the reference to
"treatment", in New Zealand's pane l request. In fact, Australia id entifies the above-cited sentence in
the pre-clearance section of the IRA as the origin of the relevant language in New Zealand's panel

553 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 27.
554 New Zealand's reply to Panel question 46 after the first substantive meeting. See also
New Zealand's second written submission, p. 13.
555 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
556 Ibid., p. 1. See also the Panel's preliminary ruling, made publicly available in Australia – Apples ,
Communication from the Chairman of the Panel: Preliminary Ruling by the Panel (WT/DS367/7), 23 June
2008, attached as Annex A-2 to this report, para. 13(a).
557 New Zealand's first written submission, para. 3.83, footnote 92.
558 Australia's IRA, Part B, p. 314.

request.
559 Also, New Zealand argues that fruit inspection and treatment are specifically relevant for
ALCM, as the IRA refers to AQIS involvement in these steps.560
2.203 New Zealand adds that:
"In respect of ALCM, under 'Option 1: Inspec tion with Treatment', the IRA stipulates
at p. 320 that 'Under pre-clearance arra ngements AQIS would be involved in the
supervision of these procedures ' (emphasis added). 'These procedures' includes the
requirement that, 'where any live quarantinable arthropod is found the lot must be
subjected to an appropriate treatment (for example, fumigation) or rejected for
export.' (Emphasis added.)"
561
2.204 In light of the above and New Zealand's right as complainant to identify Measure 15 in its
panel request, the Panel finds no reason to exclud e AQIS involvement in "treatment" from the scope
of Measure 15.
2.205 Australia recognizes that the relevant parts of the IRA might require further clarification. 562
Of course, the Panel needs to take into consider ation all the arguments and evidence submitted by the
Parties. Nonetheless, in its analysis of the natu re of Measure 15, the starting point for the Panel's
analysis remains the IRA. It is the IRA that spells out Measure 15 in detail, and it is the IRA that the
Panel needs to review in this dispute.
2.206 The main issues of disagreement between the Part ies as regards the nature of Measure 15 is
whether it involves audits, whether it amounts to syst ems audits as identified by the Parties, and
whether it entails 100 per cent involvement by AQIS officers. The Panel notes that the above core
description of Measure 15 in the pre-clearance section of the IRA, referenced by New Zealand, does
not explicitly mention audits or systems audits . It talks in an unqualified manner about the
involvement of AQIS inspectors in two types of activities: (i) inspections, namely inspection of
orchards for European canker and fire blight, and in spection of fruit; and (ii) "direct" verification of
packing house procedures. In regard to the latte r, the IRA states that AQIS officers will be involved
in the direct verification of packing house pro cedures, but the IRA does not say that this would
necessarily entail AQIS audits.
2.207 The direct involvement of AQIS officers is under scored by the explicit language to that effect
in the first sentence of the IRA's pre-clearance section:
"[A]t least for initial trade, the quarantin e measures operate through a standard pre-
clearance arrangement with AQIS officers being directly involved."
563
2.208 These core sentences of the IRA with regard to Measure 15 do not explain whether this direct
involvement of AQIS would be 100 per cent or less. Through their unqualified language they do not
exclude 100 per cent involvement of AQIS officers at all.
2.209 In the other parts of the IRA's pre-clearance section, only one sentence makes reference to
audits:

559 Australia's reply to Panel question 48 after the first substantive meeting.
560 New Zealand's second written submission, 2.23, re ferring to Australia's IRA, p. 314. See also
New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties, para. 27.
561 New Zealand's second written submission, para. 2.23, footnote 28.
562 Australia's first written submission, 150.
563 Australia's IRA, Part B, p. 314.

"The involvement of AQIS officers in pre- clearance would also facilitate a rigorous
audit of other arrangements including regi stration procedures, standard commercial
practice, traceability, and handling export fruit in a secure manner."564
2.210 Importantly, this sentence refers to the "facilitation" 565 of audits, without stating that
pre-clearance itself would involve audits. Also, it refers to a "rigorous audit", implying that any
potential overlap between pre-clearance and audit w ould not weaken but rather strengthen audit by
AQIS. Furthermore, the pre-clearance section of the IRA refers to for the first time pre-clearance as
"pre-clearance arrangement"566, and introduces the sentence immediately preceding the one relating to
audits with the words "[u]nder these arrangements". 567 Accordingly, the reference to "other
arrangements"568 in the sentence referring to audit implies that audit would concern measures different
from pre-clearance. These points appear to distinguish pre-clearance from audit.
2.211 Turning to the section of the IRA entitled "Audit", invoked by Australia in the context of
Measure 15, the Panel notes that this section is separate from the pre-clearance section, although it
immediately follows the latter.
2.212 This audit section of the IRA makes various refe rences to pre-clearance. One sentence in that
section mentions that "[a]udits may be conducte d at the discretion of AQIS during the entire
production cycle and as a component of any pre-clearance arrangement." 569 This would seem to
suggest that pre-clearance arrangements may include audits as a component, although the IRA does
not say that it will be necessarily the case. Furt her, under the audit section, audit extends to
participants in pre-clearance arrangements, although it relates to auditing the integrity of pre-clearance
arrangements and participants' compliance with such arrangements:
"Participants in pre-clearance arrangeme nts will be audited by AQIS during the
season to verify that requirements such as the following continue to be met:
• There is an effective approved documented system in operation, including product
identification and labelling at each facility to ensure that pre-cleared and non pre-
cleared products are kept separate.
• At any time pre-cleared product is moved, the transport systems used maintains the
integrity of the pre-cleared product.
• Appropriate records are maintained for all pre-cleared product in storage."570
2.213 As regards the scope of audit, under the aud it section of the IRA, AQIS audit concerns the
"apple production and certification system" 571, and it "will be conducted to measure compliance with
packing house responsibilities, traceability, la belling, segregation and product security, and
MAFNZ/Agency certification processes." 572 Further, "AQIS field audits will measure compliance
with orchard registration, bloc k identification, pest/disease management/monitoring, records
management, and the administration of the area freedom and accreditation requirements." 573 A s

564 Australia's IRA, Part B, p. 314.
565 Ibid.
566 Ibid.
567 Ibid.
568 Ibid.
569 Ibid.
570 Australia's IRA, Part B, pp. 314-315.
571 Australia's IRA, Part B, p. 314.
572 Ibid.
573 Ibid.

indicated above, pre-clearance arrangements entail direct AQIS involvement in orchard inspections
for European canker and fire blight, in direct veri fication of packing house procedures, and in fruit
inspection.
2.214 The Panel cannot exclude that the scope of a udit set out in the "Audit" section of the IRA
might have some, partial overlap with the scope of pre-clearance arrangements. However, the IRA
does not specifically explain that relationship, nor does it indicate that any such relationship would
imply a specific link between audit and pre-clearance.
2.215 In light of the above, the Panel finds as a factual point that Measure 15 is clearly linked to the
section of the IRA entitled "Requirement for pre-cl earance", as invoked by New Zealand. The Panel
notes also that the IRA does not explicitly exclude th at at least certain aspects of Measure 15 may be
linked to the audit section of the IRA, or involve some audit by AQIS officers; however, any linkages
spelt out in the IRA in that regard are not suffici ently clear, explicit or unconditional to establish that
Measure 15 would necessarily involve any audit by AQIS officers.
2.216 This is underscored by Australia's arguments th at try to link the audit section of the IRA and
AQIS audit to Measure 15. In fact, in its respon se to a question by the Panel, Australia emphasizes
that AQIS audit would be undertaken separately:
"[T]he reference to orchard inspections a nd verification of packing house procedures
in [Measure 15] should be taken to be linked to auditing requirements which AQIS
officials may separately undertake while present in New Zealand to conduct pre-
clearance."
574
2.217 Likewise, in response to another question:
"Australia explained that 'pre-clearance' means that activities are undertaken outside
Australia to meet Australia's usual on-a rrival verification requirements, which are
separate to auditing requirements. AQIS o fficials present in New Zealand to conduct
pre-clearance will separately conduct systems audits."575
2.218 Further, in trying to link the pre-clearance and audit sections of the IRA to each other and to
Measure 15, Australia highlights certain key differences between the nature of the requirements under
those two sections:
"In the Final IRA Report, the distinction between 'pre-clearance' and 'audit' is made to
indicate that AQIS officers' involvement in orchard inspections for European canker
and fire blight, in direct verification of packing house procedures and in fruit
inspection is mandatory. Audit of othe r components of the New Zealand apple
production and certification system may be conducted at the discretion of AQIS."
576
2.219 Another difference between the pre-clearance and audit sections of the IRA flows from the
potentially transitory nature of pre-clearance arra ngements and the uncertainty regarding the timing
and criteria for its eventual phasing out under the IRA.
2.220 As regards the length of time during which th e pre-clearance arrangements would apply and
the exact criterion for their phasing out, the pre-cl earance section of the IRA explains that pre-

574 Australia's reply to Panel question 48 after the first substantive meeting (original emphasis).
575 Australia's reply to Panel question 47 after the first substantive meeting (original emphasis).
576 Australia's reply to Panel question 101 after the second substantive meeting.

clearance arrangements would apply " at least for initial trade" 577, and that "[t]he need for pre-
clearance would be reassessed after experience ha d been gained following significant trade." 578
Neither "initial trade" nor "significant trade" are defined by the IRA.
2.221 The section of the IRA entitled "Verification of documents and inspection on arrival where
pre-clearance is not used" starts by repeating the "i nitial trade" criterion and refers, in a rather vague
manner, to possible changes to pre-clearance arrangements:
"It is recommended that, at least for initial trade, pre-clearance be used (see above).
However, it is possible that this requirement may change in the future."579
2.222 Further, the section of the IRA entitled "Review of import conditions" provides that:
"It is recommended that Biosecurity Australia and AQIS in consultation with
MAFNZ, will review the import requirements after the first year of trade.
Further reviews will occur if circumstances or information warrant such action."580
2.223 As Australia argues581, this review at the end of the first year might involve a review or phase-
out of pre-clearance arrangements ; however, it will not necessarily do so. In fact, the Panel cannot
exclude that the pre-clearance arrangements might be phased out directly, and separately from the
review of import conditions.
2.224 Under the IRA, Australia's consent is indispensable for phasing out pre-clearance
arrangements either directly or in the framework of a review of import conditions. In light of the
uncertainty of the exact criteria and timing of the phase-out, the IRA accords wide discretion to
Australia for eventually phasing out pre-clearance arrangements. It also appears from the above
sections of the IRA that pre-clearance arrangements w ould be – at least potentially – transitory. This
potentially transitory nature of pre-clearance arra ngements and the uncertainty regarding the timing
and criteria for its eventual phasing out under the IRA constitutes a further difference between the
pre-clearance arrangements and the requirements spelt out in the audit section of the IRA.
2.225 The above uncertainties with regard to the IR A in the context of Measure 15 are underscored
by the IRA's requirement that the details of pre-cl earance be addressed by the Parties in the operating
manual and work plan, but which has not yet been adopted. According to the IRA:
"It is a requirement that MAFNZ or the registered agency prepare a documented
standard operating procedure (SOP) or ma nual that describes the phytosanitary
procedures for each of the pests of quaran tine concern for Australia and the various
responsibilities of all parties involved in meeting this requirement. The operating
procedure must be approved by AQIS befo re exports commence and will be subject
to audit by AQIS.
A draft work plan will be develope d between DAFF and MAFNZ following the
finalisation of this IRA.
The work plan procedures may include, but are not limited to operational details on:

577 Australia's IRA, Part B, p. 314 (emphasis added). See also Australia's IRA, Part B, p. 325.
578 Australia's IRA, Part B, p. 314.
579 Australia's IRA, Part B, p. 325.
580 Ibid.
581 Australia's closing oral statement at the first su bstantive meeting of the Panel with the Parties,,
para. 34.

• inspection and sampling methodology
• pre-clearance arrangements
• maintenance and supply of records
• storage segregation and identification of lots, and
• dealing with rejected lots. [sic]
• details on standard commercial practice."
582
2.226 Although the "operating procedure must be approved by AQIS" 583, according to the IRA it
needs to be prepared by New Zealand. Likewi se, under the IRA the work plan does not depend only
on Australia but it needs to be developed jointly by both Parties, including New Zealand. The
Panel appreciates Australia's forthcoming offer du ring the proceedings to specify what Measure 15
might involve in detail in light of earlier discussions between the Parties to prepare the standard
operating procedures.
584 However, to the extent that New Zealand – the complainant – has not
accepted those explanations during the proceedings or the Parties have not agreed on the standard
operating procedures and work plan, the Panel cannot be certain that the final version of those
documents would include the same requirements wi th regard to Measure 15 as the ones offered in
Australia's explanations.585
2.227 The pre-clearance section of the IRA does not specify the frequency or intensity of the
involvement of AQIS officers in Measure 15. At the same time, it spells out the direct involvement of
AQIS officers in unqualified language, and it is silent on any further details of that involvement. This
certainly does not exclude a 100 per cent involvement, i.e. that during initial trade AQIS officers
would be involved in all orchard inspections for European canker and fire blight, in all direct
verification of packing house procedures, and in all fruit inspection. Australia recognizes that this is a
possibility under the IRA, at least as regards certai n elements of Measure 15, although Australia also
argues that this would be exceptional.
2.228 The Panel notes that Part A of the IRA summari zes the conclusions of the IRA in relevant
part as follows:
"This final report recommends that the importation of apples to Australia from
New Zealand be permitted, subject to the following risk management conditions:
• Mandatory pre-clearance arrangements with Australian Quarantine and Inspection
Service officers involved in all risk management measures in New Zealand and
auditing of the systems and processes used by New Zealand to certify exports."
586
2.229 As mentioned above, Australia argues that pre-clearance is mandatory whereas the
requirements set out in the audit section of the IRA are at the discretion of AQIS. 587 Accordingly,
only the first part of the above bullet point summary in Part A of the IRA could relate to the pre-

582 Australia's IRA, Part B, pp. 313-314.
583 Australia's IRA, Part B, p. 313.
584 Australia's reply to Panel questions 105 and 106 after the second substantive meeting.
585 See for example, New Zealand's comments on Australia's responses to the Panel's questions 105 and
106 after the second substantive meeting, paras. 250-254.
586 Australia's IRA, Part A, p. 1 (emphasis added).
587 Australia's reply to Panel question 101 after the second substantive meeting, para. 454.

clearance section of the IRA, while the second part of the same bullet point summarizes the
requirements set out in the audit section of the IRA.
2.230 The first part of the above bullet point summary in Part A of the IRA indicates that, under the
pre-clearance arrangements, AQIS officers would be involved in all pre-clearance-related risk
management measures in New Zealand. Based on this language in the IRA, Measure 15 seems to
entail the involvement of AQIS officers in all orchar d inspections for European canker and fire blight,
in all direct verification of packing house procedur es, and in all fruit inspection and treatment. At the
same time, the Panel is aware that the IRA does not provide a full picture on Measure 15. In light of
the details on Measure 15 offered by Australia dur ing these proceedings, the Panel could imagine –
although it cannot be certain at this point – that in its final form Measure 15 will not entail AQIS
involvement in all measures related to pre-clearance arrangements.
2.231 As regards the Parties' differences on whether Measure 15 equals systems audits, the Panel
notes that the neither the pre-clearance nor the audit part of the IRA mention systems audits. Part A
of the IRA summarizes the requirements in the audit section of the IRA as the "auditing of the systems
and processes used by New Zealand to certify exports." 588 Nevertheless, this summary does not
explain in detail whether the requirements set out in the audit section of the IRA would effectively
amount to a systems audit as understood by the Parties. In any event, as stat ed earlier, it is unclear
from the IRA whether Measure 15 relates also to the audit section of the IRA, and the Parties have not
finalized the work plan and operating procedures. A ccordingly, it remains impossible for the Panel to
establish also whether Measure 15 would include sy stems audits as understood by the Parties. The
Panel notes that this issue is more directly rela ted to New Zealand's claim under Article 5.6 of the
SPS Agreement.
6. Territorial applicability of the measures at issue
2.232 The IRA assesses the three pests at issue "for the whole of Australia". 589 Accordingly, the
measures spelt out in the relevant parts of the IRA in regard to those pests apply to apple exports from
New Zealand to the entire territory of Australia.590
7. Legal issues to be addressed in the findings section of the report
2.233 The Panel notes there are various further issues of disagreement between the Parties as
regards the measures that are at issue in this dispute, such as:
(a) Whether all of the 16 specific measures qualify as SPS measures;
(b) Whether New Zealand has the right to c ontest each of the 16 specific measures
individually or only as a whole, including whether some measures should be
addressed together as part of a "systems" approach; and,
(c) Whether, as Australia argues, some of those measures are "ancillary" to some other,
allegedly "principal" measures.
These issues are more relevant for the eventual lega l review of the measures at issue than for the
determination of which measures are at issue in the dispute and precisely what some of these

588 Australia's IRA, Part A, p. 1 (emphasis added).
589 Australia's IRA, Part B, p. 47. See also Ibid., pp. 48-49.
590 The IRA addressed some other pests and recommended certain measures only for Western
Australia, these measures and the pests to which they relate that are not at issue in this dispute. See Australia's
IRA, Part B., pp. 239-310, and 324.

measures might entail. Accordingly, the Panel w ill address these issues in the findings section of the
report.
2.234 A further question related to measures at issue is whether the "IRA process" as a whole is a
measure within the purview of this Panel. Au stralia contests this in the specific context of
New Zealand's claim under Article 8 and Annex C(1)(a) of the SPS Agreement.
591 It is in the legal
review of that claim that the Panel will address this question.
E. PRODUCT AT ISSUE
1. The Parties' arguments
2.235 The Parties have discussed at length the product at issue throughout these proceedings.
2.236 In principle, both Parties agree that the product at issue should be determined by the Panel's
terms of reference, as containe d in New Zealand's panel request 592 and adopted by the DSB.
New Zealand's panel request refers in gene ral terms to the "importation of apples from
New Zealand"593 to Australia.
2.237 Despite the Parties convergence on the relevance of the panel's request for determining the
product at issue, they express differences on the impor tance in this regard of the maturity, freedom
from trash, symptomless nature and the mode of trade of apples.
2.238 In its first written submission, New Zealand states that the product at issue in this dispute is
apples imported from New Zealand into Australia, as described in the Panel's terms of reference. 594
But New Zealand adds that "[i]n practice, [New Zealand] would export mature, symptomless apples
to Australia"595 because:
"The IRA requires, as a condition of entry, that all New Zealand apples must meet the
'class 1 export quality fruit' standard in respect of the presence of wounds and
maturity596 and must be free of trash. 597 Such a standard would be consistent with
practice in the export of apples from New Zealand, and in bringing this case
New Zealand made no challenge to this type of requirement."598
2.239 New Zealand repeatedly states that its argum ents focus on the product actually exported 599,
namely, mature, symptomless apples.600

591 See, for example, Australia's first written submi ssion, paras. 1117-1126; Australia's second written
submission, paras. 184-218.
592 New Zealand's reply to Panel question 1 after the first substantive meeting, para. 2; Australia's reply
to Panel question 1 after the first substantive meeting, p. 1.
593 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report.
594 New Zealand's first written submission, para. 3.44 ; New Zealand's opening oral statement at the
first substantive meeting of the Panel with the Parties, para. 23; New Zealand's reply to Panel question 1 after
the first substantive meeting, para. 2, and Panel question 2 after the first substantive meeting, para. 5.
595 New Zealand's first written submission, para. 3.44.
596 (footnote original) IRA, p. 315.
597 (footnote original) IRA, p. 318.
598 New Zealand's first written submission, para. 3.45.
599 New Zealand's reply to Panel question 2 after the first substantive meeting, para. 5.
600 New Zealand's reply to Panel question 10 after the second substantive meeting, para. 20.

2.240 In response, Australia argues that "New Zealan d's attempt to character ize the product at issue
as 'mature, symptomless apples' should be dismissed." 601 Australia adds that the Panel would commit
a legal error by defining the product at issue as "mature, symptomless apples" 602 because the "term
'symptomless' could be misinterpreted as sugges ting that New Zealand would only export 'risk-free
goods' without requiring New Zealand to prove this." 603 In Australia's view, even if apples are
"symptomless", this does not necessarily mean that they are pest free: apples latently infected with
European Canker or carrying fire blight bacteria are by definition "symptomless".604
2.241 Australia argues that "[t]he product at issue in this dispute should be de termined by reference
to the scope of the Final IRA Report". 605 Australia points out that New Zealand's panel request cites
the policy determination of the Australian Direct or of Animal and Plant Quarantine concerning the
importation of apples from New Zealand, subjecting the importation of apples into Australia to the
requirements of the IRA.606 In Australia's view, that reference in New Zealand's panel request defines
the product at issue by linking it to the product considered in the IRA. 607 Since the IRA's scope is
"mature apple fruit free of trash, either packed or sorted and graded bulk fruit from New Zealand" 608,
Australia argues that the product at issue should be defined in the terms used in the IRA and not as
"mature, symptomless apples".609
2.242 In response, New Zealand contends that there is no practical difference between the apples
actually exported to Australia and those under the scope of the IRA. 610 Nevertheless, New Zealand
states that it is not appropriate to determine the prod uct at issue by reference to the scope of the IRA,
but rather that it should be defined by the panel's terms of reference 611 as "apples imported from
New Zealand into Australia."612 In New Zealand's view, limiting the product at issue by reference to
the scope of the IRA "would effectively allow a Member undertaking an IRA to exclude certain
elements from review by a dispute settlement panel si mply by defining the scope if its investigations
in a particular way." 613 At the same time, as noted, New Zealand points out that its arguments focus
on the product actually exported, namely mature, symptomless apples.614
2.243 The Parties also discuss the relevance of the mode of trade of apples for the purposes of
defining the product at issue. New Zealand asserts that "[t]he mode of trade does not have
implications for the definition of the 'product at i ssue', which is determined by the Panel's terms of
reference."615 Australia on the other hand, argues that the product at issue is defined by the IRA and

601 Australia's reply to question 1, p. 3.
602 Australia's reply to Panel question 15 after the second substantive meeting, paras. 50-51.
603 Australia's reply to Panel question 3 after the first substantive meeting, p. 4.
604 Ibid.
605 Australia's first written submission, para. 123.
606 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report.
607 Australia's reply to Panel question 1 after the first substantive meeting, pp. 1-3.
608 Australia's IRA, Part B, p. 9. See Australia's reply to Panel question 1 after the first substantive
meeting, pp. 1-3.
609 Australia's reply to Panel question 1 after the first substantive meeting, pp. 1-3; Australia's second
written submission, para. 81-83.
610 New Zealand's reply to Panel question 10 afte r the second substantive meeting, para. 20;
New Zealand's first written submission, para., 2.33.
611 New Zealand's reply to Panel question 1 after the first substantive meeting, para. 2.
612 Ibid., citing in support Australia – Apples, Request for the Establishment of a Panel by New Zealand
(WT/DS367/5), 7 December 2007, attached as Annex A-1 to this report.
613 New Zealand's reply to Panel question 1 after the first substantive meeting, para. 1.
614 New Zealand's reply to Panel question 10 after the second substantive meeting, para. 20.
615 New Zealand's reply to Panel question 8 after the first substantive meeting, para. 12.

that "[t]he mode of trade, namely packed fruit or bulk fruit, is an important aspect of this definition
and therefore determines the product at issue."
616
2. The Panel's analysis
2.244 The Panel's task is to define the scope of the dispute with regard to the product at issue.
According to established jurisprudence, it is the panel's terms of reference that "define the scope of [a]
dispute."617 In turn, a panel's mandate or terms of re ference are determined by the request for the
establishment of the panel.618 The panel request constitutes the "matter referred to the DSB", which in
turn forms the basis of a panel's terms of refere nce under Article 7.1 of the DSU. To define the
product at issue, the Panel must thus refer to its terms of reference.
2.245 New Zealand's panel request refers to "t he importation of apples from New Zealand" 619 into
Australia. Thus, the panel request determines the product at issue in general terms, without any
qualifications. In particular, the request does not refer to either "mature, symptomless apples", or
"mature apple fruit free of trash, either packed or sorted and graded bulk fruit".
2.246 The Panel recalls the argument of Australia that the product at issue should be defined by the
IRA, and that the mode of trade, namely packed fruit or bulk fruit, is an important aspect of this
definition and therefore determines the product at issue.
2.247 The measures at issue identified in the panel requ est are contained in the IRA, also referenced
by the panel request. 620 As noted by Australia, the IRA states th at "[t]he scope of [its] analysis is the
importation of mature apple fruit free of trash, eith er packed or sorted and graded bulk fruit from
New Zealand."621 At the same time, the IRA applies to apples produced in New Zealand and to be
exported to Australia. Indeed, the IRA is entitled "Final Import Risk Analysis Report for Apples from
New Zealand", without any qualification. Part A of the IRA, summarizes the overall conclusions of
the IRA by referring to New Zealand apples in equa lly general terms: "This final report recommends
that the importation of apples to Australia from New Zealand be permitted, subject to the following
risk management conditions."
622 The applicability of the IRA to apples from New Zealand destined to
Australia is acknowledged by both Parties. Austra lia states that "[a]ny apples proposed for export
from New Zealand to Australia would be subject to the requirements in the Final IRA Report." 623.
Thus, while the scope of the IRA's analysis might be limited to certain apples, the measures set out in
the IRA apply to any apples exported from New Z ealand to Australia. This is underscored by
Biosecurity Australia's Policy Memorandum 2007/ 07 of 27 March 2007, from which New Zealand's
panel request cites the following passage: "Im portation of apples [from New Zealand] can be
permitted subject to the Quarantine Act 1908 , and the application of phytosanitary measures as
specified in the Final import risk analysis report for apples from New Zealand, November 2006."624
2.248 If the Panel were to focus only on mature apple fruit free of trash, either packed or sorted and
graded bulk fruit from New Zealand, as Australia ar gues, it would commit a legal error. Australia's

616 Australia's reply to Panel question 8 after the first substantive meeting, p. 7.
617 Appellate Body Report on US – Carbon Steel, para. 126.
618 Panel Report on Japan – Apples, para. 8.32.
619 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report.
620 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report.
621 Australia's IRA, Part. B, p. 9.
622 Australia's IRA, Part A, p. 1.
623 Australia's reply to Panel question 5 after the first substantive meeting, p. 5.
624 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report.

arguments narrow the product at issue with respect to how it is identified in the panel request. Even if
the Panel accepted Australia's arguments, it would still reach the conclusion that the IRA's effects
extend to all apples from New Zealand imported into Australia. Indeed, only apples within the scope
of the IRA are allowed to be imported into Australia. In other words, the IRA is equally applicable to
any other type of apple from New Zealand, in the sen se that it restricts the importation of those apples
into Australia.
2.249 The Panel now turns to New Zealand's focus on "mature, symptomless" apples. New Zealand
states that its focus on "mature, symptomless" appl es is done in the context of the arguments it has
brought forth in this case "[which] are, as a practic al matter, based on the product actually exported
from New Zealand". 625 Such focus, made for the purpose of New Zealand's arguments relates to
issues of the merits of the case, issues which will not be dealt with in this section. This should not be
confused with the definition of the product at issue.
2.250 Again, for the purpose of defining the product at i ssue it is the Panel's terms of reference that
define the scope of the dispute. New Zealand's cl aims are directed to measures contained in the IRA
which are applied to the importation of apples fro m New Zealand. The Panel cannot broaden or
narrow its mandate, it has to limit itself to address th e measures and products identified in the Panel's
terms of reference. 626 Accordingly, the identified product at issue is apples imported from
New Zealand into Australia. This constitutes the scope of this dispute. New Zealand's arguments
referring to "mature, symptomless apples" are relevant, not for the determining the product at issue,
but rather for the purposes of reviewing Australia's challenged measures in light of the provisions of
the SPS Agreement identified in the Panel request. In sum, the Panel's terms of reference, and not
New Zealand's legal arguments, define the product at issue and the scope of the dispute.
2.251 In conclusion, the Panel's terms of reference refer to "the im portation of apples". The Panel
may not limit itself to the analysis of only "mature apple fruit free of trash, either packed or sorted and
graded bulk fruit from New Zealand", or on the other hand to only "mature, symptomless apples". By
doing so, and failing to incorporate into its analys is the products defined in the Panel's terms of
reference, namely apples from Ne w Zealand imported into Australia, the Panel would be incorrectly
narrowing its mandate.
2.252 In light of these considerations, the Panel concludes as a factual point that the product at issue
identified in the Panel's terms of reference is apples from New Zealand imported into Australia.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 New Zealand requests the Panel to find that the challenged measures are, both individually
and as a whole, inconsistent with the obligations of Australia under the following provisions of the
SPS Agreement: Articles 2.2 and 2.3 (both sentences); Articles 5.1, 5.2, 5.5 (fi rst sentence) and 5.6;
Article 8; and Annex C(1)(a).
3.2 In response, Australia argues that:
(a) Australia's measures are not inconsistent with Article 5.1 and, accordingly, with
Article 2.2 of the SPS Agreement, and that they are also not inconsistent with
Article 5.2 of the SPS Agreement; or, altern atively, that Australia's measures are not
inconsistent with Article 2.2 of the SPS Agreement;
(b) Australia's measures are not inconsistent with Article 5.6 of the SPS Agreement;

625 New Zealand's reply to Panel question 2 after the first substantive meeting, para. 5.
626 Appellate Body Report on Japan – Alcoholic Beverages II , p. 26.

(c) Australia's measures are not inconsistent w ith Article 5.5 of the SPS Agreement and,
consequently, with Article 2.3; and,
(d) New Zealand's claim under Article 8 and Annex C(1)(a) of the SPS Agreement is
outside the scope of this dispute and should be dismissed by the Panel.
IV. ARGUMENTS OF THE PARTIES
627
A. NEW ZEALAND
1. Executive summary of New Zealand's first written submission
(a) Introduction
4.1 The importation of New Zealand apples into Australia is subject to highly restrictive measures
relating to fire blight, European canker and apple leafcurling midge (ALCM) set out in Australia's
Final Import Risk Analysis Report for Apples from New Zealand (IRA). These measures effectively
close Australia's market to New Zealand apples.
4.2 While New Zealand does not dispute the right of a WTO Member to take sanitary and
phytosanitary (SPS) measures necessary for the protec tion of human, animal or plant life or health, as
a WTO Member and party to the Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS Agreement), Australia's SPS measures must also comply with its obligations under
that Agreement.
4.3 The SPS Agreement requires that SPS measures a pplied to the importation of a product – in
this instance apples imported into Australia from Ne w Zealand – be based on an appropriate risk
assessment and be supported by sufficient scientific evidence. However, there is no scientific
evidence that mature, symptomless apples are a pa thway for the transmission of fire blight or
European canker – indeed there is evidence to the contrary. In the case of ALCM, Australia
conjectures a confluence of events which falls far short of being a real world likelihood.
4.4 Accordingly, and for the reasons detailed be low and set out in full in New Zealand's
submission, the measures at issue adopted by Australia are inconsistent with Articles 2.2, 2.3, 5.1, 5.2,
5.5, 5.6, 8 and Annex C(1)(a) of the SPS Agreement.
(b) Background
4.5 The Australian market has eff ectively been closed to New Zealand apples since 1921. In
1986, and again in 1989 and 1995, New Zealand requested access to that market – and each time
access was denied.
4.6 In 1999, New Zealand made its fourth request for the admission to Australia of New Zealand
apples. Almost eight years later, in November 2006, the IRA was released. It sets out measures to be
applied to the importation of New Zealand apples to address pests and diseases that Australia reports
itself to be free of, in particular: fire b light – a plant disease caused by the bacterium Erwinia
amylovora; European canker - a plant di sease caused by the fungus Neonectria galligena; and ALCM
– a small, winged insect which feeds on the unfurling leaves of apple trees. These measures in effect
continue to exclude New Zealand apples from the Australian market.

627 This section on the arguments of the Parties is based on the executive summaries submitted by the
Parties to the Panel.

4.7 During the many years of preparation of the IRA, New Zealand's request for market access
for apples developed a political prominence in Austra lia. The issue of New Zealand apple access was
debated in the run-up to federal elections, there were Senate Committee hearings on the matter and the
Australian apple industry was closely involved in the import risk analysis process.
4.8 In its panel request, New Zealand identified sev enteen specific measure s imposed in respect
of three pests: fire blight, European canker and ALCM. The measures fall into two categories; those
of general application and those specific to each of the three pests. New Zealand considers these
measures are inconsistent with Australia's obligations under the SPS Agreement.
4.9 The measures at issue applicable to fire blight are the requirements that: apples be sourced
from areas free from fire blight disease symptoms; orchards/blocks be inspected for fire blight
disease symptoms; an orchard/block inspecti on methodology be devel oped and approved;
orchards/blocks be suspended for the season on the basis that any evidence of pruning or other
activities carried out before the inspection could constitu te an attempt to remove or hide symptoms of
fire blight; orchards/blocks be suspended for th e season on the basis of detection of any visual
symptoms of fire blight; apples be subject to disi nfection treatment in the packing house; all grading
and packing equipment that comes in direct contact with apples be cleaned and disinfected
immediately before each Australian packing run, and that packing houses registered for export of
apples process only fruit sourced from registered orchards.
4.10 In respect of European canker the measures at issue are the requirements that: apples be
sourced from export orchards/blocks free of European canker; all trees in export orchards/blocks be
inspected for symptoms of European canker; a ll new planting stock be intensively examined and
treated for European canker; orchards/blocks be suspended fo r the season on the basis that any
evidence of pruning or other activities carried out befo re the inspection could constitute an attempt to
remove or hide symptoms of European canker; and exports from orchards/blocks be suspended for
the coming season on the basis of detection of Europ ean canker and that reinstatement would require
eradication of the disease, confirmed by inspection.
4.11 The measures at issue applicable to ALCM are the requirements of inspection and treatment,
including: the option of inspection of each lot on the basis of a 3000 unit sample selected at random
across the whole lot, with detection of any live quarantineable arthropod resulting in appropriate
treatment or rejection for export; or the alternative option of inspection of each lot on the basis of a
600 unit sample selected at random across the whole lot, plus mandatory treatment of all lots.
4.12 The general measures are: the requirement th at Australian Quarantine and Inspection Service
officers be involved in orchard inspections for Europ ean canker and fire blight, in direct verification
of packing house procedures, and in fruit inspection and treatment; the requirement that New Zealand
ensure that all orchards registered for expor t to Australia operate under standard commercial
practices; and the requirement that packing houses provide details of the layout of premises.
(c) Legal analysis
(i) Australia's measures are inconsistent with Article 2.2
4.13 Australia's measures are "maintained without su fficient scientific evidence". There is no
"rational or objective" relationship between those measures and scientific evidence, and therefore they
are inconsistent with Article 2.2 of the SPS Agreement.
4.14 All of Australia's fire blight measures depend on the contention that mature apple fruit
provide a pathway for the transmission of the disease. However, there is no evidence that fruit to be
exported from New Zealand – that is, mature, symptoml ess apples – provide such a pathway. Rather,

the scientific evidence shows that mature, sympto mless apple fruit do not transmit the disease and
have never done so.
4.15 In Japan – Apples, the relevant scientific evidence was reviewed by the panel and by its
scientific experts. The panel found that the risk that mature, symptomless apple fruit would transmit
fire blight was negligible. The panel's conclusi ons were upheld by the Appellate Body. There is
nothing to suggest that the panel and the scientific experts in Japan - Apples were wrong. Indeed,
scientific research on fire blight since Japan – Apples only serves to reinforce the panel's conclusions.
4.16 Fire blight bacteria are not found internally in mature apple fruit. The bacteria are only rarely
found externally on apples, and then only on the ca lyx, an environment that is not conducive to the
growth, survival or transfer of E. amylovora. Even when found on the calyx, E. amylovora are not in
quantities sufficient to be transmitted to a susceptible host and initiate an infection, particularly
following the decline in bacteria numbers that occurs during post-harvest handling, storage and
transport of apples. Studies have concluded that the risk of importing E. amylovora on commercial
apple fruit and the concomitant risk of a fire blight outbreak is so small as to be insignificant.
4.17 The scientific evidence is reinfor ced by the reality of the intern ational trade in apples. Over
the past several decades, billions of apples have be en exported into fire blight-free countries with no
spread of fire blight resulting.
4.18 Since the contention that mature, symptoml ess apple fruit provide a pathway for the
transmission of fire blight is not supported by sci entific evidence, none of the fire blight measures
imposed by Australia have a rational or objective re lationship with the scientif ic evidence. Indeed,
many of the Australian measures, for exam ple chlorine dipping, parallel those in Japan – Apples
found to be in violation of the SPS Agreement.
4.19 Similarly, the measures imposed in respect of European canker are based on the contention
that mature, symptomless apples provide a path way for transmitting the disease. However, once
again, this is not supported by scientific evidence. Such a pathway has never been demonstrated to
exist. In particular, there is no scientific eviden ce of mature New Zealand apple fruit being latently
infected with N. galligena . Australia's contentions about la tent infection are based on studies
conducted in countries where the climate, characteri sed by high summer rainfall, is very different
from that of New Zealand.
4.20 There is also no scientific support for the propositi on that mature apple fruit could be infested
(surface-contaminated) with N. galligena by spores at harvest, as a future source of infection or cross-
contamination of clean apple fruit. Further, even if N. galligena were present in or on mature
New Zealand apple fruit and survived handling, pro cessing and transport into Australia, there is no
scientific evidence that spores would be produced from la tently infected or infested fruit, or that these
spores could be spread from infected fruit to a susceptible host.
4.21 Finally, there is no scientific evidence that Eu ropean canker could establish and spread in the
Australian climate, given that conditions favourab le to European canker, namely rainfall and
moderate temperatures, are not prevalent in Austra lia's apple growing regions. There can be no better
evidence of the lack of a pathway and the inhospita bility of the Australian climate to the disease than
the failure of European canker to spread during the Tasmanian outbreak last century, despite the
unrestricted movement of apple fruit within and from Tasmania during this period.
4.22 Since there is no scientific evidence that matu re, symptomless apple fruit provide a pathway
for the transmission of European canker, none of the European canker measures imposed by Australia
have a rational or objective relationship with the scientific evidence.

4.23 The Australian measures in relation to ALCM are also maintained without sufficient scientific
evidence. In formulating its measures for ALCM Au stralia has not taken into account the scientific
evidence which indicates that approximately 85 per cent of ALCM cocoons on New Zealand apple
fruit are not viable because they do not contain liv e pupae. That fact, combined with the midge's
limited lifespan and flight range, and other biologi cal factors, renders highly improbable the sequence
of events on which Australia relies to support its measures.
4.24 Australia's contention would require at least 4,000 apples to be dumped, uncovered at a single
site within 30m of apple trees with new shoots. There is no scientific evidence demonstrating that
such a sequence of events has occurred or would occur in the real world.
4.25 The implausibility of such a sequence of events is borne out by the history of trade in apple
fruit. New Zealand has exported millions of apples to ALCM-free countries with no special measures
for ALCM and with no spread of ALCM resulting.
4.26 In light of this, a standard AQIS inspecti on regime of 600 apples would be more than
adequate to address the risk. The 3000 fruit sample inspection regime required by Australia or the
mandatory treatment in addition to a 600 fruit inspection are disproportionate to the risk.
4.27 Equally, the general measures imposed by Au stralia for the importation of New Zealand
apples are maintained without sufficient scientific ev idence. Indeed, Australia does not even attempt
to provide a scientific justification for these measures.
(ii) Australia's measures are inconsistent with Article 5.1
4.28 Australia's measures are not based on a "risk as sessment" within the meaning of Article 5.1
and Annex A and are therefore inconsistent with Article 5.1 of the SPS Agreement.
4.29 The IRA approaches the risk asse ssment in a way that ascrib es quantitative probability values
to steps that are often no more than possibilities – in some instances the remo test of possibilities.
Such an approach is inconsistent with that adopted by the Appellate Body in Australia – Salmon and
EC – Hormones , which emphasises that a ri sk assessment must be concerned with probabilities and
not just possibilities.
4.30 Australia compounds this problem with several fundamental methodological flaws, with the
result that the levels of risk ascribed in the IRA ha ve no credibility. Such flaws include the choice of
an inflated maximum value for th e probability of events with a "negligible" likelihood of occurring,
inappropriate use of the uniform distribution to model the likelihood of various events, and
overestimation of the projected volume of trade in New Zealand apples. The overall effect of these
three fundamental methodological flaws has been to seriously overestimate the likelihood of events
whose probability of occurring is negligible.
4.31 Additionally, like Japan in Japan – Apples, Australia has neither "evaluated the likelihood" of
entry, establishment or spread of the relevant pests, nor has it evaluated the likelihood of their entry,
establishment or spread "according to the SPS measures which might be applied".
4.32 In respect of fire blight, the IRA asserts a high ly inflated likelihood of entry of the bacteria
into Australia via imported apples. Australia's "im portation steps" for fire blight assume a continuous
transmission pathway, ignoring the fact that at criti cal points there is no evidence of a pathway. In
assigning probability values to what are frequently th e remotest of possibilities, Australia has ignored
or significantly misunderstood scientific evidence, which throughout provides no support for the
suggestion that a pathway exists.

4.33 Mature, symptomless apple fruit is not a vector for the transmission of E. amylovora. This is
confirmed by the scientific evidence, as endor sed by the Panel and scientific experts in Japan –
Apples. Hence, fire blight would not be transmitted to host plants in Australia through the importation
of mature, symptomless apples. Australia's IRA is thus not an evaluation of the "likelihood of entry";
it is speculation on the possibility of entry that is not in conformity with Article 5.1 of the
SPS Agreement.
4.34 The IRA equally fails to evaluate the likelihood of the establishment or spread of fire blight
within Australia. Australia contends that, once apples infested or infected with E. amylovora arrive in
Australia, the disease would be likely to be transmitt ed to host plants. This contention assumes that
there is a dispersal mechanism to move the bacteria to a susceptible host. However, there is no
scientific evidence of any likelihood that this could occur. In this area, too, the IRA's analysis rests on
remote possibilities and not on probabilities based on scientific evidence of naturally occurring
events. The IRA has only offered speculation about hypothetical events that have never been shown
to occur.
4.35 Nor does Australia's analysis of the consequences of fire blight constitute an evaluation of the
"associated potential biological and economic conse quences" of the disease within the meaning of the
SPS Agreement. The IRA overestimates the severity of the impact of fire blight on pipfruit
production as well as other consequences of the introduction and spread of the disease, based on
selectively chosen evidence and on assumptions that have no basis in scientific evidence or fact. A
proper assessment, relying on the actual experience of countries where fire blight is present, would
have resulted in the overall consequences of th e introduction and spread of the disease being
recognized as minor.
4.36 Equally, the IRA's analysis of the probability of importation of European canker rests on the
flawed contention that mature, symptomless a pple fruit are a pathway for the transmission of
European canker, a contention that is not supported by scientific evidence.
4.37 In particular, there is no scientific evidence of mature New Zealand apple fruit being latently
infected, or infested, with N. galligena. Further, even if N. galligena were present in or on mature
New Zealand apple fruit, there is no scientific evid ence to support the likelihood that spores would be
produced from latently infected or infested fruit, or that these spores could be transferred from
infected fruit to a susceptible host in conditions suit able to initiate infection once in Australia. In
assigning probability values to steps that are no more than remote possibilities, the IRA ignores or
misapplies scientific data or speculates about events that would almost certainly not occur.
4.38 The IRA also fails to evaluate the likelihood of the establishment or spread of European
canker within Australia. Once again, the Australia n analysis is based on assumptions about climatic
similarity and alternative hosts in other countries where European canker is known to occur – none of
which finds support in science. Equally, Australia significantly overestimates the severity of the
consequences of European canker, based on assumptions that are not supported by scientific evidence.
4.39 In respect of ALCM, Australia overestimates the likelihood of entry at several importation
steps and then bases likelihood of establishment and spread on a scenario that almost certainly would
not occur. In particular, the IRA's evaluation of the likelihood of entry of ALCM into Australia
erroneously equates the number of cocoons with the number of viable ALCM found on apples.
However, cocoons themselves are not a risk factor fo r ALCM. It is only cocoons that contain viable
ALCM pupae that pose any potential risk.
4.40 Just as Australia has failed to evaluate the lik elihood of entry of ALCM, it has equally failed
to evaluate the likelihood of "establishment or sp read" of the pest. The IRA's evaluation of the
transfer of ALCM to a susceptible host rests on uns ubstantiated assumptions about the circumstances

and conditions under which adults wi ll emerge and the likelihood that they will successfully mate.
Australia's contention that ALCM would be likely to become established and spread in Australia is
unsupported by scientific evidence or experience. It ignores the issue of viability of cocoons, the
actual biology of ALCM and the reality of commer cial practice with respect to the sale, use and
disposal of apple fruit. Australia's purported an alysis of the "associated potential biological and
economic consequences" of ALCM is also flawed, constituting nothing more than a listing of
unsubstantiated assumptions.
4.41 Finally, Australia has failed to evaluate the lik elihood of entry, establishment and spread of
each pest "according to the SPS measures that migh t be applied". The IRA determined, without
analysis, that certain measures should be applied and failed to evaluate alternative measures that
might have been applied instead, including a partic ular measure proposed by New Zealand requiring
apples to be imported "retail ready".
4.42 Since Australia has failed to comply with its obligations under Article 5.1 of the
SPS Agreement it is also in breach of the requirement s of Article 2.2 that the measures be "based on
scientific principles" and not be maintained "without sufficient scientific evidence".
(iii) Australia's measures are inconsistent with Article 5.2
4.43 Australia has also failed to comply with its obligations under Article 5.2. The IRA ignores
available scientific evidence on the basis of which the panel in Japan – Apples concluded there was
no pathway for the transmission of fire blight through mature, symptomless apples; it ignores
relevant apple production processes in New Zealand; it ignores its own border inspection processes;
it ignores the actual prevalence of the relevant di seases or pests in New Zealand; and it ignores
relevant climatic conditions in both New Zealand and Australia.
(iv) Australia's measures are inconsistent with Article 5.5 and Article 2.3
4.44 Australia's measures for the importation of New Zealand apples are inconsistent with its
obligations under Articles 5.5 and 2.3. Australia has established its own leve l of protection (ALOP)
against risks to plant life or hea lth in respect of two diseases affecting Japanese pears – brown rot and
Japanese Erwinia. In those cases, imported fruit with a degree of risk equivalent to or higher than that
of New Zealand apples are subject to measures subs tantially less restrictive than those imposed on
New Zealand apples, constituting arbitrary and unjustif iable distinctions in treatment of different
situations resulting in discrimination or a disguised restriction on international trade.
4.45 Several of the "warning signals" and other additional factors, identified by the Appellate Body
in EC – Hormones and the panel in Australia – Salmon are present in the current instance. These
include: the inconsistency of the measures with Arti cle 5.1; the level of politicisation of the IRA
process; the undue delay involved in the process and the absence of certain comparable domestic
requirements. The presence of such warning si gnals and additional factors indicates that the
distinctions in the levels of protection adopted by Australia in different situations are arbitrary and
unjustifiable and amount to discrimination or a disguised restriction on international trade.
(v) Australia's measures are inconsistent with Article 5.6
4.46 Australia's measures for the importation of New Zealand apples are inconsistent with its
obligations under Article 5.6.
4.47 There are alternative measures available that would have met Australia's ALOP. In the case
of fire blight and European canker, restricting trade to mature, symptomless apples would be
consistent with the ruling in Japan – Apples and would meet Australia's ALOP. In the case of

ALCM, inspection of a 600-unit sample would also have been a less trade restrictive alternative.
Such alternative measures would ach ieve Australia's appropriate le vel of phytosanitary protection,
taking into account technical and economic feasibility. They are al so reasonably available and are
significantly less trade restrictive than those which Australia has im posed in relation to New Zealand
apples.
4.48 In addition, because the measures at issue are mo re restrictive than required, they also breach
the requirement in Article 2.2 that measures be "applied only to the extent necessary to protect human,
animal or plant life or health".
(vi) Australia's measures are inconsistent with Article 8 and Annex C(1)(a)
4.49 Australia's measures for the importation of New Zealand apples are inconsistent with its
obligations under Article 8 and Annex C(1)(a). Th e delay by Australia of almost eight years to
complete its approval procedures for access for New Z ealand apples is clearly "undue". In the case of
fire blight, there was no new scientific ev idence contrary to the conclusions in Japan – Apples
requiring consideration, and in the case of Eur opean canker and ALCM the science was accessible
and uncontroversial. Instead, Australia adopted an approval process that was intertwined with a
political process, resulting in Australia 's market remaining effectively closed to New Zealand apples.
Measures resulting from such a delayed process ha ve not been imposed in accordance with the
SPS Agreement.
(d) Conclusion
4.50 For these reasons, further developed in the body of its submission, New Zealand requests the
Panel to find that Australia's measures are inconsis tent with its obligations under the SPS Agreement,
and to recommend that Australia bring its measures into conformity with that Agreement.
2. Executive summary of New Zealand's opening oral statement at the first substantive
meeting
(a) Introduction
4.51 This dispute is about access of apples from New Zealand into the Australian market. For over
80 years, Australia's market has b een closed to New Zealand apples. Finally in 2007, some eight
years after New Zealand had made a fourth request for entry, apples from New Zealand were
permitted access to Australia but subject to measures that meant that effectively the market was still
closed. New Zealand has challenged 17 of those me asures relating specifically to fire blight, to
European canker, and to apple leafcurling midge as well as certain general measures applicable to all
three pests. As New Zealand pointed out in its first written submission, these measures do not
conform to Australia's obligations under the SPS Agreement.
4.52 The essence of the New Zealand case is quite straightforward. Among the core requirements
of the SPS Agreement are the obligations that sanita ry and phytosanitary meas ures not be maintained
without sufficient scientific evidence (Article 2. 2) and that such measures be based on a risk
assessment (Article 5.1). In both of these fundame ntal respects Australia has failed to meet its
obligations under the SPS Agreement.
(b) Product at issue
4.53
The product at issue in this case is apples im ported from New Zealand into Australia. In
practice, New Zealand would export mature, sy mptomless apples in acco rdance with the class 1
export quality standard. Australia is incorrect to suggest that the product at issue in this dispute

should be determined by reference to the scope of th e IRA. The product at issue is determined by the
terms of reference of the Panel.
(c) Measures at issue
4.54 In its Panel request, New Zealand identified 17 specific measures that New Zealand considers
are inconsistent with Australia's obligations unde r the SPS Agreement. These measures fall into two
categories: those of general application to all three pests; and those specific to each of the pests.
4.55 In its first written submission, Australia argues th at there are only 15 measures at issue. First,
in the light of Australia's statement in its first written submission that there is no pruning requirement
with regard to European Canker, New Zealand w ill not pursue its claim that this is a measure.
However, it asks the Panel to record Australia's position and New Zealand's response in its report.
4.56 Second, Australia argues that New Zealand mi scharacterises the measure relating to AQIS
involvement. New Zealand considers that any type of AQI S involvement in orchard inspections for
European canker and fire blight, in direct verification of packing house procedures, and in fruit
inspection and treatment is without scientific s upport, and accordingly there is very much a live
dispute between the Parties. Furthermore, a 100 pe r cent audit of survey teams and packing houses in
the first year by the officials of an importing country does not conform to any notion of a systems
audit as understood by New Zealand.
4.57 Finally, Australia's distinction between pr incipal and ancillary measures (measures which
"support, verify or operationalise" the principal risk reduction measure) is spuri ous. It has no textual
basis in the SPS Agreement. Neither Annex A no r any of the substantive obligations make any
distinction between types of measures. Australia thus uses the principal/anc illary distinction as a
vehicle to avoid scrutiny under Articles 2.2 and 5.1 of this class of "ancillary" measures.
New Zealand submits that such an approach should be resisted.
(d) The applicable law
(i) Standard of review
4.58 In New Zealand's view the appropriate standard of review in this case is set out in Article 11
of the DSU. This requires the Panel to "make an objective assessment of the matter before it,
including an objective assessment of the facts of th e case and the applicability of and conformity with
relevant covered agreements…". This standard of review has been applied in every WTO SPS case to
date.
4.59 Australia's claim that an alternative standa rd of review should be applied, based on
"considerable deference" to risk assessments, is without merit. The Appellate Body has twice rejected
similar arguments in previous SPS cases, EC – Hormones and Japan – Apples.
4.60 Australia's suggestion of "considerable" defere nce should be similarly rejected. Any other
approach would fundamentally alter the "finely drawn balance" of jurisdictional competencies
reflected in the SPS Agreement.
(ii) Order of analysis
4.61
Australia is wrong to suggest that "the question of whether Australia has maintained measures
"without scientific evidence" under Article 2.2 can only be answered by considering whether
Australia's measures are based on a valid risk assessment under Article 5.1".

4.62 Article 5.1 is a specific application of Article 2.2. There is nothing in the text of the
SPS Agreement that suggests that an analysis of Ar ticle 5.1 should logically precede an analysis of
Article 2.2. On the contrary, the Appellate Body in EC – Hormones considered that an approach that
started with the "Basic Rights and Obligations" in Article 2 was "logically attractive". New Zealand
agrees. Australia is attempting to limit the scope of Article 2.2 "in favour" of Article 5.1, contrary to
Japan – Agricultural Products.
4.63 Australia's view on the relations hip between Article 2.2 and 5.1 subsumes the third
requirement of Article 2.2 within Article 5.1, and then through its standard of review drains it of any
substantive content . The consequence would be that th e panel would have no mandate to assess
whether there is a "rational or objective" relationship between the science and the SPS measures.
(iii) Burden of proof
4.64 The issue of burden of proof should not be cont entious in these proceedings. However, in a
number of places in its first written submission, Australia misapplies the burden of proof. For
example, in the context of Article 2.2 Australia us es the notion of "burden of proof" to transform the
obligation not to maintain measures without scientif ic evidence in Article 2.2 into its own watered-
down version of Article 5.1. This should be rejected.
(e) Article 2.2
4.65 In its first written submission New Zealand argued that Australia's measures violated
Article 2.2, in particular the third requirement of Ar ticle 2.2. The core of New Zealand's argument is
that there is no scientific evidence to support th e view that mature, symptomless apples provide a
pathway for fire blight and European canker and the likelihood of the existence of a pathway for
ALCM is negligible.
4.66 In respect of New Zealand's arguments with respect to Article 2.2, Australia relies principally
on its contention that consistency with Article 5.1 constitutes consis tency with Article 2.2. Thus,
Australia does not make a serious attempt to rebut New Zealand's arguments relating to Article 2.2.
4.67 Though Australia does not rebut New Zealand' s Article 2.2 claim directly, there is a
continuing refrain that Australia is entitled to rely on "divergent scientific opinion". But, there are no
divergent scientific opinions suggesting the existence of pathways for each of the pests in question, on
which Australia claims to have relied. They simp ly cannot be found. This is hardly surprising
because there is no diverging scientific opinion. No such pathway exists for the two diseases and the
likelihood of a pathway for ALCM is negligible.
4.68 Even in respect of the allegedly diverging sci entific opinion relating to specific steps in the
alleged pathway, on closer analysis there is no true divergent opinion. And, even if there had been
divergent scientific opinion, this would not mean th at Australia could automatically rely on it. The
divergent science must be of a nature that there is a rational and objective relationship between the
scientific opinion and the measures in question. N one of the alleged divergent opinion meets that
requirement.
(i) Fire blight
4.69 Australia fails to rebut New Zealand's claim th at there is no scientific support for the view
that mature symptomless apples provide a pathwa y. Instead, it seems to argue that "there is no direct
evidence that apples do not spread fire blight" and that it is up to New Zealand to produce such direct
evidence, thereby rewriting the burden of proof an d requiring New Zealand to prove a negative.
Article 2.2 does not permit a Member to maintain measures in relation to a hypothetical pathway as

long as there is no scientific evidence disproving the hypothesis. Rather a Member may not maintain
measures without sufficient scientific evidence. Australia seeks to turn Article 2.2 on its head.
4.70 Australia's claim that the Roberts and Sawyer 20 08 study is not relevant to this dispute and
that its findings are "unreliable and inappropriate " is without substance. The US Third Party
submission has pointed this out in detail and New Zealand fully agrees with its analysis.
4.71 The overall conclusion of Roberts and Sawyer was that the risk of importing E. amylovora on
commercial apple fruit and of establishing new outbr eaks of fire blight is so small as to be
insignificant – the opposite conclusion from that reached by the IRA.
4.72 In short, New Zealand's arguments in respect of fire blight have not been rebutted. Australia's
measures in respect of fire blight are not supporte d by sufficient scientific evidence and Australia is
thus in violation of its obligations under Article 2.2.
(ii) European canker
4.73 Australia's attempted rebuttal of the New Zealand case on European canker focuses on the
incidence of European canker fruit rot in New Z ealand. However, while fruit rots caused by
N. galligena are not unknown, they are very rare in New Zealand, where summer conditions are
generally not conducive to fruit infection.
4.74 Australia continues to rely on the Braithwaite paper as evidence of latent fruit infection in
New Zealand. However, the reference in Braithwa ite is not to scientific research. Further, the
assumption in Braithwaite as to the existence of a pathway was just speculation. Nor was the
Braithwaite paper "endorsed" by the New Zealand Chief Plants Officer, as Australia on several
occasions alleges.
4.75 As New Zealand has pointed out in its first written submission, the IRA's assumptions about
the climatic similarity of Australian apple-produc ing regions to other regions of the world where
European canker is present, are not based on scientific evidence.
4.76 Australia seeks now to present its own analysis of climate data, an analysis that was
completely missing in the IRA. However, the Australian paper does not provide the methodological
information necessary to allow an appraisal of the c limate matching procedure used. The flaws in the
Australian analysis are demonstrated in its risk maps of New Zealand, which indicate high European
canker risk in areas of New Zealand where European canker is virtually non-existent. This is a clear
expression of the unreliability of the Australian analysis.
4.77 The failure of European canker to establish and spread during the Tasmanian outbreak was
also a probable consequence of climatic conditions. Australia now tries to argue that the Tasmanian
strain of N. galligena was a "unique" strain. But there is no scientific evidence to support Australia's
novel speculation that the N. galligena found in Tasmania was a heterothallic strain or that a
New Zealand "strain" of N. galligena would produce ascospores if introduced into Australia. The
failure of the disease to spread within Tasmania, let alone to the mainland, despite the uncontrolled
movement of thousands of tonnes of apple fruit (and millions of apples) is convincing evidence of the
lack of a pathway for the spread of European canker in Australia.
(iii)
 ALCM
4.78 The key flaw in the assumption of the IRA that New Zealand apples could be a pathway for
the transmission of ALCM to Australia is that th ere is no scientific support for suggesting that the

likelihood of establishment of ALCM in Australia as a result of trade in apples is anything other than
negligible.
4.79 A major problem with Australia's analysis of AL CM is that the great majority of cocoons on
New Zealand apples are not viable, either because th e midge inside has already developed into an
adult and left the cocoon, or because it has died insi de the cocoon. Australia's arguments in its first
written submission disputing New Zealand's es timates on the proportion of ALCM cocoons
containing viable pupae are based on Australia's faulty reading of the research into the viability rate of
cocoons set out in Rogers et al. 2006.
4.80 If the low level of viable cocoons on New Z ealand apples, the ALCM's biology and normal
trade practices are all taken into account, the unavo idable conclusion is that the likelihood of ALCM
establishment in Australia from the importation of New Zealand apples is negligible. The scenario on
which Australia relies in its first written submission to rebut this is simply implausible. In sum,
New Zealand's claim that Australia is in violation of its obligations under Article 2.2 stand unrebutted.
(f) Article 5.1
(i) Australia has not evaluated the likelihood of entry, establishment or spread
4.81 In this case, Australia has, for only the sec ond time, applied a semi-quantitative methodology
to its risk assessment for plant products, apparently in response to a proposal by a Senate Inquiry into
the IRA process for apples. There are however, inhe rent risks and limitations in a semi-quantitative
methodology. The IRA provides a "misleading impression of objectivity and precision". The IRA
approached what were often the remotest of possibilities, and ascribed them inflated numerical values.
Fundamental flaws in the IRA

4.82 First, Australia has adopted an inflated maxi mum value for the probability of events with a
"negligible" likelihood of occurring. Notably, this figure is applied on a per apple basis. Negligible
is, by Australia's own qualitative definition, an even t that would almost certainly not occur, yet in
expressing this in quantitative terms, Australia c hooses a maximum value of 1 in a million (apples).
This bears no relation to real world events.
4.83 This flaw is compounded by the inappropriate use of the uniform distribution to model the
likelihood of various events. The effect of Aust ralia's choice of a maximum value of 1 in a million
(apples) combined with Australia's choice of uniform distribution to model events with a negligible
likelihood of occurring, is that outcomes are skewed towards higher values and "negligible
likelihoods" occur on average once in two million apples.
4.84 The third fundamental flaw in Australia's risk assessment is that its estimate of the likely
volume of trade inflates the assessed level of risk by a factor of at least three. This flaw has a
significant impact on Australia's assessment of risk because the higher the estimated volume of trade,
the higher the overall assessed risk.
4.85 The overall effect of these three fundamental methodological flaws has been to overestimate
seriously the likelihood of events whose probability of occurring is negligible, with the result that the
levels of risk ascribed in the IRA have no credibility.

New Zealand does not conduct its own risk assess ment nor has Australia identified "very
significant deficiencies"
4.86 According to Australia, each time New Zealand points to the absence of scientific evidence,
New Zealand is conducting its own ri sk assessment. In fact New Zealand is doing no more than
discharging its burden of proof in accordance with the correct standard of review.
4.87 With regard the phrase "appropriate to the circumstances", the panel in Australia – Salmon
noted that it cannot "annul or supersede" the subs tantive obligation in Article 5.1. New Zealand
agrees.
4.88 With regard the relevance of Japan – Apples, the central scientific issue that was resolved was
whether apples serve as a vector for transmission of fire blight. It is beyond any doubt that the reports
in that case are highly relevant in the present case.
There are important errors in the IRA's analys is of the entry, establishment and spread in
respect of each pest
Fire blight
4.89 In its first written submission, New Zealand established that the IRA's analysis of the
importation steps for fire blight ignored or misappl ied relevant scientific data and assigned inflated
probability values to events that would certainly not occur. Australia's counterargument attempt to
rebut this relies on a critique of the Roberts and Sa wyer 2008 study, which is completely misplaced,
given the authors' conclusion that the likelihood of a pathway for the transmission of fire blight
through apples is "so small as to be insignificant".
4.90 Australia relies on the theory that only a small number of bacteria present on an imported
apple would be sufficient to initiate a fire blight infe ction. But there is no scientific evidence that in a
real orchard environment low numbers of bacteria can initiate infections.
4.91 Australia also relies heavily on an assessme nt of the consequences of establishment and
spread of the disease. But the consequences of a fire blight outbreak, no matter how serious, do not
increase the chances of the pathway being complete d. There cannot be real consequences of an
"event" that is purely hypothetical. Thus, the IRA's risk assessment in respect of fire blight does not
conform with Australia's obligations under Article 5.1 of the SPS Agreement.
European canker
4.92 In its first written submission, New Zealand pointed out that the IRA's analysis of the
importation steps for European canker had assigned pr obability values to steps which often were no
more than remote possibilities, resulting in the conclusion of a pathway for the transmission of
European canker for which there is no support in sci entific evidence or which has never been shown
to exist in fact. As the IRA itself says, "there is no evidence in the literature that indicates that long-
distance spread of the disease is due to the movement of fruit".
4.93 Further, New Zealand established that the clima tic conditions in Australia were not suitable
for the establishment and spread of European canker. Australia's attempted rebuttal of this consists of
its own, new analysis of the implications of c limate for European canker. However, Australia's
climate analysis is seriously flawed and unreliable. In any event, Australia cannot remedy in these
proceedings the failure of the IRA to consider climate in its risk assessment.

4.94 Equally, the IRA's arguments about alternative hosts in its analysis of the likelihood of
establishment and spread are not based on scientific evidence. However, d espite the presence of the
pathogen in New Zealand for more than 80 years and the unrestricted movement of apple fruit around
the country, there is no evidence of N. galligena causing disease on these hosts. Australia's attempts
to play down the failure of European canker to spread during the Tasmanian outbreak, do not stand up
to analysis.
ALCM
4.95 In its first written submission, New Zealand point ed out that there was no scientific evidence
to support the IRA's conclusions about the likelihood of entry, establishment and spread of ALCM.
4.96 As New Zealand pointed out, the IRA only assessed the likelihood that apples are infested
with cocoons, not whether the cocoons were viable. However, it is only viable cocoons that are a risk
factor for ALCM.
4.97 The fact that the IRA ignored viability data is obvious from the text of the IRA. Australia
tries to justify its failure to take into account viability by trying to discredit Rogers et al. 2006.
However, Australia's analysis of Rogers is simply wrong.
4.98 Australia also failed, in its evaluation of the likelihood that ALCM survives and remains with
fruit after on-arrival minimum border procedures, to take into account the effect of AQIS inspection at
the border.
4.99 Australia's claim in its first written submission that adult emergence could occur at any point
in Australia, including transportation, and re-pack ing is simply incorrect. The scenario on which
Australia relies for the establishment of ACLM in Australia has never occurred in the real world and
is simply implausible.
4.100 There was, thus, no basis in science for the assumption of the IRA about the establishment of
ALCM in Australia and the Australian first written submission fails to rebut New Zealand's arguments
on this point.
4.101 In respect of all three pests, Australia tries to shift the emphasis of a risk assessment from the
likelihood of entry, establishment and spread to th e consequences of establishment. Australia argues
vehemently that risk assessment involves more than science; it involves economic and technical
factors. But in making this argument, Australia, once again, misses the central point. There is no
basis under the SPS Agreement for the application of SPS measures to deal with the consequences of
an event if, on the basis of the relevant scientif ic evidence, the event itself has no likelihood of
occurring. Australia's arguments on consequences are thus simply misguided.
(ii) Australia has not evaluated likelihood "acco rding to the SPS measures which might be
applied"
4.102 Finally, Article 5.1 requires that there be an evaluation of the likelihood of entry,
establishment and spread of the three pests "according to SPS measures that might be applied".
4.103 In respect of seven of the measures at issue th ere is no evaluation at all in the IRA of their
effect on the risk factors identified in the IRA; th at is, no evaluation of the impact they would have,
either on their own or as part of a systems approach, on the assessed level of risk. Australia
acknowledges this failure but claims that the requi rement to evaluate measures is limited to only
"principal" measures, and that the seven it failed to evaluate are "ancillary" measures. However, there

is no basis for Australia's distinction between "p rincipal" and "ancillary" measures. Australia's
distinction is spurious.
4.104 The IRA also failed to evaluate a measure requi ring that apples be imported retail ready even
though specifically requested to do so by New Zealand. At a minimum, importing countries should
consider reasonable alternatives proposed by exporting countries. Australia did not do this.
4.105 The cumulative result of all the matters raised by New Zealand in respect of the risk
assessment conducted by the IRA is that Australia has failed to comply with its obligations under
Article 5.1 of the SPS Agreement.
(g) Article 5.2, 5.5 and 5.6
4.106 As New Zealand pointed out in its first written submission, Australia has breached
Article 5.2. The obligation to "take into account" is an obligation of substance that requires giving
genuine consideration to available scientific eviden ce and the other factors set out in Article 5.2.
When, as in this case, the measures adopted fly in th e face of available scientif ic evidence, then the
Panel needs some evidence to show that the available scientific evidence and the other relevant factors
were taken into account. But Australia provides no evidence to establish that it has in fact acted
consistently with its obligations under Article 5.2.
4.107 Australia's measures for the importation of New Z ealand apples are also inconsistent with its
obligations under Article 5.5. Australia has adopted arbitrary or unjustifiable distinctions in the levels
of protection it considers to be a ppropriate in different situations, and those distinctions result in
discrimination or a disguised restriction on internati onal trade. Australia's attempt to contradict the
New Zealand arguments on the basis of alleged measures that do not exist or volumes of trade are not
convincing, and its objections to the warning signals and additional factors identified by New Zealand
are misguided.
4.108 Article 5.6 requires that a Member must not establish or maintain measures that are more
trade restrictive than required to achieve its ALOP. However, that is exactly what Australia has done.
In respect of both fire blight and European canke r, a less trade restrictive alternative would be a
measure requiring that New Zealand apples imported in to Australia be mature, symptomless fruit. In
respect of ALCM, there is also a less trade rest rictive alternative available – a 600-unit sample
inspection.
(h) Article 8 and Annex C
4.109 Australia has acted in breach of its obligati ons under Annex C(1)(a), and consequently under
Article 8, of the SPS Agreement. The comple tion of the IRA process was delayed well beyond any
reasonable period of time for considering New Zeal and's request for apples access. As New Zealand
noted in its first written submission, "[m]easures re sulting from such a delayed process have not been
imposed in accordance with the SPS Agreement."
4.110 New Zealand rejects Australia's claim and sees no need for a preliminary ruling on this
matter. Australia's arguments are based on the false assumption that the measure at issue under
New Zealand's Annex C(1)(a) claim is the "IRA process". New Zealand has never claimed that the
IRA process is a measure at issue in this dis pute. The measures at issue under New Zealand's
Annex C(1)(a) and Article 8 claim are the 17 meas ures identified in New Zealand's panel request.
Australia appears to believe that the "measure at issue" under Annex C(1) must be the "procedures to
check and ensure the fulfillment of SPS measures" referred to in the chapeau of Annex C(1). Once
again, as was clarified in EC – Approval and Marketing of Biotech Products, Australia is mistaken.

4.111 In New Zealand's view, the procedure to check and ensure the fulfilment of SPS measures in
the present case is the IRA process relating to apples fr om New Zealand. So while the IRA process is
certainly relevant to New Zealand's claim, it is not the measure at issue. In New Zealand's view,
measures resulting from such a delayed process ha ve not been imposed in accordance with the
SPS Agreement.
4.112 Where substantive SPS measures have been a dopted following an approval process, the
approval process itself will have ceased to exist. In US – Certain EC Products the Appellate Body
said it would be an error for a panel to make recommendations under DSU Article 19.1 where a
measure has ceased to exist. An interpretation of Annex C(1)(a) that requires a complaining Party to
challenge measures that have ceased to exist do es not accord with the DSU's aim of securing a
positive solution to the dispute. For these reasons, Australia's procedural objection to New Zealand's
claims under Annex C(1)(a) and Article 8 should be rejected.
4.113 Finally, New Zealand reaffirms all matters dealt with in its first written submission that have
not been discussed in this oral statement and requ ests the Panel to make the rulings set out in its
request for relief in its first written submission.
3. New Zealand's closing oral statement at the first substantive meeting
4.114 In the light of the first written submissions a nd oral statements, New Zealand thought that it
would be helpful for the Panel for New Zealand brie fly to identify in this concluding statement the
issues in dispute between the Parties.
4.115 First, this is not a case about the right of Australia to set its ALOP. In its opening oral
statement at the first substantive meeting Australia ma de much of the fact that it is entitled to set its
own ALOP. New Zealand has not and does not dis pute this. New Zealand makes no challenge to
Australia's ALOP in this case or its right to set its ALOP.
4.116 Second, this is not a case about the burden of proo f. Again, Australia frequently claims that
New Zealand has not met its burden of proof, ofte n more as a rhetorical device than as a real
argument. But, the issue between the Parties is not about whether sufficient evidence has been
adduced to establish a prima facie case or whether New Zealand must prove a negative – that
pathways for the transmission of fire blight, European canker and ALCM do not exist.
4.117 Third, this is not really a case about the appli cable law. The basic obligations relating to SPS
measures have been clarified through dispute se ttlement in several cases so there should be little
dispute about them. Australia has tried to introdu ce a "considerable deferenc e" standard of review,
apparently as a kind of lex specialis for SPS cases, or perhaps as New Zealand heard in the first day of
the meeting in response to questions for Article 5. 1 alone. But attempts like this in other SPS cases
have been rejected in the past and they should not be given any credence in this case.
4.118 Equally Australia's attempt to give Article 5.1 primacy so that consistency with Article 5.1
constitutes consistency with Article 2.2 provides a gloss on the law which, when combined with a
deferential standard of review, is really an attemp t to shield its measures from serious review in the
light of the standards of the SPS agreement. It is a claim for exemption from the agreement. Under
the guise of maintaining a balance in the rights a nd obligations of the SPS Agreement, Australia is
seeking to re-order those rights and obligations.
4.119 Fourth, the fundamental question in this case and the fundamental issue that divides the
Parties is whether the measures imposed by Aust ralia are maintained w ith sufficient scientific
evidence. This can be expressed in terms of Article 2.2 as whether there is a "rational or objective

relationship" between the measures and scientific evid ence, and in terms of Article 5.1 whether there
has been a proper assessment of the "likelihood of entry, establishment and spread" of the three pests.
4.120 This, in fact, is the heart of this case.
4.121 The claim by Australia that the importation of mature symptomless apples provides a pathway
for the transmission of the fire blight and Europ ean canker diseases and the ALCM pest, is based on
conjecture and supposition, not on scientific evidence. At critical points along these alleged
pathways, as New Zealand has pointed out, scientif ic evidence in support of the Australian position
simply does not exist. The resolution of this differe nce between the Parties is ultimately the issue that
the Panel has to decide.
4.122 Measures that can be shown to have a rati onal or objective relationship with scientific
evidence meet the requirements of Article 2.2. A risk assessment that ev aluates the likelihood of
entry, establishment and spread of a disease on the b asis of scientific evidence about that risk, not on
the basis of supposition or speculation about risk, co mplies with Article 5.1. But an assessment of
risk cannot take negligible risk and multiply it up into higher risk by the use of numerical probability
values that have no relationship to real world experi ence. And, while it is true that minority scientific
opinion can be taken into account, such minority science must exist; it cannot just be claimed to exist.
4.123 In short, the task for the Panel in this case is ultimately to determine whether the Australian
measures are grounded in sufficient scientific evidence, that is, whether there is a rational or objective
relationship between the measures and scientific evidence, and whether that risk was properly
evaluated in the IRA on the basis of scientific evid ence. New Zealand is confident that, when the
Panel does so, it will find Australia lacking on both counts.
4.124 Australia's failure to find a basis in science fo r its measures have certain further consequences
in terms of its obligations under Articles 5.2, 5.5, 2.3 and 5.6. In those instances, too, Australia is in
breach of its obligations under the SPS Agreement. In addition, be hind all of this are Australia's
intermingled political process and its lengthy, undue delay which results in a breach of Annex C and
Article 8, and also provides an important background and context for considering Australia's measures
in this case.
4.125 This concludes New Zealand's closing statemen t. New Zealand thanks the Panel for its
attention in this first oral hearing and looks forwar d to responding in due course to the Panel's written
questions.
4. Executive summary of New Zealand's second written submission
(a) Introduction
4.126 In its first written submission, New Zealand established that Australia's measures for the
importation of apples from New Zealand are not in c onformity with Australia's obligations under the
SPS Agreement. Australia's purported rebuttal seeks to shelter the Final Import Risk Analysis for
Apples from New Zealand (IRA) from effective review , and divert the Panel from the fundamental
issue in this case, namely, the lack of sufficient scientific evidence to support Australia's measures.
The responses of the experts to the Panel's questio ns have confirmed the flaws in the IRA and the
insufficiency of the scientific evidence relied on by Australia.

(b) Detailed rebuttal of Australia's arguments
(i) Measures at issue
4.127 Australia is incorrect in arguing that the definition of SPS measures contained in the
SPS Agreement only includes measures that "actively" reduce SPS risks ("principal measures"), and
not measures that reduce risk by supporting or implementing "principal measures" ("ancillary
measures"). It is clear that the definition of SPS measures in the SPS Agreement includes any
measures applied to protect against SPS risks. The reasoning in US – Export Restraints does not
change this definition, and is entirely consistent with treati ng both "principal" and "ancillary"
measures as SPS measures in the present case.
4.128 With the exception of measure 12, New Zeala nd maintains its position that the measures
identified in New Zealand's panel request remain at issue, and are correctly characterised.
(ii) Product at issue
4.129 Whatever disagreement remains as to the precise "product at issue" in this case, the Parties
appear to agree that the focus of this dispute s hould be on the product that is actually traded.
New Zealand articulates this as "mature, symptomless apples". There is no practical difference
between this and the product assessed in the IRA.
(iii) Standard of review and burden of proof
4.130 The appropriate standard of review in this case is set out in Article 11 of the DSU, which
requires that the Panel make an "objective assessment" of the matter. The Appellate Body has stated
that this "articulates with great succinctness but wi th sufficient clarity the appropriate standard of
review", and this standard has been applied in every SPS case to date. Australia proposes a standard
of "considerable deference" which has been rejected twice before by the Appellate Body. None of the
cases cited by Australia support a "considerable deference" standard, and the "balance of
jurisdictional competencies" would be undermined, no t promoted, by Australia's proposed standard of
review.
4.131 New Zealand has not presented an alternative vi ew of the science as Australia suggests.
Rather, New Zealand has established that Australia 's measures, and the conclusions in its risk
assessment, do not find sufficient support in the sci ence, which is simply discharging New Zealand's
burden of proof.
4.132 The right to rely on divergent scientific opini on does not help Australia's defence. The
studies or information relied on by Australia either do not meet the definition of "divergent scientific
evidence", or do not sufficiently support Australia's conclusions. In addition, there is no evidence,
divergent or otherwise, regarding the completion of the various pathways as a whole. Moreover,
Australia's implication that the IRA is itself a sour ce of divergent scientific opinion is simply another
variation of "considerable deference", designed to prevent meaningful WTO review of the IRA.
(iv) Relationship between Articles 2.2 and 5.1, and order of analysis
4.133 Articles 2.2 and 5.1 establish separate legal obligations. Australia's view that compliance
with Article 2.2 "can only be answered" by consid ering compliance with Article 5.1 is incorrect and
ignores the jurisprudence of panels and the Appellate Body. Australia seeks to conflate two distinct
provisions into a single obligation with a single t est. Combined with Australia's "considerable
deference" standard of review, the result is that panels would be denied a mandate to objectively
assess the sufficiency of the science. New Zeal and disagrees that Article 2.2 was drafted too

narrowly, or that the complexity of risk analysis, the weighing of factors, the use of judgement by risk
assessors, or the application of particular methodol ogies, are reasons to read down Article 2.2 in
favour of Article 5.1.
4.134 In New Zealand's view, it would be appropriate in the circumstances of this case for the Panel
to start its examination with Article 2.2. This approach is consistent with that taken in Japan – Apples
and the opinions of the Appellate Body in EC – Hormones and in Australia – Salmon.
(v) Australia's measures are inconsistent with Article 2.2
4.135 Australia's measures for fire blight assume that there is a risk that mature, symptomless apples
are involved in the spread of the disease. Yet Aust ralia has been unable to point to any scientific
evidence to support the existence of a pathway that would or could allow the introduction of fire
blight in Australia via mature, symptomless appl es imported from New Ze aland. The experts'
responses to the Panel's questions also support New Z ealand's position that there is no such scientific
evidence. There is therefore no rational or objective relationship between any of Australia's measures
for fire blight and the scientific evidence, in breach of Article 2.2 of the SPS Agreement.
4.136 There is also a lack of scientif ic evidence to support each of the individual steps into which
Australia breaks up its hypothetical fire blight pa thway. For example, New Zealand and the experts
have noted the absence of scientific suppor t for Australia's hypothesis that a single E. amylovora
bacterium, or a very small number of such bacteria on a mature, symptomless apple, would be
sufficient to introduce fire blight under natural c onditions. Accordingly, New Zealand maintains its
submission that the population levels of E. amylovora occasionally found on infested apples at harvest
are, under natural conditions, insufficient to be tr ansferred to a susceptible host and result in the
spread of disease. While it is possible that in rare circumstances E. amylovora may survive on
harvested apple fruit, any such bacteria will only su rvive in small and diminishing numbers, unable to
multiply.
4.137 Having been unable to produce any scientific ev idence to support its fire blight measures,
Australia then asserts that New Zealand is requi red to produce the evidence to prove that mature,
symptomless apples could not introduce fire blight. But this is an attempt to reverse the obligations in
the SPS Agreement. Rather, under Article 2.2, Australia may not maintain a measure without
sufficient scientific evidence. Aust ralia has failed to rebut New Zealand's case that Australia's fire
blight measures are maintained without sufficient scientific evidence.
4.138 Australia's European canker
 measures are based on the contention that mature, symptomless
apples from New Zealand provide a pathway for the establishment of European canker in Australia.
The experts' responses confirm that such a pathway has never been demonstrated to exist.
4.139 In New Zealand, pre-harvest fruit rots caused by N. galligena are extremely rare and latent
fruit rots (the only kind relevant to the allege d pathway) are virtually non-existent, which, as
confirmed by the experts, reflects the generally unfavourable summer climatic conditions for fruit
infection in New Zealand. New Zealand has demons trated, and the experts have confirmed, that the
only "evidence" put forward by Australia of latent infections in New Zealand, the Braithwaite report,
does not constitute sufficient scientific evidence to support Australia's assumptions.
4.140 Moreover, climatic conditions in Australia ar e not conducive to the establishment and spread
of European canker, an assessment supported by the experts. Australia's attempts to discredit
New Zealand's climate arguments are misconceived. Australia has resorted to defending the IRA by
producing an alternative climate analysis, but this lacks transparency, is methodologically flawed, and
shows incorrect results when compared against the known incidence of European canker.

4.141 The failure of the disease to spread from the four affected orchards during the outbreak of
European canker in Tasmania supports New Zealand's arguments as to climatic unsuitability. In an
attempt to rebut this, Australia offers new explanat ions, not previously considered by the IRA, as to
the existence of a heterothallic strain of N. galligena and the absence of a suitable mating partner.
However, Australia's theory relies on an isolated finding in Germany which has no basis in the facts
surrounding the Tasmanian outbreak. In addition, Australia has failed to rebut evidence of the
absence of a pathway, in light of the failure of th e disease to spread beyond the four affected Spreyton
orchards despite the unrestricted movement of apple fruit for the duration of the Tasmanian outbreak.
4.142 Australia has failed to provide any scientific support for its contention of a pathway for the
transmission of European canker via New Zealand a pple fruit. Accordingly, none of the measures
imposed by Australia in respect of European ca nker are based on sufficient scientific evidence, and
are thus in breach of Article 2.2.
4.143 Australia's measures for apple leafcurling midge (ALCM) are also maintained without
sufficient scientific evidence. They are premised on the incorrect assumption that all ALCM cocoons
are risk factors. But the scientific evidence is clear that only viable cocoons would present any risk,
and only a very small proportion of cocoons on New Zealand apples contain viable ALCM.
4.144 Australia argues that it did take cocoon viability into account but, as confirmed by the experts,
it is obvious from the text of the IRA that it did not. Australia's attempt to critique the methodology
of the scientific studies on viability is flawed, and do es not change the fact that Australia ignored the
relevant scientific evidence.
4.145 Australia's measures are also based on the incorrect assumption that ALCM females have a
flying range of up to 200m. As confirmed by the e xperts, this conclusion is not sufficiently supported
by the scientific evidence. The experts have also confirmed New Zealand's position that ALCM
emergence will occur over an extended period of time, which was not factored into the IRA's
conclusions. Finally, Australia's measures are ba sed on incorrect assumptions about normal retail
supply chain practices which would effectively exclude any opportunity for ALCM establishment.
4.146 There is, therefore, no rational basis for Austra lia's conclusion that the sequence of events
required for ALCM establishment in Australia – ma ny thousands of apples left outside of cold
storage, uncovered, in the same place, at the sa me time, within 30-50m of newly unfurling apple
leaves – would occur. Australia's comparison with the establishment of wheat bug in the Netherlands
(which has not been linked to trade in apples) is irrelevant to this dispute.
4.147 Because none of the pest-specific measures are supported by sufficient scientific evidence,
neither are the general measures
. Australia has failed to identif y, with reference to scientific
evidence, the particular risks which the general meas ures are supposed to address, or their efficacy in
dealing with that risk. Australia's flawed principal/ancillary distinction cannot remedy this failure.
(vi) Australia's measures are inconsistent with Article 5.1
4.148 New Zealand has demonstrated that the IRA is not objectively justifiable; it does not contain
reasoning that is objective and cohe rent, or conclusions that find sufficient support in the scientific
evidence relied upon. Australia's attempts to read down the obligation in Article 5.1 – by proposing a
new "objective and credible" standard, misrepresen ting the phrase "appropriate to the circumstances",
falling back on "expert judgement" and "scientific uncertainty", and claiming that New Zealand has
conducted its own risk assessment – are without basis, and should be rejected.
4.149 Australia's responses to the three fundamental flaws with the IRA's methodology identified by
New Zealand also lack merit. Australia effectiv ely admits that there is no correlation between the

maximum value of one in a million apples, and th e qualitative description of a "negligible" likelihood
as an event that would almost certainly not occur. Australia's arguments regarding the second flaw
merely underline the fact that using a uniform di stribution results in an over-representation of values
that significantly overestimate the risk. When applie d to something traded in millions of units (the
"per apple" methodology), the result is that "n egligible" events are ass essed as occurring numerous
times each export season. With regard to the third flaw, Australia has failed to rebut New Zealand's
arguments that the volume of trade will be signifi cantly lower than the IRA's most likely value and
that this is another factor causing the assessed level of risk in the IRA to be inflated.
4.150 Australia did not evaluate the likelihood of importation, establishment and spread of fire
blight, or of the associated potential biological and economic consequences, in relation to imports of
mature, symptomless apples from New Zealand. No evidence of the existence of a pathway is
contained in the IRA, or in Australia's first writte n submission, and thus Australia has failed to assess
risk in accordance with Article 5.1. In addition, none of the experts have identified any scientific
evidence supporting Australia's contention that a pathwa y exists for the introduction of fire blight via
mature, symptomless apples.
4.151 Contrary to Australia's assertion in its fi rst written submission, New Zealand draws
appropriately on the following four matters in suppor t of its case that the IRA is inconsistent with
Article 5.1:
(a) Japan – Apples , in which the panel found that, w ith respect to mature, symptomless
apples, the risk that the transmission pathwa y could be completed is negligible; and
that pathways must have a basis in science be fore they can legitimately form part of a
risk assessment. Without making any sugges tion that the Panel in the present case is
"bound" to follow the findings in Japan – Apples , or that Australia did not need to
carry out its own risk assessment, New Zealand's position remains that the findings in
Japan – Apples are directly relevant to the present dispute.
(b) The spread of fire blight to other countries via trade in apple fruit has never been
reported.
(c) Under natural orchard conditions, the number of E. amylovora that may, very rarely,
be present on fruit will be low, dormant and declining, and as such will be insufficient
to be transferred to susceptible hosts and initiate new infections.
(d) Roberts and Sawyer 2008 and Roberts et al. 1998, which concluded that the risk of
introduction of fire blight via imported apple fruit was so small as to be insignificant.
None of Australia's criticisms of these studies have any merit. In any event, Australia
misunderstands the purpose of New Zealand's reference to these studies.
New Zealand does not contend that they are a substitute for Australia's risk
assessment, or for the Panel's role in making an objective assessment of the matter
presently before it. Nevertheless, the Pa nel may look at the conclusions in those
papers (as it can with respect to any other relevant scientific study) in considering
whether the conclusions in the IRA are supported by the scientific evidence.
4.152 New Zealand has also established that several of the conclusions drawn by the IRA in relation
to its 'importation scenario' lack sufficient support in the scientific evidence relied upon. Australia has
failed to rebut these criticisms. For example, Aust ralia has failed to rebut New Zealand's argument
that the IRA's conclusion on the probability of entry of E. amylovora into Australia is greatly inflated
and is not supported by the scientific evidence. Nor has Australia rebutted New Zealand's case that
there is no evidence to support Australia's crucia l transmission ("exposure") theory. Australia
speculates that E. amylovora would be transferred from mature, symptomless apples, either by insects

or by mechanical means, to susceptible hosts, under natural conditions, and that an infection would be
initiated. New Zealand maintains its claim that there is no scientific evidence that, under natural
conditions, low (or any) numbers of E. amylovora bacteria on mature apple fruit can be transferred
onto a susceptible host and result in an infection. To the contrary, the scien tific evidence shows that
the likelihood of such occurrence is so small as to be insignificant.
4.153 In addition, the experts' responses cast furthe r doubt on the conclusions Australia draws in
relation to its importation steps for E. amylovora; the likelihood of importation of E. amylovora; and
the probability of E. amylovora being transferred to and infecting a susceptible host.
4.154 The IRA's conclusions about entry, estab lishment and spread of European canker
, as well as
its assessment of consequences are not supported by sufficient scientific evidence. In New Zealand's
first written submission, in addition to noting the lack of scientific support for the pathway as a whole,
New Zealand pointed out the lack of scientific suppor t for the individual steps in the pathway. In
particular, there is no objective or rational re lationship between the scientific evidence and the
probability value that is chosen at each step of Aust ralia's European canker pathway. In other words,
the conclusions drawn by the IRA do not find suff icient support in the evidence relied on. The
experts' responses confirm the lack of scientific evidence for almost every step of the pathway.
4.155 The probability value assigned to the likelihood that infected fruit may be picked (importation
step 2) is exaggerated in light of the absence of confirmed reported instances of latent fruit infections
in New Zealand due to the unfavourable summer clim atic conditions in New Zealand's apple growing
regions. Australia relies primarily on the unveri fied personal communication referenced in the
Braithwaite report and data from Northern hemis phere countries with climatic conditions more
favourable to fruit infection, to ju stify its conclusion in relation to this step, but these do not provide
the necessary scientific support.
4.156 In addition, the experts confirm the lack of scientific support for the IRA's conclusions with
respect to the likelihood that fruit may beco me surface-contaminated (infested) with N. galligena
(importation steps 3, 5 and 7). Australia attemp ts to downplay the significance of these importation
steps to the IRA's assessment, describing them as of only "minor" concern, but in fact they account for
more than 80 per cent of the total probability of entry. The experts also support New Zealand's
arguments that the IRA's conclusi ons regarding the survival of N. galligena during packing house
processes and transport to Australia (importation st eps 4 and 6) do not find sufficient support in the
scientific evidence relied on.
4.157 As a consequence, the IRA arrives at an inflat ed estimate of the overall probability of entry,
which estimates that approximately 1 in 15,000 New Zealand apples arriving into Australia would be
latently infected or infested. Such a conclusion is not supported by the scientific evidence.
4.158 Australia has also failed to rebut New Zeal and's argument that the IRA's conclusion on
exposure is not supported by sufficient scientific evidence. In particular, New Zealand pointed out the
lack of scientific support for the IRA's conclusions about spore production and dispersal of spores
from rotten fruit onto a susceptible host in Austra lian conditions. Although Australia now seeks to
distance itself from the IRA's assumptions about mummified fruit producing ascospores as a source of
new infections in Australia – assumptions which have also been dismissed by the experts – Australia's
revised position is inconsistent with the IRA. In a ddition, although Australia now insists that the IRA
factored in that the dispersal range is no more th an a few metres, this is not evident from the IRA.
Finally, Australia's focus on a "sequence of events " continues to overlook the fact that the IRA failed
to factor in the requirement for the simultaneous inte raction of all three factors; pathogen, host and
climate; in order for infection to occur.

4.159 Australia's attempted rebuttal of New Zealand's arguments on establishment and spread
focuses on attacking New Zealand's climate analysis. Australia's first written submission relies on its
own deeply flawed climate analysis, which does not remedy the flaws in the IRA's original
consideration of this crucial factor. Australia's rebuttal of New Zealand's arguments on alternative
hosts continues to rely on assumptions about the clim atic similarity of Australia to regions where N.
galligena is present on those hosts. These arguments cannot be sustained.
4.160 Finally, as the experts confirm, Australia's as sessment of consequences is a significant over-
estimate, as once again Australia has failed to cons ider its own circumstances, in particular the
unfavourable climatic conditions.
4.161 The IRA's assessment of risk with respect to ALCM is also not sufficiently supported by
scientific evidence. Indeed, the expert responses c onfirm that the IRA's assessment of risk is so
flawed that it needs to be "recalculated".
4.162 The IRA's assessment of the likelihood that picked fruit will be infested with ALCM
(importation step 2) has no scientific basis because it did not take into account the scientific evidence
on viability. The IRA's conclusions with respect to the likelihood of contamination of New Zealand
apples during packing and transport (importation step 3) also have no scientific basis.
4.163 Australia's only response to the numerous flaw s in the IRA's estimate of the likelihood of
ALCM entry is to concede that the IRA's eight st ep analysis of the likelihood of ALCM entry is
irrelevant because it also used the August 2005 data provided by New Zealand. Australia's readiness
to discard a significant part of its risk assessment is striking and calls into question the soundness of
the rest of Australia's risk assessment.
4.164 The IRA's assessment of the likelihood of ALCM establishment and spread, and related
consequences, also has no scientific basis. There is no scientific support for the IRA's key
assumptions in respect of ALCM biology and the effect of normal trade practices on the risk
associated with the importation of apples from New Zealand.
4.165 Finally, Australia has failed to evaluate the lik elihood of entry, establishment and spread of
each pest "according to the SPS measures which might be applied" . Australia does not contest the
IRA's lack of evaluation of what it terms 'ancill ary' measures, but relies instead on its flawed
principal/ancillary distinction to argue, incorrectly , that it is under no obligation to do so. In any
event, the jurisprudence is clear th at even what Australia calls 'ancillary' measures must be evaluated.
Further, Australia responds to the argument that it has failed to consider the retail-ready measure put
forward by New Zealand by misinterpreting the relevant case law.
(vii) Australia's measures are inconsistent with Article 5.2
4.166 Australia is incorrect to claim that it was not required, under Article 5.2, to give genuine
consideration to the factors identified by New Zeal and. Australia has failed to rebut New Zealand's
case that these factors were not taken into account in the IRA.
(viii) Australia's measures are inconsistent with Article 5.5
4.167 New Zealand showed in its first written submis sion that the way Australia treats the similar
risks associated with Japanese nashi pears and New Zealand apples constitutes a breach of Article 5.5.
In response, Australia effectively concedes that the diseases are comparable (Japanese Erwinia and
fire blight; and brown rot and European canker respectively) and focuses almost exclusively on
showing differences in risks between the two situations. Australia relies on, inter alia: "assumptions"
about area freedom in export areas; a flawed interpre tation that situations must be current in order to

be compared; arguments about the relevance of trade volumes which are not borne out by the
measures applied to Japanese nashi pears; and su pposed differences in consequences which are not
even supported by Australia's own assessments in the context of its Draft China Apples IRA. Despite
the similar risks, Australia applies no measures to Japanese Erwinia, and the measures applied to
Japanese nashi pears in respect of brown rot are much less onerous than those applied to New Zealand
apples in respect of European canker. Australia is unsuccessful in its attempts to downplay or
discredit the warning signals and additional factors identified by New Zealand, and taken into account
in previous cases, as demonstrating discrimination and a disguised restriction on international trade.
(ix) Australia's measures are inconsistent with Article 5.6
4.168 Australia's primary objection to the alternativ e measures identified by New Zealand is that
they would not meet Australia's ALOP, based on th e assessments of risk contained in the IRA.
However, New Zealand challenges these assessments of risk. There is no scientific evidence that
mature, symptomless apples can provide a pathway fo r the introduction of fire blight or European
canker into Australia, or that their importation would result in ALCM establishment and spread.
New Zealand's alternative measures therefore meet Australia's ALOP.
4.169 Australia's proposed general measures are not required in respect of any other New Zealand
exports. Australia has not provided any explanation as to why these are necessary to meet Australia's
ALOP, and its efforts to downplay their restrictiveness are incorrect. New Zealand's proposed
alternative (audits of WTO compliant measures) is consistent with existing arrangements between
Australia and New Zealand and meets Australia's ALOP.
(x) Australia's measures are inconsistent with Article 8 and Annex C(1)(a)
4.170 Australia has not responded to New Zealand' s substantive arguments regarding "undue
delay", arguing only that the "IRA process" is not a measure at issue. However, New Zealand's claim
is that the measures resulting from the IRA process are the measures at issue under this claim.
4.171 The 8 years (94 months) taken to complete the IRA clearly exceed what was reasonably
necessary given that: Australian officials origina lly expected the process to take 12 months;
Australian IRAs must now be completed within 24-30 months; similar IR As had been conducted
previously; there was no difficulty gaining access to the scientific information; there was no
significant evolution of the science during this peri od; and there is no reasonable explanation that
would justify the time taken to complete the IRA. Australia has not rebutted the evidence provided by
New Zealand of a parallel and intertwined political pro cess that helps to explain, but not justify, this
delay.
(c) Conclusion
4.172 For these reasons, further developed in the body of its second written submission,
New Zealand reaffirms the request in its first writte n submission that the Panel find that Australia's
measures are inconsistent with the SPS Agreement.
5. Executive summary of New Zealand's opening oral statement at the second substantive
meeting
(a) Introduction
4.173 Australia has failed to rebut New Zealand's cas e that Australia's measures are not supported
by scientific evidence and the IRA does not cons titute a risk assessment whose conclusions are

objectively justifiable. The experts reiterated wh at they said in their reports and they too
demonstrated that the conclusions of the IRA are not supported by scientific evidence.
4.174 The experts confirmed that there is no scientif ic evidence to support Australia's conclusions
that mature apples pose a risk of introduction of fire blight. The IRA's overall probability of
importation is unsupported by scientific evidence, as are its conclusions in relation to most of the
importation steps. Dr Paulin concluded that the risk of fire blight from trade in apples is about as
likely as the risk of such transmission by insects carried by air currents from New Zealand, i.e. there is
no greater risk than through natural dispersal. Imposing measures on apples creates no greater
protection than having no measures.
4.175 With respect to European canker, the experts confirmed that there is no evidence that apple
fruit are responsible for dissemination of the disease to new areas. There is no basis for concluding
that a mature, symptomless requirement would not meet Australia's ALOP. Dr Swinburne described
the risk of transfer via apples as "vanishingly sma ll". The real risk of transfer is through the
movement of planting material. In addition, the e xperts confirmed the insufficiency of the scientific
evidence supporting the IRA's conclusions as to in dividual importation steps and the probability of
entry, exposure, establishment and spread. The expe rts also considered that the IRA's assessment of
consequences was flawed.
4.176 In respect of ALCM, the expert view was unequivocal. By ignoring viability, parasitism, the
prolonged period of adult ALCM emergence, and mode of trade issues, and by making assumptions
that were not based on scientific evidence, the IR A overestimated the likelihood of ALCM entry and
establishment. Indeed, the ALCM expert, Professor Cr oss, concluded that the risk assessment was so
flawed that it needed to be "recalculated".
(b) Australia's second written submission
4.177 Australia's argument about principal and ancillary measures finds no basis in the
SPS Agreement. If principal and ancillary meas ures are capable of giving rise to violations
"collectively", then they must also be subject to the obligations "collectively" and need to be
evaluated "collectively" with principal measures to assess their impact on risk. The IRA did not do
this.
4.178 Since Canada – Continued Suspension the law relating to standard of review has not changed.
The Appellate Body simply applied well-established principles prohibiting de novo review, and
affirmed the right of Members to rely on diverg ent scientific evidence. Although Australia now
claims to have renounced the use of the terms "def erence" and "considerable deference", the decision
in Continued Suspension is treated by Australia as embodying a "considerable deference" standard.
Clearly it does not do so.
4.179 Australia claimed that the IRA is supported by unspecified divergent scientific evidence or
that the IRA was itself divergent scientific evidence. Unable to find sufficient scientific support for
its measures, Australia now claims there is "scien tific uncertainty", such that deference must be
accorded to the expert judgement of the risk assessors. Although the term "scientific uncertainty"
does not appear in the SPS Agreement, it provid es a framework for managing scientific uncertainty,
through Article 5.7 and the right to rely on divergent scientific opinion. Beyond this, notions of
"scientific uncertainty" and "expert judgement" provide no justification for avoiding the science-based
obligations in the SPS Agreement, or for suggesting that deference be accorded to the views of the
risk assessors. The fact that Australia cannot find data or scientific studies to support its conclusions
underlines the speculative and hypothetical nature of th e pathways considered. This is not a situation
of scientific uncertainty; it is an example of the scientific evidence not supporting Australia's
measures.

4.180 Australia also places weight on conclusions wh ich it asserts the IRA Team reached but which
are not reflected in the IRA itself, for example impo rtation steps 3, 5 and 7 in respect of European
canker. Transparency is an integral part of objec tive justifiability. Claimed backroom deliberations
of the IRA Team are irrelevant.
(c) The task of the Panel
(i) Standard of review
4.181 In accordance with DSU Article 11 the task of the Panel is to "objectively assess" the claims,
evidence and arguments before it, and to determine whether the measures at issue are consistent with
the relevant provisions of the SPS Agreem ent. The Panel should not conduct a de novo review or do
its own risk assessment. The focus must be on re viewing the sufficiency of the scientific evidence
underlying Australia's measures. The Panel enjo ys discretion as to which evidence to utilise in
making its findings, and the value and weight to be ascribed to that evidence. This mandate applies
under both Article 2.2 and Article 5.1.
4.182 The Appellate Body in Continued Suspension stated that a panel's role under Article 5.1 is to
"determine whether [a] risk assessment is supported by coherent reasoning and respectable scientific
evidence and is, in this sense, objectively justifiabl e". This requires determining whether the measure
is based on science coming from a respected and qua lified source, i.e. it has "the necessary scientific
and methodological rigour to be considered reputable science", and whether "the reasoning articulated
on the basis of the scientific evidence is objective a nd coherent". The Appellate Body stated that this
requires a panel to "review whether the particular conclusions drawn by the Member assessing the
risk find sufficient support in the scientific evidence relied upon".
4.183 Continued Suspension does not support Australia's claim that New Zealand must demonstrate
"serious flaws" with respect to each and every conc lusion in the IRA. The focus must be on whether
the IRA is "objectively justifiable", requiring an assessment of the cumulative effect of the IRA's
many flaws. The Appellate Body reaffirmed the "b road discretion" that panels have in exercising
their "significant investigative authority" to consu lt experts. In making its "objective assessment" the
Panel will consider the relevancy and weight to be attached to the experts' comments in deciding
whether the IRA is supported by sufficient scientific evidence. This "objective assessment" should be
carried out in light of the well-established rules rega rding burden of proof. Australia's suggestion that
New Zealand faces a higher burden of proof in this case should be rejected as yet another attempt to
shelter its risk assessment from proper review.
(ii) Relationship between Articles 2.2 and 5.1
4.184 Australia's original argument was that Article 5.1 had to be considered first because
compliance with Article 2.2 "can only be answered " by reference to Article 5.1. New Zealand
demonstrated this argument is incorrect. Austra lia now says that "the standard established by
Article 2.2 is fully met if the risk assessment satisfi es the conditions elaborated in Article 5.1." This
says nothing about the order in which those provisi ons should be assessed, and is also incorrect. A
determination that there has been a risk assessment within the meaning of Article 5.1 does not resolve
whether each of the challenged measures has a ra tional and objective rela tionship with scientific
evidence under Article 2.2.
(iii) The weight to be given to Japan – Apples
4.185 In Japan – Apples
the panel concluded that the scientific evidence did not establish that
mature, symptomless apple fruit would be infected by fire blight, or harbour endophytic populations
of E. amylovora, or harbour epiphytic populations of bacteria capable of transmitting fire blight. And

the panel in Japan – Apples concluded that the scientific eviden ce did not establish that apple fruit –
whether mature or immature – would serve as a means or pathway for the introduction of fire blight to
a fire blight-free area. The panel's conclusions in Japan – Apples were reached on the basis of
substantially the same scientific evidence as that considered in the context of this dispute. If the Panel
were to reach the same conclusions in relation to the scientific evidence as were reached in Japan –
Apples, then it would inevitably follow that Australia' s fire blight measures are maintained without
sufficient scientific evidence, in breach of Article 2. 2. This would not constitute "deferring" to the
findings in Japan – Apples as Australia asserts; it would be the result of an objective assessment
required under DSU Article 11.
4.186 Australia's arguments for ignoring Japan – Apples cannot be sustained, because the
conclusions in Japan – Apples relate to the same matters in issue in the present case. Contrary to
Australia's argument, the conclusions in Japan – Apples relate equally to epiphytic infestation as
endophytic infection. The consequences of the intr oduction of fire blight were taken into account, as
was the volume of international trade in apple fruit. Australia fails to point to any scientific evidence,
considered by the IRA team but not considered in Japan – Apples, that would have altered the panels'
conclusion in that case.
(d) Article 2.2
(i) Fire blight
4.187 New Zealand's central argument in relation to fire blight is that there is no scientific evidence
that mature, symptomless apples provide a pathway fo r the introduction of the disease. First, mature
apple fruit are not a conducive environment for E. amylovora . Second, the likelihood apples will
enter Australia with E. amylovora on them is very small and there is no evidence to justify the high
figure that Australia has used in the IRA. Third, as confirmed by the experts, there is no scientific
evidence of transfer of bacteria from a mature appl e to a susceptible host and an infection resulting.
The only scientific evidence goes the other way.
4.188 Australia fails to point to any "interpretati on" of the scientific evidence that supports its
pathway hypothesis apart from the so -called "divergent scientific evidence" of the IRA itself, or the
exercise of the IRA Team's "expert judgement" in relation to matters of "scientific uncertainty".
Thus, according to Australia, the IRA itself beco mes scientific evidence sufficient to satisfy
Article 2.2. But, Australia cannot by these means escape the core obligation of Article 2.2, not to
maintain measures without sufficient scientific evidence.
4.189 Equally, New Zealand has no obligation to prove that apples are not a pathway for the
introduction of fire blight. New Zealand has estab lished a prima facie case that there is no evidence
of a pathway and it is for Australia to point to the scientific evidence that supports its contention that a
pathway exists. It has not, and it cannot do so. Acco rdingly, Australia maintains fire blight measures
without sufficient scientific evidence, in breach of Article 2.2.
(ii) European canker
4.190 The measures established by the IRA are not based on sufficient scientific evidence, contrary
to Article 2.2. The experts have confirmed there is no scientific evidence of the transfer of European
canker through trade in mature, apple fruit. Australia argues that latent fruit infection is a widely
accepted phenomenon, and that because latent fruit inf ection occurs in some Northern Hemisphere
countries, it also occurs in New Zealand. This fa ils to take account of the effect of climatic
differences. The only evidence Australia provides on latent infection in New Zealand is the
Braithwaite report, which the experts confirm is neither relevant nor reliable.

4.191 Further, there is no scientific evidence to supp ort the contention that European canker could
establish via discarded fruit, let alone spread under Au stralian conditions. In particular, the experts
confirm that there is no evidence in th e literature that fruit rots caused by N. galligena are a source of
new infections in new areas. In addition, the IRA's assumptions about the climate of Australian
apple-producing regions are not based on scientific ev idence. Australia's new "climate analysis" is
simply a collection of weather data with no predic tive value and fails to contradict New Zealand's
position.
4.192 Australia's argument that Tasmania is less suitable for European canker establishment and
spread than other parts of Australia is not supp orted by the first BRS report which Australia relies
upon. And Australia contradicts the conclusions in the IRA by suggesting that the outbreak of disease
in Tasmania may not have been caused by N. galligena at all.
(iii) ALCM
4.193 There is no scientific evidence that the seque nce of events required for ALCM establishment
in Australia – many thousands of apples left outsi de of cold storage, uncovered, in the same place,
over a considerable period of time, within the lim ited female ALCM flight range of newly unfurling
apple leaves – would occur. Indeed, there is no scientific evidence that ALCM has ever been vectored
by trade in apples. As confirmed by the expert responses, the existing scientific literature instead
links the movement of ALCM to planting material.
4.194 Australia claims that enough New Zealand apples could be sent to orchard wholesalers for
mating to occur. But retail ready packaged New Z ealand apples are extremely unlikely to be sent to
orchard wholesalers, the only utility point within su fficient proximity to apple trees, leaving, in
Professor Cross's words, "virtually no opportunity for ALCM to emerge, mate, exit the packing house
and locate a susceptible apple tree".
4.195 Only once New Zealand apples reach their final retail destination and are outside of cold
storage could emergence occur. But, by then, New Zealand apples would never be in the quantities
required for ALCM mating. Because of the very lo w level of viable cocoons on New Zealand apples,
the prolonged period of emergence of ALCM adults and their very short life-span, many thousands of
apples would need to be outside of cold storage, in the same place, over an extended period of time,
for there to be any possibility of mating occurring. Au stralia failed to take su ch matters into account.
Instead, Australia's measures are based on the in correct assumption that ALCM emergence would
occur immediately from all cocoons on New Zeala nd apples, an assumption th at has no scientific
basis. Australia's claim that emergence and mating could occur while apples are on display at retail
outlets, open-air markets or when dumped as waste is therefore implausible.
4.196 As Australia has itself admitted, urban retailers are very unlikely to be near enough to apple
trees for egg laying to occur. Thus, even if suffi cient quantities of apples were on display at retail
outlets or open air-markets, they would not be within the female ALCM's flight range of apple trees.
Likewise, even if apple waste was disposed of in the volumes required for mating, it is extremely
unlikely that it would be left near commercial apple trees. Australia's argument that "large quantities
of fruit waste may be left uncovered in production ar eas" and may be "dumped under host plants", is
made without any supporting evidence. Such prac tices would be directly contrary to Australian
orchard biosecurity best practice guidelines which require agricultural waste to be destroyed or
disposed of well away from orchards. Australia 's measures are therefore maintained without
sufficient scientific evidence, in violation of Article 2.2.
4.197 In addition, there is no scientific support for the general measures that apply to all three pests,
in breach of Article 2.2.

(e) Article 5.1
(i) Methodology
4.198 New Zealand has demonstrated that the "negligible" interval (between 0 and 10 -6) used in the
IRA to represent events that "almost certainly will not occur" includes values that significantly
overestimate the risk. The use of a uniform dist ribution weights the outcome in favour of those
values. The result is that these are no longer events that "would almost certainly not occur".
4.199 This approach is not, in any sense, objectivel y justifiable. The IRA simply applied pre-
determined probability intervals taken from generi c draft "Guidelines" developed in a completely
different context. The IRA contains no explanat ion or analysis as to why these pre-determined
probability intervals were appropriate in the context of a risk assessment for apples. The IRA took no
account of the implications of applying these pre-determined probability intervals when the unit
considered (a single apple) is traded in the tens of millions (the IRA's model was based on a "most
likely volume of trade" of 150 million apples). In th is context the maximum value of the "negligible"
interval represents one in a million apples, and a pplying a uniform distribution results in outcomes
that tend toward the average of one in two million apples. The "negligible" interval is the lowest
probability interval used in the IRA. Despite Aust ralia's claim that the IRA Team were free to use
other intervals, not once was a lower probability interval applied.
4.200 There is no objective basis for the parameters a nd distribution of the "negligible" interval.
Australia argues that the interval was used to "assist consistency in the risk assessment", and that "any
choice of intervals is arbitrary". But the parameters and distribution of the interval have a direct and
significant bearing on the overall estimation of risk, especially given that th e "negligible" interval
makes up over a third of all likelihood values used in the risk assessment. The values chosen must be
objectively justifiable.
4.201 Australia also suggests that the intervals are justified because the interval "contained" the
actual value. But the "negligible" interval ranges from zero to one in a million apples. It therefore
represents events that "almost certainly will not occu r", as well as events that manifestly would occur.
Systematically combining this interval with a uni form distribution means that higher likelihoods are
significantly over-represented.
4.202 Australia claims that "[t]he IRA Team applie d expert judgment in a rriving at appropriate
distributions taking into account available data and the uncertainty resulting from the absence of
data". However, simply claiming that "expert j udgement" has been applied does not establish that the
outcome is "objectively justifiable". Australia purpor ts to render its risk assessment self-justifying.
Moreover, it is difficult to see in what sense the IR A Team applied "expert judgement" in the context
of the "negligible" interval. Pre-determined prob ability intervals were simply imported from another
context without analysis. The same interval was us ed every time a "negligible" interval was applied.
And a uniform distribution was applied almost ever y time. Beyond concluding that this broad and
over-inclusive interval "contained" the actual value, the role of expert judgement is not apparent.
4.203 Furthermore, the quantity and quality of the data are factors that should be considered in
deciding what methodology to apply. The experts' re plies have made it clear that the incorporation of
quantitative elements into a methodology is meant to add precision where available data and scientific
evidence make this possible. It is not supposed to create imprecision through the systematic
application of uniform distributions, justified on th e basis of "significant uncertainties". This is
especially so where the interval in question ranges across several orders of magnitude.
4.204 Australia's description of the method used to arrive at an expert opinion appears to have been
an unstructured process, not following any recogn ized method for eliciting and combining expert

opinions in order to derive a particular range of values and distributions, casting doubt on the notion
that a coherent and objective process was used.
4.205 Australia's estimate of a most likely import quantity of 150 million New Zealand apples
annually (15 per cent of Australia's domestic fr esh apple fruit market) also lacks any objective
justification, and is based on a range of unsuppor ted assumptions and suppositions. But despite the
many uncertainties inherent in Australia's conclusion on the likely volume of trade, and the doubts
raised by New Zealand, Australia firmly clings to its estimate. This is no doubt because of the
importance of volume of trade to Australia's risk analysis methodology. As the IRA itself
acknowledges, "very low exposure values expressed on a per apple basis could be highly significant
when the potential volume of trade is taken into account". This reflects an unstated motivation
underlying Australia's application of the semi-qua ntitative methodology; to use volume of trade to
boost the estimated risk associated with New Zealand apples to a level that Australia claims justifies
phytosanitary measures.
(ii) Fire blight
4.206 The experts confirmed that many of the conclusi ons in the IRA relating to fire blight lack
sufficient scientific support. This was true of im portation steps 1, 2, 3, 4, 5 and 7, the IRA's
conclusions in relation to the ove rall probability of importation of E. amylovora, and in relation to the
probability of exposure of a susceptible host to E. amylovora. Rather, the experts confirmed that the
IRA's conclusions are fundamentally flawed and not objectively justifiable. Their responses confirm
that "the scientific evidence actually relied upon did not support the conclusions drawn", and that
Australia's theory that mature apples provide a pathway for the introduction of fire blight has no
scientific support.
4.207 Unable to challenge the substance of the expe rts' responses, Australia has instead: attacked
their qualifications; asserted that the flaws found by the experts were not serious enough to require
the Panel to do anything; and argued that the Pane l or New Zealand needs to see whether alternative
probabilities are available on the evidence. This, in effect, asks the Panel and New Zealand to redo
the risk assessment. None of these arguments withstands analysis.
4.208 Under Article 5.1, the task of the Panel is to review Australia's risk assessment, not to conduct
a de novo review, or redo the Australian risk assessment. New Zealand's claim that the IRA fails to
provide a risk assessment in respect of fire blight has been confirmed by the experts and is not
rebutted by Australia.
(iii) European canker
4.209 New Zealand has demonstrated, and the experts have confirmed, that the IRA's conclusions in
relation to the probability of entry, establishment and spread of N. galligena, and its conclusions on
consequences, do not find sufficient support in the scientific evidence relied on.
4.210 New Zealand challenges the IRA's assessment of the probability that latently infected fruit
will be harvested from New Zealand orchards. As the experts confirm, Australia has not provided
sufficient scientific evidence to support the values a ssigned to this step. Moreover, in assigning an
effective probability of 1 to survival of latent infections through processing in the packing house, the
IRA does not take into account that fruit would be stored in New Zealand until grading and packing
for just in time delivery to the Australian market. Thus, any rots which developed in storage would be
removed prior to export, reducing the possibility of the entry of infected fruit into Australia.
4.211
 Australia also asserts that "surface infestation of mature apples occurs in New Zealand, both
in the field and in processing". However there is no evidence of surface contamination. The experts

conclude that contamination would not "play any part in an entry pa thway" and that "this possibility
should be disregarded from the risk analysis". Si nce the surface contamination pathways under the
IRA account for more than 80 per cent of the total probability of entry, it is impossible to have any
confidence in the conclusions of the IRA.
4.212 Australia now argues that New Zealand (and by implication the experts) have misunderstood
the IRA's methodology and that surface infestation is only a precursor to latent infection and in this
way importation steps 3, 5 and 7 refer also to latent infection. However the IRA does not discuss how
or when fruit infestations would turn into fruit in fection or evaluate the likelihood of this event
occurring. In any event, there is no scientific evidence to support the contention that surface
infestations will lead to infections at each of these steps and this was confirmed by the experts.
4.213 Australia also claims expert support for its exposure scenario, but it can only do so by
selectively quoting from the experts' responses. In fact, Professor Latorre challenges the probability
values assigned by the IRA team. And, both Drs. Swinburne and Latorre identified numerous reasons
why the scientific evidence does not support the IRA's conclusion on exposure.
4.214 In its first written submission, New Zealand established that the IRA's analysis of climate was
flawed and that the climatic conditions in Australia were not suitable for the establishment and spread
of European canker. The experts confirm that there is no evidence to support the IRA's use of
1000mm rainfall as the relevant climatic indicator for European canker establishment. In its
subsequent climate reports, Australia employs sel ective weather data, fails to take account of
inoculum production and inappropriate ly uses "one off" weather events to predict establishment risk.
Australia's use of different predictive models to bol ster the IRA's conclusions as to the suitability of
Australia's climate are deeply flawed and confirm that it is necessary to over-predict European canker
risk in order to support the IRA's conclusions.
4.215 As New Zealand has established and the experts confirm, Australia's assessment of
consequences is significantly over-estimated. Austra lia's arguments rest on the flawed premise of the
suitability of its climate and assertions about the abili ty of the disease to establish on alternative hosts
in Australia, which are not supported by scientific evidence.
(iv) ALCM
4.216 New Zealand has demonstrated that the conclu sions drawn by the IRA in relation to the
likelihood of entry, establishment and spread of ALCM, and the IRA's assessment of consequences,
do not find sufficient support in the scientific evid ence relied on. This has been confirmed by the
experts, who describe the IRA's analysis of the lik elihood of importation as "unclear", reliant on "old
and inadequate published data", "subject to larg e uncertainties" and, most importantly, without
"sufficient scientific evidence".
4.217 Australia's only response is its claim that the IRA's assessment of the likelihood of
importation of ALCM is "irrelevant" because the IR A also relied on the August 2005 data. However,
the IRA's failure to take into account the scientific evidence on viability is relevant not only to the
IRA's conclusions on importation, but also to the entire assessment of risk, including the IRA's
alternative conclusions on the likelihood of entr y, establishment and spread, based on the August
2005 data, which related to occupi ed cocoons and not, as Australia incorrectly assumed, viable
cocoons.
4.218 In an apparent acceptance of the IRA's failings with respect to viability, Australia has put
forward various justifications, including that Australia was entitled to ignore Rogers et al. 2006
because its methodology was flawed and its results we re unclear. Australia also claims that seasonal
and varietal variability and scientific uncertainty miti gate the IRA's errors. But none of these factors

can cure the IRA's complete disregard of viability. While uncertainty may be an inherent part of risk
analysis, it is not a licence to ignore inconvenient evidence.
4.219 As New Zealand has explained, the high rate of non-viable cocoons on New Zealand apples
substantially affects the risk of ALCM establishing in Australia. As Professor Cross has said, the
issue of viability is of "crucial importance … in calculating risks a nd determining appropriate sample
sizes…"
4.220 Moreover, as pointed out by Professor Cross, many of the key biological conclusions in the
IRA with respect to the likelihood of ALCM establishment in Australia are not supported by scientific
evidence. Even if there may be some uncertainty as to precisely when and how long it will take for
adults to emerge there is no doubt that Australia's assumption of simultaneous emergence as soon as
apples are removed from cold storage has no scientif ic support. As Professor Cross pointed out, the
prolonged period of emergence s ubstantially decreases the chance of male and female emerging
during the necessary time frame for mating. To quote Professor Cross, "The risk of establishment is
thus substantially reduced and this important factor has not been taken into account in Australia's
IRA…"
4.221 The IRA also failed to take into account that standard commercial practices in Australia in
respect of cold storage of fruit and agricultural w aste disposal preclude any likelihood of the scenario
required for ALCM establishment occurring in Australia. Australia claims that the IRA was correct to
ignore Australian waste disposal practices because th e Australian industry is unl ikely to comply with
them. This is a rather surprising proposition and it is a view not shared by Professor Latorre, who had
a much more generous view of the "cultural attitude of Australian people" to the disposal of waste.
Moreover, the waste disposal practices at issue are prescribed in the manual of Australian orchard
biosecurity best practice guidelines.
4.222 The IRA also failed to take into account the cruc ial issue of mode of trade, a matter that was
noted by the ALCM expert. If New Zealand apples are exported retail ready to Australia, the primary
pathway identified by the IRA for ALCM establishment – orchard wholesalers – would disappear.
4.223 Finally, the IRA's assessment of the likelihood of ALCM spread and consequences failed to
take into account the climatic factors required for establishment and spread and therefore over-
estimated consequences. This, too, was confirme d by the experts and appears to be accepted by
Australia.
4.224 With respect to Articles 5.2, 5.5, 2.3 and 5.6, New Zealand reaffirms its position on these
provisions as stated in its earlier pleadings.
(f) Article 8/Annex C
4.225 The IRA process took 8 years to complete. Aust ralia has offered no justification for this
delay. Rather than countering New Zealand's subs tantive claim, Australia continues to relitigate the
Panel's preliminary ruling. Australia wrongly equa tes the IRA process with the measures at issue,
blurring "the distinction between measures and claims". The IRA process is the subject of the
obligation, not the measure at issue. Moreover, Australia has not explained how the IRA process,
which has ceased to exist, could be a challengeable measure under the DSU. It is well-established
that "the measures included in a panel's terms of re ference must be measures that are in existence at
the time of the establishment of the panel". Fina lly, it is difficult to understand how Australia could
not have known what case it had to answer. It was not necessary for Australia to know precisely what
arguments New Zealand would be making to be on no tice to begin preparing a defence in relation to
its eight year delay.

6. New Zealand's closing oral statement at the second substantive meeting
4.226 New Zealand's closing statement will be brief. What New Zealand would like to do is come
back to the fundamentals – the core of this case – because much has been said throughout this case by
Australia to distract from that central core.
4.227 The Panel has heard over the course of these proceedings many arguments by Australia about
what should be taken into account in the assessment of the evidence in this case. These have included
the notions of considerable deference, scientific uncertainty, and expert judgment. And in their
opening statement, Australia tried to characterize New Zealand's position as one of requiring scientific
certainty. And under the guise of considering the "practical realities of conducting risk assessments"
Australia seemed to be asking you to roll back the disciplines of the SPS Agreement. But the Panel's
task need not be trammeled by these efforts to confound the issue.
4.228 The central question is one of sufficient sci entific evidence. New Zealand has made
arguments and produced evidence to show that it is lacking. The Panel now has to consider all the
evidence and the arguments presented, consider the e xperts reports and what the experts said in the
meeting with them, and consider whether the Au stralian measures are based on sufficient scientific
evidence, whether the alleged scientific basis for the measures is objective and credible, and whether
the risk assessment is "objectively justifiable".
4.229 The essence of this case is that Australia has imposed measures on the importation of apples
from New Zealand that are not based on sufficient scientific evidence, indeed in most instances not
based on scientific evidence at all. The Panel h as seen the arguments of New Zealand where this has
been set out. The Panel has seen the reports of the experts that confirmed this and it has heard them
repeat that confirmation earlier this week.
4.230 And it is not surprising that this should be so. In respect of fire blight the matter was
completely reviewed in Japan – Apples . The panel looked at the scientific evidence and found that
there was nothing to support the view that apple fruit provide a pathway for the introduction of fire
blight. That in substance was the same scientific evidence that was reviewed in the IRA and has been
discussed throughout these proceedings. There was not hing new to consider. There was no scientific
evidence then of a pathway for the transmission of fi re blight by mature, symptomless apple fruit, and
there is none today. Of course, as the experts said, it cannot be completely ruled out, but its likelihood
is no greater than the movement of fire blight thr ough natural dispersal. This means that measures on
apple fruit provide no additional protection against fire blight.
4.231 In respect of European canker and ALCM the science has been less abundant, but that which
exists does not support the Australian theory. More fundamentally, in arguing that European canker
and ALCM could enter, establish and spread th rough trade in apple fruit, Australia is positing
something that has never been shown to occur either through experimentation or in the real world.
This was reiterated quite emphatically by the expe rts during the meeting with the Panel. The Panel
heard Dr Swinburne and Dr Latorre say this a bout European canker, and Professor Cross speaking
about ALCM. And, in respect of all of the pest s New Zealand heard the same statement from the
experts; transmission is not through mature fruit, it is through planting material.
4.232 In the face of this lack of the needed scien tific evidence to support the measures for each of
the pests, Australia is clearly in violation of its obligations under Article 2.2 of the SPS Agreement.
4.233 The lack of scientific support also goes to the heart of the deficiency of the IRA as a risk
assessment. The only way the IRA could find that Australia's ALOP was not met was to apply a
methodology in a way that is not objectively justifia ble. This involved applying probability intervals
to the notion of "negligible" risk that transformed events that woul d almost certainly not occur into

events that would occur with some frequency. An event that almost certainly would not occur was
now becoming an event that would occur once in every 2 million apples in a trade that would be in
millions of apples per year. And, nothing New Z ealand has heard at the second substantive meeting
gives it any reason to alter its position in this regard.
4.234 If there had been the supporting scientific ev idence, the IRA Team could have adopted a
methodology that was objective and credible, and the result may well have been objectively
justifiable. But in the absence of scientific support, the only way that measures could be justified was
to apply a flawed methodology that arbitrarily magni fies risk and then multiplies that magnified risk
by an inflated assumption of the volume of trade.
4.235 Thus, Australia is forced to significantly overest imate the likelihood of events that have never
occurred and for which there is no scientific suppor t. As a result of the probabilities assigned under
particular import steps, highly speculative events become events that are predicted to produce
thousands, sometimes tens of thousands, of infested or infected apples entering Australia each year,
which are then multiplied by proximity and exposur e values which themselves bear no relationship to
the scientific evidence.
4.236 The result is not a risk assessment that meets the requirements of WTO disciplines and it
places Australia in violation of its obligations under Article 5.1 of the SPS Agreement. Moreover, the
failure of Australia to give appropriate consider ation to the requirements of the SPS Agreement has
equally placed Australia in violation of Article 5.2 of the SPS Agreement. These failings were
confirmed by the experts consulted by the Panel. The only "support" Australia can claim for its
measures requires an assumption of a zero-risk approach to the importation of "risk" apples. But of
course, this is not consistent with Australia's AL OP, or the SPS Agreement which deals with the risk
of entry, establishment, spread and associated consequences.
4.237 The IRA process took place, as New Zealand h as described, in a highly charged political
environment, and as a result it took over 8 years to complete. And while that political context might
explain the delay, it does not free Australia from it s obligations under Article 8 and Annex C of the
SPS Agreement.
4.238 The fact that Australia has imposed measures in respect of apples from New Zealand that it
does not impose in circumstances of comparable risk , is illustrated by the way Australia has treated
the importation of nashi pears from Japan in viola tion of its obligations under Article 5.5 of the
SPS Agreement.
4.239 But, none of this needed to happen. Th ere are measures, set out in New Zealand's
submissions, that are reasonably available and less tr ade restrictive that would meet Australia's ALOP
in respect of each of the pests at issue. Failure to apply such measures places Australia in violation of
its obligations under Article 5.6 of the SPS Agreement.
4.240 Thus, New Zealand has established that in applying the 17 measures to apples from
New Zealand set out in New Zealand's First Writte n Submission Australia is in violation of its
obligations under the SPS Agreement.
4.241 New Zealand would also take this opportunity to reaffirm all matters dealt with in its written
submissions that have not been discussed in its or al statements in the second substantive meeting and
to request the Panel to make the rulings for relief set out in New Zealand's First Written Submission.
4.242 Finally, New Zealand would like to take th is opportunity to thank the Panel and the
Secretariat for all of the time and care they have devoted to this case and no do ubt will continue to do

so over the next several months. New Zealand would also like to thank the experts for their important
contribution to the dispute settlement process.
4.243 That concludes New Zealand's closing statemen t. New Zealand looks forward to responding
to any written questions that the Panel may have.
B. AUSTRALIA
1. Executive summary of Australia's first written submission
(a) Introduction
4.244 Australia opened its market to New Zealand a pples in 2007. This followed an extensive
import risk analysis which recommended that a number of measures were required to mitigate the risk
that the causal agents of fire blight and Eur opean canker, and apple leafcurling midge (ALCM),
inter alia, could enter Australia with serious and irre versible consequences. In requiring such
measures, Australia is exercising its basic right unde r the SPS Agreement to protect its plant life and
health from risks arising from the introduction of pests not present in Australia but endemic to
New Zealand, at the appropriate level of protection (ALOP) determined by Australia.
4.245 New Zealand's challenge to the trade liber alising, science-based measures, fails to
demonstrate any breach by Australia of its WTO ob ligations. Australia also completely rejects
New Zealand's unsubstantiated allega tions that the preparation of the Final Import Risk Analysis
Report for Apples from New Zealand, November 2006 (the Final IRA Report) was tainted by political
interference. Australia requests the Panel to disregard these allegations in their entirety.
(b) Legal framework
4.246 As complainant in this dispute, New Zealand must establish a prima facie case based on both
evidence and legal argument, in relation to each of its claims and each of the measures challenged,
before the evidentiary burden shif ts to Australia. However, New Zealand's submission makes flawed
legal arguments and bald, and sometimes misleading, assertions, without submitting evidence to
support many of its claims. These failings mean that New Zealand has not discharged its burden of
proof and, therefore, the presumption that Austra lia's measures are WTO-consistent has not been
overturned. Australia nonetheless demonstrates, through solid scientific evidence and legal argument,
that its measures are fully consistent with the re levant provisions of the SPS Agreement. While
New Zealand is entitled to rebut Australia's argume nts, it is not entitled to remedy its failure to
provide sufficient factual evidence in support of its claims in its first written submission, by
introducing new evidence in the rebuttal stage of these proceedings.
4.247 The product and measures at issue limit the scope of this dispute. First, the product at issue,
as set out in the Final IRA Report, is "mature appl e fruit free of trash, either packed or sorted and
graded bulk fruit from New Zealand." New Zealand' s attempts to mischaracterise the product at issue
should be rejected by the Panel.
4.248 New Zealand purports to challenge the 17 "measu res" specifically identified in its panel
request, but several of those measures do not exist as New Zealand has described them. Australia
does not impose the orchard-suspension following pr uning requirement for European canker alleged
by New Zealand. Australia also considers that th ere is no live dispute regarding the requirement for
involvement of Australian Quarantine and Insp ection Service officers in inspections, because
New Zealand's challenge results from a misundersta nding of the actual requirement. Accordingly,
there are only 15 measures at issue in this dispute. In addition, a large nu mber of the "measures"

identified by New Zealand are not challengeable on an individual basis, and should only be assessed
by the Panel when "taken as a whole" with the principal risk reduction measures applied by Australia.
4.249 Australia also draws the Panel's attention to the critical threshold issue of standard of review.
The Panel should be mindful of the appropriate standa rd(s) of review in its evaluation of the basis for
Australia's measures. The nature of what is required of a panel to conduct an "objective assessment of
the facts" pursuant to Article 11 of the DSU varies depending on the particular provision at issue.
Under the SPS Agreement, Australia submits that a panel's jurisdictional competence is most limited
in respect of its review of risk assessments, b ecause the obligation to base SPS measures on a risk
assessment means that a thorough expert evaluation of the relevant technical issues compulsorily
precedes a panel's analysis of the issues.
4.250 In Australia's view, Article 5.1 requires a panel to examine whether the risk assessment relied
upon by a Member is objective and credible. Guidan ce from past cases indicates that a panel may not
conduct its own risk assessment, attempt to settle a scientific debate or substitute its own judgment for
that contained in a risk assessment, without appropr iate cause. Australia submits that, only if the
complainant establishes flaws in a risk assessment which are so serious that they would prevent a
panel from having reasonable confidence in that asse ssment will the panel's duty extend to scrutiny of
the relevant scientific evidence and intervention in the findings or conclusions of a risk assessment.
4.251 In addition, the nature of the relationship between Article 2.2 and Article 5.1 of the
SPS Agreement warrants careful consideration by the Panel. The Appellate Body has explained that
these two provisions should constantly be read toge ther and that the elements of each inform and
impart meaning to the other. New Zealand effec tively ignores this guidance by artificially dividing
the substantive matters to be addressed under the two provisions.
4.252 In Australia's view, the obligation that SPS me asures not be maintained without sufficient
scientific evidence (Article 2.2) and the obliga tion to base measures on a valid risk assessment
(Article 5.1) cannot be meaningfully separated. Ar ticle 5.1 is a specific application of Article 2.2.
This means that Article 5.1 and its associated provi sions elaborate specific conditions which, if met,
will establish the consistency of the relevant measures with Article 2.2.
4.253 Australia's view is supported by the text of the SPS Agreement. Both Article 2.2 and
Article 5.1 are concerned with whether the av ailable evidence supports the establishment of risk,
which provides an underlying justification for the adoption of SPS measures. Risk assessments under
Article 5.1 involve the expert evaluation of scien tific evidence, as well as technical and economic
factors, in accordance with an appropriate methodol ogy. They must also be appropriate to the
circumstances. Accordingly, if measures are based on a valid risk assessment under Article 5.1, the
requirement of Article 2.2 that measures not be maintained without suffici ent scientific evidence is
satisfied. Australia has therefore addressed New Z ealand's technical and scientific claims together
under Article 5.1 and encourages the Panel to similarl y commence its analysis of Australia's measures
under Article 5.1.
(c) Legal and factual rebuttal
(i) Australia's measures are consistent with Article 5.1, and accordingly, with Article 2.2
New Zealand misunderstands what is required of a valid risk assessment

4.254 Australia's measures are consistent with Article 5.1 and, accordingly, w ith Article 2.2 of the
SPS Agreement. They are based on a comprehensive risk assessment, which is appropriate to the
circumstances and is consistent with the criteria set out in Articles 5.1, 5.2, 5.3 and Annex A(4) of the
SPS Agreement. The Final IRA Report expresses the conclusions of qualified and respected scientists

and technical experts (the IRA Team). The IRA T eam concluded on the basis of available evidence
that, in order to meet Australia's ALOP, measures would be necessary to protect plant life and health
from fire blight, European canker and ALCM, as well as a range of measures for other pests that are
not the subject of dispute by New Zealand.
4.255 New Zealand misunderstands the nature of the risk assessment required by Article 5.1.
4.256 For example, New Zealand argues that, instead of obtaining a proper risk assessment
appropriate to the circumstances, Australia should have based its measures on the findings in the
Japan – Apples dispute. However, the findings in Japan – Apples clearly do not constitute a risk
assessment within the meaning of the SPS Agreemen t. Those findings do not take account of
Australian conditions including its ALOP, consum ption and distribution patterns, environmental
conditions, host distributions or the potential comm ercial volume of New Zealand apples which may
be exported to Australia. Australia does not accept that the panels in Japan – Apples envisaged that
their legal conclusions should be considered a "global" risk assessment that could be substituted for a
proper risk assessment applying to an entirely diffe rent set of circumstances. In any event, Japan –
Apples is concerned with risks associated with only one of the three pests at issue in this dispute – fire
blight.
4.257 New Zealand's criticisms of the IRA Team's anal ysis of the available scientific evidence is
often based on selective reliance upon particular pi eces of evidence and is also based on multiple
erroneous calculations and assumptions. New Zeala nd relies on the superficially attractive notion of
scientific "certainty" around the transfer and spread of the pests at issue. This conveniently ignores
the range of credible scientific views on these issues. The IRA Team, in exercising its expert
judgment, was entitled to rely on the full spectru m of scientific evidence drawn from qualified and
respected sources. Members regularly take measures to mitigate the potentially significant
consequences of low probability events. This is good risk management practice and does not mean
that Australia has over-estimated or exaggerated the risks. It is for Australia to set its own ALOP.
4.258 The flaws in New Zealand's critique are compounded by errors of law. Pursuant to the
relevant provisions of the SPS Agreement, a valid assessment of phytosanitary risk must evaluate both
the likelihood of entry, establishment or spread of a pest, as well as the associated potential biological
and economic consequences . New Zealand wrongly implies that the notion of "risk" should be
confined to the likelihood of entry, establishmen t or spread. New Zealand also inappropriately
conflates the notion of mere "possibility" with events that may only have a very small or "negligible"
probability of occurring. This effectively amounts to an assertion that risk assessments are required to
identify a minimum magnitude of risk – a proposition which has been expressly rejected by the
Appellate Body.
4.259 New Zealand also wrongly claims that there are flaws in the semi-quantitative methodology
used by the IRA Team. The IRA Team rigorously applied sound methodology, as is scrupulously
detailed in the Final IRA Report. Its approach was commensurate with best practice risk assessments
worldwide, including the International Plant Prot ection Convention standards (ISPMs). Furthermore,
the SPS Agreement is not prescriptive as to methodol ogy and Australia cannot be required to use
New Zealand's own methodology.
4.260 The use of distributions by the IRA Team in estimating probability reflects the range and
variability of available scientific evidence, accomm odating small but significant probabilities as well
as uncertainties, consistent with ISPM No.11. Ne w Zealand's claims that the volume of trade is
overestimated in the Final IRA Report are based on faulty suppositions a bout Australian consumer
preferences, distribution channels, price responses and exporter behaviour.

New Zealand's claims in respect of fire blight are unsubstantiated

4.261 The Final IRA Report outlines in precise detail th e analysis of the IRA Team, which arrived
at the conclusion that there is an identifiabl e risk that the causal agent of fire blight,
Erwinia amylovora, could find a pathway into Australia on mature New Zealand apples and result in
serious consequences. The findings in Japan – Apples do not amount to scientific evidence, or a valid
risk assessment, therefore undermining New Zealand' s claims in this dispute. New Zealand also
attempts to substitute the Final IRA Report with the scientific study by Roberts and Sawyer (2008),
which is based on outdated data largely concerni ng trade between the United States and Japan under
conditions that are no longer relevant.
4.262 New Zealand relies on purported evidence about the "long history of trade" between
exporting countries with fire blight and those countries without the disease, as well as scientific
studies which speculate about the causes of fire blight spread, to support its claim that mature apples
do not spread fire blight. Australia shows to th e contrary that there is no direct evidence which
establishes this "fact". Many fire blight incurs ions around the world remain unexplained. Members
other than Australia also share the concern that apple fruit may transmit E. amylovora, evidenced by
the risk management measures that they impose on imported apples. Some of New Zealand's other
trading partners impose measures very similar to t hose adopted by Australia on New Zealand apples.
New Zealand also argues that the pathway for fire blight could never be completed because there
would be insufficient quantities of E. amylovora bacteria to initiate an infection in Australia. In
Australia's view, these arguments are based on an unbalanced and selective view of the evidence.
4.263 Finally, New Zealand's assertion that the conse quences of a fire blight incursion in Australia
would be the same as in New Zealand is without b asis. The Final IRA Report demonstrates that fire
blight is a highly variable disease a nd is not likely to be experienced in the same way in different
places. In any case, there is ample evidence from New Zealand and the United States to show that fire
blight disease has very serious consequences.
New Zealand's claims in respect of European canker are unsubstantiated
4.264 In respect of European canker, the Final IR A Report outlines in similarly precise detail the
IRA Team's analysis to arrive at the conclusion that there is an identifiable risk that mature fruit could
provide a pathway for the entry, establishment a nd spread of the disease, with serious potential
consequences. New Zealand seeks to overturn the IRA Team's meticulous approach through a series
of ill-founded arguments. However, it cannot esca pe the explicit acknowledgement by the Chief
Plants Officer of the New Zealand Ministry of Agriculture that "apple fruit are a potential pathway for
the introduction of European canker, as the fruit can develop latent or storage rots."
4.265 Australia shows that New Zealand's climate analysis is too narrow as it focuses solely on a
few environmental criteria relevant to commercia l apple and pear production, and it overlooks the
biology of the pathogen and its wide range of hosts distributed throughout large areas of Australia.
This leads to incorrect predictions as to the potenti al distribution of European canker. Australia's
modelling shows that the potential distribution of Eur opean canker in Australia covers a much larger
area than that suggested by New Zealand.
4.266 Contrary to New Zealand's suggestion, the IR A Team identified four relevant studies in
relation to fruit rot caused by Neonectria galligena in New Zealand, as well as scientific evidence
regarding spore dispersal and survival. Further, Au stralia has clearly articulated the reasons for the
limited spread during the Tasmanian outbreak of Eu ropean canker. These reasons include a rigorous
eradication program and a unique strain of N. galligena which required another mating type for
reproduction.

4.267 Finally, New Zealand's claim in relation to the assessment of potential consequences of
European canker is superficial and confused.
New Zealand's claims in respect of ALCM are unsubstantiated
4.268 The Final IRA Report also represents an obj ective and credible analysis of the risks
associated with the entry, establishment or spread of ALCM in Australia associated with New Zealand
apples. New Zealand acknowledges that viable ALCM on imported New Zealand apples pose a risk
for Australia. But New Zealand fails to appreciat e that the mobility of the insects required the IRA
Team to adjust its methodology and consider a much more complex pathway than for fire blight and
European canker. New Zealand demonstrates its misunderstanding of the IRA Team's approach to
assessing unrestricted risk by arguing that the IRA Team should have taken into account the affect of
risk management measures in its importation an alysis. Also, New Zealand's reliance upon pieces of
scientific evidence is highly selective, failing to take into account the range of scientific data
available.
4.269 Particularly detrimental to New Zealand's arguments on ALCM is its clear misinterpretation
of the results of the paper by Rogers et al. (2006), upon which it relies heavily in respect of the
proportion of fruit likely to be infested with viable ALCM. This misinterpretation irredeemably taints
New Zealand's claims in respect of the probability of entry, establishment and spread of ALCM.
New Zealand also asserts that most of its apples w ill be exported "retail ready", suggesting that only
relatively few would require repacking at orchard packing houses, and therefore insufficient quantities
of infested apples would be situated together near susceptible hosts. However, this "retail ready"
assertion is unsupported by any evidence relevant to th e conditions of the Australian market. In any
event, the IRA Team's analysis makes clear that, even if a relatively small proportion of New Zealand
apples are sent to orchard packing houses, there w ould still be sufficient quantities of infested apples
for ALCM to establish on the basis of the estimated volume of imported apples.
4.270 New Zealand's claim that the necessary sequen ce of events to enable ALCM to enter,
establish and spread in Australia could never occur in the "real world" is undermined by the clearly
successful spread of ALCM and other insect pests across the world.
4.271 New Zealand's claims in relation to the IRA Team's assessment of potential consequences of
an ALCM incursion are imprecise and unsubstantiated.
Conclusion on the risk assessment for fire blight, European canker and ALCM
4.272 New Zealand fails to demonstrate any flaws in the Final IRA Report, let alone flaws that are
"so serious" that they should prevent the Pane l from having reasonable confidence in the risk
assessment. In any event, Australia has demonstrat ed that the IRA Team properly evaluated risk and
applied its expert judgment rigorously to arrive at an objective assessment in relation to fire blight,
European canker and ALCM.
The IRA Team properly evaluated those SPS measures which might be applied
4.273 Australia rejects New Zealand's assertion that the IRA Team failed to evaluate the SPS
measures which might be applied. It is clear from the Final IRA Report that each of the principal risk
reduction measures and alternatives were evaluated for each of the pests at issue. Australia submits
that there is no obligation in the SPS Agreement to evaluate any and every potential measure that
might be applied to address a particular risk; such an obligation would be impossible for any Member
to satisfy.

Conclusion

4.274 For the above reasons, Australia submits that th e Final IRA Report is a valid risk assessment
within the meaning of Article 5.1 and related provi sions of the SPS Agreement. As New Zealand has
not challenged whether Australia's measures are "bas ed" on the risk assessment in question, Australia
submits that its measures are consistent with Artic le 5.1 of the SPS Agreement and, accordingly, with
the requirement that measures not be maintain ed without sufficient scientific evidence under
Article 2.2.
(ii) Australia has acted consistently with Article 5.2
4.275 The IRA Team took into account all of the fact ors listed in Article 5.2, including those
identified by New Zealand: available scientif ic evidence; relevant processes and production
methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests;
and relevant ecological and environmental condition . New Zealand has failed to demonstrate
otherwise. Moreover, New Zealand's attempt to conve rt Article 5.2 to an obligation to give "genuine
consideration" to these factors is not grounded in th e text of the provision and is instead merely a
complaint that the IRA Team took a different view to New Zealand's own view of these factors.
(iii) Alternatively, Australia's measures are nonetheless consistent with Article 2.2
4.276 Australia considers that New Zealand has effec tively abandoned any claims in relation to the
Article 2.2 requirement that measures be "based on scientific principles".
4.277 If the Panel does not accept Australia's primary su bmission that consistency with Article 5.1
establishes consistency under Article 2.2, Australia submits that New Zealand has nevertheless failed
to establish that Australia's measures are "maint ained without sufficient scientific evidence" in
violation of Article 2.2. In any event, Aust ralia has demonstrated that, on the basis of the
comprehensive analysis of the evidence in the Fi nal IRA Report, there is a rational and objective
relationship between Australia's measures and the scientific evidence.
(iv) Australia's measures are consistent with Article 5.5 and Article 2.3
4.278 Australia applies its explicitly stated ALOP consistently, including with respect to
New Zealand apples and Japanese nashi pears. New Zealand has failed to establish that Australia
applies different levels of protec tion under Article 5.5. New Zealand's simplistic comparison of the
respective measures applied in relation to New Zealand a pples and Japanese nashi pears ignores the
fact that the risks associated with the two products are mark edly different. Therefore, the measures
required to meet Australia's ALOP differ. Accordin gly, the application of Australia's ALOP does not
exhibit arbitrary or unjustifiable distinctions in th e treatment of different situations which result in
discrimination or a disguised restriction on international trade. New Zealand has failed to substantiate
any of the so-called "warning signa ls" and "additional factors" in relation to the third element of
Article 5.5.
4.279 As New Zealand fails to estab lish a violation of Article 5.5, its consequential claims under
Article 2.3 must also fail.
(v) Australia's measures are consistent with Article 5.6
4.280 Australia's measures are not more trade restri ctive than required to achieve its ALOP under
Article 5.6. New Zealand's claims under Article 5.6 rest entirely on its contention that the unrestricted
risks associated with the importation of New Zeala nd apples are lower than the levels established in
the Final IRA Report; a claim which New Zealand has failed to substantiate. New Zealand has failed

to satisfy its burden under Article 5.6 to show that any of the "alternative" measures identified would
achieve Australia's ALOP. Nor, in the case of AL CM, has New Zealand shown that the "alternative"
measure would be significantly less trade restrictive. New Zealand has also failed to identify any
alternatives to the general measures.
4.281 Australia considers that New Zealand has abandoned any claim that Australia's measures are
not "applied only to the extent necessary to prot ect human, animal or plant life or health" under
Article 2.2.
(vi) New Zealand's claim under Article 8 and Annex C( 1)(a) is outside the Panel's terms of
reference
4.282 New Zealand's claim under Article 8 and Annex C(1)(a) depends on the "IRA process" being
a measure at issue in this dispute. In its prelimin ary ruling, the Panel concluded that the scope of this
dispute is confined to the 17 measures specifically listed in New Zealand's panel request, which do
not include the IRA process. New Zealand's claim that Australia is in breach of Article 8 and
Annex C(1)(a) is therefore outside the scope of this dispute.
(d) Conclusion
4.283 For the above reasons, Australia asks the Panel to find that New Zealand has not established a
prima facie case that any of Australia's measures are in consistent with its obligations under the
SPS Agreement. Alternatively, if the Panel consid ers New Zealand has established a prima facie case
in respect of one or more measures, then Australia requests the Panel find that it has rebutted that case
on the basis of its evidence and legal argument.
2. Executive summary of Australia's opening oral statement at the first substantive
meeting
(a) Introduction
4.284 This case is about the basic right of all WTO Me mbers to protect plant life and health within
their territory. It is about the level of risk that Australia is prepared to tolerate and Australia's
particular quarantine circumstances. It is about serious plant pests not present in Australia but
endemic in New Zealand – fire blight, European can ker and apple leafcurling midge. It is about the
comprehensive and transparent science-based risk assessment undertaken by the IRA Team and set
out in the Final Import Risk Analysis Report for A pples from New Zealand. It is about Australia's
reasonable quarantine measures, necessary to mitiga te the risk of serious plant pests entering
Australia. It is about the application of scien tific and technical judgment by the qualified and
respected experts who inform Austra lia's quarantine regulatory decisions. It is about the extent to
which a WTO panel is permitted to intervene in such decisions. It is about the trade liberalizing
reality of Australia having opened its market to New Zealand apples in March 2007.
4.285 Australia is free of many of the world's major pl ant pests. Australia's unique biodiversity and
distinctive native flora and fauna are of world renown. In addition, Australia's favourable plant-health
status is vital to its multi-billion dollar agricultura l sector. In order to protect these significant assets,
Australia invests heavily in quaran tine. As a result, Australia has one of the most comprehensive and
effective quarantine systems in the world.
4.286 As recognized in the SPS Agreement, Australia ha s the right to maintain its favourable plant
health status. In this regard, Australia is not ask ing to be treated differently to other WTO Members
when it urges the Panel to pay close attention to Au stralia's particular quarantine circumstances. In
order to maintain its favourable plant-health status, Australia must be able to rely on the WTO bargain

that it signed up for – including the delicate and carefully negotiate d balance of rights and obligations
set out in the SPS Agreement. In undertaking its ro le in this dispute, the Panel should respect this
delicate balance.
(b) Australia's appropriate level of protection in action
4.287 The SPS Agreement does not require internati onal harmonization of Members' quarantine
measures. In fact, the determination of a Memb er's acceptable level of risk, also known as the
appropriate level of protection, is the Member's sole prerogative. No-one may impinge on that
prerogative – not trading partners, not WTO panels, not the Appellate Body. This position has been
clearly articulated by the Appellate Body
628, and is widely accepted by the WTO membership. 629 To
deny a Member's sovereign right to determine its own appropriate level of protection would disregard
the balance of rights and obligations set out in the SPS Agreement.
4.288 Whether other Members may be content to tole rate the risk of an event occurring once in
every five years or five thousand years, is irre levant. The SPS Agreement does not require Members
to accept the same level of risk or a certain minimum level of risk. It is entirely up to each Member to
judge whether its national interest is best served by a higher or lower appropriate level of protection.
What matters in the present case is the risk that Australia is prepared to tolerate , not the risk that
New Zealand or any other Member is prepared to tolerate.
4.289 The Australian community demands that its Gove rnment takes responsible action to protect
Australia's agricultural sector and biodiversity from e xotic pests, and Australia's appropriate level of
protection is set to reflect this. It explicitly an d transparently expressed as requiring quarantine risks
to be managed to a very low level, although not to zero.
4.290 The concept of appropriate level of protection cannot be seen in isolation. The appropriate
level of protection is integral to each Member's quarantine system. In order to implement their
appropriate level of protection, Members have a basic right under the SPS Agreement to take SPS
measures for the protection of human, animal and plant life or health. The appropriate level of
protection is the benchmark, and the SPS measures are the instrument used to achieve that benchmark.
4.291 A Member's appropriate level of protecti on fundamentally shapes its decision on SPS
measures. The first step is to determine the level of unrestricted risk posed by the product at issue. If
that risk is higher than the Member's acceptable level of risk, then the Member may adopt measures to
achieve its appropriate level of protection.
(c) The Final IRA Report provides the basis for Australia's measures
4.292 The relevant level of risk posed to Australia by the importation of apples from New Zealand
was rigorously examined in the Final IRA Report . This document provides the basis for the SPS
measures central to this dispute and cannot be ig nored. The risk assessment conducted by the IRA
Team, as set out in the Final IRA Report, is fully consistent with the SPS Agreement and with
internationally recognized scientific method.
4.293 New Zealand is critical of the Final IRA Repor t and the measures applied by Australia to
New Zealand's apple exports. This flows from a broa d argument that there is a single correct view of

628 Appellate Body Report on Australia – Salmon, para. 199.
629 See for example: Chinese Taipei's Third Party submission, para. 20; Chile's Third Party
submission, para. 8; European Communities' Third Party submission, paras. 31 and 61; and United States'
Third Party submission, paras. 78-79.

science; that for there to be two opposing views in any scientific disagreement means that one of
those views must necessarily be wrong. This is simply not the case.
4.294 In this dispute, New Zealand relies on the superficially attractive notion of scientific
"certainty" around the transfer and spread of the pests at issue. The reality is that there are different
views on many scientific issues based on the same set of facts, often held by equally qualified and
respected scientists. Moreover, the state of scientific knowledge is limited and constantly evolving.
4.295 In this dispute, the Panel is faced with competing scientific opinion and evidence, and
Australia asks that the Panel bear in mind the A ppellate Body's statemen t that responsible and
representative governments may act in good faith on th e basis of so-called "divergent" scientific
opinion, coming from qualified and respected sources. 630 In other words, there is no need for the
Panel to try to choose what it considers the "correct" view to be. To do so would constitute an error
of law.
4.296 The Final IRA Report takes into account some thousand scientific references, including
scientific references cited by New Zealand in its written submission. This literature needs to be
interpreted in light of Australia's particular circumstances. The IRA Team, a group of highly
qualified and respected scientists and technical experts, performed this role.
4.297 The IRA Team applied its expert judgment and el aborated its reasoning at every step in the
Final IRA Report. On the basis of its detailed an alysis of the level of risk associated with the
importation of New Zealand apples, the IRA Team concluded that certain risk mitigation measures
were required in order to achieve Australia's appropr iate level of protection. New Zealand can export
apples to Australia, provided that it observes the reasonable measures recommended in the Final IRA
Report.
(d) This dispute is not a re-run of Japan – Apples
4.298 It is clear that New Zealand believes that this dispute is simply a re-run of Japan – Apples .
New Zealand continues to treat Japan – Apples as some form of scientific process, not a legal process.
This is a major error by New Zealand, a fact th at Third Parties in this dispute have recognized. 631
Japan – Apples is not a risk assessment and is not scientific evidence. Moreover, there are significant
differences between the two sets of circumstances, in cluding the pests at issue, appropriate level of
protection, climatic conditions, potential host plants, and the volume and mode of trade.
(e) The product and measures at issue must be identified clearly
4.299 The product at issue in this dispute, as set out in the Final IRA Report, is "mature apple fruit
free of trash, either packed or sorted and graded bulk fruit from New Zealand." 632 Any attempt by
New Zealand to characterise th e product at issue as "mature symptomless apples" must be dismissed.
"Symptomless" apples are not necessarily hazard-free.
4.300 The measures at issue also define the scope of this dispute and warrant careful consideration
by the Panel. In the Panel's preliminary ruling of 6 June 2008 633, the Panel clearly limited its terms of
reference to the 17 measures specifically identified in New Zealand's panel request. The onus is on
New Zealand to establish that each measure meets th e definition of an "SPS measure", as set out in

630 Appellate Body Report on EC – Hormones, para. 194.
631 Chile's Third Party submission, paras. 11-13; Japan's Third Party submission, para. 2; European
Communities' Third Party submission, para. 47; and United States' Third Party submission, para. 11.
632 Australia's IRA, Part B, p. 9.
633 Australia – Apples , Communication from the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 13(b).

Annex A(1) of the SPS Agreement. In any event, as explained in Australia's written submission, two
of these 17 measures are not live issues in this dispute.
4.301 Not all of the measures can be challenged individually, as several are ancillary measures
which support, verify and operationalise the principa l risk reduction measures. In Australia's view,
the Panel should only examine such ancillary measures when "taken as a whole" with the principal
risk reduction measures to which they relate.
4.302 On this, Australia notes that New Zealand's ch allenge does not cover the whole of the Final
IRA Report. The Final IRA Report covers pests and diseases which are not at issue in this dispute,
and this needs to be borne in mind, particularly when examining the ancillary measures.
(f) New Zealand has not backed up its claims with evidence and legal argument
4.303 New Zealand bears the burden of raising a prim a facie case of inconsistency in relation to
each of the provisions it is challenging under the SPS Agreement. To do this, New Zealand must
present sufficient evidence and legal argument to support that prima facie case. Only if New Zealand
succeeds in doing so must Australia rebut the alleged inconsistencies. Until that point, Australia is
entitled to the presumption of WTO-consistency. Australia emphasises this point because it believes
that the assertions made by New Zealand in its fi rst written submission are simply not supported by
legal argument or evidence. Neither the Panel, nor the Third Parties, are permitted to "make the case"
for New Zealand.
4.304 New Zealand is required to discharge its burden of proof in relation to each of the measures at
issue under each of the challenged provisions of the SPS Agre ement. Australia is firmly of the view
that New Zealand's case is fatally flawed as it has failed to meet its burden of proof. Australia
nonetheless demonstrates, through solid scientific ev idence and legal argument, that the measures at
issue are fully consistent with the SPS Agreement.
(g) The Panel's role in this dispute is not unfettered
4.305 Another critical threshold issue relates to the role that the Panel is required to perform in this
dispute. The Panel's role is not unfettered. Rath er, there are parameters w ithin which the Panel must
operate, which are imposed in the standard of review to be applied by the Panel. The Appellate Body
has stated that a failure to apply the proper standard of review constitutes a legal error.
634 Australia
therefore considers it essential that the Panel apply the appropriate st andard of review throughout this
dispute.
4.306 Contrary to what New Zealand has suggested, the final word on standard of review is not
Article 11 of the Dispute Settlement Understanding. While the "objective assessment" standard under
Article 11 is certainly the starting point for the Pa nel's standard of review, it nevertheless provides
limited guidance on the precise nature and intensity of the review required by panels in their fact-
finding role. Accordingly, as indicated by the Appe llate Body, the appropriate standard of review
must also be informed by the particular covered ag reement and, within that agreement, the particular
obligation at issue.635
4.307 Upon signing up to the WTO bargain, Members co nsciously conceded their jurisdiction on
certain issues to the WTO, effectively nominating the WTO as arbiter of those issues. However, on
other issues, Members' jurisdictional competences we re deliberately retained. The effect of this
delicate and carefully negotiated balance is that there is a line that traces its way through the

634 Appellate Body Report on US – Countervailing Duty Investigation on DRAMS, para. 187.
635 Appellate Body Report on US – Softwood Lumber VI (Article 21.5 – Canada), para. 92.

SPS Agreement – on one side lies the areas of juri sdictional competence that Members conceded, on
the other side, the areas they did not.
4.308 The Panel should observe that line. In the c ontext of the SPS Agreement, the Appellate Body
has explicitly stated that the standard of review must "reflect the balance established in that
Agreement between the jurisdictional competences conceded by the Members to the WTO and the
jurisdictional competences retained by the Members for themselves."636
4.309 The standard of review has important implications for this dispute. It means that the Panel
should not conduct its own risk assessment for Aust ralia. A WTO panel should not attempt to choose
its preferred view of the science and thereby substit ute its judgment for that of the risk assessor – in
this case, the IRA Team.
4.310 Australia is not suggesting that the Panel's role in this dispute is marginal. Rather, the Panel
has the centrally important role of determining wh ether Australia's measures are based on a valid risk
assessment in accordance with the relevant provisions of the SPS Agreement; of determining whether
that risk assessment is objective and credible.
4.311 Australia submits that the Pa nel should be guided by the co mpliance panel's approach in
Australia – Salmon (Article 21.5 – Canada) . The Panel must be satisfied that it has reasonable
confidence in the risk assessment, and only if Ne w Zealand establishes flaws in the Final IRA Report
which are so serious that they would prevent the Panel from having that confidence, should the Panel
be required to intervene in the findings or conclusions of the Final IRA Report.637
4.312 Australia notes that the European Communities "l argely agrees" with Australia's position on
standard of review.638
(h) New Zealand disregards the special relationship between Articles 5.1 and 2.2
4.313 A further important issue in this dispute is th e nature of the relationship between Articles 5.1
and 2.2 of the SPS Agreement. Australia believes th at New Zealand's approach to these provisions is
confused and incorrect.
4.314 According to the Appellate Body, Articles 5.1 and 2.2 should "constantly be read together", as
the elements of each provision inform and impart meaning to the other. 639 In fact, the Appellate Body
has indicated that Article 5.1 is a specific application of Article 2.2 640, meaning that Article 5.1, and
its associated provisions, elaborate specific conditions which, if met, will establish the consistency of
the relevant measures with Article 2.2.
4.315 Australia's view of the relationship between Articles 5.1 and 2.2 is firmly grounded in the text
of the SPS Agreement. Both Articles concern whether the available evidence demonstrates the
existence of risk. That risk provides the basis for the adoption of SPS measures.
4.316 New Zealand has effectively ignored the clear a nd consistent guidance of the Appellate Body
by treating Articles 5.1 and 2.2 in virtual isolati on from each other. New Zealand has neglected to
illuminate how it considers the two provisions relate to each other.

636 Appellate Body Report on EC – Hormones para. 115.
637 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.57.
638 European Communities' Third Party submission, para. 28-30, 84.
639 Appellate Body Report on EC – Hormones , para. 180; Appellate Body Report on Australia –
Salmon, para. 130; Appellate Body Report on Japan – Agricultural Products II, para. 82.
640 Appellate Body Report on EC – Hormones, para. 180.

4.317 Risk assessments involve the expert evalua tion of scientific evidence and technical and
economic factors, in accordance with an appropriate methodology. They must also be appropriate to
the circumstances. Accordingly, if measures are based on a valid risk assessment under Article 5.1,
the Article 2.2 requirement that measures not be ma intained without sufficien t scientific evidence is
satisfied. As acknowledged by the Appellate Body, Article 5.1 marks out and elaborates a particular
route leading to the same destination set out in Article 2.2.
641
4.318 Australia notes that the Europ ean Communities agrees that the question of whether Australia
has maintained measures "without sufficient sci entific evidence" under Article 2.2 can only be
answered by considering whether Australia's me asures are based on a valid risk assessment under
Article 5.1.642
4.319 In light of the special legal re lationship between Articles 5.1 and 2.2, and the fact that the
Final IRA Report provides the basis for the measures at issue, Australia urges the Panel in this dispute
to commence its assessme nt of New Zealand's technical and scie ntific arguments under Article 5.1 in
this dispute.
(i) Consequences are an integral part of risk assessment
4.320 New Zealand wrongly implies that the notion of "r isk" should be confined to the likelihood of
entry, establishment or spread. However, pursuant to the relevant provisions of the SPS Agreement, a
valid assessment of phytosanitary risk must evaluate both likelihood, as well as the associated
potential biological and economic consequences . New Zealand cannot paper over the inconvenient
truth that the pests at issue in this dispute – fire blight, European canker and apple leafcurling midge –
all have serious biological and economic consequences.
(j) Australia's measures address real probabilities
4.321 New Zealand also confuses the notion of mere "pos sibility" or "theoretical risk" with events
that have a very small or "negligible" probabilit y of occurring. This effectively amounts to an
assertion that risk assessments are required to iden tify a minimum magnitude of risk – a proposition
which has been expressly rejected by the Appellate Body.
4.322 The careful use of statistical distributions by the IRA Team in estimating probability reflects
the range and variability of available scientific evidence, accommodating small but significant
probabilities as well as uncertainties, consistent with th e relevant international standard for pest risk
analysis, the ISPM No. 11.
(k) New Zealand's and the United States' scientific and technical arguments lack merit
4.323 Australia's first written submission comprehens ively rebuts New Zealand's scientific and
technical arguments and clearly demonstrates that the Final IRA Report is a valid risk assessment
under Article 5.1. As such, Australia's measures are consistent with Article 5.1, and, accordingly with
Article 2.2 of the SPS Agreement.
4.324 Australia notes that the United States has lodged a lengthy submission with a heavy focus on
scientific and technical evidence in relation to fi re blight and European canker. Australia will
vigorously and comprehensively rebut the serious flaw s in the arguments raised by the United States
in its rebuttal submission.

641 Appellate Body Report on Australia – Salmon, paras 137-138.
642 European Communities' Third Party submission, para. 13.

(l) New Zealand's secondary claims are flawed
4.325 In addition to its primary claims under Articles 5.1 and 2.2, New Zealand's first written
submission sets out a number of secondary claims relating to Articles 2.3, 5.2, 5.5 and 5.6 of the
SPS Agreement. Australia has already comprehe nsively addressed these claims in its written
submission and notes that a number of the Third Parties also question the validity of New Zealand's
claims.
(m) New Zealand's undue delay claim is outside the scope of this dispute
4.326 The Panel has asked the Parties to address Aust ralia's request for a ruling in relation to
New Zealand's claim of undue delay under Article 8 and Annex C(1)(a) of the SPS Agreement.
Australia's position is clear. The Panel issued a preliminary ruling on 6 June 2008, in which it made it
very clear that New Zealand's panel request is limi ted to the items specified by bullet point in that
panel request.
643 All other matters are therefore outside the scope of this dispute.
4.327 Despite the Panel's preliminary ruling, New Zeal and has proceeded with a claim that the IRA
process was subject to undue delay. Australia considers that this is legally untenable. It is clear from
New Zealand's panel request, and the Panel's preliminary ruling, that the IRA process is not a measure
at issue in this dispute; the IRA process is not one of the items specified by bullet point in
New Zealand's panel request.
4.328 Australia therefore wrote to the Panel on 22 August 2008 asking it to apply its preliminary
ruling of 6 June by making a further ruling explicitl y stating that New Zealand's undue delay claim is
outside the scope of these proceedings.
4.329 Australia notes that paragraph 16 of the Pane l's Working Procedures clearly allows for a
jurisdictional ruling at any stage of the proceed ings upon the showing of good cause. Australia
believes that there is very good cause for a ruling at this stage of proceedings, as the respondent
should not be required to defend clai ms which the Panel has indicated ar e not within its jurisdiction.
In any event, Australia is not seeking a ruling on a ne w issue; Australia is merely asking the Panel to
apply its preliminary ruling of 6 June.
4.330 This is a complex dispute involving detailed legal argument and voluminous scientific and
technical evidence. It concerns three pests - bacterial, fungal and insect – each with quite different
biology. The Panel, the Parties and the Secretariat all have limited resources, and there is no need to
expend those limited resources on a moot point. Aust ralia believes that a ruling at this stage would
help secure a positive solution to the dispute.
(n) The Panel may take into account amicus curiae submissions as necessary
4.331 Australia does not see amicus curiae submissions as having the same status as party or third
party submissions. However, they may provide a u seful perspective on issues under consideration in
this dispute. Accordingly, the Panel should acce pt amicus curiae submissions into the record.
Beyond that, it is up to the Panel whether or not to take such submissions into account in resolving the
issues raised in this dispute.

643 Australia – Apples , Communication from the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 13(b).

(o) Australia is ready to provide its views on the role of experts
4.332 Australia notes that the Panel may decide to consult experts in relation to scientific and
technical issues in this dispute.
644 If the Panel chooses to do so, Australia emphasises that, in its view,
the selection of such experts requires careful deliberation, and their role requires demarcation from the
outset.
(p) Conclusion
4.333 Australia is an active Member which takes its WTO obligations seriously. Australia is not
seeking to resile from the disciplines contained in th e SPS Agreement. On the contrary, Australia has
opened its market to New Zealand apples subject to reasonable risk mitigation measures set out in the
science-based Final IRA Report. These measures are directed at protecting plant life and health
within Australia from serious pests not present in Australia but endemic in New Zealand. The
measures are fully WTO-consistent and are require d to achieve Australia's appropriate level of
protection.
3. Australia's closing oral statement at the first substantive meeting
(a) Introduction
4.334 Australia thanks the Panel for its questions during this hearing.
4.335 In Australia's view, the statements of the Parties and their answers to questions during the first
substantive meeting have evidenced the complexity of the legal, scientific and technical issues
involved in this dispute. Australia has sought to respond directly and substantively to the Panel's
questions to assist the Panel in dealing with this co mplexity. In particular, Dr Roberts has provided a
direct account of key aspects of the IRA Team's work.
4.336 Contrary to New Zealand's assertions, Australia is not seeking to avoid scrutiny of its
comprehensive and transparent Final IRA Report a nd the reasonable risk reduction measures required
for New Zealand apples. Nor is Australia seeking to rewrite the SPS Agreement or indeed the DSU.
Rather, drawing on Appellate Body guidance, Austra lia has advanced reasoned interpretations of its
obligations under the SPS Agreement that can be applied practically by the Panel to the circumstances
of this dispute.
4.337 During this hearing, New Zealand made a numbe r of legal and factual assertions, many of
which Australia has not previously heard or had th e opportunity to address. Accordingly, Australia
will take this opportunity to touch on some of those assertions. Australia will, of course,
comprehensively address all of the arguments presented in New Zealand's opening statement in its
rebuttal submission.
(b) The product at issue is clear
4.338 As has been further reinforced this afte rnoon, New Zealand seeks to run a dual-track
argument on product at issue. On the one hand, New Zealand asserts that the product at issue is
apples imported from New Zealand into Australia. On the other hand, New Zealand asserts that, "in
practice", it would only export mature symptomless apples. Clearly, despite New Zealand's
equivocation on the matter, there can only be one product at issue in this dispute.

644 Article 11.2 of the SPS Agreement and Article 13.2 of the DSU.

4.339 In principle, Australia agrees with New Zealand's assertion in paragraph 23 of its opening
statement that the "product at issue is determined by the terms of reference of the Panel". These terms
of reference are defined by New Zealand's panel re quest. The first paragraph of that panel request
clearly indicates that the importation of apples from New Zealand can be permitted subject to the
application of measures as specified in the Final IR A Report. Page 9 of the Final IRA Report defines
its scope as "mature apple fruit free of trash, either packed or sorted and graded bulk fruit from
New Zealand." Logic therefore dictates that this definition establishes the product at issue in this
dispute. It also follows that any variation to the product at issue would require the IRA Team to
conduct a new risk assessment.
(c) There is a sound basis for the distinction between principal and ancillary measures
4.340 Australia has noted the Panel's interest in th e distinction between principal and ancillary
measures. Australia has undertaken to provide further elaboration in writing. The distinction is based
on the definition of "SPS measure" in Annex A(1) of the SPS Agreement , and the reasoning of the
panel in the US – Export Restraints dispute. Contrary to New Zeal and's assertions in its opening
statement, the issue of whether a measure can indivi dually give rise to a violation of WTO obligations
was discussed at a general level in US – Export Restraints. The relevance of that panel's reasoning in
that dispute is accordingly not limited to the Agreement on Subsidies and Countervailing Measures
(SCM Agreement).
4.341 According to Annex A(1), an "SPS" measure is defined as "any measure applied to protect
against" certain categories of risk. In Australia's view, a measure that aims to protect against risks
must aim to reduce those risks in some concrete wa y. If a measure does not protect against risks, or
reduce those risks by itself, then it cannot fall within the definition of "SPS measure".
4.342 Australia's contention is supported by the releva nt international standards for phytosanitary
measures. Ancillary verification measures are broa dly used in international quarantine arrangements
to ensure that primary risk reductions measures are properly applied. Au stralia understands that
New Zealand itself requires that ancillary measures be met as part of its own quarantine risk reduction
measures.
(d) The appropriate standard of review in this dispute
4.343 Australia recalls that the Panel asked a number of questions in relation to the standard of
review under the SPS Agreement. While Australia w ill elaborate on this subject further in writing, it
would take this opportunity to re mind the Panel of the critical point made in Australia's own opening
statement.
4.344 In this dispute, the standard of review re flects the balance of jurisdictional competences
between Members and the WTO established in the SPS Agreement. As Australia explained in
response to questions from the Panel, the standard of review must be considered in light of the
specific obligations at issue, a notion explicitly recognized by the Appellate Body.
645
4.345 In its questions, the Panel asked Parties whether they considered that a specific standard of
review applied to disputes under the SPS Agreement, gi ven the lack of an explicit standard of review
set out in that Agreement. The Panel contrasted this to the existence of the specific standard of review
set out in Article 17.6 of the Anti-Dumping Agreement.
4.346 Australia notes that the lack of an explicit sta ndard of review under other covered agreements
has not prevented panels and the Appellate Body from applying a specific standard of review in

645 Appellate Body Report on US – Softwood Lumber VI (Article 21.5 – Canada), para. 92.

disputes relating to covered agreements other than the Anti-Dumping Agreement. For example, the
standard of review has been a significant i ssue in both safeguards disputes and under the
SCM Agreement. More particularly, in EC – Hormones, the Appellate Body clearly recognized that
panels must "adopt a standard of review… clearly rooted in the text of the SPS Agreement itself".
646
4.347 Accordingly, in Australia's view, the absence of an express provision in the SPS Agreement
addressing standard of review does not mean that there is not a carefully delimited division of
competences between Members and the WTO which mu st be reflected in the standard of review
applied by the Panel.
4.348 For example, in relation to Article 5.1, unless New Zealand can demonstrate flaws so serious
that the Panel cannot have reasonable confidence in the assessment of risk in the Final IRA Report,
the Panel must not substitute its own assessment for that of the IRA Team.
(e) Australia may rely on divergent scientific opinion
4.349 New Zealand's opening statement illustrates its continued discomfort with the Appellate
Body's express recognition that Members are entitled to rely on "divergent" scientific opinion from
qualified and respected sources. In understanding th e Appellate Body's guidance, it is important to
recognize that scientific evidence does not exist in a vacuum; it does not have an autonomous reality.
In the context of the quarantine regulatory system , scientific evidence needs to be interpreted by
experts and applied to the specific circumstances of the importing Member. This is the role that was
undertaken by the IRA Team.
4.350 By way of example, New Zealand claims that divergent scientific opinion on fire blight does
not exist. However, it is illustrative to examine one of the technical issues raised by New Zealand –
that of the number of bacteria needed to start an in fection. The scientific opinion on this issue reflects
diverging scientific papers that showed variously that the number of bacteria needed to start infection
varies from 1 bacterium to around 10,000 bacteria. This is just one small example of the divergent
scientific opinion that was considered in great detail in the Final IRA Report.
(f) New Zealand's continued reliance on Japan – Apples is misguided
4.351 Australia recognizes that the Panel has hear d Australia's views on the applicability of Japan –
Apples to the present dispute. Australia will not repeat its views, except to note that the United States,
the complainant in that dispute, takes a more modera te approach than New Zealand to this issue. In
fact, Australia notes that the United States did not mention the Japan – Apples dispute in its statement
at the meeting with the Panel.
(g) Likelihood combined with consequences equals risk
4.352 New Zealand alleges that Australia is trying to shift the emphasis of risk assessment from
likelihood to consequences. This is simply untrue. As explained dur ing the first substantive meeting,
Australia's risk estimation matrix takes full acc ount of both elements of risk: likelihood and
consequences. Australia's matrix is firmly gr ounded on the definition of risk assessment in
Annex A(4) of the SPS Agreement.
(h) Articles 5.1 and 2.2 exist in a special legal relationship
4.353 Turning to the relationship between Article 2.2 and Article 5.1, Australia wishes to correct
some significant errors in New Zealand's attempted critique of Australia's arguments.

646 Appellate Body Report on EC – Hormones, para. 115.

4.354 New Zealand has misrepresented and mischaracterised Australia's interpretation of Article 2.2
and Article 5.1. Contrary to "inverting" the re lationship between the two provisions, or interpreting
those provisions in a way that deprives Article 2.2 of substance, Australia has sought to provide the
Panel with a workable, good faith interpretation of those closely connected provisions, consistent with
the established guidance of the Appellate Body. Articl e 2.2 is not an invitation for the Panel to assess
the validity of the scientific basis of Australia's measures on a basis other than the Final IRA Report.
4.355 As indicated in Australia's first written submi ssion, Australia's interpretation in relation to
Articles 5.1 and 2.2 is the one that it considers to be applicable in this case. It makes no submissions
about the "correct" approach in all cases.
4.356 Australia's position is simply this. In the present case, where the Final IRA Report is both a
current and comprehensive risk assessment, th e question of whether Australia's measures are
maintained without sufficient sci entific evidence should be answered by considering whether the
Final IRA Report is a valid risk assessment.
(i) Australia has comprehensively rebutted New Zealand's Article 2.2 arguments
4.357 Australia firmly rejects any suggestion that it has not made a serious attempt to rebut
New Zealand's arguments in relation to Article 2. 2. In paragraph 344 of Australia's first written
submission, Australia notes that there is a subs tantial overlap in New Zealand's technical and
scientific arguments under Articles 5.1 and 2.2, and that it would therefore address them together.
Australia then proceeds with a 150 page comprehe nsive rebuttal of New Zealand's scientific and
technical arguments. In addition, Australia's fi rst written submission also contains a substantive
alternative argument in relation to Article 2.2. Accordingly, there is no doubt whatsoever that
Australia has responded very directly to New Zealand's arguments in relation to Article 2.2.
4.358 New Zealand has attempted to reverse the burde n of proof in relation to Article 2.2.
Australia's position on the burden of proof applicable to Article 2.2 is based on a straightforward
application of the customary rules of interpretation of public international law to that provision. Put
simply, the third requirement of Article 2.2 is co uched in negative terms. Namely, Members must
ensure that their measures are " not maintained without sufficient scientific evidence". The provision
does not say that Members must ensure that their measures are "maintained with sufficient scientific
evidence".
4.359 In Australia's view, the drafters of the SPS Agreement very deliberately chose this
formulation of words to emphasise that complainants bear a heavy evidentiary burden in establishing
a breach of the third requirement of Article 2.2. It requires the complainant to positively prove
insufficiency of the scientific evid ence in relation to the measures at issue. In the context of this
dispute, this means that New Zealand must positivel y demonstrate that the IRA Team's evaluation of
the scientific evidence was not objective and credible.
(j) Scientific and technical arguments
4.360 During this hearing, New Zealand has intr oduced a few new scientific and technical
arguments in relation to European canker and a pple leafcurling midge. Nothing new has been
introduced in relation fire blight.
(i)
 European canker
4.361 Australia firmly rejects New Zealand's assertion th at it is attempting to re-write the Final IRA
Report in relation to European canker, or any other p est at issue. As the respondent in this dispute,
Australia is clearly entitled to rebut New Zeala nd's claims and arguments in order to defend the

consistency of its measures. This is not equivale nt to re-writing the Final IRA Report; it is simply
usual practice under the WTO dispute settlement system.
4.362 New Zealand criticises Australia for introducing an "alternative climate analysis", suggesting
that this somehow acknowledges the inadequacy of the "original climatic risk assessment" in the Final
IRA Report. However, New Zealand fundamen tally misunderstands Australia's position.
Environmental conditions, including climate, are onl y one of the three key criteria which determine
disease development. New Zealand's fixation with c limate analysis ignores the other two key criteria,
the pathogen and the host. In contrast, the IRA Team took into account all three criteria in its
assessment of European canker as demonstrated by the Final IRA Report. Moreover, contrary to what
New Zealand alleges, the climate analysis contained in Annex 2 of Australia's first written submission
is not directed at patching up the Final IRA Repo rt. Rather, it was merely introduced to rebut
New Zealand's climate analysis - in doing so it conf irms the credible and objective analysis set out in
the Final IRA Report.
4.363 New Zealand continues to erroneously equate the significant apples trade from Tasmania with
insignificant apples trade from the four diseased orchards in Spreyton. Australia notes New Zealand's
assertions as to the volume of trade moving out of the Spreyton area during the period of the outbreak,
and looks forward to receiving the evidence referred to by New Zealand.
(ii) Apple leafcurling midge
4.364 New Zealand claims in its opening statement at paragraph 105 that Australia included AQIS
inspections at the border as a component of Australia's unrestricted risk analysis in relation to apple
leafcurling midge. This is simply not true. In this regard, Australia refers the Panel to page 23 of the
Final IRA Report, which states that "possible AQIS on-arrival inspection for quarantine pests
associated with apples is not considered in the assessment of unrestricted risk".
4.365 Australia notes that New Zealand has introduced a purported clarification of the Rogers et al
2006 paper on apple leafcurling midge. Australia do es not consider that it clarifies how New Zealand
derives an overall viability rate of 15 per cent fro m that study. Australia will further address the
content of the Rogers et al 2006 study, together with Exhibit NZ-102, at a later stage of the
proceedings. Suffice to say, New Zealand's assertion with respect to this paper does not impugn the
IRA Team's assessment of the probability of importation of apple leafcurling midge.
(k) The AQIS audit requirement has been misunderstood by New Zealand
4.366 The AQIS auditing requirement continues to be a contentious issue for New Zealand but, in
Australia's view, needlessly so. Despite repeated clarifications from Australia, both before and during
these proceedings, New Zealand continues to misquote and misunderstand the AQIS audit
requirements. In practice, Australia expects that the audit requirements would not be onerous as,
following normal practice, New Zealand and Australia would negotiate arrangements for minimising
duplication and maximising efficiency. Australia w ill provide further elaboration on this point in
writing as part of the question and answer process.
4.367 Australia also points out that its import requirements for apples from New Zealand, including
the AQIS audit requirements, are subject to review after the first year of trade.
647 Australia applies
such a review mechanism in relation to all import risk assessments. Australia highlights US table
grapes as an example where Australia has adjusted the relevant import requirements a number of
times.

647 Australia's IRA, Part B, p. 325.

(l) New Zealand's secondary claims continue to lack merit
4.368 In addition to its primary claims under Articles 5.1 and 2.2, New Zealand's oral statement
recycles the arguments made in its first writte n submission regarding its secondary claims under
Articles 5.2, 5.5 and 5.6 of the SPS Agreement. Au stralia has already comprehensively rebutted these
arguments in its first written submission. Moreove r, a number of the Third Parties have also called
into question the validity of New Zealand's secondary claims.
4.369 Australia continues to be of the view that Ne w Zealand has failed to discharge its burden of
proof by establishing a prima facie case. In all legal proceedings, including this one, the burden of
proof is a critical issue, contrary to what New Zeal and has asserted in its closing statement. Australia
reiterates its position that New Zealand cannot be permitted to introduce new evidence to make a
prima facie case by way of its rebuttal submission.
4.370 In its opening statement, New Zealand appears to query whether Australia has acted in good
faith by reserving its position in relation to New Zealand's claim of undue delay under Article 8 and
Annex C(1)(a). New Zealand goes on to allege that , as a consequence, the Panel is entitled to accept
New Zealand's claim as it has not been challenged by "reasoned argument".
4.371 This argument is completely devoid of merit. New Zealand's claim on undue delay has been
challenged by Australia as being outside the scope of the Panel's terms of reference. Australia has
done so by "reasoned" and compelling argument, in stark to contrast to New Zealand's acrobatics on
the issue. Australia has acted in good faith in doi ng so and reserves further argument until the Panel
delivers its ruling. On that point, Australia woul d appreciate an indication from the Panel as to when
it is likely to rule on this issue.
(m) Timing of the second hearing
4.372 Before concluding, Australia would like to flag with the Panel a potential logistical issue with
respect to the timing of the second panel hearing. Australia has repeatedly tried to secure
accommodation for our delegation since it became aware of the timetable. Unfortunately, Australia's
efforts to date have been unsuccessful due to the f act that the Geneva motor show coincides with the
dates of the second hearing. Australia will continue with its search, but foreshadow that if it is
unsuccessful within the next few weeks, it will write to the Panel to request that the second hearing be
rescheduled to the nearest available dates. It is obviously not possible for the Australian delegation to
travel to Geneva for the second hearing if Australia is unable to secure accommodation.
(n) Conclusion
4.373 Australia also notes New Zealand's reference in its closing statement to Australia's IRA
process being "intermingled" with a political process. Australia absolutely rejects any inference that
its science-based IRA process was intermingled with any political process. As noted in Australia's
written submission, New Zealand has provided no evid ence to back up such inferences and Australia
has asked the Panel to disregard them completely.
4.374 In conclusion, there is no question that New Zealand and Australia enjoy a harmonious
relationship based on shared values, partnership and mutual interest. The bilateral trade agreement
between New Zealand and Australia is one of the most comprehensive and successful worldwide.
There is no better basis on which to found a mutually agreeable resolution to this dispute. Australia
welcomes the comments the Panel offered in this regard, and would like to assure the Panel that it will
continue to work closely with its neighbour and close friend, New Zealand, towards this end.

4.375 Australia would like to thank the delegation of New Zealand, the Third Parties, the Panel and
the Secretariat for the opportunity to present its case at this hearing.
4. Executive summary of Australia's second written submission
(a) Introduction
4.376 The key issue for the Panel's determination is the validity of Australia's risk assessments for
fire blight, European canker and ALCM under th e SPS Agreement. New Zealand has failed to
demonstrate any serious flaws with those risk assess ments. Accordingly, the Panel should find that
the Final IRA Report provides objectively justifiable ri sk assessments for the thr ee pests at issue, and
that the measures at issue are required to achieve Australia's appropriate level of protection (ALOP).
(b) Overarching legal arguments
4.377 The Appellate Body's decision in US/Canada – Continued Suspension provides important
guidance to the Panel for some of the key issues in this dispute: in particular, a panel's limited
mandate when evaluating a risk assessment, as established by its standard of review; the right of
Members to rely on "divergent or minority" scientific opinion; and the appropriate use of experts by
panels. Australia's previous submissions on standard of review are substantially congruent with this
guidance.
4.378 New Zealand's disregard for the Panel's limite d mandate and the special relationship between
Articles 5.1 and 2.2 of the SPS Agreement has cause d it to misjudge the nature of the case it was
required to advance. Instead of directing its ch allenge at the Final IRA Report, New Zealand has
argued that its own interpretation of the available sc ientific evidence is the only "correct" view. By
doing so, it has effectively asked the Panel to conduct a de novo review of the scientific and technical
evidence, an approach which the Appellate Body ha s made clear is impermissible. New Zealand's
misjudgement has resulted in it failing to meet its bu rden of proof. New Zealand may not rely on
either the Panel or the experts to make its case.
4.379 In US/Canada – Continued Suspension , the Appellate Body reaffirmed that the scientific
basis relied upon by a Member in its risk assessment need not reflect the majority view within the
scientific community, but may reflect "divergent or minority" views. This recognizes that there may
be more than one legitimate opini on, from qualified and respected s ources, in situations where the
available scientific evidence is sufficient to conduct an objectively justifiable risk assessment.
4.380 In particular, multiple valid opinions may result where there is scientific uncertainty on a
particular issue. In Australia's view, a lack of comprehensive or definitive evidence on a particular
point does not render a risk assessment legally invalid. Data constraints and expert judgment are part
of the reality of conducting risk assessments in the context of a quarantine regulatory system directed
at facilitating international trade.
4.381 The experts appointed by the Panel have a limite d but important role to assist the Panel in
considering the scientific evidence submitted and th e arguments made by the Parties. The Panel
should be mindful not to inadvertently defer its j udgment to the experts on matters which ultimately
require the Panel to draw legal conclusions.
4.382
New Zealand has failed to show that each of the 16 remaining measures at issue would fall
within the definition of "SPS measure" in Annex A(1) of the SPS Agreement, when taken alone.
Australia considers that its distinction between pr incipal and ancillary measures is well-founded, and
reflects a distinction between those measures which are intended to be active in risk reduction, and
those which are not. The Panel may make findings with respect to all of the measures at issue in this

dispute, but Australia submits that it may only eval uate the "ancillary" measures when taken together
with related "principal" measures.
4.383 New Zealand continues to equivocate on the product at issue. To restrict the scope of the
Panel's findings to "mature, symptomless apples", as New Zealand would apparently have it, would be
a legal error.
(c) Specific legal arguments
4.384 Australia recalls its submission that Articles 5.1 and 2.2 exist in a special relationship,
whereby Article 5.1 provides a means of achieving the Article 2.2 requirement that SPS measures not
be "maintained without sufficient scientific eviden ce" where an importing Member relies on a current
risk assessment. New Zealand has incorrectly treated Articles 5.1 and 2.2 as sources of distinct
obligations. Both the European Communities and the United States support Australia's approach to
Articles 5.1 and 2.2 in this dispute.
4.385 New Zealand inappropriately equates scientific un certainty with the notion of "insufficient"
scientific evidence. The IPPC has acknowledged that uncertainty is an inherent part of pest risk
analysis, and Australia submits that it may be va lidly addressed by a risk assessment which satisfies
the requirements of Article 5.1. A lack of data on a particular aspect of a risk pathway does not
absolve a risk assessor from its duty to conduct an objectively justifiable risk assessment, and
accordingly may require the exercise of expert judgmen t. As observed in Firko and Podleckis (2000),
scientific experiments are seldom conducted specifica lly to provide estimates to be used in risk
assessments.
4.386 As none of the pests at issue ar e present in Australia, the Final IRA Report's estimations of
risk inevitably constitute an extrapolation from avai lable data to a hypothetical situation. However,
historical data cannot be determinative when tryi ng to predict how a pest may behave in a new
environment. Furthermore, the level of risk determined in the Final IRA Report was closely related to
the projected commercial volume of New Zealand apples that would be imported.
4.387 New Zealand's claim that Article 5.2 requires Memb ers to give "genuine consideration" to the
matters listed in that provision is contrary to the customary rules of interpretation of public
international law. As Australia has previously noted, the IRA Team was not obliged to draw the same
conclusions as New Zealand on the basis of the evidence available.
(d) The scientific and technical issues with respect to Australia's measures
4.388 Australia considers that the Final IRA Report sets out objectively justifiable risk assessments
for fire blight, European canker and ALCM. The Final IRA Report expresses the reasoning and
conclusions of qualified and respected scientists an d technical experts on the basis of the evidence
available, in a manner appropriate to Australia's ci rcumstances. New Zealand's failure to demonstrate
any serious flaws with those risk assessments me ans that its arguments have not undermined the
validity of the Final IRA Report as a basis for the measures at issue.
(i) New Zealand has not shown that the IRA Team's methodology is flawed
4.389 Australia has refuted New Zealand's assertions that the semi-quantitative methodology used in
the Final IRA Report suffered from three "fundamental flaws". New Zealand asserted that the Final
IRA Report used uniform distributions, including the distribution (0, 10 -6), to "inflate risk". In
attempting to support this assertion, New Zealand re lied heavily on what it describes as "real world
data" from its trade in apples with other countries. Th is data is not scientific evidence, and Australia's
careful analysis demonstrates that New Zealand's reliance on it is misplaced. New Zealand also

asserted that the assessment in the Final IRA Report of the potential volume of trade in apples from
New Zealand was overestimated. Australia has sh own this assertion to be based on four faulty
suppositions.
(ii) The risk assessment for fire blight is objectively justifiable
4.390 New Zealand's principal claim in respect of fire blight is that there is no scientific evidence
supporting the proposition that mature apples provide a pathway for fire blight establishment. It relies
on four key bases to substantiate this claim: Japan – Apples, Roberts and Sawyer (2008), "real world"
data, and its own interpretation of selected scientific evidence. This approach is legally and
technically flawed.
4.391 By arguing that each of these four bases confirms the absence of a pathway, New Zealand
effectively advances alternative accounts of a fire bl ight risk assessment which, in its view, should be
preferred to the Final IRA Report. Requesting that the Panel consider these arguments is tantamount
to asking the Panel to conduct a legally impermissible de novo review.
4.392 New Zealand's key technical arguments are equally flawed. First, they are based on
unreliable evidence and are not appropriate to the specific risk assessed in the Final IRA Report. The
findings in the Japan – Apples dispute do not address the same risk scenario as the Final IRA Report;
the Roberts and Sawyer (2008) paper relied upon by New Zealand does not consider unrestricted risk
and, in any event, contains flaws in its data se t; and the "real world" trade data highlighted by
New Zealand is not scientific evidence and cannot be used to draw direct inferences about the disease
pathway.
4.393 New Zealand's arguments are also based on a f undamental misunderstanding of the fire blight
pathway and the requirements of the SPS Agreement. Completion of the fire blight pathway does not
require, as New Zealand suggests, that populations of E. amylovora bacteria remain high throughout
the entire duration of the entry scenario. The material point in time when bacterial populations are
significant is at the time of infection of a suita ble host. Further, the SPS Agreement does not
recognize any a priori limits on the kind of scientific eviden ce which may be considered in a risk
assessment, provided that it meets the scientific comm unity's standard of legitimate science. Thus,
New Zealand's attempts to exclude laboratory evid ence from review should be rejected. Laboratory
studies are a standard scientific method for deve loping an understanding of what may be possible
under field conditions, and may be the only scientific evidence available.
4.394 Finally, New Zealand's critique of the Final IRA Report is superficial and deficient.
New Zealand has sought to downplay the critical point that it did not provide the IRA Team with any
evidence demonstrating orchard freedom from E. amylovora in any apple producing areas.
New Zealand has overlooked key elements of the IRA Team's reasoning and faile d to appreciate that
certain conclusions were tailored to the specific circ umstances of this case. Further, in relation to
several importation steps, New Zealand has inappropria tely attempted to expand its suite of claims by
relying on the experts' replies to introduce ar guments it failed to make itself previously.
New Zealand's arguments on exposure ignore the real challenges faced by risk assessors when dealing
with a lack of data and scientific uncertainty. Im portantly, New Zealand has failed to show that the
extremely small probability interval assigned to this step by the IRA Team is not within the potential
range of objectively justifiable views on the matter.
4.395 Australia also notes that the fire blight expert s appointed by the Panel support the application
of risk management measures for fire blight, and confirm the inadequacy of New Zealand's purported
alternative measure (restricting imports to "mature, symptomless apples") to achieve Australia's
ALOP. Such support is fundamentally incompatible with New Zealand's assertion that there is no
pathway for fire blight through "mature, symptomless apples". Further, the experts expressed strong

support for the assessment of potential conseque nces in the Final IRA Report. Accordingly,
New Zealand has failed to demonstrate any serious flaws in the IRA Team's risk assessment for fire
blight, and the Panel should find it to be objectively justifiable.
(iii) The risk assessment for European canker is objectively justifiable
4.396 New Zealand's case on European canker is legally flawed and as a result it has failed to meet
its burden of proof. Australia has refuted New Zeal and's deficient scientific and technical arguments.
Moreover, the European canker experts appointed by the Panel acknowledged that there is a risk of
introducing European canker into Australia associat ed with the importation of latently infected
New Zealand apples, which was the IRA Team's primary risk scenario.
4.397 The IRA Team's analysis shows that latent fru it infection with European canker is a widely
accepted phenomenon in the scientific community and it has been reported in New Zealand. Both
experts appointed by the Panel agree that latent fruit infection occasionally occurs in New Zealand.
New Zealand's attempt to distance itself from its own official report (i.e., Braithwaite (1996)), which
concludes that latently infected apple fruit are a potential pathway for the introduction of European
canker, lacks credibility. The relevant CABI datash eet confirms that fruit is one of the plant parts
liable to carry the pest in trade/transport. Furt her, surface-infestation of mature apples occurs in
New Zealand, in both the field and in processing, and such infestation can lead to latent infection.
4.398 With respect to the potential for European ca nker to establish and spread in Australia, the
Final IRA Report cites scientific evidence that apples rotting in the field due to European canker can
produce spores to act as a source of further infection. This scenario is accepted by one of the experts
appointed by the Panel. Dispersal of spores by "onl y a few metres" is all that would be required for a
rotting apple in orchard wholesaler waste, or in a backyard compost heap, to transfer N. galligena to a
susceptible host. European canker has a wide range of alternative hosts, many of which are present in
Australia. In addition, contrary to New Zealand' s assertions, there are areas of Australia (including
commercial apple growing regions) that have clim atic conditions which are conducive to European
canker, as shown by Australia's climate analysis.
4.399 New Zealand overplays the significance of the 1950s disease outbreak in Spreyton, Tasmania.
New Zealand erroneously attempts to project the e xperience of this outbreak to the entire Australian
continent. Australia also considers that New Zealand has misrepresented what occurred in the
movement of Spreyton apples during that time.
4.400 Finally, Australia rejects New Zealand's ongoing attempt to diminish the consequences of
European canker. It is widely accepted around the world that the disease has serious consequences.
In fact, it is one of only a few pests addressed by the Pipfruit NZ integrated fruit production manual.
4.401 As New Zealand has failed to identify any seri ous flaws in the IRA Team's risk assessment
for European canker, the Panel should be satisfied that it is objectively justifiable.
(iv) The risk assessment for ALCM is objectively justifiable
4.402 In relation to ALCM, New Zealand has failed to demonstrate that there was reliable data
which was not taken into account by the IRA Team in respect of the prevalence of viable ALCM on
New Zealand apples. The probability values chosen by the IRA Team aimed to ensure that the
potential for considerable seasonal and geographic va riation in ALCM-prevalence was accounted for,
in light of the scant information available on the matter.
4.403 Furthermore, New Zealand has failed to estab lish that sufficient quantities of apples would
not be co-located within sufficient proximity to apple host plants so that adult insects could not

emerge and establish in Australia. New Zealand's cl aim that this would never occur on the basis that
it would export the majority of its apples in "retail re ady" form is flawed. First, limiting its exports in
such a way would be commercially disadvantage ous, and secondly, the apples may nevertheless be
sent to orchard wholesalers for repackaging or reco nditioning. In addition, New Zealand's assertion
that apple waste will not be left uncovered for a sufficient length of time to allow adult ALCM to
emerge is based on mistaken assumptions relating to waste management in Australia.
4.404 Australia notes that the ALCM expert appointed by the Panel expressed the view that the IRA
Team's analysis was objective and coherent on a number of key issues in dispute, including its
evaluation of the potential consequences of an ALCM incursion. Similarly, the ALCM expert opined
that New Zealand's assertions regarding the time required for adult emergence after removal from
cold storage and the flight distance of adult fe males were unsupported by the evidence available.
Finally, the ALCM expert implicitly agreed w ith Australia that a 600-unit inspection alone, as
proposed by New Zealand, would not achieve Australia's ALOP.
4.405 Accordingly, New Zealand has failed to establis h any flaws which were so serious that, if
absent, would have led to a lower level of assigne d risk. The Panel should accordingly accept that the
Final IRA Report provides an objectively justifiable risk assessment for ALCM.
(v) The general measures
4.406 The general measures at issue are all ancillary re quirements to Australia's principal measures
for fire blight, European canker and ALCM. Acco rdingly, the purpose and technical basis of the
general measures is inextricably linked to that of the principal measures.
4.407 Australia considers there to be no reason for the Panel or New Zealand to doubt the accuracy
of Australia's explanation what its requirement concerning "AQIS involvement" in certain procedures
in New Zealand entails. Systems auditing will be the extent of the "AQIS involvement". ISPM
No. 20 recognizes that auditing of the systems in an exporting country may be required in the
development of new trade. Australia notes that New Zealand has not identified an "alternative"
measure to Australia's existing requirement.
(vi) The IRA Team evaluated likelihood according to the SPS measures which might be applied
4.408 Australia notes that the IRA Team evaluated a range of potential measures for each of the
pests at issue, and that the measures recommend ed were limited to those necessary to achieve
Australia's ALOP. Australia agre es with the compliance panel in Australia – Salmon (Article 21.5 –
Canada) that the rights and obligations concerning th e linkages between a risk assessment and the
measures selected are not set out under the mere defi nition of "risk assessment" in Annex A(4) of the
SPS Agreement, but rather in Article 5.1 and Article 5.6. Australia considers that it is disingenuous
for New Zealand to complain that the IRA Team fail ed to properly evaluate certain measures when it
has accepted, by conceding Australia's measures are "based on" the Final IRA Report, that there is an
adequate relationship between the Final IRA Report and all of the measures at issue under Article 5.1.
In addition, New Zealand has failed to raise other alternative measures under Article 5.6.
(vii) Australia's measures are not inconsistent with Articles 5.1, 5.2, 2.2 and 5.6
4.409 New Zealand's claims under Articles 5.1, 5.2, 2.2 and 5.6 are interdependent and conditional
on each other. As a result, should the Panel fi nd the Final IRA Report to provide valid risk
assessments within the meaning of the SPS Agreement, it should make consequential findings that all
of the measures at issue are consistent with each of those provisions.

4.410 New Zealand concedes that Australia's measures are "based on" the Final IRA Report.
Therefore, to the extent that the Panel finds the risk assessments for the thr ee pests at issue to be
objectively justifiable, it should find that the measures at issue are consistent with Article 5.1.
4.411 Australia's primary submission is that consis tency with Article 5.1 establishes consistency
with the Article 2.2 requirement that SPS measur es not be "maintained without sufficient scientific
evidence". Accordingly, to the exte nt that the Panel finds the measures at issue to be consistent with
Article 5.1, it should also find them to be consistent with Article 2.2. Alternatively, Australia submits
that New Zealand has nevertheless failed to establish that Australia's measures are inconsistent with
Article 2.2.
4.412 Article 5.2 is an obligation directed at the conduct of risk assessments, rather than to the
consistency of particular measures. Therefore, a finding that the risk assessments are valid within the
meaning of the SPS Agreement would also mean that the factors under Article 5.2 were taken into
account in the Final IRA Report, New Zealand having failed to demonstrate otherwise.
4.413 In relation to Article 5.6, it is undisputed that the "alternative" measures proposed by
New Zealand would not achieve the same degree of risk reduction as the measures at issue.
New Zealand's claims that restricting imports to "mature, symptomless apples" would be sufficient in
regards to the risks associated w ith fire blight and European canker, and that a 600-unit inspection
would be sufficient in regards to ALCM rest on its flawed belief that the unrestricted risk for those
pests meets Australia's ALOP. Therefore, a findi ng that the Final IRA Report presents valid risk
assessments means that New Zealand has not iden tified alternative measures which would achieve
Australia's ALOP. Accordingly, the Panel should fi nd that Australia's measures are consistent with
Article 5.6.
(viii) Australia's measures are not inconsistent with Article 5.5
4.414 Australia recalls its view that its defence in respect of Article 5.5 was prejudiced by
New Zealand's failure to specify the basis of its complaint in its panel request.
4.415 Australia has comprehensively refuted New Ze aland's contention that New Zealand apples
and Japanese nashi pears have similar risk profiles. Unlike the situation with New Zealand apples,
Japan has measures in place to maintain area freedom from the relevant pests for nashi pears exported
to Australia. Furthermore, the level of risk is pr oportional to the volume of trade in a product, and
Australia notes that there have been no imports of Japanese nashi pears since 2003 and minimal trade
before that.
4.416 Australia's measures for New Zealand apples and Japanese nashi pears are commensurate to
the different level of risk associated with each product. Accordingly, New Zealand has not
demonstrated any inconsistency in the applica tion of Australia's ALOP which has resulted in
discrimination or a disguised restriction on international trade.
(ix) New Zealand's undue delay claim remains outside the scope of this dispute
4.417 New Zealand's undue delay claim remains outside th e Panel's terms of reference. The Panel's
preliminary ruling limited the measures at issue to the requirements listed in bullet point form in
New Zealand's panel request. Since that ruling, Ne w Zealand has constantly shifted the basis of its
undue delay claim in an attempt to bring it within the Panel's terms of reference.
4.418
 New Zealand currently refers to the "IRA pro cess" and Australia's quarantine framework in
the context of its undue delay claim, but neither were identified in New Zealand's panel request.

Furthermore, New Zealand's claim that the "IRA pr ocess" checked and fulfilled the measures at issue,
ignores the ordinary meaning of the text of Article 8 and Annex (C)(1).
(e) Conclusion
4.419 Australia has identified serious deficiencies in New Zealand's legal arguments and evidence,
and does not consider that New Zealand has impugned the risk assessments for fire blight, European
canker or ALCM. Accordingly, New Zealand has faile d to establish that any of Australia's measures
are inconsistent with the relevant provisions of the SPS Agreement.
5. Executive summary of Australia's opening oral statement at the second substantive
meeting
(a) Introduction
4.420 This case concerns the conduct of risk assess ments by WTO Members in the "real world",
where the scientific evidence available is often not comprehensive, the limited scientific data
available may not fully resolve uncertainties about elements of potential risk pathways, and risk
assessors must necessarily and legitim ately exercise expert judgment to interpret available scientific
data and to address uncertainty.
4.421 Unless New Zealand can establish serious flaws in Australia's risk assessments for fire blight,
European canker or ALCM, the Panel should find th at the Final IRA Report is objectively justifiable
in light of Australia's ALOP. New Zealand has not done so and accordingly its case should be
dismissed.
(b) The practical realities of conducting risk assessments
4.422 Dr Schrader confirmed that lack of data is a problem with almost all plant risk assessments,
particularly where rare events are concerned. As a result, nearly every ri sk assessment will involve
expert judgment. New Zealand takes the restrictiv e view that scientific evidence may not be relied
upon if it was generated in a laboratory, and that ri sk pathways are not able to be considered unless
they have been historically documented and experi mentally confirmed in the field. If New Zealand's
view were accepted, risk assessments would be i nvalid unless the scientific ev idence was absolute in
its completeness and certainty. New Zealand's view fa ils to accord with the r eality highlighted by the
experts and Biosecurity New Zealand's own Risk Analysis Procedures . It also runs contrary to the
guidance provided in previous WTO SPS cases.
648
(c) Sufficiency of scientific evidence is not equivalent to scientific certainty
4.423 What will be "sufficient" scientific eviden ce for the imposition of SPS measures must be
assessed according to the specific circumstances an d evidence available for each pest, taking into
account the ALOP. By asserting that scientific ev idence will only be "sufficient" if facts are
experimentally proven under orchard conditions 649, New Zealand effectively argues that "sufficient
scientific evidence" requires "scientific certainty". However, full scientific certainty does not exist in
the real world of plant risk assessments.

648 See, for example, Panel Report on Japan – Apples , para. 8.98; Appellate Body Report on EC –
Hormones, para. 187.
649 For example, see New Zealand's second written submission, paras. 2.111-2.121.

4.424 Australia agrees that the "conclusions drawn by the Member assessing the risk [must] find
sufficient support in the scientific evidence relied upon". 650 But certain steps in any given pathway
analysed will be better supported by direct or experimental evidence than others, because some issues
have been subject to greater levels of investigati on, while others may be very difficult to replicate
experimentally to produce reliable results. The sufficiency of scientific evidence relied upon by a
Member is a judgment to be made in relation to the overall risk assessment.
4.425 Australia acknowledges that certain steps in th e pathways assessed were better supported by
evidence than others in the Final IRA Report. In those latter cases, expert judgment was employed.
But this does not undermine the overall sufficiency of scientific evidence relied upon in the Final IRA
Report.
4.426 In Australia's view, the mere fact that a path way has not been historically confirmed is no
reason to dismiss a risk as pure speculation. The experts agreed with this view and Dr Paulin
recognized the legitimate role of using hypotheses in conducting risk assessments. It is common
practice for WTO Members – including New Zealand itself 651 – to impose SPS measures on fruit
imports despite there being no historically proven pathway for particular diseases. If fruit can be
infected and carry the causal organism of a particular disease, then it has the potential to introduce
that disease to the importing country. In such ci rcumstances, a risk ass essment is based on the
biology of the disease.
4.427 New Zealand denies that it is judging what ri sks are significant for Australia. However, it
does precisely this when it argues that the standard of sufficient scientific evidence contemplated by
the SPS Agreement can only be met by conclusive, hist orical proof of a pathway. This is because a
judgment as to whether the likelihood of a pathwa y being completed is "insignificant" is a value
judgment about the acceptable level of risk. Th e key issue is whether or not the risk exceeds
Australia's ALOP.
(d) Standard of review and burden of proof remain fundamentally important
4.428 Australia has not sought to "shelter" the Fi nal IRA Report from review, as New Zealand has
claimed.652 Rather, Australia has argued that the Pane l should begin its examination with the Final
IRA Report. Australia recognizes the legitimacy of WT O scrutiny, but any review must be consistent
with the "delicate and carefully negotiated balanc e" of rights and obligations contained in the
SPS Agreement. The substance of Australia's submi ssions on standard of review has been confirmed
by the Appellate Body in US/Canada – Continued Suspension.653
4.429 New Zealand's burden of proof, which flows fro m the standard of review, requires it to
establish serious flaws with the risk assessments at i ssue before the Panel may find that they are not
objectively justifiable. Moreover, the objective ju stifiability of a risk assessment is not impugned
unless New Zealand has demonstrated that any serious flaws identified suggest to the Panel that, if
absent, there would have been a lower level of assigned risk – not merely that this might have
happened.654

650 Appellate Body Reports on US/Canada – Continued Suspension, para. 591.
651 New Zealand has in place measures to protect agai nst the entry of certain pathogens on papaya and
lychees: Bipolaris hawaiensis, Pestalotiopsis sp. and Pytophthora capsici.
652 New Zealand's second written submission, paras. 1.5 and 1.8.
653 Australia's second written submission, paras. 13-18; Appellate Body Report on US/Canada –
Continued Suspension, paras. 590-615.
654 Appellate Body Report on Australia – Salmon (Article 21.5 – Canada), para. 7.57.

4.430 New Zealand has to meet its burden of proof. It cannot rely on either the Panel or the experts
to make its case.
655 Furthermore, these proceedings do not constitute a "peer review" of the Final IRA
Report, whereby the Panel can rely on the experts to choose a preferred view of the science, because
doing so would constitute a de novo review. Multiple legitimate opinions may result where there is
scientific uncertainty, such as when there is a lack of data.
(e) The Final IRA Report constitutes a scientific opinion
4.431 New Zealand argues that the Final IRA Report "does not itself constitute independent
scientific opinion or scientific evidence". 656 But this is inconsistent with the views of past panels and
the Appellate Body, who have accepted that risk assessments unquestionably constitute scientific
opinion.657 Thus, if the risk assessments at issue are objectively justifiable, Australia is entitled to rely
upon them as the basis of its measures, whether or not the conclusion on risk is a "divergent or
minority opinion".
(f) New Zealand seeks to revive its case
4.432 New Zealand has attempted, in its rebuttal subm ission, to revive its case by introducing new
arguments which it had previously failed to pursue. For example, New Zealand has used its rebuttal
submission to attempt to expand its claims under Ar ticle 5.6 by seeking to introduce further potential
"alternative" measures for the three pests at issue.658 The Panel should not allow this to occur.
(g) The role of experts is limited
4.433 According to the Appellate Body in US/Canada – Continued Suspension , experts assisting
panels in SPS disputes have a very sp ecific and limited role: to provide advice to the panel and to
assist the panel on the technical and scientific aspects of this dispute. Panels may not defer judgment
to experts on matters which ultimately require the panel to draw legal conclusions, such as what
amounts to "sufficient scientific evidence". The experts' views should not be considered
determinative of the issues in dispute, especially wher e the question is not whether something can
occur, but how likely it is to occur. A rigorous review of any risk assessment will always highlight
particular points on which qualified and respected scientis ts disagree. It is not for the Panel to choose
between different views.
(h) Methodology
4.434 Australia has demonstrated that New Zealand's assertions of fundamental flaws in the semi-
quantitative methodology used in the Final IRA Repor t contain significant technical errors and lack
evidentiary support. New Zealand has failed to make its case on methodology.
4.435 In the meeting with the experts, Dr Sgrillo a dvised that the semi-qua ntitative model used in
the Final IRA Report was acceptable. He observed that the assessment of the likelihood of entry,
establishment and spread was conducted on a quantitativ e basis, while the evaluation of consequences
was conducted on a qualitative basis.

655 See Appellate Body Report on Japan – Agricultural Products II, para. 129.
656 New Zealand's opening oral statement at the first meeting of the Panel with the Parties, para. 49;
New Zealand's second written submission, paras. 2.76, 2.107, 2.314.
657 See Appellate Body Report on EC – Hormones , para. 194; Panel Report on EC – Marketing and
Approval of Biotech Products , paras. 7.3059-7.3060; Appellate Body Reports on US/Canada – Continued
Suspension, para. 591.
658 See New Zealand's second written submission, pa ras. 2.894-2.895; New Zealand's first written
submission, paras. 4.490, 4.491, 4.513.

4.436 New Zealand takes issue with the use of the probability interval 0–10 -6, in particular, the
maximum value of 10 -6, or one in a million. New Zealand asserts that this maximum value is
"significantly greater than can be justified on the basis of known data", including trade data. 659
Australia has demonstrated that New Zealand's reliance on trade data is flawed.660
4.437 There is a fundamental contradiction in New Zeal and's case which is starkly illustrated by its
claim that trade data may support its case and yet the Final IRA Report is to be judged strictly against
experimental evidence under orchard conditions. Indeed, New Zealand insists that the IRA Team
should have used trade data to inform its expert judgment.
4.438 New Zealand asserts that, in terms of the volumes of apples that may be exported to Australia,
the chance of something occurring once in a milli on apples may not be seen to be negligible. 661 It
states that:
"[A]n adverse event with a probability of 1 x 10-6 on a per-apple basis is equivalent to
an expected occurrence of once in a million apples, or 150 times per year, based on
… Australia's estimate of the most likely vo lume of apples traded (that is, 150 million
apples per annum)."
662
4.439 New Zealand creates a misleading impression in referring to an event occurring 150 times
every year. It does not specify the nature of th e adverse event, where it occurs on a pathway, and
whether that event would occur in the total population of 150 million apples. Without the specific
case being given, New Zealand's calculation lacks any concrete connection to the Final IRA Report.
4.440 New Zealand also notes that the mean of the interval 0–10
-6, when applied as a uniform
distribution, is 5 x 10 -7, or one in two million. It states that, if an adverse event has a probability of
occurring once in two million apples, then, in a population of 150 m illion imported apples,
75 occurrences would occur. 663 Again, without the specific case being given, New Zealand's
calculation is in the abstract and lacks any concrete connection to the Final IRA Report.
4.441 In this regard, Australia recalls that, in the meeting with the experts, Dr Sgrillo acknowledged
that, if only a proportion of a total population of a pples was infested, then th e expected number of
events would be reduced proportionately. Based on his example of applying one in a million to 200
million apples, giving 200 events, Dr Sgrillo agreed that if the infested population was only 1 per cent
of the total population, or two million apples, then the number of expected events would be two.
4.442 New Zealand asserts that there was "no evid ence, presented anywhere" that there was a
"structured or recognized" process in place for eliciting the opinions of IRA Team members. 664
New Zealand's error in making this assertion was hi ghlighted in the meeting with experts when
Australia referred the Panel and New Zealand to Ap pendix 1 of the Final IRA Report, which contains
a summary of key points of the elicitation process.
4.443 New Zealand's assertion that the semi-qua ntitative methodology overestimates the likely
volume of trade in apples from New Zealand is based on faulty suppositions. New Zealand wrongly
supposes that: Australian consumers will not buy the main varieties of apples it produces, such as
Royal Gala and Braeburn; Austra lian supermarkets will be unlikely to stock New Zealand apples;

659 New Zealand's first written submission, p. 95.
660 See Australia's first written submission, paras 3 08-311; New Zealand's second written submission,
paras. 247-263.
661 New Zealand's first written submission, para. 4.180.
662 New Zealand's second written submission, para. 2.342.
663 New Zealand's first written submission, para. 4.191.
664 New Zealand's second written submission, para. 2.348.

the volume of New Zealand apples entering the Australian market would lead to large price falls,
making its exports uneconomic; a nd New Zealand's apple exporters will not divert apples to the
Australian market. As to the economic viability of New Zealand apple exports, Australia recalls the
views of advisors to the New Zealand apple indus try that Australia represents a significant export
opportunity.
(i) Fire blight
(i) The fire blight case is essentially about the accep table level of scientific uncertainty in risk
assessments
4.444 The case for fire blight essentially comes down to the degree of scientific uncertainty that the
SPS Agreement can tolerate in a risk assessment. What is acceptable will depend on how the
elements of uncertainty – that is, what we do not know, and perhaps cannot prove about fire blight –
measure up against what we do know and have proven about fire blight.
4.445 New Zealand's burden of proof is central to the fire blight case. New Zealand must show that
the elements of uncertainty result in flaws so serious that, if absent, would have led to a lower level of
overall assessed risk.
665
4.446 In this regard, it is significant that the fire blight experts not only confirmed that there is a
potential pathway for fire blight through mature apples 666, but that there is a real risk present to be
assessed and managed. Dr Paulin explicitly supp orted Australia's two principal risk reduction
measures, supporting the IRA Team's view that th e risk associated with that pathway is above
Australia's ALOP.
(ii) New Zealand's "pathway" argument is the core of its fire blight case
4.447 The central pillar of New Zealand's argument is the claim that there is no scientific evidence
supporting a pathway for fire blight through mature, symptomless apples. 667 In effect, New Zealand
claims that risks do not exist unless the pathway has been historically documented and experimentally
proven.
4.448 However, this requirement has no basis in the SPS Agreement or the international
standards.668 Dr Schrader confirmed that the absence of a historical pathway is not a sound reason for
excluding a risk. 669 Similarly, Articles 5.1 and 2.2 do not refer to pathways and do not impose any
requirement that Members assess only the pathways that have been historically documented.
(iii) The fire blight pathway is substantially confirmed
4.449 The fire blight experts confirmed that the path way for fire blight through mature apples is far
from being wholly "speculative". The pathway is substantially confirmed with some elements of
uncertainty.

665 Panel Report on Australia – Salmon (Article 21.5 – Canada) , para. 7.57. See Australia's first
written submission, para. 346.
666 See also reply of Dr Paulin to Panel questions 16 and 45, in List of Replies from the scientific
experts to questions posed by the Panel.
667 See for example New Zealand's second written submission, paras. 2.104, 2.108, 2.110, 2.111, 2.120,
2.123, 2.127, 2.451-2.454.
668 For example, ISPM No. 11.
669 Reply of Dr Schrader to Panel question 45, in List of Replies from the scientific experts to questions
posed by the Panel; Oral comment of Dr Schrader at the experts' meeting, 30 June 2009.

4.450 It is beyond doubt that live E. amylovora will enter Australia on the surface of mature apples
if trade occurs. 670 It is beyond doubt that Australia has suitable conditions for the establishment of
fire blight disease.671 It is also beyond doubt that if fire b light were to establish in Australia, there is
the potential for spread within geographic regions. 672 Finally, it is beyond doubt that fire blight has
the potential to cause severe economic and biological loss.
4.451 Only one step in the pathway is uncertain, and that is whether E. amylovora can be
transmitted from an apple to a susceptible host plant and initiate a fire blight infection. But even this
step is supported by indirect evidence that transm ission can occur. Dr Paulin confirmed that rotting
apples discarded in an orchard can provide a possible source of inoculum. 673 The experts also
confirmed that vectoring through pollinating insect s could occur in the way described by the IRA
Team.674 Finally, the IRA Team's view that small numbers of bacteria can multiply to cause
infections in susceptible hosts is supported by scientific evidence.
4.452 When this evidence is taken together, the IRA Team's judgment that transmission could occur
in a rare case can hardly be dismissed as "speculation". 675 Indeed, Australia's view is corroborated by
other WTO Members who impose very similar risk management measures to Australia.676
(iv) New Zealand's evidence is not relevant to Australia's circumstances
4.453 Even leaving these issues to one side, New Ze aland cannot simply assert that the pathway is
"hypothetical". It must prove this point with evidence and argument.
4.454 New Zealand's pathway argument, and indeed its fire blight case, rests primarily on three
pieces of evidence: Japan – Apples , Roberts and Sawyer (2008) and "real world" trade data. It is
highly significant that each of these three bases have either been discredited by Australia 677, rejected
by the experts as irrelevant or inappropriate 678, or both. Recently, New Zealand has asserted that
several other studies also point to a lack of a pathway. However, much of this evidence 679 is
unreliable for drawing conclusions about the risk in Australia's circumstances.
4.455 Hale et al. (1996) and Taylor et al. (2003a) do not say anything about rare events as the
sample sizes are not comparable to commercial volumes of apples. Roberts et al. (1998), like Roberts

670 CABI. Indeed, the vast preponderance of scientific evidence accept that E. amylovora will be found
on the surface of apple fruit when sourced from areas where fire blight is endemic.
671 Australia's first written submission, para. 482.
672 Australia's first written submission, para. 485.
673 Reply of Dr Paulin to Panel question 21, in List of Replies from the scientific experts to questions
posed by the Panel.
674 Even New Zealand agrees that insects are a mean s of secondary spread. New Zealand's reply to
Panel question 61 after the first substantive meeting, para. 96. Reply of Dr Paulin to Panel question 35, in List
of Replies from the scientific experts to questions posed by the Panel.
675 New Zealand's first written submission, paras. 4. 8, 4.237, 4.252; New Zealand's second written
submission, paras. 2.492 and 2.452.
676 See Australia's second written submission, paras. 342 and 343.
677 In relation to Japan – Apples , see Australia's first written submission, paras. 250-262; Australia's
reply to Panel question 40 after the first substantive me eting; Australia's second written submission, paras. 325-
329. In relation to Roberts and Sawyer (2008), see Australia's first written submission, paras. 363-376;
Australia's second written submission, paras. 330-337 and Annex 1. In relation to trade data, see Australia's first
written submission, paras. 308-311; Australia's second written submission, paras. 247-263 and 338-343.
678 Reply of Dr Paulin to Panel questions 41 and 44, in List of Replies from the scientific experts to
questions posed by the Panel; Reply of Dr Deckers to Panel questions 41 and 44, in List of Replies from the
scientific experts to questions posed by the Panel.
679 With the exception of Taylor et al. (2003b), as Australia has discussed.

and Sawyer (2008), is focussed on restricted risk an d therefore indicates nothing about potential risks
when trade is unrestricted.
680
4.456 Finally, much of the scientific evidence Ne w Zealand relies upon concludes that the pathway
is "negligible", not that it does not exist. This is important: "negligible" is not zero, nor does it mean
that an event will not occur, unless you define "negligible" as "insignificant" or "not worth
considering". But, the significance or otherwise of a potential event is ultimately a value judgment
associated with ALOP and, therefore, a judgment for Australia alone.681
(v) New Zealand has not demonstrated serious flaws in the Final IRA Report
4.457 Once New Zealand's pathway argument falls aw ay, the only remaining question is whether
New Zealand has established serious flaws in the Fi nal IRA Report. New Zealand has consistently
failed to show any serious flaws in the levels of probability assigned to key steps in the pathway.
4.458 New Zealand asserts that the probability of 1 given for importation step 1 is overestimated
since E. amylovora cannot be present in all source orchards in New Zealand. 682 However, under
Article 6 of the SPS Agreement, it is up to exporting Members to "objectively demonstrate" disease
free areas and areas of low pest prevalence. It wo uld be very surprising if a lesser standard of
objective proof was required under Article 5.1. In this case, New Zealand had many opportunities to
provide the relevant evidence to the IRA Team but declined to do so.683 It is therefore not credible for
New Zealand to effectively argue that it has a claim to area freedom when it clearly does not.
4.459 Similarly, New Zealand implies that, under im portation step 4, the IRA Team should have
assumed that that an undefined number of pack ing houses achieve equivalence to Australia's
disinfection measure. However, New Zealand h as not provided "objective" proof as to whether
disinfectant is applied effectively. 684 Accordingly, New Zealand has no legitimate claim of
equivalence pursuant to Article 4.1.
4.460 Importation steps 2, 3 and 5 make the most significant contribution to the probability of entry.
However, New Zealand's arguments on importation step 2 are not credible in light of its failure to
acknowledge the critical assumptions un derpinning the IRA Team's analysis 685 and its insistence that
endophytic infection is relevant to the IRA Team's assessment in the face of clear and explicit
statements to the contrary.686 In relation to importation steps 3 and 5, New Zealand led no substantive
evidence and argument of its own in the first stages of this dispute. The Panel should take care that it
does not inadvertently make the case for New Zeala nd by allowing the experts' replies to plug the
significant gaps in New Zealand's evidence.687
4.461 Even leaving the legal concerns aside, the expert s' replies do not raise an inference of serious
flaws. New Zealand may have shown that the experts had some doubts about some of the IRA
Team's use of evidence. But all that this means is that the experts did not agree with the IRA Team's
analysis in its entirety. It is simply not enough for New Zealand to point to minor flaws and assume
that they are sufficient to overturn th e risk assessment. New Zealand has to prove that the absence of
any shortcomings would have led to a lower level of assessed risk, and in this it has failed.

680 Australia's second written submission, Annex 1.
681 See European Communities' third party submission, para. 33.
682 New Zealand's second written submission, para. 2.402.
683 Australia's IRA, Part B, p. 54.
684 Australia's second written submission, para. 382.
685 Australia's second written submission, paras. 371-373.
686 Australia's second written submission, para. 370.
687 Appellate Body Report on Japan – Agricultural Products II, para. 129. See also, Australia's second
written submission, para. 5.

(j) European canker
4.462 At the experts' meeting, Professor Latorre re iterated that there is a risk of introducing
N. galligena associated with the importation of latently infected apple fruit. 688 Both experts agreed
that the long distance spread of European canker via apple fruit could not be ruled out.689
4.463 Contrary to what New Zealand asserts, the Fina l IRA Report contains an objective, coherent
and substantive analysis of the environmental conditions, including climate, relevant to the
establishment and spread of European canker. 690 The validity of this analysis has been confirmed by
the work undertaken by the Bureau of Rural Sciences (BRS).691
4.464 Rather than identifying any serious flaws in the IRA Team's consideration of climate,
New Zealand has simply introduced an alternative c limate analysis in an attempt to impose its own
view of the science on Australia. There is ongoing debate in the scientific community regarding the
climatic conditions required for European canker de velopment, resulting in a variety of predictive
models.692 Dr Swinburne confirmed that there is no co mplete model but rather a range of models
which are yet to be joined up, and that expert judgment was required.
4.465 The BRS climate analysis draws on various predictive models, including New Zealand's own
Beresford and Kim model, to demonstrate the climatic similarity between parts of Australia and those
areas of the world where European canker is present. 693 It shows that, if European canker entered
Australia, it could establish and spread to host plan ts in commercial apple growing regions, such as
the Adelaide Hills in South Australia, and metropo litan areas, such as Sydney and Melbourne. Both
European canker experts accepted this at the experts' meeting.
4.466 The alleged unsuitability of Australia's climat e lies at the core of New Zealand's case on
European canker. It underpins New Zealand's arguments on spore production, dispersal and infection;
on establishment and spread; on alternative hosts; on the Spreyton disease outbreak; and on
consequences. Therefore, once you accept the reality that New Zealand does not have the only
legitimate predictive model for European canker development, its case falls away.
694
4.467 New Zealand continues to equivocate on the incidence of latent fruit infection in
New Zealand which was the focus of the IRA Team's analysis under importation step 2. However,
fruit rot occurrences have been reported in New Zeal and and it follows that latent fruit infection does
occasionally occur in New Zealand. 695 This was the view of the IRA Team 696 and it was accepted by
Dr Swinburne.
4.468 Contrary to what New Zealand asserts, the IRA Team's view that discarded infected apples
can produce spores (primarily conidia) which disper se and initiate infection, is legitimate science. 697
This view is consistent with the biology of fu ngal pathogens as evidenced by photographic evidence

688 See reply of Dr Latorre to Guideline (g) and Panel question 65, in List of Replies from the scientific
experts to questions posed by the Panel.
689 See also reply of Dr Swinburne to Panel question 64, in List of Replies from the scientific experts to
questions posed by the Panel.
690 Australia's IRA, Part B, pp. 119-120, 137, 140, and 141.
691 Australia's first written submission, Annex 2; Australia's second written submission, Annex 2.
692 Australia's second written submission, Annex 2, pp. 249-250.
693 Australia's second written submission, Annex 2, pp. 251-257. See also Australia's first written
submission, Annex 2, Figure 10.
694 Australia's second written submission, paras. 532-550.
695 Australia's second written submission, paras. 473-485.
696 Australia's IRA, Part B, p. 123.
697 Australia's second written submission, paras. 507- 521.

showing masses of conidia on rotten fruit.
698 It also finds support in Professor Latorre's view that
asymptomatic but infected apples could develop symptoms and eventually sporulate during transit and
commercialisation in Australia 699, and that rotted fruits discarded near susceptible hosts could be a
source of inoculum for infections in new areas.700
4.469 New Zealand's criticism of the IRA Team's c onsequences analysis disregards Australia's
particular circumstances, including that there are a wide range of alternative hosts in Australia. 701
Plant pathology information from around the world 702 invariably refers to European canker as having
serious consequences. Dr Swinburne noted the occurrence of 5 per cent fruit rot at East Malling in the
UK703, an area which only had marginal climatic suita bility for development of the disease. This is
consistent with the IRA Team's "moderate" rating for European canker consequences.
4.470 In sum, although there is a low risk associated with importing New Zealand apples, it exceeds
Australia's ALOP. Accordingly, the IRA Team de termined that it was necessary to source apples
from New Zealand export orchards or blocks free of the disease. Professor Latorre reiterated that this
is a reasonable risk mitigation measure. 704 Both experts agreed that requiring New Zealand to export
"mature, symptomless apples" would not achieve Australia's ALOP.
(k) ALCM
4.471 The Panel's consideration of the ALCM risk assessment needs to be cognisant of the
significant lack of data available on several of th e key issues in dispute – including the viability of
ALCM on New Zealand apples. ALCM is present in only a few countries and, as Professor Cross
confirmed, there has been relatively little research conducted or reliable data generated on this pest.
4.472 During these proceedings, New Zealand has provided new data on a number of issues in its
attempt to criticise the IRA Team's evaluation of ALCM. 705 Obviously, however, the IRA Team
could not have considered information that was not available to it during the IRA process. Australia
recognizes that this new information would need to be taken into account in any review of the import
conditions. But it is clear that further reliable data is required, and New Zealand is in the best position
to provide the appropriate information.
4.473 New Zealand does not seriously dispute that ALCM could establish in Australia from a
biological perspective. Professor Cross' reference to the "powerful life force" in the context of the
insect's potential survival in a new environment was significant in this regard. Rather, New Zealand
relies on its assertion that the "majority" of its e xports will be in the "retail ready" form, which
New Zealand contends means that insufficient nu mbers of infested apples would come within
proximity of suitable hosts. And secondly, that "Australian agricultural waste practices would
preclude any opportunity for ALCM establishment" because of New Zealand's conjecture that apple

698 Exhibit NZ-10: McCartney (1967), p. 279.
699 Reply of Dr Latorre to Panel question 65, in List of Replies from the scientific experts to questions
posed by the Panel.
700 Reply of Dr Latorre to Panel question 69, in List of Replies from the scientific experts to questions
posed by the Panel.
701 Australia's second written submission, paras. 578-580.
702 Australia's second written submission, Annex 3.
703 Exhibit AUS-142: Berrie (1989).
704 Reply of Dr Latorre to Guideline (g), in List of Replies from the scientific experts to questions
posed by the Panel.
705 New Zealand's advice that the August 2005 data related to occupied cocoons in New Zealand's
response to the experts' factual qu eries, 17 February 2009; New Zealand's clarification of the Rogers et al .
(2006) paper in Exhibit NZ-102; data on adult emergence in Sandanayaka and Rogers (2009), Exhibit NZ-119.

waste is never left exposed in Australia. 706 In Australia's view, New Zealand has failed to establish
the validity of either of these propositions. Professo r Cross confirmed that if large volumes of apples
were directed to orchard packing houses, the risks would be considerable.
4.474 Neither Australia nor New Zealand is in a position to specify with any degree of precision
how frequently the mode of trade would be via bulk fruit as opposed to "retail ready" fruit. It will
depend on commercial considerations which will vary according to the market circumstances at a
particular time.
4.475 And even if the "majority" of apples were im ported retail ready, this does not mean that
insufficient quantities would be sent to orchard wholesalers for repackaging or reconditioning. 707
Similarly, New Zealand has failed to establish that apple waste would be managed in the way that it
asserts, and that groups of apples would never be le ft out of cold storage near host plants for a
sufficient length of time. 708 The Final IRA Report illustrates that there would be more than enough
infested apples distributed to orchard packing hou ses for there to be a reasonable likelihood of an
establishment event taking place 709, even if the actual level of infestation of New Zealand apples is
somewhat lower than the IRA Team assumed on the basis of the August 2005 data.
4.476 Professor Cross validated the IRA Team's judgment on the question of adult emergence from
cold storage, when he confirmed at the experts' meeting that adults could potentially emerge very
quickly. New Zealand's claim that "the IRA's co nclusions were based on the assumption that all
ALCM present on New Zealand apples would simu ltaneously emerge as soon as the apples were
removed from cold storage" 710 is simply wrong. The IRA Team's analysis was focussed on "the
likelihood of at least one establishment and spread event happening" in light of the number of apples
that might arrive at particular locations. 711 Emergence of individuals over a period of time does not
mean that a mating pair could not emerge simulta neously. Further, Professor Cross has made clear
that the IRA Team's consideration of flight distance was reasonable.
4.477 In circumstances where the unrestricted risk is above Australia's ALOP, Dr Sgrillo agreed
with Australia that the underlying level of infesta tion is the appropriate factor for determining the
requisite rate of inspection. New Zealand's pr oposed 600-unit inspection would be insufficiently
sensitive to reduce the risk to Australia's ALOP given the low level of ALCM-infestation on
New Zealand apples.712
(l) The measures at issue
4.478 Australia considers that the Panel may make findings in respect of each of the remaining
measures at issue in this dispute. However, New Ze aland has failed to demonstrate that each of those
measures fall within the definition of "SPS measure" when taken alone.
4.479 The description of the measure listed at the eight h bullet point in New Zealand's panel request
suggests that registered packing houses which pr ocess apples intended for Australia may not also

706 For example, see New Zealand's second written submission, paras. 2.252, 2.750, 2.752, 2.754.
707 See Australia's second written submission, paras. 651-654; Australia's first written submission,
paras. 781-783.
708 See Australia's second written submission, paras. 659-665.
709 See Australia's second written submission, paras. 644-649.
710 New Zealand's second written submission, para. 2.741 (footnote omitted).
711 Australia's IRA Report, Part B, p. 34 (emphasis added).
712 Also, see Australia's second written submission, paras. 682-687.

process apples sourced from non-registered orchards or apples intended for other markets. This is
incorrect.
713
(m) Conclusion
4.480 The importation of US table grapes provides a "real-world" example of Australia's
commitment to seeing trade flow freely within the bounds of its ALOP. Based on the scientific data
collected since trade began, the measures have been adjusted five times. The measures are now less
trade-restrictive and trade has grown. The same review mechanisms are available in the Final IRA
Report for New Zealand apples. Australia stands ready to allow commercially valuable trade in
New Zealand apples to occur.
6. Australia's closing oral statement at the second substantive meeting
(a) Introduction
4.481 It is beyond dispute that this case raises a large number of complex scientific questions.
There are three risk assessments at issue: one each on a bacterium, a fungus and an arthropod. Given
the complexity of the issues, it is clear why the Panel's role is not to undertake its own risk
assessment.
(b) Standard of review
4.482 Australia submits that this means that the Pa nel must find serious flaws in the Final IRA
Report if it is to decide that Australia has acted in consistently with its oblig ations. New Zealand has
provided no serious alternatives to the "serious fl aws" burden of proof. In this regard, the Panel
should follow the clear guidance that the Appellate Bo dy has provided on the role of experts in SPS
cases.
4.483 In any event, New Zealand has not established any such serious flaws that would impugn the
objective justifiability of the thr ee risk assessments at issue. A ccordingly, its challenge against
Australia's measures must fail.
(c) Transparency
4.484 New Zealand repeatedly claims that the Fi nal IRA Report is not transparent. But
New Zealand fails to acknowledge that the Final IR A Report is among the most transparent plant risk
assessments prepared by any WTO Member. The ve ry fact that New Zealand has been able to
challenge its reasoning and conclusions in such detail testifies to its transparency. New Zealand's own
risk assessments – which in many cases remain entirely unpublished – contain far less detail about the
reasoning and conclusions than the Final IRA Report.
4.485 New Zealand has been unable to point to any obligation in the SPS Agreement that requires
transparency in risk assessments beyond that pr ovided in the Final IRA Report. WTO Members
agreed on a range of disciplines to apply to risk assessments, and they are set out clearly in the
SPS Agreement. On the issue of transparency, the Final IRA Report exceeds the standards required.
(d) Methodology
4.486 Australia considers that in the course of the meeting with the experts and the second
substantive meeting there has been a valuable exam ination of the issues relating to the methodology

713 See Australia's IRA, Part B, p. 317.

used in the Final IRA Report. Australia has show n that New Zealand's assertions on methodology are
deeply and irretrievably flawed.
4.487 Australia has identified a fundamental contradi ction in New Zealand's case that, on the one
hand, it seeks to support its own case with trade data, yet, on the other hand, it requires the Final IRA
Report to be judged strictly against experimental evidence. New Zealand has not addressed this
contradiction.
4.488 Australia also notes the discussion of the interval 0-10 -6, in particular, the exchanges between
the Panel and the Parties this morning. In this regard, Australia recalls the fundamental difference
between the total population and the relevant popu lation. The Chairman's funnel was a useful
analogy.
(e) Fire blight
4.489 The Final IRA Report is the scientific basis of Au stralia's measures, and therefore, the fate of
those measures, stand or fall with its validity.
4.490 Before the Panel gets to the question of whethe r the risk assessment is valid, it must first be
satisfied that New Zealand has made out a convi ncing case on fire blight. If the Panel thinks
New Zealand has, then it must ask whether Aust ralia has provided an appr opriate defence of its
measures. But if the Panel does not think New Zealand has made out its case, if the Panel has doubts
about whether New Zealand has led ad equate evidence and argument to prove that the fire blight risk
assessment is seriously flawed, then the Panel must dismiss New Zealand's case for failure to meet its
burden of proof.
4.491 In the case of fire blight, there is a genuine question about whether New Zealand has met its
burden of proof. Its primary contention – that ther e is no pathway for fire blight through mature
apples – has been shown to be wholly without basi s by Australia and confirmed by Dr Deckers and
Dr Paulin. The three key evidentiary pillars of New Zealand's case, have been discredited and shown
to be irrelevant. In its opening statement, New Zealand attempted once again to elevate the findings
in Japan – Apples to the status of scientific evidence
714 and has done so again in its closing statement.
However, New Zealand still ignores the critical poin t that legal findings on the sufficiency of
evidence led by the Parties in dispute cannot be converted into scientific facts.715
4.492 This is not a case of expert equivocation or doubt . All of the experts agreed that fire blight
has serious consequences. Indeed, Dr Schrader noted that where the impact of a pest is high and there
are open questions about entry, then uncertainties in the data should not prevent the application of
measures. As New Zealand has put no substantive argument on this issue of consequences either in
its second written submission, or in the course of the second substantive meeting, Australia now
considers that this point is undisputed.
4.493 Even more significantly, Dr Deckers and Dr Paulin both confirmed clearly that the risk of fire
blight through mature apples is a real one – a ri sk worth assessing, and more importantly, one that
necessitates risk management. Australia's principa l risk management measures have been endorsed
without qualification, and neither expert adjusted their view that mature, symptomless apples will not

714 Despite its claim that Japan – Apples is not scientific evidence, and not a risk assessment. See
New Zealand's reply to Panel's question 116 after the first substantive meeting.
715 Australia notes that Japan did not lead sufficient evidence in its risk assessment on many of the
scientific issues in Japan – Apples . This had a material impact on the evidentiary findings in that case, as is
evident from the panel report itself (see Panel Report on Japan – Apples , paras. 8.147, 8.167 and 8.175). See
Australia's first written submission, paras. 257-259.

meet Australia's ALOP. In Australia's view, these comments must bear significant weight in
determining whether the ultimate conclusion in th e fire blight risk assessment meets acceptance
within the scientific community.
4.494 As Australia stated, only one step in the risk assessment is subject to any real degree of
uncertainty. And on this issue, the Panel has heard extensively from the experts. The experts
confirmed that the scientific evidence on this issue is highly uncertain and only tells us directly about
what is probable, but not what might happen ex ceptionally. Thus, it is easy to see how WTO
Members concerned only with common risks could be satisfied on the evidence that the risk, for them,
would be insignificant.
4.495 But for WTO Members such as Australia, who ar e concerned with rare events, the evidence
discloses no such certainties. Therefore, the IRA Team had to exercise expert judgment to extrapolate
from the available evidence to draw a conclusion about whether a rare event could occur. Dr Paulin
has told us clearly that these sorts of inferences are "not outside science". Accordingly, the key
question is whether the Panel is satisfied that the IRA Team's judgment that this event could occur is a
rational inference from the evidence.
4.496 Australia does not have to establish that mature apples have been the vehicle for transmission
of fire blight. Nor does Australia have to show it is likely to happen. When talking about a potential
pathway, all that has to be shown is that it can rationally happen, that the probability range assigned to
that step is acceptable, and that the potential risk is above Australia's ALOP.
4.497 On each of these points, the IRA Team's analysis was directly vindicated by the experts.
When asked directly whether the IRA Team had presented evidence which shows that mature fruit
can transmit fire blight, both Dr Paulin and Dr D eckers said "yes". When asked directly whether the
probability range assigned to this step – that is, (0-10
-6) – was acceptable, both experts said "yes".
Finally, when asked directly whet her there was a risk of fire b light through mature apples, both
experts again said "yes". Dr Deckers was very clear on this point – for him, the risk was real and not
exaggerated.
4.498 Australia considers that the exposure analysis in the Final IRA Report has been shown to be
rational and to constitute legitimate science according to the standards of the scientific community. In
deciding whether the Panel can accept this view, it ma y be worth considering the alternative view of
this evidence that New Zealand has put before the Panel in its arguments. New Zealand asserts, on
the basis of evidence including Hale et al. (1996) and Taylor et al. (2003a) that transmission does not
occur, and will never occur. The experts unanimously confirmed that this view is incorrect. Thus, to
the extent that there is any choice between the two positions put before the Panel, it is important to
keep in mind that while Australia's position is rational on the available science, New Zealand's
position is not.
4.499 This is the only real step in contention as New Zealand has failed to make a case on the key
importation steps, through failure to lead any credib le evidence of its own. This was highlighted in
New Zealand's responses to questions put by Austra lia where New Zealand had failed to point to any
evidence apart from the experts' replies. 716 But as New Zealand itself acknowledged, experts replies
are not evidence in themselves, but can only verify the arguments and evidence of the Parties.
Accordingly, as Australia considers that the expe rts have supported the key elements of the IRA
Team's reasoning, Australia considers that New Zealand's case on fire blight fails.

716 Australia notes that para. 4.228 of New Zealand's first written submission and para. 2.426 of
New Zealand's second written submission (as referred to by New Zealand this afternoon) do not refer to dump
tank contamination and do not refer to any scientific evidence.

(f) European canker
4.500 The foundation of New Zealand's case on Europ ean canker is that Australia's climatic
conditions are unsuitable for the development of th e disease. However, there are areas of Australia,
including commercial apple growing regions, whic h have climatic conditions suitable for the
establishment and spread of European canker.
4.501 The practical reality is that climate analysis is a complex area necessitating expert judgment.
In the real world there is no single universally accepted epidemiological model for predicting the
establishment and spread of European canker. Ac cordingly, there is no reason why New Zealand's
climate analysis should be regarded as the only legitimate scientific view.
4.502 After reviewing a wide range of scientific evid ence the IRA Team concluded that there was a
risk of introducing European canker into Australia as sociated with the importation of latently infected
New Zealand apple fruit. Both European canker experts appointed in this dispute agree that this is so.
The only contested issue relates to the level of this risk.
4.503 The risk associated with introducing European canker certainly exceeds Australia's ALOP.
The IRA Team determined that it was necessary to source apples from New Zealand export orchards
or blocks free from the disease. This is a reasonable and practical risk mitigation measure considering
the serious consequences of the disease which is ab sent in Australia; both European canker experts
agree that a measure simply requiring "mature symptomless apples" would not achieve Australia's
ALOP.
(g) ALCM
4.504 As Australia has pointed out on ALCM, it is not possible to be definitive as to the important
issue of mode of trade in advance of trade comme ncing. New Zealand's most recent "evidence" in
this regard (Exhibit NZ-136) relates only to kiwi fruit and not to apples. Further, it indicates that only
a "portion" of New Zealand kiwi fruit are exported to Au stralia in "retail ready" condition. This is far
from the guaranteed "majority" of New Zealand apples that New Zealand would have the Panel
uncritically accept. In any event, even if the "majority" of New Zealand apples were imported in
"retail ready" condition, the IRA Team still f ound that more than enough ALCM-infested apples
would end up at orchard packing houses together to pose an establishment risk.
717
4.505 As Australia has already acknowledged, there is a significant lack of data available in relation
to ALCM, including on viability. Any change in this regard largely depends on New Zealand – unless
it provides further data or carries out further resear ch, the lack of data means significant uncertainty
will remain. Australia notes that New Zealand was una ble to provide further data on viability levels
when this was requested by the experts earlier in the year 2009.718
4.506 If the present data were to be considered insu fficient, any review would suffer the same
problem in the absence of further information. The IRA process contemplates review on the basis of
new information and Australia stands ready to do th is. However, without new data, any review will
face the same difficulties as faced by the IRA Team. This is the real world which confronts Australia.
(h) Article 5.6
4.507 On Article 5.6, New Zealand's opening statem ent makes it clear that the only "alternative"
measures that the Panel should consider are "mat ure, symptomless apples" for fire blight and

717 Australia's IRA, Part B, p. 174, Table 43; Australia's second written submission, paras. 644-649.
718 Communication from New Zealand to the Panel, 9 April 2009.

European canker, and a 600-unit inspection for ALCM. New Zealand did not mention any other
potential alternative measures.
(i) The Panel's evaluation of the measures
4.508 It is also clear from this se cond substantive meeting that New Zealand indicated no objection
with the Panel evaluating each of the measures at issue on a collective basis, rather than each
individually. In Australia's view, this would be the appropriate approach.
(j) Real world measures
4.509 Finally, the real world of apple production and trade inevitably involves damaged fruit,
discarded waste, diverse handling procedures and inev itable, unpredictable human interaction. The
real world does not involve monolithic, sterile procedures. New Zealand has not offered any
alternative measures on any of the pests that meet Australia's ALOP.
4.510 As is clear from a reading of the Final IR A Report, and acknowledged by New Zealand, the
IRA team considered a number of different measures in relation to each pest. For each of the pests, it
recommended the least restrictive measure of those which would achieve Australia's ALOP. For most
pests considered in the Final IRA Report, it found that no risk management measures were necessary
to achieve Australia's ALOP. For the three pests at issue, it recommended risk management measures
largely endorsed by the experts.
4.511 On fire blight, the experts have confirmed th at Australia's principal measures – symptomless
orchards and chlorine treatment – are warranted. On European canker, they have agreed that
measures to ensure pest-free places of production would be necessary to reduce th e risk to Australia's
ALOP.
4.512 On ALCM, the expert expressed the view that th e intensity of any inspection would need to
be determined by reference to more reliable data such as viability. But the best existing data indicates
that the only alternative measure proposed by New Zealand – a 600-unit inspection – would not
reduce the risk below Australia's ALOP because it is insufficiently sensitive.
4.513 It is important for the Panel to recognize the real world constraints that apply to the
formulation of risk management measures. The reality is that there are a limited number of
approaches that can be taken to risk management for any given pest. New Zealand has proposed no
alternative measures for any of the pests that would meet Australia's ALOP. Australia would ask that
the Panel bear this in mind when considering how best to secure a positive solution to this dispute.
(k) Conclusion
4.514 In conclusion, Australia reaffirms its position that New Zealand has failed to establish any
serious flaws in the risk assessments for fire blight, European canker and ALCM.

V. ARGUMENTS OF THE THIRD PARTIES719
A. CHILE
1. Chile's written submission
5.1 Chile expressed its interest in participating as a Third Party in this dispute, both as an exporter
of apples and from a systemic viewpoint, as it consid ers strict compliance with the disciplines of the
WTO Agreement on the Application of Sanitary an d Phytosanitary Measures (SPS Agreement) to be
crucial.
5.2 The fundamental disciplines of the SPS Agreement include those set forth in Article 2.2,
which stipulates that the sanitary and phytosanitary measures applied by a Member must be based on
scientific principles and maintained with sufficient scientific evidence. It is also vitally important that
sanitary and phytosanitary measures be applied only to the extent necessary to protect human, animal
or plant life or health.
5.3 The foregoing lends support to the rule estab lished in Article 2.3, whereby such measures
shall not be applied in a manner which would constitute a disguised restriction on trade.
5.4 A second set of fundamental disciplines is set out in Article 5 of the SPS Agreement, which
provides that sanitary or phytosanitary measures shall be based on an assessment, as appropriate to the
circumstances, of the risks. Article 5 also regulates how Members must carry out such risk
assessment and determine the appropriate level of san itary or phytosanitary protection. In particular,
Members are required, when determining the appropriate level of sanitary or phytosanitary protection,
to take into account the objective of minimizing negative trade effects.
5.5 Annex A to the SPS Agreement contains a precise definition of the concept of risk assessment
and, as noted by New Zealand in paragraph 4.155 of its First Written Submission, establishes a three-
pronged test to be applied by Members when assessing a risk. Adherence to this definition and to the
related test ensures proper compliance with Article 5.1 of the SPS Agreement.
5.6 With regard to the scientific basis required for sanitary and phytosanitary measures, Chile
believes that the Panel must follow the Appellate Body 's approach, in the sense that, for there to be a
sufficient scientific basis, there must be a rationa l or objective relationship between the measure and
the scientific evidence, and this will be determined in the light of factors such as the characteristics of
the measure and the quality of the scientific evidence.
5.7 In this dispute, New Zealand contests the restric tions that have affected its exports of apples
to the Australian market. These restrictions stem from the application of phytosanitary measures that
have made it impossible for this product to enter Australia.
5.8 Chile acknowledges the right claimed by Australia to determine its own level of protection as
it deems appropriate, as provided for in the de finition in Annex A, paragraph 5, to the
SPS Agreement. Accordingly, as pointed out by Australia, neither the complaining party nor the
Panel may substitute the criteria that the Import Ri sk Analysis (IRA) team took into consideration
before applying the protective measure. However, even if Australia were to have such a right, this
does not mean that it can impose measures at a level established at its own discretion. Australia is, in
particular, required to base its measure on the provi sions of Articles 2 and 5 of the SPS Agreement in

719 This section on the arguments of the Third Parties is based on the executive summaries submitted by
the Third Parties to the Panel.

respect of risk assessment and the rationale behind the determination of an appropriate level of
protection.
5.9 In the light of the foregoing, the phytosanitary measures contested by New Zealand must be
based on scientific principles and applied in such a way as not to constitute a disguised restriction on
trade. It is therefore the responsibility of the Pa nel to examine whether Aust ralia, when assessing its
risks and deciding on a certain level of protection, adhered to the above-mentioned requirements.
5.10 Chile believes that, given the different and even conflicting scientific opinions in this dispute
in respect of the pests covered by Australia's risk assessments (fire blight, European canker, and apple
leafcurling midge), the Panel may have recourse to Article 11.2 of the SPS Agreement.
5.11 With regard to the relevance in this case of analysing the criteria or reasoning contained in the
Panel and Appellate Body reports relating to Japan – Apples (DS245) , Chile believes that the Panel
must properly interpret the relevant Articles of the SPS Agreement, as stated in the reports concerning
that dispute. The foregoing does not, however, free the Panel from its obligation to make an objective
assessment of the matter, as required under Article 11 of the Dispute Settlement Understanding
(DSU). Even though one of the pests in question is the same as in Japan – Apples (fire blight), the
conditions in Australia may differ from those in Japan.
5.12 That said, Chile agrees with New Zealand that th e criteria used to interpret the relevant rules
of the SPS Agreement in Japan – Apples must be applied in the same way in this dispute. Chile
considers it important to distinguish this situati on from others through the particular circumstances
involved in the case, which must be determined by this Panel.
5.13 Although Japan – Apples presents similarities to this case, th e task of the current Panel is to
study the Australian measures contained in the mandate given by the DSB, while taking into
particular consideration the specific nature of the justification for these measures, in relation to the
risks assessed in the light of the real circumstance s of the case at issue. Only when the Panel has
established the specific circumstances surrounding the Australian measure might it be useful to
consider any criteria already used in Japan – Apples.
5.14 Lastly, Chile would like to refer to the requi rements under Article 8 of the SPS Agreement.
Members are required to observe the provisions of Annex C to the SPS Agreement in the operation of
control, inspection and approval procedures. The ru le stipulating that such procedures are to be
undertaken and completed without undue delay is relevant in this respect. In this case, the eight years
it took the Australian authorities to complete the risk assessment seems far too long and it is therefore
of particular importance that the Panel rule on wh ether the procedure followed is consistent with the
provisions mentioned.
2. Chile's oral statement
5.15 Chile appreciates this opportunity to provide the Panel with our views on this important
dispute. Although Chile does not have anything mo re to add to our written statement, Chile would
like, briefly, to stress three points:
5.16 First, Article 5.4 and 5.5 of the SPS Agreemen t establishes the principles contained in the
determination of the appropriate level of sanitary or phytosanitary protection, that is, the objective of
minimizing negative trade effects and the avoidance of arbitrary or unjustifiable distinctions in the
levels Members consider to be appropriate in diffe rent situations, if such distinctions result in
discrimination or a disguised restriction on international trade.

5.17 These elements must be taken into account by th e Panel in order to evaluate the Australian
measures challenged by New Zealand. In this regard , Chile would like to reiterate its suggestion that,
as contemplated in Article 13.2 of the DSU, the Pa nel, in performing this task, seek information from
any relevant source and consult experts to obtain th e opinion on the scientific elements comprised in
this case.
5.18 Second, regarding the undue delay claim under Ar ticle 8 and Annex C of the SPS Agreement,
Chile reiterates its concern about the long time take n by the Australian authorities to complete its
approval procedures for access to their market. Such a long time of delay, as in the case of
New Zealand apples, creates insurmountable barriers to the access of a product to a certain market.
5.19 Finally, regarding Australia's request to the Panel to adopt a preliminary ruling concluding
that New Zealand claim on undue delay of the IRA pro cess is outside the scope of this dispute, Chile
is concerned about the insistence on discussing procedur al issues at this stage in this dispute, which,
in Chile's opinion, affects the nature of the WTO di spute settlement mechanism, and in particular the
prompt resolution of the substance of the case. Li kewise, Chile understands that the claim related to
Article 8 and Annex C of the SPS Agreement, is cove red by its request for a panel (WT/DS367/5). In
consequence, it is within the terms of reference of the Panel.
B. E
UROPEAN COMMUNITIES
1. Executive summary of the European Communities' written submission
(a) Introduction
5.20 The European Communities sees international tr ade as a powerful means to increase States'
and citizens' welfare on a global level. However, greater trade sometimes carries risks which may
outweigh the possible benefits which countries and citizens may derive from it. An appropriate
balance must be found.
5.21 Trade disputes concerning SPS measures raise deli cate issues insofar as the imperatives of
free commerce must be balanced ag ainst the legitimate right for countries to protect those public
interests at the level their democratically elected bod ies consider appropriate. In the light of this, the
tasks conferred to the interpreter of the pertinent legal rules ought to be exercised with particular
prudence and cautiousness.
(b) Legal assessment
(i) Articles 2.2 and 5.1 of the SPS Agreement
5.22 As a preliminarily matter, the European Communities would like to stress it agrees with
Australia that New Zealand has wrongly treated Articl es 2.2 and 5.1 as sources of distinct obligations.
The European Communities notes that the Appellate Bo dy has already clarified that Articles 2.2 and
5.1 of the SPS Agreement should be read constantly together. In fact, Article 5.1 may be reviewed as
a specific application of the basic obligations contained in Article 2.2 of the SPS Agreement.
5.23 Article 2.2 of the SPS Agreement sets out a ge neral rule requiring WTO Members to have
"sufficient scientific evidence" as b asis for their SPS measures. In Japan – Agricultural Products II,
the Appellate Body has held that "sufficiency" is a "relational concept" which requires the existence
of a sufficient or adequate re lationship between two elements, in casu, between the SPS measure and
the scientific evidence, and having regard to the importing Member's appropriate level of protection.

5.24 According to Australia, this scientific evidence is a risk assessment: the Final IRA. In the
light of this, the Panel should, first of all, assess whether the Final IRA constitutes a risk assessment
within the meaning of the SPS Agreement.
5.25 The first clause of paragraph 4 of Annex A to the SPS Agreement defines the "risk
assessment". The Appellate Body, in Australia – Salmon , has clarified that the type risk of
assessment relevant in the present dispute is composed by a three step analysis. The Panel must thus
assess whether the Final IRA fulfils those requirements in the light of New Zealand's claims.
5.26 In this regard, the Panel should firstly determ ine whether the Final IRA is so fundamentally
flawed or biased that under no circumstances can it be considered as being supported by science.
Secondly, the Panel should verify whether the Final IRA, for each pest, identifies some risk reduction
measures and evaluates their relative effectiveness in reducing the overall disease risk. This bearing
in mind that there is no obligation to assess all possible measures.
5.27 Having concluded on whether the Final IRA is a risk analysis within the meaning of
Article 5.1, the next step for the Panel would be to verify that the measures at issue are "based on" this
risk assessment.
5.28 The Panel should thus assess whether there is a reasonable or rational relationship between
the Final IRA and the measures at issue. Acco rdingly, it should examin e whether the Final IRA
sufficiently warrants or reasonably supports the measures at issue. In this exercise, a sufficient degree
of latitude should be given to Member's choices. In fact, the expression "based on" should not be
understood to mean that an SPS measure must absolutely conform to the standard.
(ii) Article 5.2 of the SPS Agreement
5.29 Notably, Article 5.2 lists ( non-exhaustively) some factors that a WTO member conducting a
risk assessment should take into account. However, this article does not provide for what weight,
importance and relevance these factors must be given. In the light of this, the European Communities
believes that the Panel cannot find a breach of this provision unless the member claiming the violation
proves that the risk assessment did not take into account at all those factors.
(iii) Articles 5.5 and 2.3 of the SPS Agreement
5.30 Preliminarily, it is appropriate to recall that the Appellate Body clarified the scope of this
provision in EC – Hormones , when it stated that: "[it] does not establish a legal obligation of
consistency of appropriate levels of protection… It is only arbitr ary or unjustifiable inconsistencies
that are to be avoided."
5.31 Further, in the same case the Appellate Body added that a complaint of violation of
Article 5.5 must show the presence of the following three distinct and cumulative elements. In the
first place, there must exist situations which can be objectively compared. The situations exhibiting
differing levels of protection must thus present some common element or elements sufficient to render
them comparable. In the second place, a certain difference in the treatment of those situations may
not be conclusive on the breach of Article 5.5. In fact, this difference of treatment must be so clear
and so significant to amount to "arbitrary or unju stifiable inconsistency". Finally, these differences
must produce discrimination or a disguised restricti on of international trade. In other words, the
application of the measures at issue must either re sult in a different, and wo rse, treatment of some
goods or constitute a hidden form of protectionism.
5.32 In past disputes, the WTO judicial bodies have often looked at "warning signals" and other
additional factors which would hint at arbitrary or un justifiable distinctions. In the light of the above,

the European Communities urges th is Panel to assess the warning signals and additional elements
indicated by New Zealand with an appropriate de gree of prudence. Only when several and clear
signals point in one and the same direction should a panel conclude that a different treatment results in
a discrimination or constitutes a disguised restriction of trade.
5.33 With regard to Article 2.3, in the light of New Zealand's claims, it seems to the European
Communities that whether the measures at issue are inconsistent with Article 2.3 depends only on the
Panel's findings on Article 5.5.
(iv) Article 5.6 of the SPS Agreement
5.34 Footnote 3 to Article 5 explains that a nationa l measure is not inconsistent with Article 5.6
unless there exists an alternative measure which m eets the following three cumulative conditions: is
reasonably available taking into account technical and economic feasibility; achieves the appropriate
level of sanitary or phytosanitary protection; and is significantly less restrictive of trade.
5.35 The fact that alternative measures must be "reasonably available" and "significantly less
restrictive" implies that an appropriate degree of deference must be given to Members' choices of SPS
measures. The case-law makes it clear that it is fo r the complaining Member to make a prima facie
case of violation of Article 5.6. Accordingly, this member has to suggest alternative measures which
meet the three-pronged test mentioned above. The application of this provision in past cases shows
that Article 5.6 places a high evidentiary burden upon complaining Members.
(v) Article 8 and Annex C(1)(a) of the SPS Agreement
5.36 The European Communities wishes to point out th at the obligation to undertake and complete
the procedures necessary to check and ensure th e fulfilment of SPS measures can be breached only
when the length of these procedures appears, in li ght of all the evidence, scientific and otherwise,
abnormal or excessive.
5.37 The complaining Member has therefore to prove that there have been significant delays
without any objective or rational explanation. In ot her words, it has to show that the process has been
delayed either intentionally in order to have trade re strictions in place for a longer time, or because of
evident and significant negligence on the part of the responsible authorities.
5.38 The European Communities agrees wi th the Parties that it is not possible to draw in abstract
terms from the provisions of Annex C(1)(a) a general obligation to decide within a shorter or longer
period of time. The European Communities considers that the Panel ought to be particularly cautious
in its application of these provisions since procedures to assess risks to human, animal and plant life
or health and possible counter-measures are notorio usly delicate, complex and time-consuming. In
particular, it is the SPS Agreement itself that, by imposing a certain number of steps and requirements
for, and demanding that a certain number of elem ents be taken into account in, a risk assessment,
necessarily implies longer time-periods where appropriate.
(c) Conclusions
5.39 Governments need to find an appropriate balance between trade and addressing their
legitimate SPS concerns, including adopting measur es which appear necessary for the protection of
human, animal or plant life or health. The Europ ean Communities believes that the provisions of the
SPS Agreement constitutes a set of well-balanced and wise rules that preserves the rights of WTO
Members to adopt the SPS measures they consid er necessary while preventing hidden forms of
protectionism.

5.40 The European Communities considers that these pr ovisions should equally be interpreted and
applied in a balanced manner. Indeed, an over-exten sive interpretation of the role of WTO judicial
bodies in SPS disputes would risk to impinge upon th e role of national authorities when determining
their ALOP. On this point, th e European Communities largely agr ees with the legal considerations
developed by Australia on the issue of the standard of review. Therefore, the European Communities
urges the Panel to be conscious of the scope a nd limits of the role attributed to it under the
Understanding on rules and proce dures governing the settlement of disputes (the DSU) and the
SPS Agreement.
2. Executive summary of the European Communities' oral statement
(a) Introduction
5.41 The European Communities makes its third part y oral statement because of its systemic
interest in the correct interpretation of the SPS Ag reement and, being a large producer, consumer and
trader of apples, because of its substantial trad e interest in the present matter. The European
Communities stresses how the importance of this dispute goes well beyond the impact it may have on
international trade in apples, since it raises various interpretative issues on several key provisions of
the SPS Agreement.
(b) Australia's request for a ruling on New Zealand's claim of undue delay
5.42 The European Communities has some doubts on th e correctness of Australia's arguments on
this point. New Zealand's panel request asserts that the 17 measures listed are " both individually and
as a whole inconsistent with the obligations of Aust ralia under the SPS Agreement". Challenging the
alleged undue delay of the "IRA process" appears therefore to be tantamount to contesting the undue
delay with respect to those 17 measures, at least as a whole. In addition, the fact that the 17 measures
are imposed and regulated by the Final IRA mean s that the alleged delay in undertaking and
completing its approval inevitably and automatica lly affected the 17 measures duly identified by
New Zealand in its panel request.
5.43 Turning to the substance of the matter, the European Communities believes that, the
necessary time is a function of the particular circ umstances, and as long as the necessary information
is not forthcoming, the passage of time may (or may not) be justified. The European Communities
can easily envisage circumstances in which it may take very many years to determine whether or not a
given product meets the importing Member's acceptable level of protection. The key point is that
whether or not the passage of time is justified can only be judged on the merits of the case – and not
on the basis of an assertion that at some random point in time the importing Member must adopt a
final decision.
(c) The role of amicus curiae briefs
5.44 The European Communities considers that the case-law developed so far by the WTO judicial
bodies is sound and properly balances the different in terests mentioned above. On the basis of this
jurisprudence, it seems to the European Communities that the present Panel has the authority to accept
the submitted brief, and should decide whether to do so on the basis of the potential pertinence and
usefulness of such a document, and the extent to whic h the substance of the brief is taken up by either
party in a timely manner.
5.45
 Having reviewed this particular amicus curiae brief, the European Communities doubts that it
could be of any real assistance to the Panel. However, should the Panel decide to accept this brief, the
European Communities believes that the facts and arguments set out therein should be taken into
account by the Panel to the extent that Parties or Third Parties decide to adopt the views expressed

therein in their own submissions and arguments to th e Panel, or are specifically given an opportunity
to comment.
(d) The use of experts in panel proceedings
5.46 In the event that the Panel would decide that there is a need to seek expert advice, the
European Communities believes that it is imperative th at their role be clearly determined. Experts'
opinions should be confined to assess the scientific evidence submitted by the Parties in order to
determine whether that evidence is sound or plausible. It is neither the panel's nor the experts' role to
engage in de novo review of the evidence or to conduct their own risk assessments. Similarly, if there
exist different scientific opinions, or if there are scien tific questions that are yet to be resolved, that is
a matter that a panel must take into consideration. It is therefore crucial that panels bear in mind the
proper role of experts when they formulate their questions to them.
(e) The Panel's standard of review under the SPS Agreement
5.47 The European Communities believes that Australia is quite right when it contends that "the
standard of review should be informed by the part icular covered agreement(s) and obligation(s) at
issue in a given dispute". The European Communiti es recalls what the Appellate Body held on this
point in EC – Hormones.
5.48 An objective assessment of the matter before a panel means that this Panel must first of all
determine what that matter actually is. And, what that mater is depends necessarily on the
provision(s) of the covered agreement(s) that the Panel must interpret and apply in the case at hand. It
is these provisions which determine the scope and limits of the Panel's role. Different provisions of
the covered agreements may grant the WTO judicial bodies with a more stringent or more lenient
power to review the contested national measure s. The European Communities believes that,
especially in disputes which concern the SPS Agreem ent such as the present one, it is absolutely
crucial for the Panel to have a clear stance on the standard of review which should be followed. A
wrong standard of review would lead to a failure to conduct an objective assessment of the matter in
breach of Article 11 of the DSU.
(f) Conclusions
5.49 The SPS Agreement , if properly interpreted and app lied, constitutes a well-balanced
framework that preserves the rights of WTO memb ers to adopt the SPS measures they consider
necessary while preventing hidden forms of protec tionism. The European Communities urges the
Panel to interpret and apply th e SPS Agreement with the same pr udence and cautiousness with which
the WTO Members drafted it.
C. J
APAN
1. Executive summary of Japan's written submission
(a) Introduction
5.50 As a Third Party to this dispute, Japan would like to address, from a systematic viewpoint to
ensure fair and objective application of the Agreement on the Application of Sanitary and
Phytosanitary Measures agreements (hereinafter " SPS Agreement"), whether Australia's measures for
the importation of New Zealand apples are inconsistent with its obligation under Articles 2.2, 5.1, 5.2,
and 5.5 of the SPS Agreement.

5.51 Many of the issues in this dispute relate to questions of facts on which Japan is not in a
position to comment. In fact, scientific knowledge has not been fully accumulated enough in Japan
with regard to the pests at issu e, especially European canker and apple leafcurling midge. Further,
there is no case that could be dir ect reference to this case in resp ect to the countries, phytosanitary
circumstances, risk assessment and other conditions . New Zealand heavily relies on the conclusions
in the Japan – Apples case to support its argument and even argues that "conclusion of the DSB was
directly applicable to the circumstances of New Zealand apples."
720 The Japan – Apples case may be
applicable to this case to some exte nt, but the case is not directly applicable to this case. Japan, thus,
limits its submission to issues of legal interpretation raised by some of the claims submitted by
New Zealand.
(b) Arguments
(i) Consistency of the measures with Article 2.2 of the SPS Agreement
5.52 New Zealand submits that Australia's measur es are inconsistent with the obligation in
Article 2.2 which creates an obligation for the Member to ensure that any SPS measures are not
maintained without sufficient evid ence. New Zealand further argues that there is no "rational or
objective relationship" between the measures imposed by Australia and scientific evidence.
5.53 The Appellate Body addressed "whether ther e is a rational relationship between an SPS
measure and the scientific evidence is to be de termined on a case-by-case basis and will depend upon
the particular circumstances of the case, including th e characteristics of the measure at issue and the
quality and quantity of the scientific evidence."
721
5.54 Japan agrees to Australia's understanding that "s ufficiency" is a concept to be evaluated on a
case-by-case basis, which requires specific scientif ic evidence on these pests. However, Japan
considers that not enough scientific knowledge has been accumulated in Japan with regard to the pests
at issue;722 therefore Japan would not comment on the question.
(ii) Consistency of the measures with Article 5.1 of the SPS Agreement
5.55 New Zealand concludes that "Australia's breach of Article 2.2 in this case indicates that it is
likely not to be in compliance with Article 5.1." 723 In this regard, Japan recalls that both panels and
the Appellate Body have made it clear that the b asic rights and obligations are provided in Article 2
whereas more specific and detailed rights a nd obligations are articulated in Article 5. 724 While it may
be reasonable to presume that breach of Article 5.1 suggests breach of Article 2.2, it does not follow,
as New Zealand argues, that breach of Article 2.2 indicates breach of Article 5.1. Although
Article 2.2 provides an important context in analyz ing the consistency of m easure under Article 5.1,
obligations under these two provisions are distinct.
5.56 Japan refrains from detailed argument as they la rgely depend on pertinent facts, but Japan
nevertheless raises two points: First, the qua ntitative method is one of the "well recognized"
725 means
of risk assessment, as New Zealand admits. Second, Jap an considers that even if the Panel finds that
the quantitative approach is not sufficient to evalua te "likelihood", it does not necessarily lead to the

720 New Zealand's first written submission, para. 2.4.
721 Appellate Body Report on Japan –Agricultural Products II, para.84.
722 See para. 5.51 above.
723 New Zealand's first written submission, para. 4.152.
724 Appellate Body Report on EC – Hormones , para. 250; Panel Report on Australia – Salmon ,
paras. 8.47-8.48.
725 New Zealand's first written submission, para. 4.162.

conclusion that the IRA fails to evaluate "likeliho od" and does not constitute a risk assessment within
the meaning of Article 5.1 and paragraph 4 of Annex A.
(iii) Consistency of the measures with Article 2.2 of the SPS Agreement
5.57 New Zealand submits that Australia's measures are inconsistent with its obligations under
Article 5.2. As Australia points out, Japan submits that New Zealand interprets the phrase "to take
into account" to mean "to give genuine consideration"726, although the latter phrase does not appear in
Article 5.2 or any of the related provisions.
5.58 Japan disagrees with the legal interpretation by New Zealand with regard to the phrase "taken
into account" in Article 5.2. Following the interpretations by the panel727, Japan is of the view that the
factors listed in Article 5.2 should be considered that a failure to respect each and every aspect of
these factors would not necessarily, per se, constitute a violation of Article 5.2.
5.59 Japan agrees with Australia in that New Zeal and's interpretation that the factors listed in
Article 5.2 must be "give[n] genuine consideration" may result in a situation, in this particular case,
where Australia and the IRA Team should have agr eed with New Zealand's own view regarding the
relevant technical factors.728
(iv) Consistency of the measures with Article 5.5 of the SPS Agreement
5.60 With regard to its inconsistency with the obl igation of Article 5.5 of the SPS Agreement,
New Zealand refers to the "measures" for Japanes e Nashi instead of its "level of protection".
New Zealand argues that "the substantial difference in the sanitary measures applied by Australia" is
"evidence of a clear difference in the level of protection applied".729
5.61 Japan considers that a complainan t must establish that the respondent applies distinctions in
the "levels" of protection in different situations, as the panel in Australia – Salmon stated that
"imposing the same sanitary measure for different situations does not necessarily result in the same
level of protection." 730 Japan is also of the view that to achieve a Member's appropriate "level of
protection" "measures" need to be determined by examining the "risks" with the importation of a
particular product. Additionally, the "risks" should be considered with the "situation."
5.62 The above factors are interrelated and necessary fo r the argument of the level of protection.
In this regard, Japan sees that New Zealand's argument is incomplete.
(c) Conclusion
5.63 Japan respectfully requests the Panel to examine carefully the facts presented by the Parties to
this dispute in light of Japan's arguments above to ensure fair and objective application of the
SPS Agreement.
2. Japan's oral statement
5.64 Japan appreciates this opportunity to present its view s in this dispute. At this meeting, Japan
will not repeat its arguments set out in its written submission. Rather, Japan would like to make a few

726 New Zealand's first written submission, para. 4.411.
727 Panel Report on Japan –Apples, para. 8.241.
728 Australia's first written submission, para. 879.
729 New Zealand's first written submission, paras. 4.439 and 4.443.
730 Panel Report on Australia – Salmon, para. 8.123.

observations on general points that Japan considers to be relevant for the Panel to take into account in
disposing the case at hand.
(a) Determination of the appropriate level of protection in the SPS Agreement as a "prerogative"
of a WTO Member
5.65 According to the definition set forth in para graph 5 of Annex A of the SPS Agreement, a
WTO Member has the sole authority to determine the appropriate level of sanitary or phytosanitary
protection it considers appropriate to protect human, an imal or plant life or health within its territory.
In the words of the Appellate Body, "the determina tion of the appropriate level of protection, a notion
defined in paragraph 5 of Annex A, as 'the level of protecti on deemed appropriate by the Member
establishing a sanitary … measure', is a prerogative of the Member concerned".
731 This is also
confirmed in the preamble of SPS Agreement whic h states that the use of harmonized sanitary and
phytosanitary measures is desired "without requiring Members to change their appropriate level of
protection …"
5.66 This Members' prerogative is not limitless; it is subject to certain constraints set forth in, for
instance, Article 5.4 and 5.5, which recognize the needs to minimize negativ e trade effects and to
avoid arbitrary or unjustifiable distinction in the leve ls of protection in different situations that would
results in discrimination or a disguised trade r estriction. This suggests that the SPS Agreement
recognizes a delicate balance between the negative effects on trade that the SPS measures may have
and the need to protect human life or health, or to an imal and plant life or health. In other words, in
Japan's view, the SPS Agreement embodies WTO Me mbers' recognition that a proper and delicate
balance be struck and thus maintained between the legitimate rights of member to determine the
appropriate level of protection against risks to human, animal and plant life and health, "that
determines the SPS measures"732, on the one hand, and the duty of th e same member to ensure that its
SPS measures be less trade restrictive, on the other hand.
5.67 Therefore, Japan would like to request the Pane l to pay due regard to such delicate balance
recognized in the SPS Agreement in examining the issues before it in this proceeding.
(b) Burden of proof
5.68 With regard to the allocation of burden of pr oof in proceedings under the SPS Agreement, the
Appellate Body agreed with the panel below in EC – Hormones that this issue is one "of particular
importance, in view of the nature of disputes under [the SPS] Agreement" because "[s]uch disputes
may raise multiple and complex issues of fact". The Appellate Body furt her approvingly described
the panel's ruling that "[t]he initial burden lies on the complaining party, which must establish a prima
facie case of inconsistency with a particular pr ovision of the SPS Agreement on the part of the
defending party, or more precisely, of its SPS measure or measures complained about."733
5.69 According to this allocation of the bur den of proof in the proceeding under the
SPS Agreement, Japan considers that in this case th e Panel should begin its analysis by examining
whether New Zealand has "presented evidence a nd legal arguments sufficient to demonstrate" 734 that
Australia's measures at issue are inconsistent with the provisions of the SPS Agreement cited in the
Panel request. In other words, the initial question before the Panel is whether New Zealand has made
out a prima facie case by satisfying its evidentially and legal burden of proof in respect of claims it
has advanced. "Only after such a prima facie dete rmination ha[s] been made by the Panel may the

731 Appellate Body Report on Australia – Salmon, para. 199.
732 Appellate Body Report on Australia – Salmon, para. 203.
733 Appellate Body Report on EC – Hormones, paras. 97-98.
734 Appellate Body Report on EC – Hormones, para. 109.

onus be shifted to" Australia "to bring forward ev idence and arguments to disprove the complaining
party's claim".735
5.70 Taking as an example New Zealand's claim that Australia's measures are inconsistent with
Article 5.6, Japan agrees with the European Comm unities that "it is for the complaining Member to
make a prima facie case of violation of Article 5.6". 736 Specifically, New Zealand must prove that
there is an alternative SPS measure which (1) is reasonable available for Australia, (2) achieves the
appropriate level of sanitary or phytosanitary prot ection of Australia, and (3) is significantly less
restrictive than the contested measure.
5.71 Japan would like to stress again that the allo cation of burden of proof is important in the
proceedings under the SPS Agreement.
D. CHINESE TAIPEI
1. Executive summary of Chinese Taipei's written submission
(a) Introduction
5.72 The Separate Customs Territory of Taiwan, Pe nghu, Kinmen and Matsu (hereinafter referred
to as "Chinese Taipei"), as a Third Party in this proceeding, makes this Third Party submission
because of its interest in the correct interpre tation and application of the Agreement on the
Application of Sanitary and Phytosanitary Measur es (the "SPS Agreement"). In addition, as an
importer of Australian and New Zealand apples, Chinese Taipei has a substantial trade interest in the
dispute before the Panel.
5.73 This submission will address the following issues:
(a) Application of the "necessity" test to Australia's contested measures; and
(b) whether Australia's appropriate levels of protection between New Zealand apples and
Japanese pears are comparable.
(b) Legal arguments
(i) Application of "necessity" test to Australia's SPS measures
Substantive requirements of the "necessity" test in the SPS Agreement
5.74 In examining whether a measure satisfies the "n ecessity" test, according to the structure of
Article 2.2 of the SPS Agreement, in Chinese Taipei 's view, three elements should be established:
(1) the measure at issue is a sanita ry or phytosanitary ("SPS") measure; (2) the objective is to protect
human, animal or plant life or health; and (3) impl ementation of the measure is necessary to achieve
the objective.
5.75 Chinese Taipei notes that in Australia – Salmon and Japan – Agricultural Products II , a
three-pronged test was established by the Appellate Body to determine "necessity" as defined in
Article 5.6 and Footnote 3 of the SPS Agreement, i.e., any given SPS measure must:
(a) Be available taking into account technical and economic feasibility;

735 Appellate Body Report on EC – Hormones, para. 109.
736 European Communities' Third Party submission, paras. 64-69.

(b) achieve the Member's appropriate level of SPS protection; and
(c) be significantly less trade restrictive than the SPS measure being contested.
The three elements are cumulative in the sense that all of them have to be met.

Australia's contested measures must satisfy the three-pronged test to establish their necessity

5.76 While there is no international standard, gui deline, or recommendation addressing the three
diseases in this dispute, Article 5.6 of the SPS Ag reement and the aforementioned three-pronged test
should serve as baselines in determining whether Australia's measures are "necessary" to protect
human, animal or plant life or health. Accordingl y, Chinese Taipei suggests that the Panel carefully
consider whether the alternative measures rai sed by New Zealand would satisfy Australia's SPS
requirements.
(ii) Whether Australia's appropriate levels of protection between New Zealand apples and
Japanese pears are comparable
Determination of Appropriate Level of Protection in the SPS Agreement
5.77 In EC – Hormones , the Appellate Body concluded that absolute or perfect consistency of
appropriate level of protection ("ALOP") is not a legal obligation, since Members revise their ALOPs
frequently on an ad hoc basis and over time, as different risks present themselves. This indicates that
Members, instead of a panel or the Appellate Body, have authority to determine their own ALOPs.
5.78 Whereas the Appellate Body in EC – Hormones focused on Members' authority, the
Appellate Body in Australia – Salmon determined rather that Members have implicit obligations to
comply with their own ALOPs.
5.79 Given these possibilities, Chinese Taipei believ es that WTO Members should be granted the
authority to determine their own ALOPs. At the sam e time, Members should not be free to act in this
respect without any constraint. Article 5.5 imposes restrictions on Members' authority in establishing
their ALOPs, in order to guard against arbitrary or unjustifiable discrimination or a disguised
restriction on international trade. Furthermore, this Article also ensures that SPS measures are not
established or maintained in a manner that is more trade-restrictive than necessary, taking into account
technical and economic feasibility.
Distinction between appropriate levels of protection can be made only in comparable

situations
5.80 In the present dispute, New Zealand claims th at Japanese pears, which may bring equivalent
or higher risks of Japanese Erwinia and brown rot, are subject to less trade-restrictive measures.
While Japanese Erwinia is similar to Erwinia amylovara (fire blight), and brown rot also has
similarities to European canker, Australia applie s different ALOPs to the import of its apples
compared to Japanese pears. As a result, Australia's contested measures constitute arbitrary or
unjustifiable discrimination or a disguised restriction on international trade.
5.81 In EC – Hormones, the Appellate Body stated that three elements should be met cumulatively
before claiming a violation of Article 5.5 of the SPS Agreement. They are:
(a) That a Member imposing a measure that results in a dispute with one or more other
Members has adopted its own levels of sanita ry protection against risks to human life
or health in several different situations;

(b) that the levels of protection exhibit arbitr ary or unjustifiable differences in their
treatment of different situations; and
(c) that the arbitrary or unjustifiable differences result in discrimination or a disguised
restriction of international trade.
5.82 For the first element the Appellate Body stated in the EC – Hormones that different situations
in which Members have exhibited varying levels of protection cannot be compared unless they
present some common element or elements sufficien t to render them comparable. Thus, mere
differences in levels of protection cannot be used as a basis for determining arbitrariness in the
measure in question. In examining the "comparab ility" of different situa tions, the Appellate Body
stated, in Australia – Salmon, that such common elements are pre sent where situations involve a risk
of entry, establishment or spread of the same or a similar disease, or where situations involve a risk of
the same or similar associated potential biological and economic consequences. In short, categorizing
risks or situations as similar requires a comparison of both the relevant likelihood and the
corresponding consequences caused by similar diseases.
5.83 Chinese Taipei agrees that with the objective of achieving consistency in the application of
the ALOP, Members should establish equivalent or similar ALOPs in situations that involve a risk of
entry, establishment or spread of the same or a similar disease, or that involve a risk of the same or
similar associated potential biological and economic c onsequences. On the other hand, diseases or
their associated biological and economic consequen ces at issue must be shown to be the same or
similar before any further analysis of potential viola tion of Article 5.5 of the SPS Agreement. If the
different situations involving apples from New Zeal and and Japanese pears are not comparable, it is
inappropriate to use the differences between the ALOPs set up by Australia for New Zealand apples
and for Japanese pears as a means of establishing arbitrary or unjustifiable discrimination or a
disguised restriction on international trade.
5.84 Accordingly, in Chinese Taipei's view, comp arability should be the prerequisite for
examining any possible breach of Article 5.5, and it would be of systemic benefit to establish criteria
for determining disease comparability.
(c) Conclusion
5.85 Whether Australia's measures violate Article 2.2 and 5.6 of the SPS Agreement depends on
whether the contested measures are applied to the ex tent necessary to protect human, animal or plant
life or health. That is, if an alternative measure able to achieve Australia's ALOP does exist and is
both less trade-restrictive and technically and economically feasible, then the legitimacy of Australia's
contested measures will be undermined.
5.86 As to whether the ALOPs established by Australia between New Zealand apples and Japanese
pears results in arbitrary or unjustifiable discrimin ation or a disguised restriction on international
trade, the first step is to determine whether the situations are identical or similar enough to be
comparable. It is Chinese Taipei's viewpoint that there would be systemic benefit in establishing
criteria to determine similarities in this dispute.
5.87 Chinese Taipei notes that both Parties to the dispute referred to Chinese Taipei with respect to
the existence of the pest at issue and its rele vant SPS regulatory regimes. Chinese Taipei has
provided some factual information in the Supplemen tary Information attached to its Submission for
the Panel's reference.
5.88 Chinese Taipei respectfully requests the Panel to take into account the above observations and
comments in its deliberations, and hope the Panel will find the views helpful.

2. Chinese Taipei's oral statement
5.89 At the Panel's meeting with Third Parties, Ch inese Taipei reiterated the arguments contained
in its written submission.
E. U
NITED STATES
1. Executive summary of the United States' written submission
(a) Introduction
5.90 The United States welcomes the opportunity to pr ovide the Panel with its views in this
dispute, in which New Zealand challenges Australia 's imposition of phytosanitary measures for the
importation of its apples under the Agreement on th e Application of Sanitary and Phytosanitary
Measures ("SPS Agreement"). As the Panel is awar e, the United States was the complaining party in
Japan – Apples, a dispute that dealt with fire blight rest rictions imposed by Japan for the importation
of US apples. In light of that experience, the United States considers it appropriate to offer its views
on the scientific evidence and the merits of some of New Zealand's claims, particularly in relation to
fire blight. The United States, as a major agricultu ral exporter and importer, has a strong interest in
the proper interpretation and application of the SPS Agreement.
(b) The Panel should make an objective assessment of the matter before it pursuant to Article 11
of the DSU
5.91 In the view of the United States, Australia h as failed to correctly set forth the applicable
standard of review in this dispute. Australia ma intains that the Panel should provide it "considerable
deference" in assessing the scientific basis of san itary and phytosanitary ("SPS") measures evaluated
in its risk assessment. But such an interpretation does not comport with Article 11 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), which
requires a panel to make "an objective assessment of the facts".
5.92 The United States considers that a panel's oblig ation to make "an objective assessment of the
facts" pursuant to Article 11 of the DSU is also important to understanding the relevance of reports by
prior panels and the Appellate Body. The United Stat es is of the view that adopted reports by prior
panels and the Appellate Body should be considered for their persuasiveness, but they are not binding
on subsequent panels and need not be followed.
(c) Article 2.2 of the SPS Agreement requires sufficient scientific evidence
5.93 The obligation in Article 2.2 not to maintain an SPS measure "without sufficient scientific
evidence" requires that there be a rational or ob jective relationship between the SPS measure and the
scientific evidence.
5.94 As was also the case during Japan – Apples , there is still no scientifi c evidence that mature,
symptomless apples transmit fire blight disease. The scientific evidence further demonstrates that
apples are not a pathway for the disease. And Australia has provided no scientific evidence
establishing either that mature, symptomless apples transmit fire blight disease or that they are a
pathway for disease. Accordingly, the United States considers that the measures for fire blight that
Australia imposes on apples from New Zealand are ma intained without sufficient scientific evidence,
in violation of Article 2.2 of the SPS Agreement.
5.95 The vast scientific literature on fire blight est ablishes that mature, symptomless apples have
never transmitted fire blight, nor do they play a role in the transmission of the disease. Two important

studies conducted a critical review of all published data on the presence of Erwinia amylovora (fire
blight bacteria) on or in mature, export-quality ap ples and estimated the theoretical probability of
transmission of the disease via those fruit. The first study, published by Roberts et al. in 1998,
estimated the risk of establishing new outbreaks of fire blight in previously blight-free areas, and
found this risk to be so small as to be insigni ficant. The second study, published by Roberts and
Sawyer in 2008, updates the Roberts et al. 1998 study and estimates that the probability of an
outbreak of fire blight due to trade in export-qualit y apple fruit was dramatically lower than originally
projected in the 1998 study. Australia attempts to discredit this comprehensive and significant 2008
study because it contradicts the findings of Australia' s risk assessment. But Australia's contentions
lack merit.
5.96 Three key factors are necessary for the infecti on of apple fruit with European canker:
(1) conducive climatic conditions; (2) the presen ce of a susceptible host; and (3) a sufficient
concentration of inoculum. Fav ourable occurrence of all three of these factors is necessary for
infection of apple fruit to occur. In light of these three factors, and the US knowledge of the disease,
the United States does not consider that Australia has adduced sufficient scientific evidence to
establish that apples will be latently infected w ith European canker and can transfer the disease to
susceptible hosts.
5.97 In Australia's discussion of apple leafcurling midge (ALCM), it notes that the United States
has a regulatory programme in place for the export of apples from New Zealand to the United States.
The United States makes one point of clarificati on regarding this regulatory programme. The
US inspection levels used for apples from New Ze aland are not targeted to ALCM, but a different
pest – light brown apple moth.
(d) Article 5.1 requires that SPS measures be based on a risk assessment
5.98 Article 5.1 of the SPS Agreement provides that "Members shall ensure that their sanitary or
phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks
to human, animal, or plant life or health, taking in to account risk assessment techniques developed by
the relevant international organizations". The Unit ed States has concerns with Australia's "Final
Import Risk Analysis for Apples from New Zealand" ("IRA") relating to both Australia's general
methodology and its evaluation of the scientific evidence, particularly with respect to fire blight and
European canker. Australia has not been consis tent regarding its methodological approach with
respect to its use of a semi-quantitative model – both within the IRA and in other risk assessments that
it has conducted for other products. The United Stat es has previously explained its concerns to
Australia in comments that it submitted on a draft IRA published by Australia.
5.99 Australia's use of a semi-quantitative model for fire blight and European canker contributed to
a flawed risk assessment. For fire blight, this is evidenced by the various values that Australia assigns
to different steps in its analysis. In several inst ances, Australia extrapolates values for risk levels in
the absence of, or contrary to, the scientific evid ence. For European canker, among other concerns,
the United States considers that the transfer scenar io of the disease set forth in the IRA from mature,
export quality apples is highly unlikely. And for both fire blight and European canker, Australia has
not evaluated the likelihood of entry, establishmen t, and spread of the diseases according to the SPS
measures that might be applied.
(e) Arbitrary or unjustifiable distinctions in the level of protection under Article 5.5
5.100 In understanding Article 5.5, the United States considers it important to recognize that the
SPS Agreement allows each Member to establish it s own appropriate level of protection and that
Article 5.5 does not prohibit a Member from having different appropriate le vels of protection in
different situations.

(f) Article 5.6 requires that SPS measures not be more trade restrictive than necessary to meet a
Member's appropriate level of protection
5.101 The United States considers that there is an a lternative measure for fire blight that is
reasonably available, achieves Australia's appropria te level of protection, and is significantly less
restrictive to trade than Australia's fire bli ght measures: restricting importation to mature,
symptomless apple fruit. This measure follows fro m the scientific evidence that mature, symptomless
apple fruit are not a pathway for the disease and thus will not result in transmission of fire blight to
Australia. In the absence of an y evidence that mature, symptomless apples transmit the disease, the
United States submits that Australia has imposed fire blight measures that are more trade-restrictive
than required to achieve its appropriate level of protection.
(g) Undue delay under Article 8 and Annex C
5.102 Article 8 of the SPS Agreement provides that "Members shall observe the provisions of
Annex C in the operation of control, inspection, and approval procedures", and paragraph 1(a) of
Annex C states that "Members shall ensure, with r espect to any procedure to check and ensure the
fulfilment of sanitary or phytosanitary measures, that: (a) such procedures are undertaken and
completed without undue delay." The United Stat es shares New Zealand's concerns about undue
delay by Australia regarding its import risk assessments for foreign apples. As Australia has done
with apples from New Zealand, it continues to bl ock access to its market for US apples due to
longstanding quarantine restrictions. The United St ates suffered a long delay in the commencement
of a risk assessment for US apples, which was further compounded by the lengthy delays in
Australia's IRA for apples from New Zealand.
2. Executive summary of the United States' oral statement
5.103 The United States would like to provide a short summary of some of the key issues addressed
in our Third-Party written submission and make a few brief points on the following topics raised in
other third-party submissions: (1) the standard of re view for a claim relating to whether there is a risk
assessment within the meaning of Article 5.1 of the Agreement on the Application of Sanitary and
Phytosanitary Measures ("SPS Agreement"); (2) the proper interpretation of Article 5.2; (3) the
"necessity" of a measure under Articles 2.2 and 5. 6; and (4) undue dela y under Article 8 and
Annex C.
(a) Key issues in the US written submission
5.104 The US third party submission focused on New Zealand's claims under Articles 2.2 and 5.1 of
the SPS Agreement. The United States agrees with Ne w Zealand that Australia's fire blight measures
are inconsistent with Article 2.2 because there is no scientific evidence that mature, symptomless
apples transmit fire blight disease. Mature, sympto mless apples are not a pathway for fire blight
disease. As for European canker, the United States similarly concurs with New Zealand that Australia
has not adduced sufficient scientific evidence to establish that apples will be latently infected with the
disease and can then transfer it to susceptible hos ts in Australia. In terms of New Zealand's
Article 5.1 claims, the United States also has con cerns regarding Australia's risk assessment, relating
both to its general methodology and its evaluation of the scientific ev idence. Australia's use of a
semi-quantitative model for its risk assessment for fire blight and Eu ropean canker contributed to a
flawed risk assessment. For fire blight, Australia's risk assessment often extrapolates values for risk
levels in the absence of, or contrary to, scientific evidence.
737 For European canker, the transfer

737 United States' Third Party submission, paras. 63-72.

scenario for the disease set forth in Australia's ri sk assessment for mature, export-quality apples is
highly unlikely.738
(b) Standard of review for a risk assessment under Article 5.1
5.105 The European Communities ("EC") argue in thei r written submission that the proper role of
the Panel in reviewing Australia's risk assessment is to determine whether the risk assessment is "so
fundamentally flawed or biased that under no circ umstances can it be considered as being supported
by science." 739 By taking this position, the EC, like Australia, advocates an extremely deferential
standard of review for risk assessments conducted purs uant to Article 5.1. But as explained in the US
written submission in response to a similar argument by Australia, this deferent ial standard of review
is not correct.740
5.106 Article 11 of the Understanding on Rules a nd Procedures Governing the Settlement of
Disputes ("DSU") provides the applicable standard of review for panels in disputes under WTO
covered agreements, including the SPS Agreement. Article 11 requires a panel to "make an objective
assessment of the facts of the case and the applicability of and co nformity with the relevant covered
agreements." Thus, the proper role of the Panel in this dispute is to make an objective assessment of
whether Australia's measures are "based on" a risk assessment, including whether the scientific
evidence presented in Australia's risk assessment supports the conclusions of that risk assessment.
(c) The proper interpretation of Article 5.2
5.107 Article 5.2 requires that a risk assessment must "take into account" certa in factors, such as
available scientific evidence and relevant processes and production methods. Australia argues that
New Zealand incorrectly interprets the phrase "t ake into account" as meaning to "give genuine
consideration" to the factors enumerated in Article 5.2, and Japan concurs. 741 The EC submits that
Article 5.2 is not breached unless the complaining pa rty "proves that the risk assessment did not take
into account at all those factors" 742 (italics added). But the phrase "to take into account" is not
qualified in the manner stated by the EC.
5.108 Further, both Australia and New Zealand ha ve cited the panel report in the dispute US –
Continued Suspension for that panel's interpretation of Article 5.2 and the phrase "take into account".
There, the panel explained that "taking available scientific evidence into account does not require that
a Member conform its actions to a particular conclu sion in a particular scientific study". The panel
further stated that "the requirement in Article 5.2 is to ensure that a Member, when assessing risk with
the aim of formulating an appropriate SPS measure, has as wide a range as possible of scientific
information before it to ensure that its measure s will be based on sufficient scientific data and
supported by scientific principles".
743
5.109 The United States agrees with both Parties th at the Panel should consider the panel's
interpretation in US – Continued Suspension in formulating its views on Article 5.2 and whether
Australia has properly taken into account the factors listed in Article 5.2. The United States also notes
that the aforementioned dispute is currently on appe al, and the Appellate Body is scheduled to issue
its report on October 16, 2008. Thus, the Panel w ill have the benefit of any articulation by the
Appellate Body of its understanding of Article 5.2 prior to resolving this dispute.

738 United States' Third Party submission, para. 76.
739 European Communities' Third Party submission, para. 30.
740 United States' Third Party submission, paras. 3-8.
741 Japan's Third Party submission, paras. 17-21.
742 European Communities' Third Party submission, para. 51.
743 Panel Report on US – Continued Suspension, para. 7.480.

(d) The "necessity" of a measure under Articles 2.2 and 5.6
5.110 The United States now turns to an issue raised by the Separate Customs Territory of Taiwan,
Penghu, Kinmen, and Matsu ("Chinese Taipei") rega rding whether an SPS measu re is "necessary" to
protect human, animal, or plant life or health under Article 2.2 and the relationship between
Articles 2.2 and 5.6. Chinese Taipei submits that in the absence of international standards, guidelines,
or recommendations, Article 5.6 should be used to determine whether a SPS measure is necessary, as
required by Article 2.2.
744 The United States believes that in th is dispute, the Panel need not make
findings on the precise relationship between Articles 2.2 and 5.6.
5.111 Rather, because New Zealand has made specifi c claims under Article 5.6, the Panel can
simply address those claims. This is particularly true because New Zealand's Article 2.2 claims
primarily relate to whether Australia's measures ar e maintained without suffi cient scientific evidence
and not whether they are necessary for the protection of human, animal, or plant life or health.
New Zealand's arguments regarding the necessity of Au stralia's measures are made with respect to its
claims under Article 5.1 and 5.6.
745
(e) Undue delay under Article 8 and Annex C
5.112 The United States also would like to address an issue of undue delay under Article 8 and
Annex C raised by the European Communities. The European Communities states that it is not
possible to draw from Annex C, paragraph 1(a), a general time frame for deciding on procedures to
check and ensure the fulfilment of SPS measures. The European Communities then asserts that the
justified time period could be quite lengthy, extending "to many years or even decades" depending on
the "exporter's anticipated profits". 746 But an "exporter's anticipated profits" should have no bearing
on whether procedures to check and ensure th e fulfilment of SPS measures are undertaken and
completed without undue delay. Such profits anticipated by exporters in no way affect a Member's
ability to proceed with its procedures " as promptly as possible," as the panel in EC – Approval and
Marketing of Biotech Products considered necessary.747
(f) Conclusion
5.113 Finally, in Australia's oral statement, it allege d that there were "serious flaws" in the United
States' Third-Party submission and stated that it would address these flaws in subsequent stages of the
dispute. Of course, the United States would not have an opportunity to comment or correct any errors
in its submission in subsequent stages. The Un ited States would like to suggest an alternative
approach: Australia could pose questions to the Unit ed States on those "serious flaws" in the United
States' submission so that the United States could provi de clarifications or corrections. This could be
of assistance to both of the Parties and to the Pane l in its efforts to produce a high-quality panel report
as set out in Article 12.2 of the DSU.
VI. INTERIM REVIEW
6.1 The Panel issued its interim report to the Pa rties on 31 March 2010. On 15 April, in
accordance with Article 15 of th e Dispute Settlement Understanding (DSU) and paragraph 14 of the
Panel's Working Procedures, New Zealand and Au stralia submitted written comments and requested
the Panel to revise precise aspects of the interim report. On 22 April, New Zealand and Australia

744 Chinese Taipei's Third Party submission, para. 17.
745 New Zealand's first written submission, para. 4.6.
746 European Communities' Third Party submission, para. 75.
747 EC – Approval and Marketing of Biotech Products, para. 7.1498.

submitted written comments on each other's comments a nd requests for interim review. Neither Party
requested an interim review meeting with the Panel.
6.2 Where appropriate, the Panel has modified certain aspects of its interim report, in the light of
the Parties' comments and requests, as explained be low. The Panel has also made certain revisions
and corrections for the purposes of clarity and accuracy. Section VI of this report summarizes these
changes. References to paragraph numbers and footnote numbers used in Section VI of the report are
to those in the interim report, except as otherwise noted.
A. INTERIM REVIEW CHANGES TO DESCRIPTIVE PART
1. Description of Panel proceedings
6.3 Australia requests that paragraphs 1.35 and 1.36 of the interim report be modified to include a
reference to "the delays in providing draft questions to the Parties for comment or the time given to
comment them".748 Paragraphs 1.41 to 1.43 of the interim report described the delays in the timetable
as a result of the Panel's difficulties in identifying available experts and prep aring written questions.
New language has been added into paragraph 1.43 to note the Panel's additional delay in providing the
proposed questions for the experts to the Parties. The Panel notes that Parties were always kept
informed of the delays and consulted about all modi fications to the timetable. At no time in the
proceedings did either of the Parties express con cerns regarding the delay in receiving the proposed
questions or the time given to comment on them. In particular, no such concern was expressed when,
on 11 November 2008, the Panel consulted the Parti es on the need to revise the timetable, nor when
the proposed questions were sent to Parties on 15 December 2008, nor, finally, when Parties
submitted their comments on the proposed questions on 19 December 2008.
6.4 Australia also requests that paragraph 1.40 of the interim report be modified to note that, in its
letter of 19 December 2008, Australia had "raised c oncerns regarding aspects of the draft guidelines
for the experts and a range of the draft questions to them".749 The fact that both Parties commented on
19 December 2008 on the proposed questions for the e xperts is already noted in paragraph 1.36 of the
report. Additional language has been added to para graph 1.40 to note that some of the procedural
concerns regarding the expert consultation pro cess were raised by Australia on 19 December 2008,
when providing its comments on the Panel's proposed questions to the experts, although at the time
those concerns were not qualified by Australia as "due process concerns".
2. Pests at issue
6.5 Australia requests an amendment to paragra ph 2.12, "to ensure that the pathology of
European canker is accurately represented in the Panel report".750 New Zealand rejects the request. In
New Zealand's view, the Panel's statement "is a gene ral one that holds true for any host plant tissue
susceptible to N. galligena (including fruit)".751 To address Australia's request, the Panel has inserted

748 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 3.
749 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 4.
750 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 7.
751 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 6.

additional language in paragraph 2.12, using te xt from Swinburne (1975)
752, the relevant reference in
the IRA.753
6.6 Australia requests that the Panel provide details of the potential consequences of the entry,
establishment and spread of the pests at issue in paragraphs 2.1 to 2.25. 754 New Zealand rejects the
request. In New Zealand's view, the consequences fo r the relevant pests are a contested issue and it
would not be appropriate to include this aspect in the factual section of the report. 755 A description of
the relevant sections in the IRA's discussion regarding the potential biological and economic
consequences associated with the entry, establishment and spread of the pests at issue is already
included in the relevant sections of the report. 756 Accordingly, the Panel sees no reason to modify
paragraphs 2.1 to 2.25 in this respect.
3. Previous risk assessment
6.7 Australia requests an amendment to paragraph 2.31, to better reflect the chronology of the
adoption of the IRA. 757 New Zealand rejects the request. In New Zealand's view, the chronology is
accurate.758 The Panel has amended paragr aphs 2.30 and 2.31 to better reflect that an earlier risk
assessment had been initiated by the Australian Qu arantine and Inspection Service (AQIS) in 1996
and released in 1998.
B. INTERIM REVIEW CHANGES TO THE FINDINGS SECTION
1. Experts' selection and consultation process
6.8 Australia requests an amendment to paragraph 7.3, to include its concern regarding "the
Panel's use of the experts in areas that were outsi de the field of expertise for which they were
appointed and on which the parties were consulted" . This concern would have been flagged by
Australia in its comments on the experts' replies to questions and would have been different from the
separate concern regarding "the experts' alleged lack of competence in certain areas in which the
Panel posed questions or the experts expressed opinions".
759 New Zealand requests that, if the
category of concerns identified by Australia is noted, in accordance with th e reference provided by
Australia it should omit the expression "on which the parties were consulted", which is not present in
Australia's submission. 760 The Panel has amended paragra ph 7.3 in the manner requested by
Australia, also taking into account New Zealand's suggestion.

752 Swinburne, "European Canker of Apple (Nectria galligena)" (1975), in Exhibit NZ-9.
753 Australia's IRA, Part C, p. 102.
754 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 8.
755 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 7.
756 For example, paras. 7.455-7.459, 7.757-7.761 and 7.873-7.874 of the interim report.
757 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 9-11.
758 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 8.
759 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 12.
760 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 9.

6.9 Australia requests that paragraphs 7.11 and 7.21 be amended to note Australia's reason for
seeking two experts for each of the three pests at issue. 761 The Panel has amended paragraph 7.11,
which notes Australia's expressed concerns, in the manne r requested by Australia. The Panel has also
made related changes in paragraphs 7.20 and 7.21.
6.10 Australia requests the Panel remove from paragraph 7.15 the reference to Australia expressing
the hope that further delays in the proceedings could be avoided. In Australia's view, the statement it
had made on 20 November 2008 "was intended to be he lpful to the Panel" and was not "any implied
complaint about delays that had occurred to date". 762 New Zealand rejects the request. In
New Zealand's view, the reference to Australia's statement is accurate. 763 The sentence has been
removed from paragraph 7.15, as requested by Australia.
6.11 Australia requests that in paragraphs 7.16, 7. 27 and 7.28 of the report the word "alleged" be
removed when referring to the "alleged connection" argued by Australia between one of the experts
and New Zealand. In Australia's view, the word "alleged" suggests that Australia did not support its
contention.764 New Zealand rejects the request. In Ne w Zealand's view, the word has been used
appropriately in these paragraphs. 765 The Panel notes that the use of the word "alleged" in the report
implies only that this issue refers to an allegation that was raised by Australia. Moreover, the Panel
ultimately found no evidence of such connection. Acco rdingly, the Panel sees no reason to remove or
replace the word "alleged".
6.12 Australia requests that the Panel remove the expression "[i]n the absence of any explanation
or evidence from Australia in this regard" from the last sentence in paragraph 7.34. Australia argues
that, while it "does not contest that the Panel may properly arrive at the view that [the] connection
[between one of the experts and New Zealand researchers] does not 'raise doubts regarding his
independence and impartiality or his capacity to prov ide expert advice' to the Panel", the Panel should
acknowledge that Australia did not simply assert a connection where none existed. 766 The Panel notes
that the expression objected to by Australia is tied to the preceding sentence and refers to the fact that
no explanation or evidence was provided by Australia about how "Dr Cross's participation in a joint
research project and publication with researchers fr om HortResearch New Zealand would call into
question Dr Cross's independence and impartiality, or create actual or potential, direct or indirect,
conflicts of interest". Accordingly, the Panel s ees no reason to remove the expression from paragraph
7.34. The Panel has, however, made small chang es in the language of the last sentence of the
paragraph.
6.13 Australia requests that in paragraph 7.35 the Pa nel change the phrase "Australia objected to
two questions being posed to Dr Cross on the flight range of ALCM, arguing that this created a
potential conflict of interest ", to "Australia objected to two ques tions being posed to Dr Cross on the

761 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 13-14.
762 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 15.
763 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 10.
764 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 16.
765 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 11.
766 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 18.

flight range of ALCM, arguing that this may create a potential conflict of interest", to more accurately
reflect Australia's original statement.
767 The Panel has made the change requested by Australia.
6.14 Australia requests that the Panel include in pa ragraphs 7.37 and 7.38 a mention to Australia's
concern, expressed on 19 December 2008, that expe rts should not have been permitted to choose the
questions that they responded to, but rather the Panel should have allocated the questions to the
experts, based on the experts' relevant areas of expertise.768 The Panel has made the change requested
in 7.37. Having noted Australia's concern in paragraph 7.37, the Panel sees no need to note it again in
paragraph 7.38.
6.15 Australia requests that in paragraph 7.39 of th e report the word "allegedly" be removed when
referring to the Panel allegedly having posed written questions to the experts that either did not appear
in the draft questions originally provided to the Pa rties or were substantially modified from the draft
list of questions. In Australia's view, the word "alle gedly" suggests that Australia did not substantiate
its point.769 The Panel notes that the use of the word "a llegedly" in this report implies only that this
issue refers to an allegation that was raised by Australia. Accordingly, the Panel sees no reason to
remove or replace the word "allegedly". In any event, and in the light of Australia's request, the Panel
has removed the quotation marks from the word "new" in subheading (b) in page 179.
6.16 Australia requests that the report be amended to note that, contrary to what paragraph 7.43
would appear to suggest, in its responses to the Pa nel's questions after the second substantive meeting
Australia did not refer only to new questions, but also to modified or amended questions.770 The Panel
has made the change requested in paragraph 7.43. The Panel has also made related changes in
paragraphs 7.46, 7.59 to 7.63 and 7.66. For the same reason, a new paragraph has been inserted after
paragraph 7.50.
6.17 Australia requests that the third sentence be deleted from paragraph 7.61, because this
sentence "is not referenced by a footnote or otherwise supported".771 New Zealand rejects the request.
In New Zealand's view, the sentence objected to "accurately reflects the thrust of Australia's
comments" in relation to Panel question 37 to the experts. 772 The Panel has added a footnote
reference to the sentence in question.
2. Whether the measures identified by New Zealand are challengeable under the SPS
Agreement
6.18 Australia requests that paragraph 7.104 be amended to reflect more accurately Australia's
submissions on whether a particular measure fa lls within the definition of an "SPS measure". 773 New
Zealand rejects the request. In New Zealand's view, Australia is trying to recharacterize its arguments

767 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
768 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 20.
769 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 22.
770 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 24-26.
771 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 27.
772 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 12.
773 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 28-29.

in relation to a distinction between principal and ancillary measures. 774 Having considered the
language used by Australia in its second written s ubmission, the Panel has amended paragraph 7.104
in the manner requested by Australia.
6.19 Australia also requests that paragraph 7.105 be amended to reflect more accurately Australia's
submissions on the relevance of the reasoning of the US – Export Restraints panel for the definition of
an "SPS measure". Australia requests that the third sentence in that paragraph be deleted and replaced
with excerpts from Australia's responses to the Panel's questions. 775 New Zealand rejects the request.
In New Zealand's view, the sentence objected to has accurately reflected Australia's argument. 776
Having considered Australia's written submissions and its responses to the Panel's questions, the Panel
has added the text proposed by Australia to pa ragraph 7.105, but it has not deleted the disputed
sentence. In a related request, Australia asks the Panel to amend paragraphs 7.175 to 7.179, which
deal with the distinction between principal and ancillary measures. 777 The Panel has accordingly
incorporated a new paragraph after paragraph 7.174 and has made changes to paragraph 7.175.
6.20 Australia requests that paragraph 7.106 be ame nded for the sake of completeness, to reflect
more accurately Australia's submissions on why its arguments would not raise systemic concerns. 778
Having considered Australia's second written submissi on, the Panel has added the text proposed by
Australia to paragraph 7.106.
6.21 Australia requests that paragraph 7.121, in the section containing the Panel's analysis on
whether the measures identified by New Zealand are challengeable under the SPS Agreement, be
amended to clarify the meaning of the first sentence. Australia also requests that the last sentence of
the paragraph be revised, in order to accurately reflect how Australia would respond to a lack of
compliance with any of the measures at issue. 779 The Panel has amended the first sentence of
paragraph 7.121 as requested by Australia. Also, ha ving considered Australia's written submissions
and its responses to the Panel's questions, as well as the description of the measures in other parts of
the report, the Panel has amended the last sentence of paragraph 7.121.
6.22 Australia requests that the Panel's findings "in r espect to whether particular measures at issue
in this dispute are 'SPS measures'", contained in pa ragraphs 7.122 to 7.171, be revised, so that those
findings are confined to groups of related measures rather than to individual measures. Australia
submits that findings on individual measures w ould be unnecessary for resolving this dispute.
Australia suggests that other sections of the repor t would also need to be adjusted accordingly. 780
New Zealand rejects the request. In New Zeal and's view, Australia's request is "based on a
fundamental misreading of the interim report". 781 The Panel considers Australia's request is
inconsistent with the approach followed in the Pa nel's report. Indeed, the Panel has examined the

774 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 13.
775 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 30-33.
776 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 14.
777 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 64-69.
778 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 34-35.
779 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 36-40.
780 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 41-51.
781 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 15-18.

measures both collectively, and individually. The Pa nel has also reserved its right to analyse various
related measures jointly, under specific provisions of the SPS Agreement. Accordingly, the Panel
sees no reason to modify paragraphs 7.122 to 7.171 in this respect.
6.23 Australia argues that there are "a number of erro rs" in subparagraphs (b), (e), (g) and (k) of
paragraph 7.140, in the section containing the Pane l's analysis on whether the measures identified by
New Zealand are challengeable under the SPS Agreem ent. Australia requests that the whole of
paragraph 7.140 be deleted. Alte rnatively, Australia requests that "appropriate changes be made" in
the paragraph to reflect its objections.
782 New Zealand rejects the request. In New Zealand's view,
Australia has failed to identify errors that would warrant deleting the whole of paragraph 7.140. At
the same time, New Zealand submits that Australia's objection to subparagraph (b) could be addressed
by amending the first sentence of that subparagraph. 783 The Panel sees no reason to delete the whole
paragraph 7.140. Having considered the description of the measures in Australia's IRA, however, the
Panel has amended subparagraphs (b), (g) and (k).
6.24 Australia requests that the first sentence in pa ragraph 7.157 be delete d, and a consequential
change be made in paragraph 7.1 58, to clarify that neither the IRA nor the IRA process are measures
at issue in the dispute. 784 Australia also requests that a word be replaced in paragraph 7.158. 785 The
Panel sees no reason to amend paragr aphs 7.157 and 7.158. The report does not define the IRA nor
the IRA process as measures at issue in the dispute. The report notes, however, that the measures at
issue are spelt out in the IRA. Also, replacing the word as suggested by Australia would change the
meaning of the sentence in question.
6.25 Australia requests that the Panel revise its analysis of the issues discussed in paragraphs 7.175
to 7.179. Australia submits that these paragraphs imply that Australia relied mainly, or exclusively,
on the reasoning of the panel in US – Export Restraints . In Australia's view, it is not appropriate for
the Panel to treat Australia's points relating to US – Export Restraints in isolation from Australia's
principal submission in respect of "SPS measures" set out Annex A(1). 786 New Zealand rejects the
request. In New Zealand's view, Australia appears to seek to downplay its reliance on US – Export
Restraints, which was central to Australia's distinction between principal and ancillary measures. In
New Zealand's view, Australia's request contradict s the statements made during the proceedings.
New Zealand adds that, in the light of Australia's reliance on US – Export Restraints , the Panel's
statements in paragraph 7.179 are important and should be retained.787 Having considered the text of
the IRA, Australia's submissions and responses to the Panel's questions, as well as New Zealand's
interim review comments, the Panel has inserted a new paragraph after paragraph 7.174 and has made
small amendments to paragraph 7.175.
6.26 Australia requests that paragraph 7.180, in the section containing the Panel's analysis
regarding the alleged distinction between principal and ancillary measures, be amended to note that
"most of the experts ... supported the notion that certain of the measures at issue could be
distinguished on the basis of their purpose in respect of risk reduction, even if they disagreed on

782 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 52-59.
783 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 19.
784 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 60-61.
785 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 62-63.
786 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 64-69.
787 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 20.

which measures would fall into which category." 788 New Zealand rejects the request. In
New Zealand's view, the last sentence of the paragr aph "correctly characterizes the experts' views". 789
The Panel sees no reason to amend pa ragraph 7.180. The Panel has, however, added references in a
footnote to paragraph 7.180, as requested by Australia and New Zealand.790
6.27 Australia requests that the Panel reconsider its analysis of the issues discussed in paragraphs
7.182 and 7.183. In Australia's view, "the Pane l appears to have mis understood the nature of
Australia's submissions on the suggested grouping of relevant measures". 791 Having considered the
text of the IRA, and Australia's submissions a nd responses to the Panel's questions, the Panel has
made changes in paragraphs 7.183 and 7.184 to address Australia's request.
3. New Zealand's claims under Articles 2.2, 5.1 and 5.2 of the SPS Agreement
(a) Order of analysis
6.28 New Zealand requests that paragraph 7.191, in the section that summarizes its arguments, be
amended. New Zealand proposes that additional text be inserted in that paragraph to better reflect its
argument regarding Australia's view that a consid erable deference should be accorded to Members'
risk assessments.792 Having considered New Zealand's statement at the first substantive meeting with
the Panel, the Panel has amended paragraph 7.191 in the manner requested by New Zealand.
6.29 Australia requests that paragraph 7.192, in the section that summarizes New Zealand's
arguments, be amended. Australia proposes that th e report reflect that a response from New Zealand
was directed at arguments raised by Australia that are specific to this dispute. 793 New Zealand rejects
the request. In New Zealand's view, Australia did not clarify in the course of the proceedings that its
arguments were "specific to this dispute".794 The Panel sees no reason to amend paragraph 7.192.
6.30 Australia requests that paragraphs 7.198 a nd 7.199, in the section that summarizes its
arguments, be amended in order to better reflect Au stralia's submissions. In Australia's view, these
paragraphs should be revised and ne w text should be added to reflect Australia's elaboration of its
arguments after the first written submission and in the light of the Appellate Body's report in
US/Canada – Continued Suspension . Australia also requests that the expression originally used by
Australia that the IRA was "objective and credib le" be replaced with "objective and coherent"
throughout the report, including in paragraph 7.200, to reflect the change in language in Australia's
latter submissions.795 New Zealand rejects Australia's request to amend paragraphs 7.198 and 7.199.
In New Zealand's view, Australia's arguments are set out in detail elsewhere in the report and it would

788 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 70-71.
789 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 21.
790 Communication from Australia to the Panel, 22 April 2010, Australia's comments on New Zealand's
request for review of the interim report, para. 2; Communication from New Zealand to the Panel, 15 April
2010, New Zealand's request for review of the interim report, p. 2.
791 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 72-73.
792 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 2.
793 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 74-75.
794 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 22.
795 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 76-82.

be unnecessary and inappropriate to insert lengthy new sections in this part of the report.
796 Having
considered Australia's submissions, its statements at the second substantive meeting with the Panel
and its subsequent responses to the Panel's ques tions, the Panel has ame nded paragraph 7.198 and
incorporated new text after this paragraph to ad dress Australia's request. The expression originally
used by Australia "objective and credible" has been replaced with "objective and coherent" in
paragraphs 7.199 and 7.202 in the manner requested by Australia. Further, a footnote has been added
to paragraph 7.199, noting that the expression used by Australia in its first written submission was
later changed to "objective and coherent". The expression was not changed in paragraph 7.200, which
contains a quote from Australia's first written submission.
6.31 Australia requests that paragraph 7.203 in the section containing the Panel's analysis, be
amended, because in its view it is incorrect to characterize New Zealand's claims under Articles 2.2,
5.1 and 5.2 as "separate and autonomous". 797 New Zealand rejects Australia's request. In
New Zealand's view, the Panel's characterization is correct. 798 The Panel notes that arguments made
by New Zealand under one claim were at times also used by New Zealand to support other claims.
The Panel considers, however, that New Zeala nd advanced separate and autonomous claims under
Articles 2.2, 5.1 and 5.2 of the SPS Agreement. Ac cordingly, there is no reason to amend paragraph
7.203 in this respect.
(b) Standard of review
6.32 Australia requests that paragraphs 7.214 and 7.215, in the section describing the Parties'
arguments, be amended to better re flect Australia's arguments as th ey were developed over various
submissions and, in particular, in lig ht of the Appellate Body's report in US/Canada – Continued
Suspension. Australia also requests that the first sent ence in paragraph 7.214 note that its argument
was that the standard of review applied by the Panel should be specific to the SPS Agreement and also
to the particular obligation in question.
799 Having considered Australia's first written submission, to
which Australia referred to in its request, the Panel has made some amendments to paragraph 7.214.
The Panel notes that footnotes to that paragraph are clear that the references are to Australia's first
written submission, to its statements at the firs t substantive meeting with the Panel and to its
subsequent responses to the Panel's questions after that meeting.
6.33 Australia requests that paragraph 7.220 be amended, because New Zealand incorrectly
described Australia's argument as suggesting that New Zealand should demonstrate the existence of
serious flaws at each step of the risk assessment. 800 New Zealand rejects Australia's request. In New
Zealand's view, it is inappropriate for Austra lia to propose amending a paragraph summarizing
New Zealand's arguments.801 Having considered New Zealand's submissions and its responses to the
Panel's questions after the second substantive mee ting, the Panel sees no reason to amend paragraph
7.220.

796 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 23.
797 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 83-84.
798 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 24.
799 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 85-86.
800 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 87-89.
801 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 25.

6.34 Australia requests that, for completeness, paragraph 7.225, in the section containing the
Panel's arguments, be amended. In its view, as the Panel refers to "Australia's reliance upon the panel
report in Australia – Salmon (Article 21.5 – Canada) ", it should "also set out paragraph 7.57 of [that]
compliance panel's report". 802 New Zealand rejects Australia's request. In New Zealand's view, the
paragraph of the Australia – Salmon (Article 21.5 – Canada) compliance panel report identified by
Australia is not directly relevant to the Pane l's general discussion on the standard of review. 803 The
Panel sees no reason to amend paragraph 7.225.
(c) Summary of the Parties' arguments under Articles 5.1 and 5.2 of the SPS Agreement
6.35 Australia requests that, for completeness, paragr aphs 7.228 to 7.233, in the section describing
the Parties' arguments, be amende d. Australia suggests that this section include arguments made by
New Zealand relating to the Japan – Apples dispute. 804 New Zealand rejects Australia's request to
amend these paragraphs. New Zealand notes that its ar guments are set out in part IV of the report and
it would be unnecessary to insert further re ferences in this part of the report. 805 The Panel sees no
reason to amend paragraphs 7.228 to 7.233.
6.36 Australia requests that the Panel record in this section Australia's response to New Zealand's
argument, noted in paragraph 7.231, that Article 5.2 of the SPS Agre ement contains an obligation to
give "genuine consideration" to a numbe r of factors listed in that provision. 806 Having considered
Australia's written submissions, the Panel has adde d a new paragraph immediately after paragraph
7.235, as requested by Australia.
6.37 With respect to paragraphs 7.232 to 7.236, Australia requests that the Panel record its "overall
contention with respect to each pest risk assess ment, that … if New Zealand has successfully
demonstrated any flaws, they are only minor ones, and do not undermine the overall objective
justifiability of the particular risk assessment at issue". 807 Having considered Australia's written
submissions, the Panel has added new text into paragraph 7.232, as requested by Australia.
(d) Requirements regarding fire blight
6.38 The Panel has amended paragraph 7.242, as requested by Australia.808
6.39 Australia requests that paragraph 7.253, in the section containing the Panel's analysis on the
alleged overestimation for im portation step 1 for fire blight, be am ended. In Australia's view, this
paragraph contains a reference that relates to "[ t]he issue of pollution of fruit surface [which] is
relevant to Importation step 2, not Importation step 1". Australia requests therefore that the Panel
delete the sentence with that reference from the para graph or, alternatively, move this sentence to the
section dealing with importation step 2. Australia also requests that the Panel replace the word

802 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 90.
803 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 26.
804 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 91.
805 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 27.
806 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 92-93.
807 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 94.
808 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 95.

"cautioned", when referring to one of the expe rts' comments, with the expression "expressed the
view". In the same paragraph, Australia requests the Panel to amend the re ference to the experts'
comments, in order that such refe rence is reproduced more accurately.
809 New Zealand rejects
Australia's request to amend this paragraph. In New Zealand's view, the reference to the expert's
response relates to importation step 1, so it would be appropriate for this sentence to remain in
paragraph 7.253. New Zealand adds that the word "cautioned" is correctly used in the paragraph. 810
The Panel considers that the sentence objected to by Australia is relevant for the discussion of
importation step 1 and, therefore, sees no reason to de lete it or move it to a different section. Having
considered the text of the experts' response to one of the Panel's questions, the Panel has made other
changes in paragraph 7.253 to address Australia's request.
6.40 Australia requests that paragraph 7.254 be am ended. This paragra ph includes a reference
that, in Australia's view, "relates to the chance of fruit contamination surface, which is relevant to
Importation step 2, not Importation step 1". Australia requests that the Panel delete the sentence with
the reference from the paragraph or, alternatively, move this sentence to the section dealing with
importation step 2. 811 New Zealand rejects Australia's request to amend this paragraph. In
New Zealand's view, the reference to the expert's response relates to importation step 1, so it would be
appropriate for this sentence to remain in paragraph 7.254. 812 The Panel considers that the sentence
objected to by Australia is relevant for the discu ssion of importation step 1 and, therefore, sees no
reason to delete it or move it to a different section.
6.41 Australia requests that a sentence be added to paragraph 7.258, in the section describing
New Zealand's arguments on the alle ged overestimation for importation st ep 2 for fire blight, in order
to note that New Zealand is referring to a paper by Roberts and Sawyer (2008). In Australia's view,
this would also provide context for the subseque nt reference to that paper in the summary of
Australia's arguments.813 New Zealand suggests that, in order to provide context, a reference to other
paragraphs in New Zealand's first written submission and in New Zealand's comments on Australia's
responses to questions after the second substantive m eeting, be added to foot note 1219 to paragraph
7.258.
814 The Panel has added the references requested by Australia and New Zealand.
6.42 Australia requests that new text be added to pa ragraph 7.260, in order to convey more fully
Australia's argument regarding Roberts and Sawyer (2008). 815 New Zealand rejects Australia's
request. In New Zealand's view, Australia's arguments on Roberts and Sawyer (2008) are
summarized in a different section, namely in pa ragraph 7.428. New Zealand suggests that the
additional references noted by Aust ralia could be added to the footnot e to paragraph 7.428; it also
suggests that additional references to New Zealand' s submissions could also be included in that
footnote.816 The Panel has added, in paragraph 7.260 and in the footnote to paragraph 7.428, the text

809 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 96-100.
810 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 28.
811 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 101-102.
812 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 29.
813 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 103-105.
814 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 30.
815 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 106.
816 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 31.

and the references requested by Australia; it has al so added in the footnote to paragraph 7.428 the
references requested by New Zealand.
6.43 Referring to paragraph 7.267, Australia requests th at the Panel record Australia's argument in
its first written submission, regarding the experi ment reported in the paper by van der Zwet et al .
(1990).817 New Zealand requests that, if the Panel in cludes the references provided by Australia, it
also include references to New Zealand's second written submission. 818 The Panel has inserted into
the footnote to paragraph 7.267 the references requested by Australia and New Zealand.
6.44 The Panel has amended paragraph 7.290, as requested by Australia.819
6.45 Australia requests that paragraph 7.299, in the section containing the Panel's analysis on the
alleged overestimation for im portation step 4 for fire blight, be amended. Australia requests that the
Panel change the expression that refers in that para graph to disinfection as "a routine procedure in the
packing house", with "a procedure used in some 53 per cent of packing houses". Australia suggests
that the latter expression is more accurate and is based on information provided by New Zealand. 820
New Zealand rejects Australia's request. New Zealand submits that the use of the expression is
appropriate. New Zealand notes that disinfection is defined as one of the "routine procedures that
occur in New Zealand packing houses".
821 The Panel notes that paragraph 7.299 is part of the Panel's
analysis of the IRA's reasoning regarding importati on step 4. Importation step 4 refers to the
likelihood that infected or infested fruit remain s infected or infested after routine processing
procedures in the packing house. According to the IRA, these "routine pr ocedures in the packing
house" include pre-cooling, washing, disinfection, brushing, waxing, sorting and grading, packaging
and cold storage.822 Accordingly, the Panel sees no reason to amend paragraph 7.299.
6.46 Australia requests that paragraph 7.316, in the section containing the Panel's analysis on the
alleged overestimation for importation step 5 for fire blight, be amended. Noting a reference to a
study by Vanneste (2008) in the statement of an expe rt included in that para graph, Australia requests
that the Panel record that this evid ence "became available in 2008, that is, after the IRA was
completed and during proceedings in the current dispute".823 New Zealand suggests that the reference
to Vanneste (2008) may have been a typographical erro r, because there is no reference to this study in
the IRA or by either of the Parties. New Zealand suggests that the expert may have been referring to
Vanneste (2006), which was submitted as an exhibit by New Zealand and is part of the record. New
Zealand notes further that the IRA refers to a differe nt study, which Vanneste co-wrote in 2004, that
reaches similar conclusions to those expressed by the expert in paragraph 7.316. New Zealand
submits that, in these circumstances, it would be appropriate to remove the reference to Vanneste

817 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 107.
818 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 32.
819 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 108.
820 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 109.
821 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 33.
822 Australia's IRA, Part B, pp. 76-77.
823 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the

(2008) from paragraph 7.316.
824 Accordingly, the Panel has re moved the reference to Vanneste
(2008) from paragraph 7.316.
6.47 Australia requests that paragraph 7.327, in the section containing the Panel's analysis on the
alleged overestimation for importation step 6 for fire blight, be amended. This paragraph includes a
reference to an expert's answer that, in Australia's view, "is not relevant to the Panel's finding at this
importation step [6], as it related to disinfection procedures which are assessed at Importation step 4".
Australia requests that the Panel remove the refere nce to the expert's answer in this paragraph. 825
New Zealand rejects Australia's request to amend this paragraph. In New Zealand's view, it would be
inappropriate to remove the reference to the expert 's response in this paragraph, because it relates to
importation step 6. 826 The Panel considers that the disputed answer is relevant for the discussion of
importation step 6 and, therefore, sees no reason to delete it from paragraph 7.327.
6.48 Australia requests that paragraph 7.349, in the section that summarizes Australia's arguments
on the alleged overestimation for the overall probab ility of importation for fire blight, be amended,
because in Australia's view in its current form it could lead to a mischaracterization of its position. 827
The Panel has amended paragraph 7.349, as requested by Australia.
6.49 The Panel has amended paragraph 7.355, as requested by Australia, in order to clarify that the
text is not a quotation.828
6.50 Australia requests that paragraph 7.362, in the section that summarizes Australia's arguments
on the IRA's analysis of the probability of entry, est ablishment and spread of fi re blight, be amended,
because in Australia's view in its current form it is not clear whether it intends to reproduce Australia's
argument or New Zealand's assertions. Australia argu es that if the intention of the paragraph is to
reproduce Australia's argument, it would be an incorrect characterization of its position. 829 Having
considered Australia's first written submission, th e Panel has amended para graph 7.362 to address
Australia's request.
6.51 Australia requests that the Panel remove the fi rst sentence in paragraph 7.376, in the section
containing the Panel's analysis on the IRA's reasoning on proximity for fire blight. In this sentence,
the Panel notes that, "[c]onsulted by the Panel, the experts expressed scepticism regarding some of the
scenarios considered under the IRA's proximity an alysis". Australia argues that the sentence
attributes an emphasis that is not present in the answers of one of the experts. 830 New Zealand rejects
Australia's request. In New Zealand's view, the wo rd "scepticism" has been used appropriately in

824 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 34.
825 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 111-112.
826 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 36.
827 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 113-114.
828 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 115.
829 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 116-118.
830 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 119.

connection with the responses of experts consulted by the Panel. 831 The Panel sees no reason to
amend paragraph 7.376.
6.52 Australia requests that the Panel amend the intr oductory sentence in paragraph 7.398, in the
section containing the Panel's analysis on the IRA's reasoning on exposure for fire blight. In this
sentence, the Panel refers to "the theoretical possib ility of an insect taking a few bacterial cells to the
hypantium of a flower of an host plant". Aust ralia requests that the Panel remove the word
"theoretical", arguing that "[t]his was not a term used by the experts". 832 New Zealand rejects
Australia's request. In New Zealand's view, the word "theoretical" has been used appropriately by the
Panel.833 Having considered the response of the expert to a Panel question that is referred to in
paragraph 7.398, the Panel sees no reason to amend paragraph 7.398.
6.53 Australia requests that the Panel amend a sen tence in paragraph 7.427, in the section
containing the Panel's conclusions regarding entry, establishment and spread for fire blight. This
sentence records the opinion of the experts cons ulted by the Panel that the studies cited " maximized
the theoretical risk of introduction of Erwinia amylovora with potentially infested apples fruits…"
Australia requests that the Panel remove the word "the oretical", arguing that "[t]he term was not used
by the experts". 834 New Zealand rejects Australia's request. In New Zealand's view, the word
"theoretical" has been used appropriately by th e Panel. New Zealand notes additionally that the
sentence objected to by Australia refers to the r esponse of an expert to a Panel's question and the
expert specifically uses the word "theoretical". 835 Having considered the response of the expert to a
Panel question that is referred to in paragraph 7.427, the Panel sees no reason to amend paragraph
7.427. The Panel has, however, added references two footnotes to paragraph 7.427, as requested by
Australia and New Zealand.836
6.54 Australia requests that the Panel amend a senten ce in paragraph 7.429. In Australia's view,
this sentence, which refers to the possible effect of proximity to orchards, does not correctly reflect
the IRA's conclusions regarding fire blight.837 Having considered the text of the IRA and the opinions
expressed by the experts, the Panel has amended paragraph 7.429 to address Australia's request.
6.55 Australia requests that the Panel amend a senten ce in paragraph 7.437. In Australia's view,
this sentence does not accurately reflect the r esponse of an expert consulted by the Panel. 838 Having
considered the response provided by the expert to the question that is referred to in the sentence
objected to by Australia, the Panel has amended paragraph 7.437.

831 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 37.
832 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 120-121.
833 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 38.
834 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 122-123.
835 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 38.
836 Communication from Australia to the Panel, 22 April 2010, Australia's comments on New Zealand's
request for review of the interim report, para. 4; Communication from New Zealand to the Panel, 15 April
2010, New Zealand's request for review of the interim report, p. 4.
837 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 124-125.
838 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 126-128.

6.56 The Panel has amended paragraph 7.442, rea rranging the order of the sentences and setting
out the quotation from an expert's response to a Panel's question, as requested by New Zealand.
839
6.57 Australia requests that the Panel amend the firs t sentence in paragraph 7.447, in the section
describing New Zealand's arguments on the pot ential biological and ec onomic consequences
associated with fire blight, in order to clarify that the expression to "uns ubstantiated assumptions" in
New Zealand's submission is referring to a paper by Roberts (1991). 840 Australia also requests that
the Panel amend the fourth sentence in order to clar ify that New Zealand's argument that "the impact
of fire blight on pipfruit production in non-outbreak years is inconsequential" is based on its own
experience.841 Australia additionally requests that the Panel amend the fifth sentence in order to
clarify that New Zealand's argument on pipfruit production losses from a fire blight outbreak are
based on evidence from New Zealand. Australia re quests that the same sentence note New Zealand's
statement that production losses "may occasionally be significant at a local level only". 842
New Zealand rejects the first of Australia's requests. In New Zealand's view, the Panel has correctly
summarized its argument, which was not merely directed at Roberts (1991). 843 Having considered
New Zealand's first written submission, the Panel ge nerally sees no reason to amend paragraph 7.447.
The Panel has, however, clarified in the sentence that, in its written submission, New Zealand referred
to the impact of fire blight on pipfruit production in New Zealand . The Panel has also corrected
footnote 1525, as requested by Australia and New Zealand. 844 It has additionally corrected footnote
1528, as requested by New Zealand. 845 The text suggested by Au stralia on the possibility of
production losses at a local level was already part of paragraph 7.447.
6.58 Australia requests that the Panel include a sentence in the section describing Australia's
arguments on the potential biolog ical and economic consequences associated with fire blight
(paragraphs 7.450 to 7.454), in order to reflect its contention that "New Zealand had put no
substantive argument on the issue of the assessment of the consequences of fire blight either in its
second written submission or at the second hearing". 846 New Zealand rejects Australia's request.
New Zealand notes that Australia's argument, which was made at the second substantive meeting with
the Panel, is contained in part IV of the report. In New Zealand's view, it is not necessary to repeat
this argument in paragraphs 7.450 to 7.454. 847 Having considered Australia's statement at the second
substantive meeting with the Panel, the Panel has added the text proposed by Australia to
paragraph 7.453.

839 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 5.
840 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 129-131.
841 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 133.
842 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 134-135.
843 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 39.
844 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 132; Communication from New Z ealand to the Panel, 15 April 2010, New Zealand's
request for review of the interim report, p. 5.
845 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 5.
846 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 136-137.
847 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 40.

6.59 Australia requests that a sentence be amended in paragraph 7.473, in the section describing
New Zealand's arguments on the alleged methodologi cal flaws identified by New Zealand. In
Australia's view, text should be added to the first sentence in that paragraph to note "that New Zealand
places reliance on trade data to support its position regarding the use of 1 × 10 -6 as the maximum
value for 'negligible'." 848 New Zealand rejects Australia's request. In New Zealand's view, it is
inappropriate for Australia to propose amending a paragraph summarizing New Zealand's arguments.
New Zealand submits that the additional text propo sed by Australia "reflect[s] Australia's comments
on New Zealand's argument, rather than the argument made by New Zealand." 849 Having considered
New Zealand's first written submission, the Pane l sees no reason to amend paragraph 7.473. The
footnote to that paragraph, however, has been amended, as requested by Australia to provide
additional context to the sentence.
6.60 Australia requests that the first sentence in paragraph 7.474, in the section describing its
arguments on the alleged methodological flaws id entified by New Zealand, be amended. In
Australia's view, the second part of the sentence shoul d be removed, because it "incorrectly refers to
alternative definitions [of 'negligible risk'] proposed by New Zealand". 850 Also in paragraph 7.474,
Australia requests that a clarification be added to a sentence, to refer to the use of the interval between
0 and 10 -6 in the IRA as a "uniform distribution". 851 Regarding the first of Australia's requests,
New Zealand suggests that, while Australia is correct, this concern could be remedied by simply
replacing a word rather than by deleting the whole text.
852 Having considered Australia's submissions,
the Panel has made all the amendments requested by Australia. The Panel has also made a correction
in the second sentence of the paragraph, as requested by Australia.853
6.61 Australia requests that paragraph 7.475, in th e section describing its arguments on the alleged
methodological flaws identified by New Zealand, be am ended. In Australia's view, its arguments are
not properly reflected in that paragraph. Austra lia suggests an alternative text for the paragraph. 854
Having considered Australia's submissions, the Panel has made the amendments requested by
Australia.
6.62 Australia requests that paragraphs 7.486 and 7. 487, in the section describing its arguments on
the alleged methodological flaws identified by New Z ealand, be amended. Australia requests that the
Panel add the word "uniform", when referring to th e distribution, in the first sentence of paragraph
7.486. Australia also suggests the addition of a te xt after paragraph 7.487, to record one of its
arguments.855 Having considered Australia's submissions, the Panel has made the amendments
requested by Australia.

848 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 138-140.
849 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 41.
850 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 141.
851 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 143.
852 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 42.
853 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 142.
854 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 144-145.
855 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 146-147.

6.63 Australia requests that paragraph 7.488, in th e section describing the Panel's analysis on the
alleged methodological flaws identified by New Zeal and, be amended. Australia requests that the
Panel delete the words "but in the circumstances of this case" from the last sentence in the paragraph.
Australia also requests that a reference be adde d into one of the footnotes of the paragraph.
856
New Zealand rejects Australia's request to delete words from the last sentence in the paragraph. 857 In
the Panel's view it is correct to refer that the stat ement contained in the last sentence in the paragraph
refers to the use of a uniform distribution in the circumstances of this case. Accordingly, the Panel
sees no reason to amend paragraph 7.488. A footnote to that paragraph, however, has been amended
to add the reference noted by Australia.
6.64 The Panel has corrected footnote 1597 to paragraph 7.489, as requested by Australia.858
6.65 The Panel has corrected paragraph 7.499 in the manner requested by Australia and
New Zealand.859
(e) Requirements regarding European canker
6.66 Australia requests that paragraph 7.526, in the section containing the Panel's analysis on the
alleged overestimation for importation step 2 for European canker, be amended. Australia argues that
the IRA cites studies which confirm fruit rot caused by N. galligena in New Zealand. Australia
submits that the report fails to refer to the relevant studies in this regard or to the experts' acceptance
of the possibility of latent infection. Australia adds that the report should acknowledge the situation
regarding the limited availability of the data for the IRA Team to access. 860 New Zealand rejects
Australia's request to amend this paragraph. In New Zealand's view, the amendments proposed by
Australia are misleading and irrelevant a nd the paragraph shou ld remain unchanged. 861 Having
considered Australia's request, the Panel sees no reason to amend paragraph 7.526, in the manner
suggested by Australia.
6.67 Australia requests that the Panel delete the word "mistakenly" from the first sentence of
paragraph 7.528, as this word was not used by the expert consulted by the Panel. 862 New Zealand
rejects Australia's request. In New Zealand's view, in light of the expert's reply, it was open for the
Panel to infer that the expert considered the IRA to be mistaken. New Zealand also requests that a
reference be added into f ootnote 1650 to the paragraph. 863 Having considered Australia's and
New Zealand's requests, the Panel has removed the word "mistakenly" and has added a reference to
the footnote in question.

856 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 148-149.
857 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 43.
858 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 150.
859 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 151; Communication from New Z ealand to the Panel, 15 April 2010, New Zealand's
request for review of the interim report, p. 5.
860 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 152-156.
861 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 44-47.
862 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 157.
863 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 48-49.

6.68 Australia requests that the Panel delete the first sentence of paragraph 7.531. Australia
submits that appropriate climat ological conditions have been and are present in New Zealand for
European canker development and latent infection. 864 New Zealand rejects Australia's request. In
New Zealand's view, the Panel's statements in this regard are adequately supported. 865 Having
considered Australia's request, the Panel sees no reason to amend paragraph 7.531.
6.69 Australia submits that paragraphs 7.532 and 7.535, in the section containing the Panel's
analysis on the alleged overestimation for importation step 2 for European canker, are actually related
to importation step 3. Australia requests that the Pa nel delete the paragraphs or otherwise move them
to the appropriate section. 866 New Zealand rejects Australia's re quest to delete the paragraphs, but
does not object to moving them to the section on importation step 3. 867 Having considered Australia's
request, the Panel has moved the content of paragr aphs 7.532 and 7.535 to the section containing the
Panel's analysis on the alleged overestimation for im portation step 3. Consequent adjustments have
been also made to paragraph 7.1198.
6.70 Australia requests that the Panel insert a quote from the response of one of the experts to
paragraph 7.533, in the section containing the Pane l's analysis on the alleged overestimation for
importation step 2 for European canker. 868 New Zealand requests that, if the Panel decides to add the
quote requested by Australia, it also include the immediately following paragraphs of the same
expert's response. 869 Having considered Australia's and New Zealand's requests, the Panel sees no
reason to amend paragraph 7.533.
6.71 New Zealand requests that the Panel add a refere nce to responses of the experts in paragraphs
7.534 and 7.537. 870 The Panel has added the references in paragraphs 7.534 and 7.537, as requested
by New Zealand.
6.72 Australia requests that paragraphs 7.536 to 7.5 38 refer to the existence of scientific studies
that were used in Australia's IRA, in order to ensu re that the Parties' arguments are properly reflected.
Australia also requests that the Panel include a re ference to the acknowledgement made by one of the
experts of the paucity of data specific to New Zeal and. Australia additionally requests that the Panel
note that the statement from one of th e experts regarding the fact that N. galligena rots are not
common in New Zealand, is based on a comparison with Europe. 871 Regarding Australia's last
request, New Zealand submits that the report correctly characterizes the expert's response. 872 Having
considered Australia's request, the Panel sees no reas on to amend paragraphs 7.536 to 7.538. The
Panel notes that the Parties' arguments are reflect ed in other sections of the report. The Panel

864 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 158-160.
865 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 50-51.
866 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 161-162 and 166-167.
867 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 52 and 55.
868 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 163-165.
869 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 53-54.
870 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 6.
871 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 168-173.
872 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 56-57.

additionally notes that, in the quote already included in paragraph 7.538, the expert explicitly states
that the available information suggests that N. galligena rots are not as common in New Zealand as
they are in Europe.
6.73 New Zealand requests an addition to paragraph 7.569, in the section containing the Panel's
analysis on the alleged overestim ation for importation step 3 for European canker. New Zealand
submits that this addition would reflect a key point fr om earlier paragraphs of the Panel's analysis and
clarify the relationship of the section with importation step 3. New Zealand also requests an addition
to paragraph 7.583, in the section containing the Panel's analysis on the alleged overestimation for
importation step 4 for European canker. New Zeala nd submits that this addition is relevant to the
IRA's consideration under importation step 4.
873 The Panel has added to paragraphs 7.569 and 7.583
the text requested by New Zealand. For consiste ncy, the Panel has also included additional language
in paragraph 7.568.
6.74 Australia requests that paragraph 7.584, in the section containing the Panel's analysis on the
alleged overestimation for importation step 4 for Eu ropean canker, be amende d. Australia submits
that the quote of an expert's response is incomplete and requests that the Panel delete the introductory
part of the paragraph. 874 New Zealand rejects Australia's reque st to amend this paragraph. In
New Zealand's view, the paragraph correc tly characterizes the expert's response. 875 The Panel has
amended paragraph 7.584, as requested by Australia. The Panel has also included the complete text
of the expert's response.
6.75 New Zealand requests that the Panel add a footnote reference to the response of an expert to
paragraph 7.614, in the section containing the Pane l's analysis on the alleged overestimation for
importation step 6 for European canker. New Zeala nd also requests that the Panel add a reference to
the responses of two experts in a footnote to para graph 7.671, in the section containing the Panel's
analysis on proximity for European canker. 876 The Panel has inserted the references into paragraph
7.614 and into footnote 1858 to paragraph 7.671, as requested by New Zealand.
6.76 In paragraphs 7.685, 7. 687, 7.689 and 7.712, in the section containing the Panel's analysis on
exposure for European canker, New Zealand request s that the Panel replace the expression "clean
fruit" with "new hosts", in order to reflect more clearly the issue under exposure and establishment. 877
The Panel has made the replacement requested by New Zealand.
6.77 New Zealand requests that the Panel insert a reference to experts' responses in footnotes to
paragraphs 7.685, 7.689 and 7.699. 878 The Panel has inserted the references into footnote 1884 to
paragraph 7.685 and into footnote 1888 to paragra ph 7.689, as requested by New Zealand. As to of
the reference requested by New Zealand for paragrap h 7.699, the Panel considers it more appropriate
to insert the reference into footnote 1901 to paragraph 7.698, instead.
6.78 Australia requests that the Panel either delete th e whole paragraph 7.702, or at least the first
sentence to that paragraph. Australia submits that it is difficult to see how the Panel could consider

873 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 6.
874 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 174-176.
875 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 58.
876 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, pp. 6-7.
877 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 7.
878 Ibid.

Australia's IRA to have failed to rec ognize the importance of the number of spores. 879 New Zealand
rejects Australia's request to amend this paragraph. In New Zealand's view, the paragraph correctly
characterizes the expert's response.880 The Panel sees no reason to delete paragraph 7.702 or even the
first sentence to that paragraph. Having consid ered Australia's request, however, the Panel has
slightly amended paragraph 7.702 for clarification. For consistency, the Panel has also made the
clarification in paragraphs 7.712, 7.729 and 7.1198, which refer to the same issue.
6.79 Australia objects to several statements made by the Panel in paragraph 7.729, in the section
containing the Panel's conclusions regarding exposure, establishment and spread for European canker.
Australia submits that these statements, referring to the lack of scientific evidence or adequate support
in the IRA on a number of issues, are factually incorrect. 881 New Zealand rejects Australia's
objections to this paragraph. New Zealand disagrees with Australia's view that the Panel's statements
are factually incorrect. 882 Having considered Australia's request, the Panel sees no reason to amend
paragraph 7.729.
(f) Requirements regarding ALCM
6.80 With respect to paragraphs 7.785, 7.786, 7.804, 7.866 and 7.1303, Australia requests that the
Panel combine its consideration of the general issu e of viability of ALCM cocoons and the issue of
parasitism, rather than considering both issues as potential cumulative errors. 883 Although the two
issues identified by Australia are linked, the Panel sees no impediment to consider each one separately
and, consequently, there is no reason to amend pa ragraphs 7.785, 7.786, 7.804, 7.866 and 7.1303 in
this regard.
6.81 Australia requests that paragraph 7.789, in the section describing the Parties' arguments on the
issue of the available data on viability of ALCM co coons, be amended in order to clarify that the 15
per cent figure cited is part of New Zealand's arguments. 884 New Zealand rejects Australia's proposed
amendment to this paragraph. 885 In turn, New Zealand requests that the Panel insert a reference to
New Zealand's second written submission in to footnote 2036 to paragraph 7.789. 886 The Panel has
amended paragraph 7.789, as requested by Australia. The Panel has also inserted into footnote 2036
the reference requested by New Zealand.

879 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 177-179.
880 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 59.
881 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 180-184.
882 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 60-63.
883 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 185-188.
884 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 189-190.
885 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 64.
886 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 8.

6.82 Australia requests that paragraph 7.791 be am ended to appropriately reflect Australia's
position.
887 New Zealand rejects Australia's proposed amendments to this paragraph. 888 Having
considered Australia's request, the Panel has made partial amendments to paragraph 7.791.
6.83 With respect to paragraphs 7.788 to 7.809, 7. 866, 7.1303 and 7.1308, Australia requests that
the Panel revise its findings regarding the risk assess ment for ALCM. In Australia's view, the Panel
appears to have overlooked the fact that the IRA contains two separate analyses. 889 New Zealand
rejects Australia's request, which, in New Zeala nd's view, is based on a misreading of the report. 890
Having considered Australia's request, the Panel sees no reason to amend its findings regarding the
risk assessment for ALCM.
6.84 As requested by New Zealand 891, paragraph 7.794, in the section containing the Panel's
analysis on the issue of the available data on viab ility of ALCM cocoons, has been amended, in order
to identify all the findings of Tomkins et al. (1994), and not only those related to cocoon occupancy.
6.85 Australia requests that paragraph 7.798 be am ended, so that the Panel acknowledge that
certain data was submitted by New Zealand and only became available in the course of the
proceedings. Australia also requests that the Pa nel reflect Australia's submission regarding this
information.892 New Zealand rejects Australia's proposed amendments to this paragraph. In New
Zealand's view, it is clear from the report that the da ta postdates the IRA. With respect to Australia's
second request, New Zealand submits that it is not appropriate to use the interim review as a
mechanism to introduce new arguments. New Z ealand adds that Australia's new arguments are
factually inaccurate and largely irrelevant. 893 Having considered Australia's request, the Panel has
made partial amendments to paragraph 7.798, in order to emphasize that the information became
available during the proceedings having been subm itted by New Zealand at the time of its second
written submission.
6.86 As requested by New Zealand 894, text that is relevant to the issue of the likely effect of
factoring viability into importation step 2, has been included in the same paragraph 7.794. Australia's
additional proposed text for this paragraph and paragraph 7.799 895 has been included in paragraph
7.796, where it appears more appropriate.
6.87 Australia requests that the second sentence of pa ragraph 7.819, in the section containing the
Panel's analysis on the issue of the flight range fo r ALCM, be amended, so that the Panel's statement

887 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 191-192.
888 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 65-67.
889 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 193-195.
890 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 68-69.
891 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 8.
892 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 196-198.
893 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 70-74.
894 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 8.
895 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 199; Communication from Australia to the Panel, 22 April 2010, Australia's comments on
New Zealand's request for review of the interim report, paras. 5-6.

correctly reflects the opinion expressed by one of the experts. 896 New Zealand rejects Australia's
proposed amendment, because the paragraph correctly characterizes the expert's view. New Zealand
adds that Australia's asser tion is unsupported by evidence submitted in the course of the
proceedings.897 The Panel has amended the second sentence of paragraph 7.819 in order to reflect
more closely the opinion expressed by the expert.
6.88 With respect to paragraphs 7.822 to 7.837, 7. 852 to 7.863 and 7.866, Australia requests that
the Panel revise its analysis and findings rega rding the IRA's assessment of the probability of
establishment for ALCM. In Australia's view, the Pa nel has not reflected nor evaluated the issue of
how apple waste would be managed in Australia. 898 New Zealand rejects Australia's request, which,
in New Zealand's view, is inappropriate. Ne w Zealand submits that Australia attempts to
recharacterize New Zealand's arguments. New Zealand adds that Australia's assertions are
incorrect.899 Having considered Australia's request, the Panel sees no reason to amend its analysis and
findings regarding the IRA's assessment of the probability of establishment for ALCM.
6.89 As requested by New Zealand 900, paragraphs 7.823, 7.835 and 7. 1284 have been amended to
note that the reference to a 13-18 day timefram e in New Zealand's submissions was a proposed
minimum time and not a range.
6.90 Australia requests that paragraphs 7.827 to 7.829, in the section describing Australia's
arguments on the issue of the period of ALCM emergen ce, be amended, so that the report fully reflect
some of the points made by Australia. 901 New Zealand rejects Australia's proposed amendments to
these paragraphs. In New Zealand's view, it is ne ither necessary nor appropriate to insert lengthy
sections of Australia's submissions in this section, as Australia's arguments are set out in detail in
other sections of the report. 902 The Panel has inserted additional language in a new paragraph after
paragraph 7.829, in order to address Australia's request.
6.91 As requested by New Zealand 903, a reference has been inserted into footnote 2165 to
paragraph 7.854, in the section describing New Zeala nd's arguments on the issue of mode of trade for
ALCM.
6.92 Australia requests that paragraph 7.856, in th e section describing Australia's arguments on the
issue of mode of trade for ALCM, be amended, so that the report acknowledge that New Zealand
never contested the IRA's conclusions on a particular point. 904 New Zealand rejects Australia's
proposed amendment to this paragraph. In New Zealand's view, Australia's assertion is factually

896 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 200-201.
897 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 75.
898 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 202-209.
899 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 76-79.
900 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 8; Communication from Australia to the Panel, 22 April 2010, Australia's comments on
New Zealand's request for review of the interim report, paras. 7-8.
901 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 210.
902 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 80.
903 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 9.
904 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 211-212.

inaccurate.
905 Having considered Australia's request, th e Panel sees no reason to amend paragraph
7.856.
6.93 Australia requests that the Panel delete the second sentence in paragraph 7.867, in the section
containing the Panel's conclusions regarding th e IRA's estimation for the likelihood of entry,
establishment and spread of ALCM. In Australia's view, in this sentence the Panel inappropriately
relies upon an expert's statement that did not rela te to the IRA's overall probability of entry,
establishment and spread of ALCM, but was rather made in the specific context of importation
step 2.906 Having considered Australia's request, the Pa nel has partially amended paragraph 7.867, in
order to clarify the manner in which the Panel took into account the expert's opinion in this regard.
6.94 New Zealand requests that paragraph 7.869, in the section describing New Zealand's
arguments on the issue of the potential biologi cal and economic consequences associated with
ALCM, be amended, so that the report accurately reflect New Zealand's argument. In the same
paragraph, New Zealand requests the add ition of references in three footnotes. 907 Australia rejects
New Zealand's proposed amendment to this paragra ph. In Australia's view, New Zealand should not
be permitted to amend its arguments at the interim review stage. 908 The Panel sees no reason to
amend paragraph 7.869, in the manner requested by New Zealand. To avoid any misunderstanding,
however, the Panel has made a small amendment in the paragraph. The Panel has included the
references in footnotes requested by New Zealand.
6.95 As requested by Australia909, paragraph 7.874 has been corrected.
6.96 Australia requests that the Panel delete paragraph 7.876. In Australia's view, in this paragraph
the Panel inappropriately relies upon an expert's st atement that referred to the effects of a risk
management measure, while the IRA consequences assessment was based on unrestricted risk. 910
Having considered Australia's request, the Panel has partially amended paragraph 7.876.
6.97 As requested by New Zealand 911, paragraph 7.883, in the section containing the Panel's
overall conclusions with respect to requirements regarding ALCM, has been corrected.
4. New Zealand's claim under Article 5.5 of the SPS Agreement
6.98 Australia requests that the Panel amend pa ragraph 7.906, in the introductory section
containing Australia's arguments, in order to provide a more accurate reflection of Australia's
submission.
912 The Panel has amended paragraph 7.906 as requested by Australia.

905 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 81.
906 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 213-214.
907 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 9.
908 Communication from Australia to the Panel, 22 April 2010, Australia's comments on New Zealand's
request for review of the interim report, paras. 9-11.
909 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 215-216.
910 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 217-218.
911 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 9. See also, communication from Australia to the Panel, 22 April 2010, Australia's
comments on New Zealand's request for review of the interim report, paras. 12-13.

6.99 Australia requests that the Panel replace the reference to "ALOP" (appropriate level of
protection) with "level of protection"in paragraphs 7.933 and 7.958, as well as in a subheading in page
390 of the interim report. In Australia's vi ew, the latter expression is more appropriate. 913
New Zealand rejects Australia's proposed amendmen t. In New Zealand's view, Australia has not
explained why the expression "level of protection" should be preferred. New Zealand adds that
"appropriate level of protection" has been used by the Appellate Body. 914 Having considered
Australia's request, and noting that the expression "appr opriate level of protection" is contained in the
SPS Agreement and has been used by the Appellate B ody and previous panels in this context, the
Panel sees no reason to replace the expression.
6.100 Australia requests that the Panel amend paragra phs 7.946 and 7.947 to clarify that the Panel's
statements contained in those paragraphs are sp ecific to the comparability test, and not necessarily
relevant for the remaining elements of an Article 5.5 analysis. 915 The Panel has amended paragraphs
7.946 and 7.947, as requested by Australia.
6.101 Australia requests that the Panel amend paragr aph 7.947 to reflect Australia's position more
accurately. Australia also requests that the Pane l correct a reference in footnote 2300 to paragraph
7.947.916 New Zealand considers that Australia's proposed amendment is unnecessary, as it is already
reflected in the paragraph.917 The Panel has amended paragraph 7. 947, as requested by Australia, and
corrected the reference in footnote 2300.
6.102 Australia requests that the Panel amend paragr aph 7.986 to qualify a Panel's statement by
making it clear that it is a direct result of the nature of New Zealand's claims. Australia suggests that
the Panel delete the first sentence of the paragraph. 918 New Zealand considers that paragraph 7.986 is
clear and does not require modification.919 The Panel has amended paragraph 7.986.
6.103 Australia requests that the Panel amend paragraph 7.1035 to make it clear that when the Panel
refers to two factors being inconclusi ve, it is referring to New Zealand's case. 920 New Zealand
considers that paragraph 7.1035 is clear and does not require modifi cation. In New Zealand's view,
the Panel's statement in that paragraph refers to the relative risk of the comparable situations. 921 The
Panel has amended paragraph 7.1035, to clarify the Panel's statement.

912 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 219-221.
913 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 222-223 and 231.
914 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 82.
915 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 224-227.
916 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 228-230.
917 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 83.
918 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 232-233.
919 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 84.
920 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 234-236.
921 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 85.

6.104 Australia requests that the Panel amend pa ragraph 7.1060, because it does not accurately
reflect Australia's arguments.
922 New Zealand rejects Australia's request. In New Zealand's view,
Australia's proposed change would ch ange the meaning of the paragraph. 923 The Panel has amended
paragraph 7.1060, to clarify the Panel's statement.
6.105 Australia requests that the Panel revise its findi ngs contained in paragraphs 7.1064 to 7.1067,
regarding the presence of the two pests in exports areas. 924 New Zealand agrees with the Panel's
conclusions in paragraphs 7.1064 to 7.1067 and rejects Australia's request. 925 Having considered
Australia's request, the Panel sees no reason to amend the findings contained in paragraphs 7.1064 to
7.1067.
6.106 As requested by New Zealand926, the word "certified" has been deleted from the first sentence
in paragraph 7.1071.
5. New Zealand's claim under Article 5.6 of the SPS Agreement
6.107 Australia requests that the Panel amend the last sentence in paragraph 7.1095, in the section
describing the Panel's approach to assessing New Zeal and's claim. In Australia's view, this sentence
does not accurately reflect Australia's primary argument under Article 5.6. 927 The Panel has amended
the last sentence in paragraph 7.1095, as requested by Australia.
6.108 Australia requests that the Panel amend para graph 7.1132, in the sec tion on the measures at
issue regarding fire blight and European canker. Australia considers that th is paragraph contains a
criticism of Australia's qualitative ALOP. Australia requ ests that, if the Panel retains this material, it
acknowledge that Members are under no obligation to quantify their ALOP and the difficulties a
Member would face if it attempted to do so.
928 Having considered Australia's request, the Panel sees
no reason to amend paragraph 7.1132.
6.109 With respect to paragraphs 7.1135 and 7.1137, Australia requests that the Panel include a
statement to the effect that co mpliance with the SPS Committee's Guidelines to further the practical
implementation of Article 5.5 and with the various ISPMs is not mandatory and that these documents
do not set out enforceable obligations. 929 Having considered Australia 's request, the Panel sees no
reason to amend paragraphs 7.113 5 and 7.1137. The report discusses in its descriptive section the
nature of ISPMs. The Panel has included, how ever, a clarification regarding the SPS Committee's
Guidelines to further the practical implementation of Article 5.5 in footnote 2277 to paragraph 7.927.

922 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 237-238.
923 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 86.
924 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 239-240.
925 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 87.
926 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 10.
927 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 241-242.
928 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 243.
929 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 246.

6.110 Australia requests that the Panel delete paragra ph 7.1136, or otherwise amend the paragraph.
In Australia's view it would be more correct to st ate that measures selected must reflect the ALOP.
Australia also submits that this paragraph is unnecessary as the relevant point has been addressed
elsewhere.930 New Zealand rejects Australia's request a nd considers that paragraph 7.1136 correctly
states the relevant requirements.931 Having considered Australia's request, the Panel sees no reason to
amend paragraph 7.1136.
6.111 Australia requests that the Panel amend pa ragraph 7.1138, in order to include an
acknowledgement that, in some circumstances, the unrestricted risk may exceed the ALOP by only a
small amount, but there may be only relatively stringent measures reasonably available and capable of
reducing the risk to achieve the ALOP.
932 Having considered Australia's request, the Panel sees no
reason to amend paragraph 7.1138.
6.112 Australia requests that the words "and to the exte nt that" be deleted from the last sentence in
paragraph 7.1139.933 The Panel has amended paragraph 7.1139, as requested by Australia.
6.113 Australia requests that the Panel amend paragr aph 7.1141. Australia considers that it is
inappropriate for the Panel to rely on the expert s to reach the conclusion that the IRA's analysis
regarding some of the importation steps was exaggerated. Specifically, Australia requests the deletion
of two statements and suggests an alternative text . Australia also requests the Panel to replace the
word "negligible" in subparagraph (g) with the IRA's actual finding for importation step 7. 934
New Zealand rejects Australia's request and considers that there is nothing inappropriate in the Panel's
analysis in paragraph 7.1141. 935 Having considered Australia's request, the Panel sees no reason to
amend paragraph 7.1141.
6.114 Australia requests that the Panel amend paragraph 7.1151, to acknowledge that the underlying
basis of the IRA's analysis for fire blight and European canker was predominantly concerned with
mature, symptomless apples. Australia also requ ests the Panel to list the number of other potential
measures which the IRA evaluated for fire blight and European canker. 936 Having considered
Australia's request, the Panel has amended paragra ph 7.1151 to note Australia's statement that the
IRA's analysis for fire blight and European canker was predominantly concerned with mature,
symptomless apples.
6.115 Australia requests that the Panel delete the wo rd "theoretical" from the first sentence in
paragraph 7.1180. Australia submits that this word was not used by the experts. 937 Having
considered Australia's request, the Panel sees no reason to amend paragraph 7.1180.

930 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 244-245.
931 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 88.
932 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 247-248.
933 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 249-250.
934 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 251-255.
935 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 89-90.
936 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 256-258.
937 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 259-260.

6.116 Australia requests that the Panel revise para graph 7.1191. In Australia's view, it is
inappropriate for the Panel to rely on experts to confirm that certain events will occur, which are a
matter of practical implementati on and enforcement by New Zeala nd and Australian authorities.
Australia also requests that footnote 2629 to the paragraph be corrected.
938 Having considered
Australia's request, the Panel has amended paragraph 7.1191 and footnote 2629.
6.117 New Zealand requests that the Panel amend subparagraph (c) in paragraph 7.1194.
Specifically, New Zealand requests the insertion of text to reflect key points from the Panel's analysis
under importation step 3.939 The Panel has amended subparagraph (c), as requested by New Zealand.
6.118 With respect to paragraphs 7.1287 and 7.1288, in the section on the measures at issue
regarding ALCM with respect to New Zealand's claim under Article 5.6 of the SPS Agreement,
Australia requests that the Panel make it clear that the statements regarding what the experts allegedly
confirmed or endorsed represent New Zealand's opinion , rather than the Panel's. Australia also
requests that footnote 2786 to paragraph 7. 1287 be correspondingly deleted or corrected. 940
New Zealand rejects Australia's request and especi ally the revision of the footnote to paragraph
7.1287.941 The Panel has amended paragraphs 7.12 87 and 7.1288, as well as footnote 2786 to
paragraph 7.1287, to address Australia's request.
6.119 As requested by New Zealand942, paragraph 7.1304 has been corrected.
6.120 Australia requests that the Panel amend paragr aph 7.1335. Specifically, Australia requests
that the Panel reflect Australia's response to New Zealand's argument. 943 The Panel has included
Australia's proposed text in paragraph 7.1341, in the section describing Australia's arguments.
6.121 The Panel has amended paragraph 7.1336, to address Australia's request.944
6.122 Australia requests that the Panel amend paragr aph 7.1337. Specifically, Australia requests
that the Panel reflect Australia's response to New Zealand's argument. 945 The Panel has included
Australia's proposed text in paragraph 7.1342, in the section describing Australia's arguments.
6.123 Australia requests that the Panel delete part of paragraph 7.1338. In Australia's view, this part
relates to Australia's measures regarding fire blight and European canker and is irrelevant for ALCM
measures.946 The Panel notes that the paragraph in ques tion explains that, according to New Zealand,

938 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 261-262.
939 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 11.
940 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 263-265.
941 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 91.
942 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, pp. 11-12. See also, communication from Australia to the Panel, 22 April 2010, Australia's
comments on New Zealand's request for review of the interim report, paras. 12-13.
943 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 266-268.
944 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 269.
945 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 270-271.
946 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 272-273.

certain arguments and factors set out in the contex t of the other two pests also apply to ALCM.
Having considered Australia's request, the Panel sees no reason to amend paragraph 7.1338.
6.124 Australia requests that the Panel amend paragr aph 7.1354. Specifically, Australia requests
that the Panel delete a sentence stating that bot h Parties agree that a 3,000-unit inspection would
effectively result in a fumigation of all lots. 947 The Panel has amended paragraph 7.1354, to address
Australia's request.
6.125 Australia requests that the Panel amend paragr aph 7.1355. Specifically, Australia requests
that its responding arguments be reflected in this section of the report. 948 New Zealand rejects
Australia's request. In New Zealand's view, Austra lia's arguments are reflected in other sections of
the report and it would not be necessary nor appropr iate to insert lengthy parts of Australia's
submissions in this section. New Zealand also subm its that Australia's proposed text is irrelevant to
the issue addressed in this section. 949 Having considered Australia's request, the Panel sees no reason
to amend paragraph 7.1355.
6. New Zealand's claims under Article under Article 8 and Annex C(1)(a) of the SPS
Agreement
6.126 As requested by New Zealand, the Panel h as amended paragraph 7.1407, in a sentence
summarizing New Zealand's claims. 950
6.127 New Zealand requests that the Panel amend paragr aphs 7.1415 to 7.1418, 7.1447 and 7.1448.
In New Zealand's view, these paragraphs erroneously suggest that New Zealand argued that the IRA
as a whole was a measure in and of itself.
951 Australia rejects New Zealand's request. In Australia's
view, New Zealand is attempting to retrospectively repair its undue delay argument as reflected in the
report. Australia submits that it is important that the report reflect New Zealand's arguments and that
New Zealand should not be permitted to rem ove the reference to its original claim. 952 Having
considered New Zealand's request, the Panel sees no reason to amend paragr aphs 7.1415 to 7.1418,
7.1447 and 7.1448.
6.128 As requested by New Zealand, the Panel h as amended paragraph 7.1423, in a sentence
summarizing New Zealand's claims. 953
6.129 Australia requests that the Panel amend paragr aph 7.1431. Specifically, Australia submits
that the paragraph does not accurately reflect Australia's position. 954 The Panel has amended
paragraph 7.1431, to address Australia's request.

947 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 274-275.
948 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 276-277.
949 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 92.
950 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 12.
951 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 12.
952 Communication from Australia to the Panel, 22 April 2010, Australia's comments on New Zealand's
request for review of the interim report, paras. 14-16.
953 Communication from New Zealand to the Panel, 15 April 2010, New Zealand's request for review
of the interim report, p. 12.

6.130 Australia requests that the Panel amend paragr aph 7.1434. Specifically, Australia submits
that the paragraph is not an accurate reflection of Au stralia's arguments. Australia also requests that
the Panel correct a footnote to the paragraph.
955 As requested by Australia, the Panel has amended
paragraph 7.1434, and corrected footnote 3020.
6.131 Australia requests that the Panel delete the l ast sentence of paragraph 7.1459. Australia
submits that this sentence is not an accurate reflecti on of Australia's position. Alternatively, Australia
suggests alternative text for this section. 956 New Zealand does not object to the deletion of the
sentence, but it rejects Australia's proposed alternative language. 957 As requested by Australia, the
Panel has deleted the last sentence of paragraph 7.1459.
6.132 Australia requests that the Panel delete sever al sections and make other amendments in
paragraphs 7.1459 to 7.1462. Australia submits that it is unnecessary for the Panel to make comments
on the question of whether an IRA-type process could be a procedure within the meaning of
Annex C(1)(a) of the SPS Agreement. 958 New Zealand objects to the changes and deletions proposed
by Australia. In New Zealand's view, Australia's re asons for requesting the deletions are incorrect.
New Zealand adds that the passages in these paragra phs are important and should be retained and that
Australia's suggested amendments are in appropriate and should be rejected. 959 Having considered
Australia's request, the Panel sees no reason to amend paragraphs 7.1459 to 7.1462.
C. MINOR CORRECTIONS AND ADDITION OF REFERENCES
6.133 Minor corrections were made to the following pa ragraphs of the interim report, as a result of
comments from New Zealand: 2.24, 4.458, 4.459, 4.460, 4.467, 7.229, 7.245, 7.248, 7.252, 7.255,
7.285, 7.333, 7.338, 7.350, 7.358, 7.414, 7.417, 7.428, 7.443, 7.447, 7.512, 7.525, 7.540, 7.568, 7.569,
7.595, 7.607, 7.621, 7.798, 7.901, 7.1047, 7.1049, 7.1141, 7.1143, 7.1144, 7.1152, 7.1164, 7.1198,
7.1249, and 7.1250.
6.134 Likewise, comments from New Zealand resulted in minor corrections to the following
footnotes in the interim report: footnote 1167 to pa ragraph 7.231, footnote 1186 to paragraph 7.240,
footnote 1187 to paragraph 7.241, footnote 1194 to paragraph 7.246, foot note 1217 to paragraph
7.258, footnote 1528 to paragraph 7.447, footno te 1530 to paragraph 7.449, footnote 2211 to
paragraph 7.885, footnote 2506 to paragraph 7.1118, footnote 2507 to paragraph 7.1118, footnote
2509 to paragraph 7.1120, and footnote 2600 to paragraph 7.1165.
6.135 As a result of comments from New Zealand, additional references have been added into
existing footnotes or have been inserted as new footnotes: the addition of a new footnote to paragraph
7.61, the addition of a new footnote to paragraph 7.180, the additio n of a new footnote to paragraph
7.375, the addition of two new footnotes to paragr aph 7.427, the addition of a new reference in
footnote 1607 to paragraph 7.496, the addition of two new footnotes to paragraph 7.540, the addition
of a new footnote to paragraph 7.568, the additi on of new references in footnote 1901 to paragraph

954 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 278-279.
955 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, para. 280.
956 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 281-284.
957 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, para. 93.
958 Communication from Australia to the Panel, 15 April 2010, Australia's request for review of the
interim report, paras. 285-287.
959 Communication from New Zealand to the Panel, 22 April 2010, New Zealand's comments on
Australia's request for review of the interim report, paras. 94-96.

7.698, the addition of new references in footnote 2036 to paragraph 7.789, the addition of a new
footnote to paragraph 7.798, the addition of a new reference in footnote 2182 to paragraph 7.869, the
addition of a new reference in footnote 2183 to para graph 7.869, the addition of a new reference in
footnote 2185 to paragraph 7.869, the addition of a new footnote to paragraph 7.955, the addition of a
new footnote to paragraph 7.1122, the addition of a new reference in footnote 2674 to paragraph
7.1213, the addition of a new reference in footnote 2677 to paragraph 7.1216.
6.136 Australia did not request any additional minor corrections.
6.137 In addition to the above, the Panel has made cl erical corrections to paragraphs 1.21, 1.41,
1.51, 1.54, 2.1, 2.39, 2.91, 4.80, 7.57, 7.79, 7.151, 7.166, 7.175, 7.184, 7.860, 7.1017, 7.1134, 7.1335
and 7.1405, and to the following footnotes in the interim report: footnote 151 to paragraph 2.6,
footnote 754 to paragraph 7.7, footnote 834 to pa ragraph 7.52, footnote 837 to paragraph 7.57,
footnote 851 to paragraph 7.75, footnote 854 to paragraph 7.79, footnote 930 to paragraph 7.115,
footnote 933 to paragraph 7.116, footnote 940 to pa ragraph 7.121, footnote 997 to paragraph 7.151,
footnote 1053 to paragraph 7.185, footnote 1880 to paragraph 7.683, foot note 1913 to paragraph
7.708, footnote 2228 to paragraph 7.893, footnot e 2373 to paragraph 7.1015 and footnote 2407 to
paragraph 7.1030. The Panel also revised the list of abbreviations and added a reference to five panel
or Appellate Body reports that were missing from the table of cases cited in the interim report.
VII. FINDINGS
A. A
USTRALIA'S CONCERNS WITH THE EXPERT SELECTION AND CONSULTATION PROCESS
7.1 Australia has raised concerns with specific aspects of the Panel's processes for selecting and
consulting the scientific experts.960
7.2 In regard to the expert selection, Australia contests:
(a) That only one expert was selected in the area of ALCM; and,
(b) The alleged connection of the Panel's sole ALCM expert with the complainant,
New Zealand.
7.3 As regards expert consultation, Australia's concerns fall into the following main categories:
(a) The alleged lack of opportunity for Australia to comment on new or modified
questions and on the Panel's limited scope for some questions;
(b) The Panel's reference in its questions to third party submissions;
(c) The experts allegedly providing information that went beyond the scope of the Panel's
questions961; and,
(d) The experts' alleged lack of competence in certain areas in which the Panel posed
questions or the experts expressed opinions and the Panel's use of the experts in areas
that were outside of the field of expertise for which each expert was selected.962

960 See, for example, Australia's communica tions to the Panel, 9 December 2008 and
19 December 2008. Australia's subsequent submissions followed these previous communications.
961 See, for example, Australia's comments on the experts' replies to questions, para. 14.
962 See, for example, Australia's comments on the experts' replies to questions, paras. 13 and 17.

1. Qualification of concerns expressed by Australia
7.4 Australia has qualified a number of the concerns described above with respect to the Panel's
procedure to select and consult experts as "concerns regarding the observance of due process in the
experts phase of this dispute".
963 These "due process concerns" raised by Australia relate to whether
Australia was given the opportunity to comment on new or amended questions posed by the Panel and
whether some of the scientific experts consulted by the Panel moved outside of the field of expertise
for which they had been selected.964
7.5 Any legal proceeding, including WTO proceedi ngs, may raise procedural concerns for the
parties involved. By definition, due process concer ns are of a procedural nature. However, not all
procedural concerns necessarily affect due process. In response to a question by the Panel, Australia
accepted the validity of a distinction between proce dural concerns that affect due process and other
"minor procedural concerns":
"[D]ue process can be understood in the context of WTO disputes as comprehending
the protection of a party's right to a fair hearing. As such, this protection must be
applied at every stage of a panel's proceedings, including, in the present case, the
Panel's selection of, and consultation with, the experts.
The distinction drawn in the Panel's ques tion between procedural concerns and due
process concerns appears to suggest that the former would be of less significance than
a due process concern. Australia considers that minor procedural concerns would not
prejudice a party's right to a fair hearing."
965
7.6 Australia notes that its argument regarding the information provided by the experts that
allegedly went beyond the scope of the Panel's re levant questions "was not intended to raise a due
process concern".966 Arguably, this concern would therefore fall in the category of "minor procedural
concerns".
7.7 The concept of due process is imp licit in WTO dispute settlement. 967 In the words of the
Appellate Body, due process constitutes "an obliga tion inherent in the WTO dispute settlement
system"968, and it is "fundamental to ensuring a fair and orderly conduct of dispute settlement
proceedings."969 Due process ensures a fair hearing for the parties to a dispute, through an adequate
opportunity to submit claims, arguments and eviden ce and to respond to the claims, arguments and
evidence presented by the other party. 970 Thus, due process also ensures procedural equality between
the parties by "guarantee[ing] that the proceedings are conducted with fairness and impartiality, and
that one party is not unfairly disadvantaged w ith respect to other parties in a dispute." 971 Ultimately,

963 Australia's comments on the experts' replies to questions, para. 15.
964 Australia's comments on the experts' replies to questions, paras. 16-17.
965 Australia's reply to Panel question 20 after the second substantive meeting, paras. 69-70.
966 Australia's reply to Panel question 20 after the second substantive meeting, para. 71.
967 Appellate Body Report on Canada – Continued Suspension , para. 435, where the Appellate Body
explains that "due process considerations are reflected in the Rules of Conduct. " No reference is made to the
DSU. Also, in India – Patents (US), para. 94, the Appellate Body recognizes that "...demands of due process ...
are implicit in the DSU..."
968 Appellate Body Report on Chile – Price Band System, para. 176.
969 Appellate Body Report on Thailand – H-Beams , para. 88. See also the Appellate Body Report on
Canada – Continued Suspension, para. 433.
970 Appellate Body Report on Canada – Continued Suspension, para. 434.
971 Appellate Body Report on Canada – Continued Suspension, para. 433.

due process ensures an objective assessment of the ma tter by panels, as mandated by Article 11 of the
DSU.972
7.8 According to the Appellate Body, due process fu lly applies to the selection and consultation
of experts by panels: "[T]he prot ection of due process applies to a pane l's consultations with experts.
This due process protection applies to the process for selecting experts and to the panel's consultations
with the experts, and continues throughout the proceedings."973
7.9 If a procedural concern puts at risk the purpose and role of due process in WTO dispute
settlement, it is effectively a due process concern, to which panels need to pay special attention.
However, it is difficult to state in the abstract wh ether a specific type of procedural concern affects
due process. Only by taking in to account the specific circumstan ces of the case, can a panel assess
whether a procedural concern affects due process and thus merits such special attention.
7.10 Accordingly, when analysing the various con cerns raised by Australia, on the selection and
consultation of experts in this dispute, the Panel will pay special attention to determine whether due
process has been prejudiced and whether as a result Australia has been unfairly disadvantaged.
2. Selection of experts
(a) The Panel's selection of only one ALCM expert
7.11 During the expert selection process, Australia e xpressed its preference that the Panel seek the
advice of two experts on each of the three pests at issue (fire blight, European canker and ALCM). 974
In Australia's view, this would ensure that the Panel "receives advice from a sufficiently diverse pool
of expertise".975 Australia reiterated this concern after the Panel had selected Dr Jerry Cross as the
sole expert on ALCM.976
7.12 In turn, New Zealand considered adequate that the Panel select one expert for each of the
three pests and, in any event, no mo re than two experts for each pest. 977 New Zealand did not raise
any objection to the selection of Dr Cross as the sole ALCM expert.
7.13 Neither Article 13 of the DSU, nor Article 11.2 of the SPS Agreement, which jointly provide
the legal basis for WTO panels to seek the advice of experts in SPS disputes, specify the number of
experts that should be selected for each particular issue. Likewise, the Panel's Working Procedures,
adopted after having consulted the Parties, do not re fer to a specific number of experts: "The Panel
will decide the number of experts in light of the number and type of issues on which advice will be
sought, as well as of the different areas on which each expert can provide expertise."978
7.14 The Panel extensively consulted the Parties throughout the expert selection process. In
accordance with the Panel's Workin g Procedures and the views expressed by the Parties, the Panel
asked the Secretariat of the specialized internationa l agency on plant health – the International Plant
Protection Convention (IPPC) –, the Council for In ternational Congresses of Dipterology (CICD), as

972 Appellate Body Report on US – Gambling, para. 273.
973 Appellate Body Report on Canada – Continued Suspension, para. 436.
974 See, for example, Australia's communicatio ns to the Panel, 4 September 2008 and
20 November 2008.
975 Australia's communications to the Panel, 20 November 2008.
976 Australia's communication to the Panel, 19 December 2008.
977 New Zealand's communications to the Panel, 11 September 2008 and 9 December 2008.
978 Working Procedures, 26 March 2008, attached as Annex A-3 to this report, para. 17(d).

well as the Parties, for suggestions of names of possible experts.
979 Each of these steps was done after
consultation with the Parties.980
7.15 The Panel consulted the IPPC Secretariat on 15 September 2008, to ask for suggestions of
experts in the four areas identified by the Panel (each of the three pests at issue, as well as pest risk
assessment).981 On 23 September 2008, the IPPC Secret ariat provided a list with ten potential
experts982, from which only four confirmed their interest a nd availability to assist the Panel. None of
these four persons was an expert on ALCM. The IPPC Secretariat stated it had difficulties finding
suitable ALCM experts, but suggested that with more time it could provide additional names of
experts in this field.
983 This situation delayed the proceedi ngs and required the Panel to amend the
timetable.984 At the end of October 2008, the IPPC Secretariat proposed 12 additional names.985 Four
of them confirmed their interest and availability. Again, none of these four persons were experts on
ALCM. Accordingly, the Panel asked the Pa rties to suggest names of experts on ALCM. 986 I n
response to the Panel's request, New Zealand suggested one ALCM expert, Dr Jerry Cross, "as having
relevant experience and expertise", and noted th at it would not object to having only one ALCM
expert, considering the various difficulties in finding appropriate a nd available experts. 987 Australia
did not propose any expert on ALCM, but suggested that the Panel contact the Council for
International Congresses of Dipterology (CICD), to ask for names of ALCM experts.988
7.16 In the light of Australia's suggestion, on 25 November 2008 the Panel contacted the CICD. 989
In response, on 26 November 2008 the Chairman of the CICD suggested one ALCM expert, noting
that this expert might be able to sugge st further names on behalf of the CICD.
990 Through contact
with the expert suggested by the CICD, the Pa nel found another ALCM expert, which raised the
number of potential ALCM experts to three: one proposed by New Zealand, one proposed by the
CICD and one proposed by the expert suggested by the CICD. 991 These three names of ALCM
experts were submitted to the Parties for comments. 992 For different reasons, all three ALCM experts
were objected to by at least one of the Parties. 993 The expert proposed by the CICD was objected to
by both Parties, because he was not available to meet with the Panel and the Parties in Geneva.994 The
expert proposed by the expert suggested by the CI CD was also objected to by both Parties, on the
grounds that his expertise was limited to midge ta xonomy and that he had limite d relevant experience
on pest management or field ecology.995 The remaining available expert, Dr Jerry Cross, was objected

979 Working Procedures, 26 March 2008, attached as Annex A-3 to this report, para. 17(b).
980 See, for example, Australia's communications to the Panel, 20 March 2008 and 4 September 2008,
and New Zealand's communication to the Panel, 11 September 2008.
981 Panel's communication to the IPPC, 15 September 2008.
982 Electronic communication from the IPPC to the Panel, 23 September 2008.
983 Ibid.
984 Electronic communication from the Panel to the Parties, 31 October 2008.
985 Electronic communications from the IPPC to the Panel, 29 and 30 October 2008.
986 Panel's communication to the Parties, 13 November 2008.
987 New Zealand's communication to the Panel, 20 November 2008.
988 Australia's communication to the Panel, 20 November 2008.
989 Panel's communication to the CICD, 25 November 2008.
990 Electronic communication from the Chairman of the CICD to the Panel, 26 November 2008.
991 Panel's communication to the Parties, 5 December 2008.
992 Ibid.
993 Parties' communication to the Panel, 9 December 2008.
994 New Zealand's communication to the Panel, 9 December 2008, and Australia's communication to
the Panel, 9 December 2008.
995 Ibid.

to by Australia on the grounds of an alleged c onnection with the New Zealand Government and
New Zealand researchers.996
7.17 On 15 December 2008, the Panel informed the Pa rties that it had selected a total of seven
experts.997 Two experts were selected on the basis of th eir qualifications and specialized expertise on
fire blight, European canker and pest risk assessment , respectively, while one of the experts, Dr Jerry
Cross, was selected for his expertise on ALCM.
7.18 As described in the preceding paragraphs, the main reason for selecting only one expert on
ALCM was the limited pool of available experts on this particular pest.
7.19 The Panel formally began its expe rt selection process on 15 September 2008 998 and finalized
it on 15 December 2008. 999 During this three-month period, the Panel consulted specialized agencies
and the Parties for names of possible experts. Du e to the problems that the Panel faced in finding
scientific experts, especially on ALCM, the timetable of the dispute was amended in November 2008,
and the proceedings were delayed.
7.20 As noted earlier, neither the DSU, the SPS Agre ement, nor the Panel's Working Procedures
specify the number of experts to be selected. Accordingly, it was ultimately within the Panel's
authority to decide on the number of experts accordi ng to the specific circumstances of the dispute,
the necessary expertise and the constraints faced. In a ddition, the Panel is bound by Article 3.3 of the
DSU to seek a prompt settlement of the dispute. The Panel noted, however, Australia's expressed
preference for two experts to be consulted in each of the three relevant pests. In general, more experts
might provide more advice than just one expert and this might be useful to a panel. But this does not
imply that consulting one competent expert would no t be sufficiently useful for a panel in a given
dispute, that this would necessarily narrow the range of scientific expert advice that the Panel would
receive, nor that the parties would be prejudiced by the selection of only one expert on a given
subject. Despite the delay, and the recourse to sp ecialized agencies and the Parties, the Panel was
unable to find a larger number of qualified and av ailable ALCM experts. In the particular
circumstances of this case, the Panel had to decide whether to proceed with one selected available
expert, with a high degree of expe rtise as demonstrated by his qualifications, or further delay the
proceedings by extending the search for a second expert on the specific pest. Given that the Panel had
already consulted the leading agencies and the Par ties themselves, there was no guarantee that this
further delay would have resulted in finding a su itable additional expert on ALCM. There was,
however, the possibility that, with any additional pos tponement, any of the experts already confirmed
could become unavailable. In the Panel's view, further delaying the selection process would have
been inappropriate, as it would have hindered the objective of seek ing a prompt settlement of the
dispute, contrary to Article 3.3 of the DSU and the expressed interest of both Parties.
1000 In the light
of the above, the Panel decided to seek the advice of only one expert on ALCM, rather than two, as in
the case of the two other pests and the issue of pest risk assessment.
7.21 In any event, there is no indication that the selection of one expert on ALCM has prejudiced
the Parties' rights in this dispute or impaired th e Panel's ability to conduct an objective assessment of
the matter before it. This selection in no way u ndermines the fairness and impartiality of the
proceedings, nor the ability of the Panel to obtain sufficient specialized scien tific expertise. In
particular, Australia has not demonstrated that it suffered any kind of prejudice by the Panel

996 Australia's communication to the Panel, 9 December 2008.
997 Panel's communication to the Parties, 15 December 2008.
998 Ibid.
999 Ibid.
1000 See, for example, Australia's communication to the Panel, 20 November 2008.

consulting only one ALCM expert. The Panel w ill address the substance of Australia's specific
objections to the selection of Dr Cross in the following section.
(b) The alleged connection of the ALCM expert with the complainant
7.22 Australia objected, under paragraph 17(c) of the Panel's Working Procedures, to
Dr Jerry Cross being consulted as an expert by the Panel, given Dr Cross's "connection with the
New Zealand Government and New Zealand researchers".
1001 Australia references joint research
projects and publications, cited by Dr Cross in his curriculum vitae, which – Australia argues – were
jointly undertaken with researchers from HortRes earch New Zealand. In particular, Australia
references a "joint publication with Suckling et al., published in 2007, which indicates a very recent
connection with relevant New Zealand researchers, whose work is primarily targeted at facilitating
access for New Zealand apples to export markets."1002
7.23 New Zealand responds that Australia's objecti on is "without basis". Dr Cross has no
connection with the New Zealand Government relevant for the present dispute. 1003 His preliminary
conflict of interest statement indicates that he has not received funding from the New Zealand
Government in relation to the activity with Ne w Zealand researchers and his collaboration with
New Zealand experts can be no basis for a compelling objection.
1004
7.24 Under the Rules of Conduct for the DSU applicab le to all covered persons in WTO dispute
settlement, experts "shall be independ ent and impartial, shall avoid direct or indirect conflicts of
interest ... pursuant to the dispute settlement mech anism, so that through the observance of such
standards of conduct the integrity and impartiality of that mechanism are preserved". 1005 In
accordance with the Working Procedures adopted by the Panel, potential experts were asked to submit
a statement of potential conflict of interests, pr ior to their selection, which was copied to the
Parties.1006 Like other persons covered by the Ru les of Conduct, experts "shall disclose any
information that could reasonably be expected to be known to them at the time which, coming within
the scope of the Governing Principle of these Rules, is likely to affect or give rise to justifiable doubts
as to their independence or impartiality."1007 According to the Illustrative List annexed to the Rules of
Conduct, this disclosure shall include information relating to:
"(a) financial interests (e.g. investments, loans, shares, interests, other debts);
business interests (e.g. directorship or othe r contractual interests); and property
interests relevant to the dispute in question;
(b) professional interests (e.g. a past or present relationship with private clients,
or any interests the person may have in domestic or international proceedings, and
their implications, where these involve issues similar to those addressed in the dispute
in question);

1001 Australia's communication to the Panel, 9 Decem ber 2008. This objec tion was maintained in
Australia's communication to the Panel, 19 December 2008.
1002 Australia's communication to the Panel, 9 December 2008.
1003 New Zealand's communication to the Panel, 11 December 2008.
1004 Ibid.
1005 Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of
Disputes (WT/DSB/RC/1), 11 December 1996, Section II (Governing Principle).
1006 Working Procedures, 26 March 2008, attached as Annex A-3 to this report, para. 17(c).
1007 Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of
Disputes (WT/DSB/RC/1), 11 December 1996, Section VI.2 (Self-Disclosure Requirements by Covered
Persons).

(c) other active interests (e.g. active par ticipation in public interest groups or
other organisations which may have a declar ed agenda relevant to the dispute in
question);
(d) considered statements of personal opini on on issues relevant to the dispute in
question (e.g. publications, public statements);
(e) employment or family interests (e.g. the possibility of any indirect advantage
or any likelihood of pressure which could arise from their employer, business
associates or immediate family members)."
1008
7.25 In line with the Rules of Conduct 1009, the Panel shared the Illust rative List with Dr Cross on
16 December 2008.1010 As New Zealand points out, in his preliminary conflict of interest statement,
Dr Cross stated that:
"You will see from my publications list that I have collaborated with scientists at
HortResearch NZ in the conduct of research into the sex pheromone of apple leaf
midge. We have not had any jointly funded research projects. I was a guest speaker
at a NZ top fruit conference a couple of y ears ago. But then again I was a guest
speaker at the IFTA [International Fruit Tree Association] 50th anniversary
conference in Hobart Australia [in 2007]. ..."
1011
7.26 Subsequently, Dr Cross submitted the disclosure form provided for in Annex 3 of the Rules of
Conduct, which states as follows: "... I understand my continuing duty ... to disclose herewith and in
future any information likely to affect my indepe ndence or impartiality, or which could give rise to
justifiable doubts as to the integrity and impartia lity of the dispute settlement mechanism; ..." 1012 No
further information in this regard was disclosed by Dr Cross.
7.27 According to Australia, Dr Cross's alleged connection to the New Zealand Government
results from his "research projects and publica tions with researcher s from HortResearch
New Zealand." As a matter of fact, HortRese arch is wholly owned by the New Zealand
Government.1013 However, participation in joint research w ith other scientists who may be affiliated
with a government-funded institution does not itself im ply a connection with that Government. There
is no indication that Dr Cross has worked for th e Government of New Zealand, nor that he has
received any monetary compensation from that Government. The extent of his collaboration with

1008 Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of
Disputes (WT/DSB/RC/1), 11 December 1996, Annex 2.
1009 Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of
Disputes (WT/DSB/RC/1), 11 December 1996, Section VI.1(a).
1010 Electronic communication from the Panel to Dr Jerry Cross, 16 December 2008.
1011 Electronic communication from Dr Jerry Cross, 28 November 2008. See Panel's communication to
the Parties, 5 December 2008, whereby th is information was sent to the Par ties, together with the curriculum
vitae of Dr Jerry Cross.
1012 Electronic communication from Dr Jerry Cross to the Panel, 16 December 2008.
1013 "HortResearch was formed on 1 July 1992 as one of nine Crown Research Institutes established
from several Government departments. [HortResearch is] wholly Government-owned but [earns] revenue
through commercial sources (currently about 40 percent) and from a Government funding process where
[HortResearch obtains] funding through a competitive investment process in association with other Crown
Research Institutes, universities and agencies." Sour ce: http://www.hortresearch.co.nz/, consulted on 26
November 2009.

New Zealand scientists at HortResearch and the fact that he did not have "a ny jointly funded research
projects" with these scientists was disclosed by Dr Cross, when initially approached by the Panel.
1014
7.28 Australia does not submit any additional argumen ts, nor any specific evidence for the alleged
connection of Dr Cross with the New Zealand Governme nt. In the light of the Illustrative List of the
Rules of Conduct cited above, there is no indication that Dr Cross has any financial, business or
property interests "relevant to the dispute in question", nor that he has any professional, other active,
employment or family interests in the dispute, under paragraphs (a), (b), (c) and (e) of that List.
7.29 Australia's objection to the selection of Dr Cross, is based on the argument that Dr Cross's
"joint research projects and publications with researchers from HortResearch New Zealand" constitute
a connection to the New Zealand Government and New Zealand researchers. In this respect, Australia
refers only to "a joint publication with Suckling et al., published in 2007" which corresponds to the
article submitted by New Zealand as Exhibit NZ-15. 1015 In Australia's view, this joint publication
"indicates a very recent connection [of Dr Cross] w ith relevant New Zealand researchers, whose work
is primarily targeted at facilitating access for New Zealand apples to export markets".1016
7.30 The Suckling et al. (2007) paper was published in June 2007 1017, prior to the establishment of
the Panel. The paper acknowledges that its resear ch, including Dr Cross's costs of travelling to
New Zealand, was supported by Pipfruit NZ Inc. and a contract from New Zealand's foundation for
Research Science and Technology to HortResearch. 1018 The paper addresses the potential of mass
trapping as a means to control ALCM.
7.31 As stated by the Appellate Body, when selecting experts, panels must consider "whether there
is an objective basis to conclude that an expert's independence or impartiality is likely to be affected
or there are justifiable doubts about that expert's independence or impartiality." 1019 The standard for
selecting experts aims at ensuring the fairness and impartiality of the ex perts' consultation in
conformity with due process. The lack of independe nce and/or impartiality will prejudice the parties'
right to a fair proceeding.
7.32 A panel is responsible for ensuring that the sel ected experts have the necessary qualifications
and expertise, and comply with the requirements for independence, impartiality and avoidance of
conflicts of interest. Conversely, it is not enou gh for a party to simply assert an objection regarding
the selection of a particular expert. Any party raisin g such an objection is expected to explain in what
manner the expert's independence or impartiality have been or may be compromised.
7.33 It is to be expected that in any specialized area of science, the few knowledgeable experts will
frequently engage with each other and may particip ate in joint research projects, in meetings and
conferences, and joint publications. Participation in "joint research projects and publications" are an
indication of the qualifications and specialized sc ientific expertise that, in accordance with its

1014 Electronic communication from Dr Jerry Cross, 28 November 2008. See Panel's communication to
the Parties, 5 December 2008, whereb y this information was sent to the Parties, together with the curriculum
vitae of Dr Jerry Cross.
1015 Suckling DM, JTS Walker, PW Shaw, L-A Manning, P Lo, R Wallis, V Bell, WRM Sandanayaka,
DR Hall, JV Cross & AM El-Sayed (2007), "Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples",
Journal of Economic Entomology 100(3), in Exhibit NZ-15.
1016 Australia's communication to the Panel, 9 December 2008.
1017 See, http://www.entsoc.org/Pubs/Periodicals/JEE/inde x.htm. This is the website of the journal in
which the article was published.
1018 Suckling DM, JTS Walker, PW Shaw, L-A Manning, P Lo, R Wallis, V Bell, WRM Sandanayaka,
DR Hall, JV Cross & AM El-Sayed (2007), "Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples",
Journal of Economic Entomology 100(3), in Exhibit NZ-15, p. 750.
1019 Appellate Body Report on Canada – Continued Suspension, para. 454.

Working Procedures, the Panel was to use as a basis to select scientific experts. Per se, this fact is not
enough to call into question a researcher's inde pendence and impartiality, nor is it necessarily
evidence of a connection with the government of a part y. Nor is the fact that some of those "joint
research projects and publications" may be funded or supported by institutions associated with the
government of a Member. This is particularly true, when, as this Panel's considerable difficulty in
identifying experts clearly demonstrates, there is a very small number of experts in the field in
question. In such a situation it is all the more lik ely that "all of the world's experts" will work and
collaborate in some way at one time or another. Moreover, the fact that a scientific project or
publication is funded by a private organization or a governmental institution is not in itself a reason to
call into question the results of the research.
7.34 As noted above, the Panel is responsible of en forcing in its proceedings the standards of
independence and impartiality contained in the Rul es of Conduct for the DSU. Notwithstanding this
fact, in the present case, as the party making an obj ection to the selection of an expert proposed by the
Panel, it was Australia's burden to make the case th at Dr Cross's participation in a joint research
project and publication with researchers from HortResearch New Zealand would call into question
Dr Cross's independence and impartia lity, or create actual or potential, direct or indirect, conflicts of
interest. In the absence of any explanation or evid ence from Australia in this regard, the Panel finds
no facts to support the conclusion that Dr Cross's participation in the res earch that led to the
publication of the Suckling et al. (2007) paper, raises doubts regarding his independence and
impartiality or his capacity to provide expert advice to this Panel.
7.35 When originally consulted by the Panel on th e draft questions to the experts, Australia
objected to two questions being posed to Dr Cross on the flight range of ALCM, arguing that this may
create a potential conflict of interest, as he w ould be asked to comment on his own work.
1020
Ultimately, the Panel decided to pose both questions . After having received the experts' responses
and having held its meeting with the experts and th e Parties, the Panel asked Australia its views on
how the Panel should consider Dr Cross's answers. In response, Australia considered that Dr Cross
did not give "undue weight or importance to his own work on the issue of flight distance, to the
detriment of other material availabl e or alternative views on the matter." 1021 Indeed, in its subsequent
submissions Australia used responses given by Dr Cross to the questions to which Australia had
previously objected, to support its arguments. 1022 In other words, there was only one instance where
Australia had articulated a specific objection th at called into question whether Dr Cross was
sufficiently impartial and, ultimately, Australia did not maintain its objection and noted that the expert
provided his response in an unbiased manner.
7.36 In US/Canada – Continued Suspension , the Appellate Body confirmed the "significant
investigative authority" of panels under Article 13 of the DSU and Article 11.2 of the SPS Agreement
and the broad discretion of panels in exercising this authority.1023 As noted in the previous section on
Australia's objections to the selection of a so le expert on ALCM, the Panel faced significant
difficulties in selecting experts on ALCM, despite th e assistance received from the IPPC, the CICD
and the Parties. Having considered the qualifications and conflict of interest statements of Dr Jerry
Cross, the Panel found no reasons that would have prevented it from seeking the scientific advice of
Dr Cross. In particular, nothing in the objection ra ised by Australia gave any indication of real or
perceived conflicts of interest or any other situation that would have affected Dr Cross's independence
and impartiality. As in the case of the other expert s, the responses provided by Dr Cross to questions
posed by the Panel and the Parties have been extrem ely rigorous and helpful, for which the Panel is
sincerely grateful.

1020 Australia's communication to the Panel, 19 December 2008, pp. 70 and 76.
1021 Australia's reply to Panel question 28 after the second substantive meeting.
1022 See, for example, Australia's second written submission, paras. 616, 670-671 and 673.
1023 Appellate Body Report on Canada – Continued Suspension, para. 439.

3. Consultation of experts
(a) Concerns expressed by Australia
7.37 In accordance with its Working Procedures, the Panel prepared its questions to experts in
consultation with the Parties.
1024 As noted in its timetable, on 15 December 2008, the Panel informed
the Parties of its proposed questions to the e xperts. The Parties submitted their comments on the
proposed questions on 19 December 2008. 1025 In its communication, Australia made extensive
comments on the proposed questions. In addition to numerous specific comments on the Panel's
proposed questions to experts, Australia identified a number of more general concerns, namely that in
its view some of the proposed questions:
 – "Appear to be leading", i.e., they may suggest an answer;

 – Address issues that were not raised by New Zealand, including issues raised only in
the United States' third party submission;

 – Use inconsistent terminology or do not stric tly follow the text of the obligations in the
SPS Agreement;

 – Include "selective, incomplete or poten tially misleading" references to Parties'
submissions; or, on the contrary,

 – Include references to Parties' submissions that go beyond what is necessary for the
experts to perform their role.
1026

Additionally, Australia noted that the Panel shoul d ensure that it does not delegate to experts
questions on which it is the Panel's responsibility to decide and that the Panel should allocate the
questions which experts should respond to, based on the experts' relevant areas of expertise.
1027

7.38 Having revised the proposed questions in the light of the Parties' comments, on
16 January 2009 the Panel sent the final version of the qu estions to the experts, copied to the Parties.
The Panel received written replies from the experts on 9 March and relayed these replies to the Parties
on 10 March. On 25 March 2009, the Parties su bmitted their comments on the experts' responses.
In its comments on the experts' responses, Australia raised the following two concerns: that a number
of the Panel's questions go to matters that requi re specialist knowledge wh ich none of the experts
selected by the Panel would have; and, that in some of their responses experts provide additional
information that does not fall within the scope of th e Panel's questions and should only be considered
as background information. Australia also noted two concerns that in its view relate to the observance
of due process in the expert phase of the dispute, namely that Australia had not been given an
opportunity to comment on several questions that were put to the experts and either had not appeared
in the draft questions originally provided to the Par ties or were substantially modified from the draft;
and that, in answering the questions, some of the experts moved outside the field of expertise for
which each was selected.
7.39 In its second written submission on 21 April 2009 , Australia argues that the Panel addressed
"some, but not all," of the "due process concerns" re garding the proposed questions to the experts that

1024 Working Procedures, 26 March 2008, attached as Annex A-3 to this report, para. 17(f).
1025 New Zealand's and Australia's communications to the Panel, 19 December 2008.
1026 Australia's communication to the Panel, 19 December 2008.
1027 Ibid.

were expressed in Australia's letter of 19 December 2008. 1028 Although Australia does not explicitly
say so, presumably these specific "due process concerns" were addressed by the Panel when it drafted
the revised version of its questions to the experts. The concerns that would have been addressed in
the revised draft questions include Australia's alle gation that some questions were "leading", used
inconsistent terminology, or included "selective, incomplete and potentially misleading" paragraph
references, and Australia's request to limit the refere nces to Parties' submissions in the questions. The
Panel reaches this conclusion because these specific concerns were not raised again by Australia when
the Panel asked Australia to clarify the nature of its due process concerns at the second substantive
meeting with the Parties and in its written questions to Australia after the second meeting. In the
second written submission, Australia also refers to its "additional due process concern" that the Panel
allegedly posed questions to the experts that either did not appear in the draft questions originally
provided to the Parties or were substantially modified from the draft.
1029
7.40 Accordingly, the Panel will address the following concerns expressed by Australia:
 – That the Panel posed questions to the expe rts that either did not appear in the draft
questions originally provided to the Parti es or were substantially modified from the
draft;

 – That the Panel should have limited its qu estions to issues rai sed by New Zealand and
should not consider issues raised in Th ird Parties' submis sions or additional
information provided by the experts; and,

 – That experts should not express opinions outside of the field of expertise for which
each was selected.

(b) Whether the Panel posed new questions to expe rts or modified questions from the draft
provided to Parties and whether such new questions affect due process
7.41 As noted above, Australia submits that due process has been affect ed as the Panel posed
several questions to the experts that did not appear in the draft list of questions provided to the Parties
on 15 December 2008 for their comments. Australia a dds that "[o]ther questions were modified or
amended which substantially altered the nature of the original questions."
1030 Australia adds that it
"was not given an opportunity to comment in any of these instances".1031
7.42 After the second substantive meeting with the Par ties, the Panel asked Australia to clarify the
nature of its due process concerns expressed in its comments on the experts' replies to questions.
With respect to the specific issue of "new" questions, Australia answered that:
"In paragraph 16 [of its comments on the e xperts' replies], Australia noted the
following concerns:
[S]everal new questions were put to the experts which did not appear
in the draft questions provided to the parties for comment. Other
questions were modified or amende d which substantially altered the
nature of the original questions. Australia was not given an
opportunity to comment in any of these instances.

1028 Australia's second written submission, para. 56.
1029 Australia's second written submission, para. 57.
1030 Australia's comments on the experts' replies to questions, Australia's communication to the Panel,
25 March 2009, para. 16.
1031 Ibid.

The following questions to the experts did not appear in the proposed list of questions
sent for comment to the parties: Questions 17, 21, 23, 36, 37, 89 and 121. Australia
has already addressed Questions 21, 89 and 121 ... as questions that addressed matters
outside the experts' fields of expertise. Australia maintains its position that the Panel,
as a matter of due process, should have gi ven it an opportunity to comment on new
questions put to the experts which did not appear in the draft questions."
1032
7.43 Australia had originally referred to both "n ew questions" and "modified or amended"
questions. When asked by the Panel to clarify its due process concern it referred to questions that
Australia identified as "questions [that] did not appear in the proposed lis t of questions sent for
comment to the parties", i.e., "new questions" 17, 21, 23, 36, 37, 89 and 121. 1033 In response to
another question from the Panel, Australia also e xpressed concerns regarding modifications made by
the Panel to questions 19, 20 and 27, as a result of comments from New Zealand.1034
7.44 Australia added that questions 17, 23 and 36 had been proposed by New Zealand, but
Australia's position had not been prejudiced by the content of these questions and, accordingly, it had
no difficulty with answers by experts to these three questions being drawn upon by the Panel.1035
7.45 As set out above, in response to the Panel's questions after the second substantive meeting
with the Parties, Australia clarified that its c oncern with questions 21, 89 and 121 is that they
allegedly address issues outside of the experts' respec tive fields of expertise. As a starting point, the
Panel notes that none of these questions was truly a "new" question. Question 121 was in the draft list
of questions provided to the Parties on 15 December 2008. It relates to the issue of whether it was
reasonable to assume that Australia would permit packing houses to leave waste exposed to the
elements.
1036 The draft question referred in this regard to paragraph 4.420 of New Zealand's first
written submission, paragraphs 898-900 of Australia's first written submission and to Australia's reply
to Panel question 100 after the first substantive meeti ng. In response to the Panel's questions after the
second substantive meeting with the Parties, Au stralia recognizes that draft question 121 was
reformulated: "[t]he revised question was also asked as Question 21 under fire blight and Question 89
under European canker."1037 As a matter of fact, questions 21, 89 and 121 are mere reformulations of
draft question 121, referring to the issue of whet her it was reasonable for the IRA to assume that
Australia would permit packing houses to leave waste exposed to the elements, in respect to the risk
assessment for fire blight, European canker and ALCM, respectively. Questions 21, 89 and 121
modified or amended draft question 121 only by posing the same question separately for each of the
three pests at issue and by incorporating a reference to relevant sections in Australia's IRA and to a
few additional paragraphs in the Parties' submissions , mostly contiguous to those already included in
the original references in draft question 121. Therefore, questions 21, 89 and 121 were not "new"
questions.
7.46 As regards question 37, Australia raises two objections. First, that the question did not appear
in the draft sent to the Parties and therefore Australia was depriv ed of an opportunity to comment. 1038
Second, that, since Australia did not have th e opportunity to comment, question 37 ultimately
followed language proposed by New Zealand that li mited the scope of the que stion to "experimental
evidence obtained in orchard conditions" 1039, and Australia did not have the opportunity to comment

1032 Australia's reply to Panel question 20 after the second substantive meeting, paras. 84-85.
1033 Australia's reply to Panel question 20 after the second substantive meeting, para. 85.
1034 Australia's reply to Panel question 22 after the second substantive meeting, para. 128.
1035 Australia's reply to Panel question 20 after the second substantive meeting, para. 86.
1036 Proposed questions for experts, Panel's communication to the Parties, 15 December 2008,
question 121.
1037 Australia's reply to Panel question 20 after the second substantive meeting, para. 76.
1038 Australia's reply to Panel question 20 after the second substantive meeting, para. 85.
1039 Australia's reply to Panel question 22 after the second substantive meeting, para. 129.

on this issue. 1040 Australia states that, by framing the question in this manner, the Panel allowed
New Zealand to limit the scope of the question to conform with New Zealand's narrow view of
applicable science linked to experimental evidence obtained in orchard conditions and prevented the
experts from commenting on the full range of relevant scientific evidence. Australia was not given an
opportunity to comment on this approach until th e experts had answered these questions. The
answers were on the record by then. 1041 Finally, Australia argued that, as a result of comments from
New Zealand, the Panel modified questions 19, 20 and 27, again limiting the questions to natural
conditions, without permitting New Zealand an opportunity to comment.1042
7.47 In response to Australia's arguments, New Zeal and asserts that, when asked by the Panel to
clarify the nature of its due process concerns afte r the second substantive meeting, Australia did not
contend that due process had been infringe d with respect to the "new questions". 1043 New Zealand
adds that the Parties had the opportunity to comme nt on the Panel's draft questions and asserts that
Australia provided extensive comments that were taken into account by the Panel. 1044 In
New Zealand's view, the Panel was entitled to draft additional questions wit hout further consultation
with the Parties and Australia subsequently had the opportunity to comment on any substantive matter
arising from the experts' responses to these "new questions".1045
7.48 Regarding the alleged limited sc ope of some of the Panel's qu estions, New Zealand considers
that the experts were not prevented by the Panel' s questions from "comment[ing] on the full range of
relevant scientific evidence". 1046 New Zealand asserts that the experts' responses demonstrate the
consideration of laboratory evidence. 1047 It also notes that Australia took advantage of "the
opportunity to comment on the issue of the scientif ic evidence considered by the experts" in
Australia's comments on the experts' responses and in the meeting with the experts.1048
7.49 In question 37, the Panel asked the experts for their opinion on the following:
"Does the IRA contain an objective and cr edible analysis, based on respected and
qualified scientific sources, for a proposition that the introduction of fire blight via
mature apple fruit has ever occurred or coul d occur, either experimentally or under
natural conditions or that populations of E. amylovora on mature apple fruit could be
the source of fire blight infections under natural conditions? Are you aware of any
scientific evidence outside of the IRA for such a proposition?"
7.50 The question posed by the Panel followed two qu estions that were suggested by New Zealand
in its comments on the Panel's proposed questions: "Are you aware of any scientific evidence either
in the IRA or otherwise that the introduction of fire blight via mature fruit has ever occurred or could
occur, either experimentally or under natural conditions?" and "Are you aware of any scientific

1040 Australia's reply to Panel question 22 after the second substantive meeting, para. 129.
1041 Ibid. See also, Australia's comments on the experts' replies to questions, communication from
Australia to the Panel, 25 March 2009, para. 85.
1042 Australia's reply to Panel question 22 after the second substantive meeting, para. 128.
1043 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, para. 44.
1044 New Zealand's comment on Australia's reply to Panel question 26 after the second substantive
meeting, para. 33.
1045 Ibid.
1046 New Zealand's comments on Australia's reply to Panel question 22 after the second substantive
meeting, paras. 61 and 64.
1047 New Zealand's comments on Australia's reply to Panel question 22 after the second substantive
meeting, para. 64.
1048 New Zealand's comments on Australia's reply to Panel question 22 after the second substantive
meeting, para. 62.

evidence that populations of E. amylovora on mature apple fruit could be the source of fire blight
infections under natural conditions?"
1049
7.51 In turn, questions 19, 20 and 27 asked the experts for their opinion on the following:
Question 19: "Please comment on whether there is sound scientific evidence that
epiphytic infestations by E. amylovora exist on mature apple fruit in quantities that
are under natural conditions capable of re production; being tr ansferred to a host
plant; and ultimately initiating an infection in that host plant?"
Question 20: "Please comment on whether th e requirements identified in Australia's
IRA, regarding disinfection treatment of apples in the packing house and the
disinfecting of packing house equipment before each Australian packing run, are
scientifically justified and reasonable? Are you aware of any reliable scientific
evidence of E. amylovora from harvested apples contaminating packing house
equipment? If so, would such bacteria survive the packing house process? Are you
aware of any reliable scientific evidence of mechanical transfer in a natural
environment of E. amylovora from workers' hands to susceptible hosts?"
Question 27: "Please comment on whether the reasoning in Australia's IRA regarding
the number of E. amylovora bacteria isolated from, and reported on, mature apple
fruit that would be sufficient to spread to a susceptible host and initiate an infection
under natural (as opposed to laboratory) cond itions. Is this evaluation objective and
credible? Is it based on respected and qualified scientific sources?"
7.52 Under Articles 13.1 of the DSU and 11.2 of the SPS Agreement, a panel has a broad right to
seek information and technical advice from scientific experts. Indeed, under Article 11.2 of the
SPS Agreement, a panel engaged in dispute settlement proceedings involving scientific or technical
issues under that agreement should "seek advice from experts chosen by the panel in consultation with
the parties to the dispute". Expert consultation is part of the broad right of a panel "to seek
information and technical advice from any individu al or body which it deems appropriate" and to
"seek information from any relevant source" and "c onsult experts to obtain their opinion on certain
aspects of the matter" under Article 13 of the DSU. Ultimately, the purpose of expert consultation is
to allow a panel to exercise its duty to "make an objective assessment of the matter before it",
pursuant to Article 11 of the DSU.
7.53 As stated by the Appellate Body in US – Shrimp:
"[T]he DSU accords to a panel established by the DSB, and engaged in a dispute
settlement proceeding, ample and extensive au thority to undertake and to control the
process by which it informs itself both of the relevant facts of the dispute and of the
legal norms and principles applicable to such facts. That authority, and the breadth
thereof, is indispensably necessary to enable a panel to discharge its duty imposed by
Article 11 of the DSU to 'make an objective assessment of the matter before it,
including an objective assessment of the facts of the case and the applicability of and
conformity with the relevant covered agreements … .' (emphasis added)"
1050
7.54 As noted above, in the US/Canada – Continued Suspension dispute, the Appellate Body
confirmed the "significant investigative authorit y" of panels under Article 13 of the DSU and

1049 New Zealand's comments on proposed questions for experts, New Zealand's communication to the
Panel, 19 December 2008, pp. 8-9.
1050 Appellate Body Report on US – Shrimp, para. 106.

Article 11.2 of the SPS Agreement and the broad discr etion of panels in exercising this authority,
including through expert consultation.1051
7.55 Paragraph 17(f) of the Working Procedures fo r the Panel, adopted by the Panel on
26 March 2008, provides that "[t]he Panel will prepar e written questions for the experts. Parties will
have the opportunity to comment on the proposed qu estions, or suggest additional ones, before the
Panel decides on the final questions to be sent to the experts."1052
7.56 The timetable adopted by the Panel on 8 April 2008 contemplated that Parties would receive
the Panel's proposed list of experts and questions on 22 October 2008, would have five working days
until 29 October to submit comments to the Panel and that the Panel would in turn send the questions
to experts five working days later.
7.57 In accordance with Articles 12.1 and 12.3 of the DSU, both the Working Procedures and the
timetable were drawn up by the Panel after havi ng consulted the Parties. While the Working
Procedures granted Parties the right to comment on the draft questions proposed by the Panel and
suggest additional questions, the Panel was ultimately responsible for deciding on the final form of
the questions that it would pose to the experts.
7.58 No provision was made in the Working Procedures, or in the timetable, allowing either Party
the opportunity to comment on questions proposed by the other Party. Nor do the Working
Procedures require the Panel to send its revised ques tions back to the Parties, allowing them a second
opportunity for commenting. The practice of granting parties an opportunity to comment on proposed
questions and to suggest additional ones has been fo llowed by previous panels that have consulted
scientific experts.
1053
7.59 In accordance with the Working Procedures a dopted by the Panel, both New Zealand and
Australia made comments on the Panel's proposed qu estions to the experts and suggested additional
questions. The comments made by the two Parties were numerous, extensive and not always easy to
reconcile. Indeed, the comments received from the Parties were so extensive that on 23 December
2008 the Panel informed the Parties that it would not be in a position to send the questions to experts
before the end of the year, as intended. Questions were ultimately sent to experts on 16 January 2009.
7.60 The Parties were aware that, under the Panel' s Working Procedures and timetable, they had
one opportunity to suggest new questions for the expe rts to the Panel. Nothing prevented any of the
Parties, however, from requesting that the Panel am end its procedures and timetable to allow for an
additional round of consultations. Before the Panel finalized and sen t its questions to the experts
neither Party requested the opportunity to comment on the revised version of the questions, or on the
questions suggested by the other Party. In particul ar, no such request was formulated either when the
Panel's Working Procedures and timetable were draw n up, nor at the moment when Parties submitted
their respective comments on the proposed questions on 19 December 2008, or after they received a
copy of each other's comments on the proposed questi ons in the period before the questions were sent
to the experts. It was only on 25 March 2009, two weeks after the Parties had received the experts'
responses from the Panel, that Australia raised for the first time its concern regarding the Panel's
posing of "new questions" or "modified questions".

1051 Appellate Body Report on Canada – Continued Suspension, para. 439.
1052 Working Procedures, 26 March 2008, attached as Annex A-3 to this report, para. 17(f).
1053 See, for example, Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.26;
Panel Report on Japan – Apples , para. 6.2; Panel Report on Australia – Salmon , para. 6.4; Panel Report on

7.61 The Panel found no reason to propose ex officio an extra step of consultations, particularly
since the proceedings had already suffered delays for a number of other reasons. Furthermore, had
the Panel allowed for a second round of comments, presumably a Party could still complain that any
questions modified or amended in the light of su ch comments would also need to be consulted on,
with the risk of engaging in a circular process of consultations. Because there was no provision that a
Party would have an opportunity to comment on questi ons to experts suggested by the other Party or
on modifications made by the Panel as a result of comments from the other Party, as a matter of fact
Australia could not have been deprived of such an op portunity by the Panel. Accordingly, there is no
evidence that due process has been affected in this respect.
7.62 Nor is due process affected by the content of questions 19, 20, 27 a nd 37, and namely the
focus on "experimental evidence obtained in or chard conditions". Under the Panel's Working
Procedures, the Panel was ultimately responsible for d eciding on the final form of the questions that it
would pose to the experts. Moreover, it is factually incorrect for Australia to assert that question 37
limited the scope of the enquiry to evidence obtained under orchard conditions.
1054 Indeed, the first
part of the question refers to the possible introduc tion of fire blight via mature apple fruit "either
experimentally or under natural conditions".
7.63 Even assuming that question 37, as well as questions 19, 20 and 27, focused on evidence
obtained under orchard conditions, as opposed to evid ence obtained in the laboratory, and that this
limited the scope of the question in a manner advant ageous to New Zealand, there is no evidence that
this would have prejudiced Australia's position.
7.64 In the Panel's view, the language of questions 19, 20, 27 and 37 was appropriate in the light of
the relevant reasoning of the IRA. As was genera lly the case, in this question, the Panel asked the
experts to initially focus on the reasoning contained in Australia's IRA. The Panel also asked the
experts to share their views on whether the IRA' s analysis was based "on respected and qualified
scientific sources".
7.65 Australia enjoyed ample opportunities to comment on the responses received from the
experts, and even to pose questions to the experts with a different focus, if it wished to. In accordance
with the Panel's Working Procedures and timetable , Parties first had the opportunity to submit
comments on 25 March 2009 on the experts' responses, and then on 9 April on each other's comments
on the responses. Parties then had the opportunity to comment again on th e issues raised by the
experts' responses in their rebuttal submissions due on 21 April. Parties were later able to pose
questions orally to the experts on occasion of the me eting with the Panel on 30 June. Indeed, after
Australia raised the argument that it was important to focus, not only on ev idence obtained in natural
conditions, but also on evidence obtained in the labo ratory, the Panel posed this specific question to
the experts during the meeting with the Parties on 30 June.1055
7.66 There is no indication that in the original written questions posed on 16 January 2009, the
experts were prevented "from commenting on the full range of relevant scientific evidence", including
evidence obtained under laboratory conditions. The Guidelines for Experts provided in the Panel's
questions of 16 January 2009, direct the experts to Australia's IRA and the scientific evidence
provided by the Parties, as well as any additional relevant scientific evidence; no limitation is made
to a specific type of evidence, obtained either unde r natural or experimental conditions. Indeed, there

1054 Australia's reply to Panel question 22 after the second substantive meeting, paras. 112-133.
1055 Transcript of the Panel's meeting with experts, paras. 170-172.

are plenty of references in the experts' responses on the specific issue of fire blight to evidence
obtained under laboratory conditions.1056
7.67 In sum, the Panel finds that there is no evid ence to support Australia's assertion that posing
questions 19, 20, 27 and 37 to the experts has prej udiced Australia's position in these proceedings.
When, as in the present case, each party is allo wed to pose its own questions, to comment on
responses received from the experts and to pose subse quent questions to the experts in a meeting with
the panel, parties' respective position in the pr oceedings and due process are initially not prejudiced
by the specific formulation of a question posed by a panel to the experts.
(c) Whether the Panel should be prevented from c onsidering issues raised in Third Parties'
submissions or additional information provided by the experts
7.68 In its comments on the proposed questions to expe rts, Australia asserted that "[a] number of
proposed questions address issues which New Zealand has not raised". 1057 According to Australia,
some of the proposed questions "address issues ra ised solely in the Unit ed States' third party
submission".1058 In its response to the Panel's questi ons after the second substantive meeting,
Australia reiterated this concern: "as third parti es are not parties to the dispute, their submissions
cannot constitute evidence and argument that can be used by either party to make the case for it. Nor
by the same reasoning can third party submissions provide a basis for questions to be put to the
experts."
1059
7.69 In response to the Panel's questions after the second substantive meeting with the Parties,
Australia identified the following written questi ons posed by the Panel to the experts on
16 January 2009 as including references to the United States Third Party submission: 20, 25, 29, 33,
41, 88, 125, 129, 132 and 138. 1060 Looking at the individual questions and answers, however,
Australia indicated that it was only concerned by questions 33, 88, 125, 129 and 132. With respect to
these five questions, Australia requested the Panel to disregard in full the responses provided by the
experts, "in order to ensure that New Zealand' s case should not inappropriately benefit from the
responses on issues which it has not raised or substantiated itself".
1061
7.70 Australia also argues that, because it is up to the complaining party to make its prima facie
case of inconsistency, "[e]xpert testimony may not be used as 'evidence' for a claim which either has
not been raised by a party or where that claim ha s been inadequately substantiated with evidence by
the relevant party."1062
7.71 In response to Australia's concern, New Zeal and rejects the proposition that a panel cannot
draw on third party submissions in posing questions to the scientific experts. In New Zealand's view:
"[T]hird parties have a right to provide argument and evidence on all of the issues that
fall within the Panel's terms of reference. The views of the third parties can be
considered, discussed, approved of, supported, or disagreed with by the Parties and
the Panel. This includes testing what the th ird parties have said by reference to the

1056 See, for example, Dr Paulin's reply to Panel questions 6, 27 28, 34, 38, 39, 40 and 42, in List of
Replies from the scientific experts to questions posed by the Panel, paras. 49, 191, 205, 238, 255-257, 259-260,
262-263 and 272-273.
1057 Australia's communication to the Panel, 19 December 2008, p. 4, fourth bullet point from the list.
1058 Australia's communication to the Panel, 19 December 2008, p. 4, fifth bullet point from the list.
1059 Australia's reply to Panel question 21 after the second substantive meeting, para. 98.
1060 Australia's reply to Panel question 21 after the second substantive meeting, para. 99.
1061 Australia's reply to Panel question 21 after the second substantive meeting, paras. 106-107 and
109-110.
1062 Australia's reply to Panel question 5 after the second substantive meeting, para. 30.

advice of experts. This is fully consiste nt with the Panel's duty to undertake an
objective assessment of the matter, and with ensuring that the right of third parties to
have a meaningful role in dispute settlement is preserved."
1063
7.72 New Zealand adds that, in any event, it has pr operly raised and substantiated all the claims
objected to by Australia.1064
7.73 Australia's concerns regarding the Panel's use of information provided by the experts or in
Third Party submissions has been framed in connec tion with the process of expert consultation.
Australia argues that New Zealand did not substantiate some of its claims and subsequently attempted
to use information provided by the experts or by th e Third Parties to cure that deficiency. Australia
also argues that the Panel cannot rely on the expe rts' responses to questions involving Third Party
submissions, since it was New Zealand's task to substantiate its claims.
7.74 As noted above when considering Australia's c oncerns regarding the alleged "new questions",
the process of expert consultation is ultimately re lated to a panel seeking in formation and technical
advice so as to fulfil its duty to "make an objectiv e assessment of the matter before it", pursuant to
Article 11 of the DSU. In turn, the "matter" before a panel consists of the claims made in connection
with specific measures identified by the complainant, as both claims and measures are reflected in the
respective panel's terms of reference.1065
7.75 It is the complaining party's burden to express the nature of its claims in the panel request, by
providing a brief summary of the legal basis of its complaint that is sufficient to present the problem
clearly. The complainant must identify the provisions in the covered agreements that, in its view, are
being breached by the offending measures. 1066 Once a claim is properly included within a panel's
terms of reference, it is again the burden of the complainant to articulate its claim by providing
arguments and evidence necessary to make a prima facie case of inconsistency.1067
7.76 In any event, once a claim is properly put be fore a panel and the complaining party has
submitted its arguments and articulated its complaint, the panel has broad powers of investigation in
order to make an objective assessment of the matter. At that point, a panel is not limited by the
arguments made by the parties to a dispute; it may develop its own arguments, and it can certainly
consider the arguments made by third parties. Australia's proposition that a panel is precluded from
considering information put forward by a third part y is contrary to the panel's duty to make an
objective assessment of the matter. It would also constitute a breach of the rights granted under the
DSU to third parties in WTO dispute settlement. Ar ticle 10.2 of the DSU provides that third parties
"shall have an opportunity to be heard by the pane l and to make written submissions to the panel".
The Appellate Body has noted in this respect that , not only have third parties the right to make
submissions in a dispute, but panels have the legal obligation to consider them. In the words of the
Appellate Body:
"[U]nder the DSU, only Members who are parties to a dispute, or who have notified
their interest in becoming third parties in such a dispute to the DSB, have a legal right
to make submissions to, and have a legal right to have those submissions considered
by, a panel. Correlatively, a panel is obliged in law to accept and give due

1063 New Zealand's comment on Australia's response to Panel question 21 after the second substantive
meeting, para. 55.
1064 New Zealand's comment on Australia's response to Panel question 21 after the second substantive
meeting, para. 56.
1065 See, for example, Appellate Body Report on Guatemala – Cement I, para. 72.
1066 See, for example, Appellate Body Report on Korea – Dairy, para. 139.
1067 Appellate Body Report on Chile – Price Band System, para. 173.

consideration only to submissions made by th e parties and the third parties in a panel
proceeding."1068
7.77 In other words, the rights of a third party to make submissions to a panel and the duty of a
panel to take into account relevant information provided by a third party in its submission are two
sides of the same coin. If panels were preven ted from considering information provided by a third
party, including arguments and evidence, then third party rights under the DSU would be illusory.
7.78 As noted above, under the Panel's Working Pr ocedures, the Panel was ultimately responsible
for deciding on the questions that it would pose to the experts. Nothing prevented the Panel from
using information, including arguments and evidence , provided in the submission of a Third Party.
Nothing would subsequently prevent the Panel fro m using such information for the purpose of
performing its objective assessment of the matter. Nor would the Panel be prevented from using
information provided by the experts in response to the Panel's questions, or in response to questions
posed by the Parties themselves during the meeting with the experts, as long as this information is
relevant to the matter that is within the Panel's terms of reference.
7.79 As regards questions 33, 88, 125, 129 and 132 to the experts, Australia has not argued that
any of these questions were outside of the terms of reference of the Panel. Australia has not alleged
that the questions did not relate to claims made by New Zealand that the challenged measures were in
breach of specific provisions of the SPS Agreement. Question 33, for example, relates to
"importation step 7" in the risk assessment for fi re blight. The consistency of the IRA's reasoning
with regard to fire blight with the provisions of the SPS Agreement cited by New Zealand is clearly
within the Panel's terms of reference.
7.80 Furthermore, Australia's argument would in practice preclude parties from developing their
arguments after their respective first written submi ssion. Australia has explicitly contended this.
In its first written submission, for example, Aust ralia suggests that, because New Zealand had already
identified a number of alleged methodological flaws in Australia's IRA, "New Zealand should not be
permitted to expand its claims beyond these so-calle d 'flaws' at a later time in these proceedings"
1069
or that because "New Zealand has not made a claim concerning the effects of brushing, waxing,
sorting and grading and packaging as considered by the IRA ... [it] should not be permitted to expand
its claims in relation to these issues at a later stage of proceedings". 1070 Australia's argument in this
regard blurs the distinction developed by the A ppellate Body between claims and arguments. As
noted by the Appellate Body:
"[T]here is a significant difference between the claims identified in the request for the
establishment of a panel, which establis h the panel's terms of reference under
Article 7 of the DSU, and the arguments supporting those claims, which are set out
and progressively clarified in the first written submissions, the rebuttal submissions
and the first and second panel meetings with the parties."
1071
7.81 In other words, if a claim was properly put by New Zealand before the Panel, and
New Zealand had submitted its arguments and ar ticulated its complaint, nothing prevents
New Zealand from developing those arguments in the course of the proceedings and referring, if it
wishes to do so, to information provided in Third Party submissions or in the responses provided by
the scientific experts. There are two limitations in this regard. First, the Panel is precluded from

1068 Appellate Body Report on US – Shrimp, para. 101 (original emphasis; footnote omitted).
1069 Australia's first written submission, para. 288.
1070 Australia's first written submission, para. 420. See also, Australia's first written submission,
paras. 528, 611, 725, 883, 904 and 906.
1071 Appellate Body Report on EC – Bananas III, para. 141 (original emphasis).

considering issues that fall outside the terms of reference approved by the DSB. Second, Australia
must be granted the right to respond to any argumen ts made by the complainant and to provide its
own counter arguments and relevant evidence. Of course, the burden is still on New Zealand, as the
complainant, to develop its prima facie case that the challenged measures are in breach of Australia's
obligations under the relevant provisions of the covere d agreements. With respect to this last point,
there is an important limitation of a panel's "signi ficant investigative authority", which the Appellate
Body has explained as follows:
"[T]his authority cannot be used by a panel to rule in favour of a complaining party
which has not established a prima facie case of inconsistency based on specific legal
claims asserted by it. A panel is entitle d to seek information and advice from experts
and from any other relevant source it chooses, pursuant to Article 13 of the DSU and,
in an SPS case, Article 11.2 of the SPS Agreement , to help it to understand and
evaluate the evidence submitted and the arguments made by the parties, but not to
make the case for a complaining party."
1072
7.82 In conclusion, to the extent that a specific i ssue raised by a Third Party was properly within
the Panel's terms of reference, and that New Zeal and had submitted its argumen ts and articulated its
complaint with respect of the specific claim, th e Panel rejects Australia's proposition that it was
prevented from addressing that issue in the written questions posed to the experts. To the same
extent, the Panel also rejects Australia's proposition that it is prevented from considering information
provided by the scientific experts in response to the Panel's questions. The Panel finds no evidence
that due process has been negatively affected for any of these two reasons.
(d) Whether the Panel should disregard opinions expressed by the scientific experts outside of the
field of expertise for which they were selected
7.83 Australia asserts that some of the written questi ons that were put to the experts by the Panel
on 16 January 2009 would have re quired specialist expertise and experience in areas other than the
respective expertise of the selected experts.1073 In response to the Panel's questions to the Parties after
the second substantive meeting, Australia identifie d the following questions posed by the Panel as
being outside of the field of expertise for which each of the experts was selected: 4, 5, 21, 66, 67, 89
and 121.1074
7.84 According to Australia, questions 4 and 5 relate to Australia's quarantine practices, an area in
which none of the experts selected had expertise.1075 Australia requests that the responses to questions
4 and 5 "should not be drawn on to the extent [the experts] express a view on Australia's quarantine
practices."1076
7.85 Australia argues that questions 21, 89 and 121 assume that the experts have "expertise in the
waste management practices of Australian packing houses". Australia adds however, that it has no
objection to the answers to questions 21 and 121, because the respective experts expressed no opinion
on the handling of waste apples at Australian packing houses. 1077 Australia objects to the experts'
responses on question 89, asserting that the respective experts had based their replies "on speculation
about the waste management practices of Australian packing houses".1078

1072 Appellate Body Report on Japan – Agricultural Products II, para. 129.
1073 Australia's comments on the experts' replies, para. 13.
1074 Australia's reply to Panel question 20 after the second substantive meeting, para. 72.
1075 Australia's reply to Panel question 20 after the second substantive meeting, para. 74.
1076 Australia's reply to Panel question 20 after the second substantive meeting, para. 75.
1077 Australia's reply to Panel question 20 after the second substantive meeting, paras. 77 and 80.
1078 Australia's reply to Panel question 20 after the second substantive meeting, paras. 78-79.

7.86 Finally, Australia argues that questions 66 an d 67 require special expertise in climatic
conditions in Australia and New Zealand, respectively. 1079 Australia requests that the Panel not draw
on the experts' responses expressing a view on the Parties' climatic conditions.1080
7.87 As a related argument, Australia adds that, b ecause of the lack of guidance provided by the
Panel in the Guidelines for Experts dated 16 January 2009, in their responses some of the experts
moved beyond the area of expertise for which each had been selected. 1081 Recalling the ruling of the
Appellate Body in the US/Canada – Continued Suspension dispute, Australia suggests that the Panel
improperly gave experts "wide latitude " by failing to request that they answer questions only in the
field of expertise for which they were selected and, consequently, there was a lack of fairness in the
consultation process.1082 Accordingly, Australia requests that the Panel refrain from drawing "in its
report on the responses to those questions where [the experts] go to matters outside [their respective]
fields of expertise."1083
7.88 New Zealand rejects Australia's argument that the experts responded to questions in areas
where they lacked specific experti se. According to New Zealand, in answering questions 4 and 5,
experts were not required to draw on specific knowle dge of Australia's quarantine systems, but were
rather asked to base their responses on the IRA and the Parties' arguments. 1084 New Zealand notes
additionally that Australia did not object to question 67 (draft question 64) when it was originally
proposed by the Panel.
1085 In New Zealand's view, in their responses to questions 66 and 67 the
experts limited themselves to expressing their views on the treatment of climate in the IRA and to
assisting the Panel in evaluating evidence brought befo re the Panel, both functions being within the
legitimate role of experts.
1086
7.89 New Zealand adds that question 89, like qu estions 21 and 121, focused on the "'IRA's
consideration' of the issue of waste management pr actices". In other words, experts were being asked
to assist the Panel in understanding evidence brought before it, which again is a legitimate role of
experts.1087
7.90 Finally, New Zealand considers that there is no basis for Australia's analogy regarding the
present case and the reasoning of the Appellate Body on the "wide latitude" accorded to experts in the
US/Canada – Continued Suspension dispute. The US/Canada – Continued Suspension dispute
concerned:
"[T]he fact that the experts were not limite d in their answers to assisting the panel to
understand the ... JECFA risk assessment (which they had helped draft) but rather
were asked to respond to questions about th e adequacy of the EC 's risk assessment

1079 Australia's reply to Panel question 20 after the second substantive meeting, paras. 81-83.
1080 Australia's reply to Panel question 20 after the second substantive meeting, paras. 82-83.
1081 Australia's comments on the experts' replies to questions, Australia's communication to the Panel,
25 March 2009, para. 17. See also, Australia's reply to Panel question 20 after the second substantive meeting,
para. 90.
1082 Australia's reply to Panel question 20 after the second substantive meeting, paras. 91-92.
1083 Australia's reply to Panel question 20 after the second substantive meeting, para. 92.
1084 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, para. 40.
1085 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, para. 42.
1086 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, para. 43.
1087 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, para. 41.

(which was directly critical of the JECFA risk assessment).
1088 This raised justifiable
doubts as to the independence and impartiality of the two experts' replies to these
questions and, therefore, gave rise to a due process concern".1089
New Zealand submits that, in the present case, Australia has not raised concerns about the
independence and impartiality of the experts, and the issue is rather whether the experts should have
been prevented from answering questions which they felt competent to answer.1090
7.91 The common element of Australia's concerns in re lation to this point refers to the competence
of the scientific experts selected by the Panel to respond to specific questions posed by the Panel and
whether the experts may have exceeded their specific expertise in some of their responses.
7.92 The Panel recalls its broad authority, under th e DSU and the Working Procedures, to decide
on the final form of the questions that it would pose to the experts. 1091 In each case, questions are
related to Australia's IRA and to evidence brought be fore the Panel, with the objective of seeking the
experts assistance to gain a better understanding of th e scientific basis and the reasoning contained in
Australia's IRA.
7.93 Questions 4 and 5, for example, request the e xperts to base their responses "on the relevant
parts of Australia's IRA, and Parties' arguments" in order to help understand Australia's practice in
audits and inspections with regard to the three pest s at issue, namely fire blight, European canker and
ALCM. The questions refer specifically to measur es identified by the IRA. In their respective
responses to questions 4 and 5, Dr Paulin, Dr Schrader and Dr Swinbur ne explicitly reference
Australia's IRA or evidence provided by Australia. 1092 In other words, both questions focus on the
IRA and not on Australia's quarantine practices generally.
7.94 As regards questions 21, 89 and 121, Australia objected to a similar question in the list of
proposed questions to experts (draft question 121) on the grounds that "none of the experts have been
appointed for any expertise in Australia's fruit fly management practices and therefore may have
difficulty answering this question". 1093 In response to the Panel's qu estions to the Parties after the
second substantive meeting, Australia argues that dr aft question 121 was reformulated so as "to ask
about the risk associated with waste being left exposed at Australian packing houses, 'taking into
account the likelihood of this situation occurring in packing houses in Australia'. ... The revised
question was also asked as Question 21 under fire blight and Question 89 under European canker." 1094
Although Australia refers to questi ons 21, 89 and 121 as "new questions", in fact as the Panel has
already noted they are mere reformulations of draft question 121. 1095 Australia argues that questions
21, 89 and 121 assumed that the experts had "expertise in the waste management practices of
Australian packing houses". Australia adds that, in any event, the respective experts had expressed no
opinion on the handling of waste apples at Australian packing houses, so Australia had no objection to
their answers on questions 21 and 121. 1096 Australia objected to the experts' responses to question 89,
asserting that in this case the respective experts had based their replies "on speculation about the

1088 (footnote original) Appellate Body Report, Canada – Continued Suspension, paras. 461-463.
1089 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, paras. 46-51.
1090 New Zealand's comments on Australia's reply to Panel question 20 after the second substantive
meeting, para. 52.
1091 See paras. 7.55 and 7.57 above.
1092 Dr Paulin's, Dr Schrader's and Dr Swinburne's replies to Panel questions 4 and 5, in List of Replies
from the scientific experts to questions posed by the Panel, paras. 34-36, 41-42 and 43.
1093 Australia's communication to the Panel, 19 December 2008, p. 87 (emphasis added).
1094 Australia's reply to Panel question 20 after the second substantive meeting, para. 76.
1095 See para. 7.45 above.
1096 Australia's reply to Panel question 20 after the second substantive meeting, paras. 77 and 80.

waste management practices of Australian packing houses". 1097 The question refers to "the
consideration in Australia's IRA of the risk associ ated with the practice of packing houses leaving
orchard wholesaler waste uncovered and exposed to the elements ... taking into account the likelihood
of this situation occurring in packing houses in Austra lia." The main focus of the question, again, is
on the evidence and the reasoning contained in Australia 's IRA. As noted above, Australia ultimately
did not maintain its objection to questions 21 and 121. With respect to question 89, in the light of
Australia's objection, the Panel will disregard the experts' responses.
7.95 Contrary to Australia's contention, questions 66 and 67 do not require special expertise in
climatic conditions in Australia and New Zealand. The main focus of both questions is rather the
climatic conditions required for the entry, establishm ent and spread of European canker. Question 66
asks for the experts' assistance to help the Panel an alyse whether the scientific research relating to
European canker relied upon by Australia's IRA is rele vant to climatic conditi ons in Australia and to
the risks of N. galligena associated with apples from New Zealand. Question 67 focuses on whether
Australia's IRA provides a coherent and analysis of conidia and ascospore production and dispersal in
the light of climatic conditions in New Zealand's apple-growing regions during harvest time. For the
purpose of responding to both questions, experts we re referred to arguments and evidence advanced
by the Parties.
7.96 In conclusion, there is no ev idence that questions 4, 5, 66 or 67 were inappropriately
formulated by the Panel. None of these questions required scientific experts to go beyond the field of
expertise for which each one was selected. Each of these questions relates to issues that are essential
for the Panel to understand the scientific basis unde rlying Australia's IRA, and whether the reasoning
articulated in the IRA on the basi s of the scientific evidence is c oherent and objective. As for
question 89, in the light of Australia's objection, the Panel will disregard the experts' responses.
7.97 An additional point relates to whether the Pane l failed to provide adequate guidance to the
experts when posing its written qu estions on 16 January 2009 and improperly allowed them "wide
latitude" in their responses. Australia notes that in its comments on the draft list of questions provided
to the Parties on 15 December 2008, it suggested th at the Panel instruct experts to "answer only
questions in the field in relation to whic h [each was] appointed by the Panel (i.e. Erwinia amylovora,
Neonectria galligena, Dasineura mali or pest risk analysis)" and "within [each one's] appointed field,
[to] only answer questions on whic h [each had] direct expertise". 1098 The Panel did not consider that
such modified guidance was appropriate. Instead, when posing written questions to the experts on
16 January 2009, the Panel instructed them to "ans wer only those questions that [they felt] competent
to answer".
7.98 The fact that the Panel has recognized and selected an individual expert for his or her
specialized knowledge in a particular area does not mean that this expert's advice cannot also be
useful to the Panel in other related areas. The qualifications and expertise of the scientific experts
selected by the Panel demonstrate a strong specia lization in specific areas for which they were
selected, but also show that their respective areas of expertise are not necessarily limited to those
specific areas. 1099 For example, Dr Jerry Cross is also specialized in "Pest Management and spray
application of fruit and other crops" and has thirty years of relevant experience.1100 According to their
curricula vitae, Dr Deckers and Dr Paulin have extensivel y published on fire blight and both Parties

1097 Australia's reply to Panel question 20 after the second substantive meeting, paras. 78-79.
1098 Australia's communication to the Panel, 19 December 2008, p. 2-4. See also, Australia's comments
on the experts' replies to questions, Australia's communication to the Panel, 25 March 2009, para. 17.
1099 Panel's communication to the Parties, 5 December 2008, whereby the Panel sent a set of documents
detailing experts' curricula vitae.
1100 Curriculum of Dr Jerry Cross, page 3, in Panel's communication to the Parties, 5 December 2008.

acknowledged their strong expertise.
1101 At the same time, these three experts could also provide
useful advice on a number of questions related to risk assessment and give an opinion on questions
involving related issues.
7.99 The Panel is satisfied that it had the benef it of receiving the advice of seven individual
scientific experts, with high qualifications and exper tise. In the absence of an y specific concerns that
would suggest otherwise, the Panel felt that it should leave it to each expert to respond to the
questions they felt competent to answer. There was no reason to exclude a priori the possibility that
one expert could provide important information on a question originally devised for another area. In
the Panel's view, from a procedural perspective, the most important factor to bear in mind was that
Parties be granted the opportunity to comment on the experts' responses and to pose their own
questions to the experts. In accordance with th e Working Procedures and the timetable, Parties had
ample opportunities for this.
7.100 Whether in practice any of the experts provided views that went beyond the expert's field of
expertise is something that can only be considered on a case-by-case basis, in the light of the specific
response. There is no reason for the Panel to disregard a priori the responses of any expert. In any
event, regardless of the discretion allowed to the e xperts, the Panel is not bound by the views of the
scientific experts it has selected. Ultimately, it is the responsibility of the Panel – and not of the
experts – to conduct an objective assessment of the matter.
7.101 In conclusion, there is no indication that the Pa nel posed questions to the experts that would
have required specialist expertise and experience in areas outside of their respective expertise, nor that
the Panel should reject a priori the responses provided by any of the experts on the grounds that the
expert expressed views outside the area of expertise for which he or she was appointed.
4. General conclusion on Australia's concern s regarding the process of selection and
consultation of experts
7.102 In conclusion, and for the reasons stated above , the Panel finds no evidence that the process
of selecting and consultating expe rts was conducted improperly, that due process in the experts
consultation phase of these proceedings was compromised , nor that Australia's procedural rights were
in any manner negatively affected in this regard.
B. WHETHER THE MEASURES IDENTIFIED BY NEW ZEALAND ARE CHALLE NGEABLE UNDER THE
SPS AGREEMENT
1. Summary of the Parties' arguments
7.103 In its first written submission New Zealand ch allenges, "individually and as a whole", each of
the measures identified in its panel request.1102 It asks the Panel to rule separately on each measure1103
in line with the Japan – Apples (Article 21.5 – US) dispute1104, and because a failure to do so would
not fully resolve the current dispute. 1105 New Zealand argues that the specific measures identified in
its panel request are SPS measures that "affect intern ational trade" within the meaning of Article 1.1
of the SPS Agreement, and serve the purposes enshrine d in subparagraphs 1(a) and (d) of Annex A of

1101 Australia's and New Zealand's 's communications to the Panel, 20 November 2008.
1102 New Zealand's first written submission, para. 3.89.
1103 New Zealand's first written submission, para. 3.92.
1104 New Zealand's first written submission, paras. 3.90-3.91.
1105 New Zealand's first written submission, para. 3.92.

the Agreement. 1106 Also, New Zealand adds, any apple imports from New Zealand to Australia
depend on compliance with "each and every measure … in the IRA." 1107
7.104 Australia responds that "New Zealand has not established that all measures are challengeable
under the relevant provisions of the SPS Agreement." 1108 This is an "important threshold issue" 1109,
and "the onus is on New Zealand to estab lish that each of the measures challenged, individually and
as a whole, meets the definition of 'SPS measure'."1110
7.105 Australia argues that potential trade impact is not relevant for defining an SPS measure. 1111
Rather, "the definition … in Annex A(1) is purpose-driven" 1112: an SPS measure must seek to protect
against specific categories of risk. 1113 Australia submits that a measure that is "applied: to protect"
against SPS risks, as required by the definition in An nex A(1), must be a measure that aims to reduce
those risks. 1114 In this context, some of the measur es are only ancillary, in that they merely
"support, verify and operationali se" other, principal measures. 1115 Namely, as regards fire blight,
Measures 3, 4 and 8 are ancillary to Measures 1, 2 a nd 5 taken together, and M easure 7 is ancillary to
Measure 6, with the principal measures (Measures 1, 2 ,5 and 6) constituting a "systems approach".1116
For European canker, Measure 11 is ancillary to Measures 9, 10 and 13 taken together. Finally,
Measure 14 on ALCM is a principal measure, while the three general measures (Measures 15-17) are
all ancillary measures.1117
7.106 Australia acknowledges that on its face the defi nition of SPS measures in Annex A(1) of the
SPS Agreement does not create a distinction between pr incipal and ancillary measures. Yet, such a
distinction is implicit from reading that definiti on together with the non-appealed panel report in
US - Export Restraints.1118 Based on that report, the question is "whether each measure operates in its
own right", that is "whether each measure constitu te[s] an instrument with a functional life of its
own."1119 According to Annex A(1) of the SPS Agreement, SPS measures are those which are
"applied: to protect" against particular categories of SPS risks. 1120 Also, Australia considers that
various ISPMs implicitly distinguish measures inte nded to actively reduce risks, from verification
measures that are not.1121
7.107 Australia concludes that its ancillary measures "cannot be challenged on an individual basis";
but only "when 'taken together' (or 'as a whole') with the [relevant] principal risk management
measures."1122 Australia contends that these arguments do not raise systemic concerns since the

1106 New Zealand's first written submission, para. 3. 87. See also New Zealand's reply to Panel
question 13 after the first substantive meeting, paras. 22-26.
1107 New Zealand's first written submission, para. 3.89.
1108 Australia's first written submission, paras. 130-131.
1109 Australia's second written submission, para. 62.
1110 Australia's first written submission, para. 131 (original emphasis; footnote omitted).
1111 Australia's second written submission, para. 72.
1112 Australia's second written submission, para. 67.
1113 Australia's closing oral statement at the first su bstantive meeting of the Panel with the Parties,
para. 8.
1114 Australia's second written submission, para. 68.
1115 Australia's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 23.
1116 Australia's first written submission. paras. 139-140.
1117 Australia's reply to Panel questions after the first substantive meeting, Annex A.
1118 Australia's reply to Panel question 23 after the first substantive meeting.
1119 Australia's first written submission, paras. 136-137 quoting US – Export Restraints, para. 8.85.
1120 Australia's reply to Panel question 14 after the first substantive meeting.
1121 Australia's reply to Panel question 24 after the first substantive meeting, and Annex B.
1122 Australia's first written submission, para. 146. See also ibid., paras. 141 and 144; Australia's
opening oral statement at the first substantive meeting of the Panel with the Parties, para. 23.

distinction between principal and ancillary measures does not undermine the ability of all measures to
be properly disciplined, and would not permit Australia to avoid compliance.
1123 In fact,
Australia "acknowledge[s] that the Panel may make findings under the SPS Agreement in respect of
all of the measures at issue (but not all of them individually)."1124 Australia does not dispute that all of
the measures at issue may be challengeable in WT O dispute settlement, but argues that whether they
are SPS measures is a different question. In its view, New Zealand was free to make allegations
under other WTO provisions in addition to cl aims under the SPS Agreement, as previous
complainants in SPS disputes have done.1125
7.108 In response, New Zealand argues that Australia's distinction between principal and ancillary
measures is "spurious" 1126: it serves only "to avoid scrutiny [of the ancillary measures] under
Articles 2.2 and 5.1" of the SPS Agreement 1127, which would be inconsistent with the object and
purpose of the Agreement. 1128 The distinction would also allow Members to bypass their obligations
under the SPS Agreement by combining broad SPS-compliant measures with non-complying ancillary
measures.1129
7.109 New Zealand recognizes the close relationship between some of the measures, and that "some
may even be characterised as supporting, ve rifying or operationalising other measures." 1130 But the
key point is that "all of the measures are aimed in some way at protecting against alleged
SPS risks"
1131: each of them "operates in a concrete way in its own right." 1132 The allegedly ancillary
requirements are separate from the relevant principa l requirements, they are enforced separately in
time, and entail additional burdens.1133
7.110 According to New Zealand, under Article 1 of the SPS Agreement, all SPS measures that
affect international trade are challengeable under the SPS Agreement.1134 The wording of Annex A(1)
of the Agreement does not distinguish principal and ancillary measures, or require that SPS measures
"actively" reduce risks. 1135 Rather, the definition applies to "a ny" measure applied to protect against
risks.1136 Also, Australia's reliance on US – Export Restraints is "misplaced" because that case is
limited to the SCM Agreement. 1137 In any event, "the US – Export Restraints case … cannot …
override the clear definition of SPS measures in the SPS Agreement."1138
7.111 New Zealand adds that the distinction between ancillary and principal measures is "confusing
and unworkable."1139 Some of the allegedly ancillary measur es actively contribute to risk reduction,

1123 Australia's second written submission, paras. 75-76.
1124 Australia's second written submission, para. 75 (original emphasis).
1125 Australia's second written submission, para. 76.
1126 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 29.
1127 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 31.
1128 New Zealand's second written submission, para. 2.7.
1129 New Zealand's reply to Panel question 22 after the first substantive meeting, para. 30.
1130 New Zealand's second written submission, para. 2.11.
1131 Ibid.
1132 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 30.
1133 New Zealand's second written submission, para. 2.9.
1134 New Zealand's reply to Panel question 13 after the first substantive meeting, paras. 22-24.
1135 New Zealand's second written submission, para. 2.5.
1136 Ibid.
1137 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
paras. 29-30.
1138 New Zealand's second written submission, para. 2.8.
1139 New Zealand's second written submission, 2.4.

and the experts disagree on the categorization of the measures. 1140 Also, the examples in the
definition of SPS measures under Annex A(1) include "testing, inspection, certification and approval
proceedings", which are the very kind of measures that Australia identifies as ancillary.1141
7.112 Finally, New Zealand questions the need for di stinguishing principal and ancillary measures,
since Australia agrees that the Pane l may evaluate the consistency of all allegedly ancillary measures
when taken together with the relevant principal measure(s). 1142 According to New Zealand, even if
some of the measures at issue were treated as part of a broader SPS measure, "this does not prevent
the Panel from making specific findings on each of the individual elements, as was the approach taken
by the [p]anel in Japan – Apples (21.5)."
1143
2. The Panel's analysis
7.113 At the outset of its analysis, the Panel recalls that New Zealand's panel request claims that
"the ... measures [at issue] are inconsistent with Australia's obligations under [nine provisions] of the
SPS Agreement."1144 Reviewing the consistency of this pane l request with Article 6.2 of the DSU,
the Panel in its preliminary ruling endorsed the understanding that New Zealand has claimed that
every measure at issue is inconsistent with each of the nine provisions mentioned in the panel
request.1145
7.114 As shown by the summary of the Parties' arguments, neither Party contests that the
16 measures at issue in this dispute (Measures 1- 11 and 13-17) constitute measures reviewable in
WTO dispute settlement. 1146 But whether the 16 measures constitute SPS measures is a different
matter. As the panel in EC – Approval and Marketing of Biotech Products stated, "not every measure
that qualifies as a measure within the meaning of the DSU constitutes, ipso facto , an
SPS measure."1147
7.115 The Parties agree that the 16 measures can be reviewed as a whole under the
SPS Agreement.1148 But New Zealand also claims a violation of the relevant SPS provisions by each
of the 16 measures individually, which Australia cont ests. Therefore, the question before the Panel is
whether individually each of the 16 measures is an SPS measure, or rather whether some of them are
ancillary measures and can only be reviewed under the SPS Agreement jointly with other, principal
measures.
7.116 The Parties agree that this is a legal issue to be reviewed in the light of Annex A(1) of the
SPS Agreement1149, which contains the "legal definition of the term 'SPS measure'." 1150 New Zealand

1140 New Zealand's second written submission, para. 2.14.
1141 New Zealand's second written submission, para. 2.6.
1142 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 16.
1143 New Zealand's comments on Australia's reply to Panel questions 17 and 18 after the second
substantive meeting, para. 32.
1144 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
1145 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, p. 3.
1146 See, in particular, Australia's second written submi ssion, paras. 75-76. For the identification of the
measures, see para. 2.91 above.
1147 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1333.
1148 New Zealand's first written submission, para. 3.89; and Australia's second written submission,
para. 75.
1149 New Zealand's second written submission, para. 2.16; and Australia's comments on the experts'
replies, para. 295.

argues that each of the 16 measures fulfils the pur poses set out in subparagraphs 1(a) and (d) of
Annex A of the SPS Agreement.
1151 In relevant part, Annex A(1) defines "[s]anitary or phytosanitary
measure" as:
"[a]ny measure applied:
(a) to protect animal or plant life or h ealth within the territory of the Member
from risks arising from the entry, estab lishment or spread of pests, diseases,
disease-carrying organisms or disease-causing organisms;
... or
(d) to prevent or limit other damage with in the territory of the Member from the
entry, establishment or spread of pests.
Sanitary or phytosanitary measures include all relevant laws, decrees, regulations,
requirements and procedures including, inter alia, end product criteria; processes and
production methods; testing, inspection, certification and approval procedures;
quarantine treatments including relevant requirements associated with the transport of
animals or plants, or with the materials n ecessary for their survival during transport;
provisions on relevant statistical methods , sampling procedures and methods of risk
assessment; and packaging and labelling requirements directly related to food
safety."
7.117 The EC – Approval and Marketing of Biotech Products panel identified three elements in
Annex A(1) of the SPS Agreement:
"Annex A(1) indicates that for the purposes of determining whether a particular
measure constitutes an 'SPS measure' regard must be had to such elements as the
purpose of the measure, its legal form and its nature. The purpose element is
addressed in Annex A(1)(a) through (d) ('any measure applied to'). The form element
is referred to in the second paragraph of Annex A(1) ('laws, decrees, regulations').
Finally, the nature of measures qualifyi ng as SPS measures is also addressed in the
second paragraph of Annex A(1) ('requi rements and procedures, including, inter alia,
end product criteria; processes and pr oduction methods; testing, inspection,
certification and approval procedures; [etc.]')."
1152
7.118 The Panel agrees that purpose, as set out in su bparagraphs (a)-(d), is an essential criterion for
assessing whether a measure amounts to an SPS me asure under Annex A(1). In the light of
New Zealand's arguments and the approach of the EC – Approval and Marketing of Biotech Products
panel1153, this Panel will identify the purpose of the 16 measures and assess whether they correspond
to subparagraphs (a) or (d) of Annex A(1) of the SPS Agreement.
7.119 The Panel also agrees that the form and natu re of alleged SPS measures are relevant for
assessing whether the measures fall within the definiti on in Annex A(1). But, for reasons specified
below, this Panel has a slightly different readi ng of how these two elements (form and nature) are

1150 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.148.
1151 New Zealand's first written submission, para. 3. 87. See also New Zealand's reply to Panel
question 13 after the first substantive meeting, para. 23.
1152 Panel Report on EC – Approval and Marketing of Biotech Products , para. 7.149. See also ibid.,
para. 7.1334; and Panel Report on Canada – Continued Suspension , para. 7.420; and Panel Report on US –
Continued Suspension, para. 7.429.
1153 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.196 et seq.

reflected in Annex A(1) than the reading adopted by the EC – Approval and Marketing of Biotech
Products panel.
7.120 Before analysing the purpose, and the form and nature of the 16 measures, the Panel points
out that effect on trade is not relevant for assessing whether a measure qualifies as an SPS measure
under Annex A(1). As the Japan – Apples panel held, "the definition in Annex A, paragraph 1, does
not consider the trade effect of a given measure as a factor to determine whether such a measure is or
is not a phytosanitary measure."
1154 Rather, effect on trade is relevant for assessing whether the
SPS Agreement applies to what has already been determined an SPS measure. As the EC –
 Hormones panels stated, "[a]ccording to Article 1.1 of the SPS Agreement, two requirements need to
be fulfilled for the SPS Agreement to apply: (i) th e measure in dispute is a sanitary or phytosanitary
measure1155; and (ii) the measure in dispute may, directly or indirectly, affect international trade.1156"1157
7.121 This concept of effect on trade has been interpreted broadly. According to the EC – Approval
and Marketing of Biotech Products panel, to be subject to the disciplines of the SPS Agreement, "[i]t
is not necessary to demonstrate that an SPS measure h as an actual effect on trade. Article 1.1 merely
requires that an SPS measure 'may, directly or indirectly, affect international trade'."1158
7.122 Clearly, the 16 measures satisfy this criterion of actual or potential effect on international
trade, both individually and as a whole. The Parties agree that the 16 measures are spelt out in the
IRA.
1159 As quoted in New Zealand's panel request, Australia's Biosecurity Australia Policy
Memorandum 2007/07 links the importation of New Zealand apples to the application of the measures
specified in the IRA.1160 New Zealand argues and Australia acknowledges that compliance with all of
the 16 measures is a precondition for allowing the im portation of apples from New Zealand; lack of
compliance with any of the measures may lead to the suspension of apple imports to Australia from
New Zealand.1161
(a) The purpose of the 16 measures
7.123 As indicated earlier, the Panel will assess the purpose of the 16 measures and verify whether
they correspond to subparagraphs (a) or (d) of Annex A(1) of the SPS Agreement, which define
"[s]anitary or phytosanitary measure".
7.124 The Parties agree that all 16 measures are set out in the IRA. The IRA is an integral
component of Australia's biosecurity regime. The IRA explains that the legislative basis for this
regime is found in "the Quarantine Act 1908 and its subordinate legislation, including the Quarantine

1154 Panel Report on Japan – Apples, para. 8.24.
1155 ( footnote original) As defined in Paragraph 1 of Anne x A of the SPS Agreement, quoted and
discussed in paras. 8.21 and 8.22.
1156 (footnote original) See para. 8.23.
1157 Panel Report on EC – Hormones (US), para. 8.36, and Panel Report on EC – Hormones (Canada),
para. 8.39.
1158 Panel Report on Approval and Marketing of EC – Biotech Products , para. 7.435. See also Panel
Report on Approval and Marketing of EC – Biotech Products , para. 7.2607; Panel Report on EC – Hormones
1159 New Zealand's reply to Panel question 13 after the first substantive meeting, para. 25, and
para. 2.97 above.
1160 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A- 1 to this report, p. 1. See, Bi osecurity Australia Policy Memorandum
2007/07, in Exhibit NZ-2.
1161 New Zealand's reply to Panel question 21 afte r the first substantive meeting, para. 27;
New Zealand's second written submission, 2.9; and Au stralia's reply to Panel question 16 after the first
substantive meeting.

Proclamation 1998 , [which] are the legislative basis of human, animal and plant quarantine in
Australia."
1162 The IRA cites "[s]ome key provisions"1163, the first one being:
"Subsection 4 (1) of the Quarantine Act 1908 [, which] defines the scope of
quarantine as follows:
'In this Act, quarantine includes, but is not limited to, measures
(a) for, or in relation to:
(i) the examination, exclusion, detention, observation,
segregation, isolation, protection, treatment and
regulation of vessels, inst allations, human beings,
animals, plants or other goods or things; or
(ii) the seizure and destruction of animals, plants, or
other goods or things; or
(iii) the destruction of premises comprising buildings or
other structures when treatment of these premises is
not practicable; and
(b) having as their object the prevention or control of the
introduction, establishment and spread of diseases or pests that will
or could cause significant damage to human beings, animals, plants,
other aspects of the environment or economic activities.'"
1164
7.125 The Quarantine Proclamation is the principal legal instrument to control importation to
Australia of goods of quarantine (or biosecurity) interest. Under this proclamation, the Director of
Animal and Plant Quarantine is empowered to gr ant an import permit base d on, among other things,
the information and policy recommendati ons in an import risk analysis. 1165 The IRA indicates that its
purpose is to deliver a policy recommendation to the Director of Animal and Plant Quarantine.1166
7.126 The IRA and Biosecurity Australia Policy Memorandum 2007/07 explain that the IRA was
prepared on the basis of the Import Risk Analysis Handbook (2003). 1167 In turn, the Import Risk
Analysis Handbook (2003) defines the "objective of Australian biosecurity policies" as "the
prevention or control of the entry, establishment or spread of pests and diseases that will or could
cause significant damage to human beings, animals, plants, other aspects of the environment, or
economic activities."
1168

1162 Australia's IRA, Part B, p. 1. See also, Austra lia's first written submission, para. 55; Australia's
second written submission, para. 210.
1163 Australia's IRA, Part B, p. 1.
1164 Ibid. (footnote omitted; emphasis added).
1165 Australia's IRA, Part B, p. 2. See also, Australia's first written submission, para. 61.
1166 Australia's IRA, Part B, p. 2. See also, Australia's first written submission, paras. 62 and 64.
1167 "This final report has been prepared as part of the IRA process as set out in the Import Risk
Analysis Handbook (BA, 2003) ." Australia's IRA, Part A, p. 3. "In response to applications from the
New Zealand Government, Biosecurity Australia has comp leted an import risk analysis (IRA) in accordance
with the provisions of the Import Risk Analysis Handbook ." Biosecurity Australi a Policy Memorandum
2007/07, in Exhibit NZ-2, p. 1. See also, Australia's first written submission, para. 65.
1168 Import Risk Analysis Handbook (2003), in Exhibit AUS-10, p. 5; Biosecurity Australia Policy
Memorandum 2007/07, in Exhibit NZ-2.

7.127 Likewise, a specific part of the IRA, entitled "Risk management and sanitary and
phytosanitary (SPS) measures"1169 provides that the purpose of the measu res is to protect the health of
people, animals and plants: "Australia's plant and animal health status is maintained through the
implementation of measures to facilitate the importa tion of products while protecting the health of
people, animals and plants."1170
7.128 The same part of the IRA makes specific refe rence to the "appropriate level of protection
from pests and diseases." 1171 Further, the IRA describes import ri sk analysis as follows: "In animal
and plant biosecurity, IRA identifies the pests and diseases relevant to an import proposal, assesses
the risks posed by them and, if those risks are unacceptable, specifies what measures should be taken
to reduce those risks to an acceptable level."1172
7.129 Since the 16 measures are spelt out in the IR A, each of them pursues the above general
objectives. The next question is whether these objectives correspond to either of those spelt out under
subparagraphs (a) or (d) of Annex A(1) of the SPS Agreement.
(i) Subparagraph (a)
7.130 The purpose set out in subparagraph (a) of Annex A(1) of the SPS Agreement is "to protect
animal or plant life or health within the territory of the Member from risks arising from the entry,
establishment or spread of pests, diseases, disease-carrying organisms or disease-causing organisms."
The Panel will consider whether the 16 measures, considering the IRA's general objectives identified
above, satisfy the various terms and phrases included in subparagraph (a).
1173
7.131 The first element of subparagraph (a) is "to protect animal or plant life or health". The IRA
and its basis, the Import Risk Assessment Handbook (2003), explicitly refer to the objective of
"protecting the health of ... animals and plants." 1174 Since subparagraph (a) links the words "life" and
"health" with the word "or", the purpose of the IRA – and the 16 measures spelt out therein – satisfy
the first element of subparagraph (a).1175
7.132 The second element of subparagraph (a) is "within the territory of the Member". The IRA –
and the 16 measures spelt out therein – satisfy this el ement, too. As indicated above, the 16 measures
apply to apple imports from New Zealand to the entire territory of Australia. 1176 Also, both the IRA
and the Import Risk Assessment Handbook (2003) mention " Australia's plant and animal health
status" in the context of ri sk management and SPS measures. 1177 As noted in the IRA, "[t]he import
risk analysis (IRA) process is an important part of Australia's biosecurity policies. It enables the
Australian Government to consider formally the ri sks that could be associated with proposals to
import new products into Australia."1178
7.133 The third and final element of subparagraph (a) is "risks arising from the entry, establishment
or spread of pests, diseases, disease-carrying organisms or disease-causing organisms". The EC –

1169 Australia's IRA, Part B, p. 5.
1170 Ibid. See also Import Risk Analysis Handbook (2003), in Exhibit AUS-10, p. 5.
1171 Australia's IRA, Part B, p. 5.
1172 Ibid. See also, Import Risk Analysis Handbook (2003), in Exhibit AUS-10, p. 8.
1173 Panel Report on EC – Approval and Marketing of Biotech Products, paras. 7.213 et seq.
1174 Australia's IRA, Part B, p. 5. See also, Import Risk Analysis Handbook (2003), in Exhibit AUS-10,
p. 5.
1175 See also, Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.239.
1176 See para. 2.232 above.
1177 Australia's IRA, Part B, p. 5; and Import Risk Analysis Handbook (2003), in Exhibit AUS-10, p. 5
(emphasis added).
1178 Australia's IRA, Part A, p. 3.

Approval and Marketing of Biotech Products panel found that the phrase "risks arising from" is
"broad and unqualified"
1179, in that:
"There is nothing in Annex A(1)(a) which indicates that potential risks to animal or
plant life or health must necessarily be the direct or immediate result of,
e.g., the spread of a pest. ... We therefore do not consider that measures taken to
protect animal or plant life or health from risks that arise indirectly or in the longer
term from pests, diseases, disease-carrying organisms or disease causing organisms
fall outside the scope of Annex A(1)(a)."
1180
7.134 As a risk assessment, Australia's " Final Import Risk Analysis Report for Apples from
New Zealand" deals with risks, namely risks aris ing from pests. Both the IRA and the Import Risk
Assessment Handbook (2003) provide that "[i]n animal and plant biosecurity, IRA identifies the pests
and diseases relevant to an import proposal, assesses th e risks posed by them and, if those risks are
unacceptable, specifies what measures should be taken to reduce those risks to an acceptable
level."1181 Further, the IRA states that the measures it sets out, including the 16 at issue in this
dispute, are necessary to achieve its ALOP, by reducing unrestricted risk to a "very low" or
"negligible" level.1182 In some cases, as for the pests at issu e in this dispute, the IRA indicates that a
combination of measures is necessary to achieve the ALOP.1183
7.135 As regards the word "pests", the IRA refers to fire blight, European canker, and ALCM,
systematically as "pests".1184 Further, the IRA explains that:
"The term 'pest' used throughout this [import risk analysis] is the collective term used
for invertebrate pests, plant diseases, viruses, bacteria and fungi that could harm
plants. The formal definition used is th e one provided in the International Plant
Protection Convention (IPPC): 'any species, strain, or biotype of plant, animal or
pathogenic agent injurious to plants or plant products'."
1185
7.136 The EC – Approval and Marketing of Biotech Products panel found that this IPPC definition
of "pests", which is used by the IRA, is en compassed in the term "pests" under Annex A(1). 1186
Further, the EC - Approval and Marketing of Biotech Products panel defined "pests" under
Annex A(1) as follows: "in the context of the SPS Agreement the term 'pest' should be understood as
referring to an animal or plant which is destructive, or causes harm to the health of other animals,
plants or humans, or other harm, or a troublesome or annoying animal or plant."1187
7.137 As explained above, each of the 16 measures relates to at least one of the three pests at issue
in this dispute.1188
7.138 Further, the IRA deals with risks arising from th e entry, establishment and spread of pests.
The IRA identifies the "assessment of the probability of entry, probability of establishment and

1179 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.226.
1180 Ibid.
1181 Australia's IRA, Part B, p. 5. See also Import Risk Analysis Handbook (2003), in Exhibit AUS-10,
p. 8.
1182 Australia's IRA, Part A, pp. 9 and 13.
1183 Australia's IRA, Part B, pp. 105-115; 151-155; 187-192; 313-325.
1184 Australia's IRA, Part A, pp. 11-13.
1185 Australia's IRA, Part B, p. 1, footnote 1. See also Ibid., p. 344.
1186 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.241.
1187 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.240.
1188 See part II.D.2. above.

probability of spread" as a key elem ent of its "pest risk assessment". 1189 The IRA then analyzes the
"[p]robability of entry, establishment a nd spread" for each of the three pests 1190, and identifies the
measures necessary to manage the resulting risk, including the 16 measures at issue.1191
7.139 Accordingly, the IRA and the 16 measures at i ssue in this case are clearly related to risks
arising from the entry, establishment and spread of pests, in the sense of subparagraph (a) of
Annex A(1) of the SPS Agreement.
7.140 This applies to the 16 measures considered both collectively and individually. As mentioned
above, the Parties agree that all 16 measures are set out in the IRA, while under the IRA each measure
would be indispensable for achieving Australia's ALOP , by reducing unrestricted risk to a "very low"
or "negligible" level.
7.141 The Panel finds further support for its conclusi on in the purpose of the various measures spelt
out in the IRA either explicitly or implicitly, an d the close linkage of those purposes to managing
risks:
(a) The IRA explains in the context of Measure 1 that "individual apple orchards ...
free from fire blight symptoms ... are know n to have lower levels of bacteria
associated with fruit than orchards where symptoms are evident." 1192 The IRA adds
that, "[w]ith lower bacterial populations in areas free from disease symptoms, the
likelihood that clean fruit is contaminated during picking or transport to the packing
house (imp3) could be expected to be significantly reduced." 1193 Likewise, for
imp5.1194
(b) The IRA discusses Measures 2-5 under the s ub-heading "[f]ire blight symptoms" 1195,
and explains that "'freedom from visible symptoms' provide[s] a firm basis for risk
reduction by substantially reducing the likeli hood that picked fruit is infected or
infested."1196
(c) The IRA clarifies that Measure 6 would "mitigate the risk of fire blight" 1197, and as a
result "the risk of E. amylovora being present in or on apples for export would be
reduced."1198
(d) The IRA explains that the purpose of Measure 7 is the "[p]revention of contamination
after the disinfection treatment."1199
(e) The IRA clarifies that Measure 8 serves to "maintain the quarantine integrity of the
commodity".1200 This is linked to the IRA's concern, under imp5, with clean fruit
being contaminated by E. amylovora during processing in the packing house.1201

1189 Australia's IRA, Part B, p. 13.
1190 See Australia's IRA, Part B, pp. 80-97 (fire blight), pp. 129-145 (European canker), and pp. 158-
166 (ALCM).
1191 Australia's IRA, Part B, p. 313.
1192 Australia's IRA, Part B, p. 105.
1193 Australia's IRA, Part B, p. 106.
1194 Australia's IRA, Part B, p. 107.
1195 Australia's IRA, Part B, p. 316.
1196 Australia's IRA, Part B, p. 106.
1197 Australia's IRA, Part B, p. 105.
1198 Australia's IRA, Part B, p. 108.
1199 Australia's IRA, Part B, p. 318.

(f) The IRA explains that the purpose of Measu re 9 is "to mitigate the annual risk" of
European canker, and it describes Measure 9 as "an effective risk management
measure for N. galligena."
1202
(g) The IRA introduces Measure 10 by stating that it serves to establish "Orchard
freedom from European canker". 1203 In the context of this measure, the IRA sets out
less stringent inspection requirements to assess "orchard freedom from European
canker"1204 "[i]n areas where climatic conditions are less favourable for disease
establishment and spread" 1205 and more stringent inspec tion requirements "[i]n areas
where environmental conditions are more conducive to disease establishment and
spread."1206
(h) The IRA introduces Measure 11 by specifically stating that "[i]nfected nursery stock
presents a pathway for the establishment and spread of European canker into places
of production." 1207 Further, the IRA states that Measures 10 and 11 for
European canker "would prevent opportunities for the disease to enter and establish in
Australia ..."1208
(i) The IRA spells out Measure 13 as a "re quirement" for "[r]isk management for
European canker."1209
(j) The IRA introduces Measure 14 stating that it "will address the risk associated with
apple leafcurling midge."1210
(k) Under the haeding "Risk management and operational framework", the IRA
references various risk management measur es. This section spells out various
measures, including the general measures (Measures 15-17), each of which as a
whole relates to all three pests, describi ng those measures as "further details on the
recommended quarantine conditions (risk management measures together with
phytosanitary procedures) ... required to manage the quarantine risks." 1211 F u r t h e r ,
the IRA sets out Measure 16 because "the risk analysis [in the IRA] and the
recommended risk management measures are based on apples produced under normal
commercial production practices".1212
(ii) Subparagraph (d)
7.142 Subparagraphs (a) and (d) of Annex A(1) of the SPS Agreement do not establish cumulative
requirements with regard to the purpose of SPS meas ures. It is sufficient for the purpose of the
16 measures to correspond to either of those subpa ragraphs. The Panel has found that the purpose of
the IRA, and each of the 16 measures containe d therein, corresponds to subparagraph (a).

1200 Australia's IRA, Part B, p. 317.
1201 See Australia's IRA, Part B, pp. 77 et seq.
1202 Australia's IRA, Part B, p. 153.
1203 Ibid.
1204 Ibid.
1205 Ibid.
1206 Australia's IRA, Part B, p. 154. See also, Australia's IRA, Part B, p. 316.
1207 Australia's IRA, Part B, p. 154.
1208 Ibid.
1209 Australia's IRA, Part B, p. 316.
1210 Australia's IRA, Part B, p. 319.
1211 Australia's IRA, Part B, p. 313.
1212 Australia's IRA, Part B, p. 315. See also, Australia's IRA, Part B, p. 105.

Accordingly, it is not necessary to assess whether th e purpose of the IRA, and 16 measures contained
therein, corresponds to subparagraph (d).
(b) The form and nature of the 16 measures
7.143 In addition to purpose, the EC – Approval and Marketing of Biotech Products panel identified
two additional and separate elemen ts of an SPS measure under Anne x A(1), namely its form and
nature:
"The form element is referred to in the second paragraph of Annex A(1)
('laws, decrees, regulations'). Finally , the nature of measures qualifying as
SPS measures is also addressed in th e second paragraph of Annex A(1)
('requirements and procedures, including, inter alia, end product criteria; processes
and production methods; testing, inspecti on, certification and approval procedures;
[etc.]')."1213
7.144 This Panel considers that the second paragra ph of Annex A(1) sets out elements of the
definition of SPS measures by providing examples. In fact, the second paragraph starts with the
words "Sanitary and phytosanitary measures incl ude". Thus, the items spelt out in the second
paragraph do not form a closed list. This is quite different from the closed list of possible purposes of
a covered SPS measure under the first paragr aph of Annex A(1), in particular its
subparagraphs (a)-(d).
7.145 Further, the Panel does not consider that th e list of examples in the second paragraph of
Annex A(1) provides a clear-cut division between th e elements of form and nature, the first three
items ("laws, decrees, regulations") corresponding to the form, and the latter two ("requirements and
procedures") to the nature of SPS measures. Given the placing of the word "and" between the fourth
and fifth items, the ordinary way to read "laws, d ecrees, regulations, requirements and procedures" is
as an enumeration of five items, with the words "all relevant" qualifying each one of them.
7.146 This is underscored by the Spanish and French versions of the SPS Agreement. One basic
principle of treaty interpretation is that "[t]he terms of the treaty are presumed to have the same
meaning in each authentic text" 1214, and that the treaty interpreter should aim at "the meaning which
best reconciles the texts [in the different authentic language versions], having regard to the object and
purpose of the treaty." 1215 The SPS Agreement has three language versions, in English, French and
Spanish, each equally authentic.1216
7.147 The Spanish version of the second para graph of Annex A(1) refers to " todas las leyes,
decretos, reglamentos, prescripcion es y procedimientos pertinentes ", placing the " y" before the fifth
item of the enumeration, and embraci ng the five items between the words " todas" and " pertinentes"
("all relevant" in English). The French version mentions " toutes lois, tous décrets, toutes
réglementations, toutes prescriptions et toutes procédures pertinents ", again with the word " et"
appearing before the fifth item. Further, the Fren ch version makes it evident that both the words in
the phrase "all relevant" at the beginni ng of the enumeration in the Eng lish version should be read as
relating to all five items of the list. In fact, the French version repeats the word "tou[te]s" before each

1213 Panel Report on EC – Approval and Marketing of Biotech Products , para. 7.149. See also, Panel
Report on EC – Approval and Marketing of Biotech Products , para. 7.1334; Panel Report on Canada –
Continued Suspension, para. 7.420; and Panel Report on US – Continued Suspension, para. 7.429.
1214 The Vienna Convention on the Law of Treaties (the "Vienna Convention"), done at Vienna, 23 May
1969, 1155 U.N.T.S 331; 8 International Legal Materials 679, Article 33.3.
1215 Vienna Convention, Article 33.4.
1216 See the Marrakesh Agreement Establishing the World Trade Organization, Article II:2 and
testimonium.

of the five items. Further, it uses the adjective " pertinents" in the masculine, indicating that it cannot
relate only to the immediately preceding noun " procédures", nor to the two preceding nouns
("prescriptions" and " réglementations"). These three nouns (" procédures", " prescriptions" and
"réglementations"), as well as the first noun of the list (" lois"), are feminine, so " pertinents" in the
masculine has to refer to all five items of list, including but not limited to the only masculine noun:
"décrets". It is a basic principle of the French language that the adjective relating to a list of both
feminine and masculine nouns takes the masculine form.
7.148 In the light of the above, the three authentic language versions of the last paragraph of
Annex A(1) are interpreted most harmoniously if the terms "laws, decrees, regulations, requirements
and procedures" are perceived as a list of five items of equal quality and importance, with the words
"all" and "relevant" referring to each of these items.
7.149 The Japan – Agricultural Products II panel also read together the list in the last paragraph of
Annex A(1) by holding that "[p]aragraph 1 of Annex A to the SPS Agreement makes clear that
'phytosanitary measures include all relevant laws, decrees, regulations, requirements and
procedures'."
1217 This lends further support to reading the list as an enumeration of five items that
exemplify the type of instruments which may include SPS measures.
7.150 Since this Panel reads "all relevant laws, decr ees, regulations, requirements and procedures"
as a list of five items, it disagrees with the EC – Approval and Marketing of Biotech Products panel
that the examples following this list in Annex A(1) would relate only to the last two items of the list
("requirements and procedures"). The Panel is aw are that some of the ex amples repeat the words
"requirements" and "procedures". But not all do. Laws, decrees and regulations may typically set out
requirements and procedures, so the examples including the words "requirements" and "procedures"
can be read as also qualifying "laws, decrees, regulations".
7.151 In fact, the Panel is convinced that the me asures exemplified in the second paragraph of
Annex A(1) serve to illustrate what can be considered as " relevant laws, decrees, regulations,
requirements and procedures" containing SPS measur es (emphasis added). The second paragraph of
Annex A(1) not only mentions "all relevant" instru ments broadly; it includes also a non-exhaustive
list of measures that can be considered as "relev ant" examples for defining SPS measures. The Panel,
again, finds support for this in the French and Spanis h versions of the definition. The French version
starts the examples after the word " pertinents". The Spanish version does likewise; in addition, it
includes a colon before the examples, thus creating a structure with a list of five items on the one hand
(form), and a list of examples (nature), on the other hand.
7.152 While distinct, these two parts of the last para graph of Annex A(1) are closely related.
In fact, the EC – Approval and Marketing of Biotech Products panel read "all relevant laws, decrees,
regulations" in Annex A(1) as "suggest[ing] that the SPS Agreement does not prescribe a particular
legal form and that SPS measures may in principle take many different legal forms." 1218 Including
"requirements and procedures" into the form elem ent of measures falling under Annex A(1) further
broadens that element. As a result, whether the instrument can be consider ed "relevant" becomes a
more important aspect of the form element for th e interpreter than the actual legal form of the
instrument. The obvious way for the interprete r to assess which "laws, decrees, regulations,
requirements and procedures" are "relevant" is by having recourse to the examples in the second part
of the same sentence, that is the nature element. Importantly, the nature element is broad. It is
introduced with the words "including, inter alia", indicating, as the EC – Approval and Marketing of

1217 Panel Report on Japan – Agricultural Products II, para. 8.111.
1218 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1334.

Biotech Products panel put it, "by way of example, a numbe r of relevant substantive requirements ...
and procedures"1219 that define the nature of a covered SPS measure.
7.153 In sum, the form and nature elements in th e definition of SPS measures in Annex A(1) are
both broad, and they are closely connected to each other. Accordingly, the Panel will now analyse
whether the 16 measures fit the elements of form and nature spelt out in the second paragraph of
Annex A(1). Given the linkage of form and natu re under that paragraph, the Panel will assess these
two elements together to analyse whether the 16 measures can qualify as SPS measures.
7.154 There is no disagreement between the parti es that the document that spells out the
16 measures at issue in this dispute is the IRA. Th e IRA is an integral part of what Australia defines
in Biosecurity Australia Policy Memorandum 2007/07 , referenced in New Zealand's panel request1220,
as Australia's "policy for the importation of apples from New Zealand".1221
7.155 Biosecurity Australia Policy Memorandum 2007/07 specifies that this policy "has [been]
determined"1222 by "Australia's Director of Quarantine" 1223, and it defines this policy in the following
way: "Importation of apples can be permitted subject to the Quarantine Act 1908, and the application
of phytosanitary measures as specified in the Fi nal import risk analysis report for apples from
New Zealand, November 2006."1224
7.156 As to the application of the policy, Biosecurity Australia Policy Memorandum 2007/07 states
that "[t]he policy will now be taken into account by decision makers when considering import
applications for apples from New Zealand in accordance with the Quarantine Act 1908 and
Quarantine Proclamation 1998 as amended."1225 This shows the official intention to systematically
enforce this policy for apple imports into Australia from New Zealand.
7.157 The above also demonstrates that Australia 's policy for the importation of apples from
New Zealand, including the IRA, was adopted in an official manner, within the framework, and on the
basis of, established legal instruments. In particul ar, the IRA was issued by the "Chief Executive of
Biosecurity Australia" 1226, a "part of the Commonwealth Depart ment of Agriculture, Fisheries and
Forestry – Australia" 1227, and under the seal of the Australian Government. 1228 Also, there was a
possibility of lodging an appeal against the IRA with the Import Risk Analysis Appeals Panel within
the same Australian Government Department.1229
7.158 All these characteristics accord a significant degree of legal formality to the IRA and liken it
to a "regulation" under Annex A(1), even if the IRA is not formally termed as such and even though it
only "recommends" measures.
1230 Through Biosecurity Australia Policy Memorandum 2007/7 ,
and by virtue of the more general legal framewor k referenced in the IRA, the measures recommended
by the IRA have become part of Australia's a pplicable and enforceable legal "policy for the

1219 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1334.
1220 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 1, footnote 1.
1221 Biosecurity Australia Policy Memorandum 2007/07, in Exhibit NZ-2.
1222 Ibid.
1223 Ibid.
1224 Ibid.
1225 Ibid.
1226 Australia's IRA, Part B, p. iii.
1227 Import Risk Analysis Handbook (2003), in Exhibit AUS-10, p. 6.
1228 Australia's IRA, coverpage.
1229 Australia's IRA, Part B, p. iii.
1230 Australia's IRA, Part A, p. 1.; and Part B, p. 313; Australia's first written submission, para. 146;
and Australia's reply to Panel question 15 after the first substantive meeting.

importation of apples from New Zealand".
1231 Nor is the legal status of these measures any weaker as
a result of the need for the Parties to jointly de velop standard operating procedures setting out specific
aspects of some of the 16 measures.
7.159 In any event, even if the IRA and the 16 measu res spelt out therein should not be considered
"regulations", they qualify as "requirements and proc edures". The IRA itself frequently refers to the
measures using one or the other of these terms.1232
7.160 The dictionary definition of the word "require ment" is "something called for or demanded;
a condition which must be complied with." 1233 Part A of the IRA introduces a summary of the
measures set out in the IRA using the word "cond ition": "This final report recommends that the
importation of apples to Australia from New Zeala nd be permitted, subject to the following risk
management conditions ..."1234
7.161 Further, as argued by New Zealand, each of the 16 measures requires New Zealand or its
apple producers, packing houses and traders to do something as a condition for New Zealand apples to
have access to the Australian market. 1235 As New Zealand explains, even Measure 15, which
ostensibly addresses the involvement of AQIS offi cials, creates a burden for New Zealand and a
requirement for it to do something. 1236 New Zealand needs to comply with each of the measures in
order to export apples to Australia.
7.162 In turn "procedure" is defined by the dictiona ry as "[t]he fact or manner of proceeding; a
system of proceeding; conduct, behaviour" 1237 and as "a particular m ode or course of action, a
proceeding."1238 Further similar definitions of "procedure" include "[a] particular course or mode of
action; an established or prescribed way of doing so mething; (also) an instance of this; a process, a
proceeding"1239 and "[t]he fact or manner of proceeding w ith any action, or in any circumstance or

1231 Biosecurity Australia Policy Memorandum 2007/07, in Exhibit NZ-2.
1232 Australia's IRA, Part B, p. 106 ("[r]equirements" ); p. 114 ("the requireme nt for inspection", "the
requirement for disinfection treatment"); pp. 151-154 (" requirements"); p. 192 ("required", "risk management
and operational procedures"); p. 313 ("quarantine conditions (risk management measures together with
phytosanitary procedures) and operational procedures required to manage the quarantine risks");
p. 314 ("[r]equirement for pre-clearance", "area freed om and accreditation requirements", "packing house
procedures", "registration procedures"); p. 315 ("requ irements for freedom from specified disease symptoms
and anthropods"); p. 316 ("procedure", "required overall efficacy", "requirements", "[ g]eneral requirements");
p. 317 ("Biosecurity Australia requires that …", "chlorine or approved alternative dip requirements",
"the necessary requirements, … includi ng measures to prevent contaminati on of fruit and packaging materials
with quarantine pests"); p. 318 ("[d]isinfection treatment of apples in the packing house is a mandatory
requirement", "required level", "must be monitored and adjusted as required", "operational procedures"),
"procedures … to prevent the contamination of apples after the disinfection treatment",
"inspection procedures"), p. 320 ("requirements", "the orchard monitoring requirements for freedom of
symptoms of fire blight and European canker", "the chlorine dip requirements"); p. 321 ("requires mandatory
treatment", "the orchard monitoring requirements for freedom of symptoms of fire blight and European canker",
"the chlorine dip requirements"); pp. 319, 320 and 322 ("procedures"); p. 325 ("operational procedures",
"import requirements").
1233 The New Shorter Oxford English Dictionary , Ed. Brown, L., Clarendon Press, Oxford, Vol. 2,
p. 2557.
1234 Australia's IRA, Part A, p. 1. See also Australia's IRA, Part B, p. 313.
1235 New Zealand's reply to Panel question 19 after the second substantive meeting, para. 33.
1236 New Zealand's first written submission, para. 4.535.
1237 The New Shorter Oxford English Dictionary , Ed. Brown, L., Clarendon Press, Oxford, Vol. 2,
p. 2363.
1238 The New Shorter Oxford English Dictionary , Ed. Brown, L., Clarendon Press, Oxford, Vol. 2,
p. 2363.
1239 The Oxford English Dictionary online, <http://www.oed.com>.

situation; the performance of pa rticular actions, esp. considered in regard to method; practice,
conduct. Also: the established or prescribed way of doing something."1240
7.163 Clearly, each of the 16 measures sets out a speci fic procedure within the meaning of these
definitions: each of them prescribes a particular wa y of doing something, which needs to be followed
if New Zealand apples are to be imported into Australia.
7.164 The Panel now turns to the last part of th e second paragraph of Annex A(1), which provides
that the term "all relevant laws, decrees, regulations, requirements and procedures":
"[I]nclud[es], inter alia , end product criteria; pr ocesses and production methods;
testing, inspection, certification and a pproval procedures; quarantine treatments
including relevant requirements associated w ith the transport of animals or plants, or
with the materials necessary for their su rvival during transport; provisions on
relevant statistical methods, sampling pr ocedures and methods of risk assessment;
and packaging and labelling requirements directly related to food safety."
7.165 Of these examples, "quarantine treatment" would seem particularly relevant in the light of the
following part of Biosecurity Australia Policy Memorandum 2007/07:
"Biosecurity Australia recommended that Australia's Director of Animal and Plant
Quarantine make a policy determination that apples from New Zealand should be
permitted entry into Australia under specific quarantine conditions.
The Director of Animal and Plant Quar antine has now determined the policy to
permit the entry of apples from New Zealand to Australia. Importation of apples can
be permitted subject to the Quarantine Act 1908, and the application of phytosanitary
measures as specified in the Final import risk analysis report for apples from
New Zealand, November 2006. These measures are designed to limit quarantine risk
to a level which is acceptably low, consistent with Australia's conservative approach
to quarantine."1241
7.166 Also, the IRA refers to "quarantine pests" 1242 and to "quarantine protection" 1243, as well as to
the "[m]anagement of quarantine risks" 1244 and specifically to "quarantine measures". 1245 T h e I R A
also uses the word "treatment" to refer to some of the measures set out therein. 1246 Further, it makes
reference to "quarantine conditions (risk mana gement measures together with phytosanitary
procedures) and operational procedures requi red to manage the quarantine risks." 1247 In addition, the
IRA refers collectively to the risk management measures set out therein as "quarantine conditions" 1248
and specifically as "quarantine treatments".1249
7.167 The Panel notes in this context the remarks by the Australia – Salmon panel on the word
"quarantine": "[w]ithout defining the word 'quarantin e' as it is used in the SPS Agreement, [the panel
considers] that the concept of 'quarantine' more generally is commonly un derstood to relate to

1240 The Oxford English Dictionary online, <http://www.oed.com>.
1241 Biosecurity Australia Policy Memorandum 2007/07, p. 1 (emphasis added).
1242 Australia's IRA, Part A, pp. 1, 3, 13 and 14.
1243 Australia's IRA, Part A, p. 7.
1244 Australia's IRA, Part A, p. 15.
1245 Australia's IRA, Part A, pp. 7 and 17.
1246 Australia's IRA, Part A, pp. 1, 5, 9, 15 and 18.
1247 Australia's IRA, Part B, p. 313.
1248 Ibid.
1249 Australia's IRA, Part B, p. 41.

avoiding the spread of pests or diseases (in the sen se of the definition of a 'sanitary measure' in
paragraph 1(a))."
1250 Each of the 16 measures at issue in this dispute has a purpose falling under
subparagraph (a) of Annex A(1) because each of them relates to avoiding the spread of pests, which
the Australia – Salmon panel linked to the word "quarantine".
7.168 In addition, other examples mentioned in the last sentence of paragraph 1 of Annex A, such as
"end product criteria", "processes and production met hods" "inspection... and approval procedures",
would also seem particularly relevant – at least for some of the 16 measures.
7.169 In any event, as indicated above, the list of examples contained in the final part of
Annex A(1) is not exhaustive: it is introduced with the words "including, inter alia ". Further, as
emphasized above, the whole second paragraph of the definition of SPS measures under Annex A(1)
is introduced with the words "Sanitary or phytosanitary measures include..." Therefore, even if the 16
measures at issue should not correspond precisely to the form and nature element of the second
paragraph of Annex A(1), they can constitute SPS measures to the extent that they ostensibly promote
at least one of the purposes spelt in subparagraphs (a)-(d) of the first paragraph of Annex A(1).
7.170 In the light of the above, the Panel finds that each of the 16 measures is an SPS measure
under Annex A(1) of the SPS Agreement. In this regard, the Panel notes the following arguments by
New Zealand:
"The IRA states that the import risk analysis 'conforms with Australia's obligations as
a WTO member country' and that 'these rights and obligations derive principally from
the WTO's SPS Agreement'.
1251

The draft IRA was notified to the SPS Committee on 16 December 2005
(G/SPS/N/AUS/122/Add.3), as were previous drafts of the IRA.
The letter by AQIS to NZMAF formally notifying New Zealand that it had initiated
an import risk assessment on apples refers to a process for 'establishing phytosanitary
measures' in respect of New Zealand apples.1252"1253
7.171 In fact, the IRA refers to "sanitary and phytosanitary measures" 1254 and to "phytosanitary
measures"1255 to collectively denote the measures it lays down. In turn, the IRA defines
"[p]hytosanitary measure" as "[a]ny legislation, regul ation or official procedure having the purpose to
prevent the introduction and/or spread of quarantin e pests, or to limit the economic impact of
regulated nonquarantine pests (ISPM 5)". 1256 Defined in this way, the "phytosanitary measures" set
out in the IRA undoubtedly fall under the defin ition of SPS measures in Annex A(1) of the
SPS Agreement.
7.172 In the light of the foregoing, the Panel concl udes that the 16 measures at issue, both as a
whole and individually, constitute SPS measures within the meaning of Annex A(1). These
SPS measures also have an actual or potential trade effect, which means that they fall under the scope
of the SPS Agreement.

1250 Panel Report on Australia – Salmon, para. 8.36.
1251 (footnote original) IRA, Part B, page 3.
1252 (footnote original)Exhibit NZ-104.
1253 New Zealand's reply to Panel question 13 after the first substantive meeting, para. 25.
1254 Australia's IRA, Part B, pp. 4 and 5.
1255 Australia's IRA, Part B, pp. 5, 40 and 337.
1256 Australia's IRA, Part B, p. 344.

(c) Principal v. ancillary measures
7.173 Finally, the Panel looks at the distinction between ancillary and principal measures.
Australia advances the notion of a distinction to support its argument that many of the 16 measures
cannot be reviewed under the SPS Agreement individually, but only in combination with certain other
measures, which are supposedly principal measures.
7.174 The Panel does not see the relevance or validity of this distinction for defining SPS measures
under Annex A(1) of the SPS Agreement. Austra lia acknowledges that Annex A(1) is key for
defining whether the 16 measures at issue qualify as SPS measures. Australia accepts also that
Annex (A)1 does not mention any distinction between principal and ancillary measures.1257 The Panel
agrees.
7.175 Australia effectively asks the Panel to carve out ancillary measures from the definition of
SPS measures, and to limit their review under th e SPS Agreement to a joint review with other
measures. But Annex A(1) does not refer to anc illary measures or spell out any such carve-out.
The criteria advanced by Australia for assessing whether the 16 measures are ancillary have not been
identified specifically in previous rulings by pane ls or the Appellate Body on Annex A(1) of the
SPS Agreement.
7.176 Australia argues that the definition of SPS measures in subparagraph (a) of Annex A(1) of the
SPS Agreement, in particular the phrase "applied: to protect" against particular categories of SPS
risks, should guide the Panel in identifying "princ ipal measures", which may be reviewed individually
under the SPS Agreement. 1258 The Panel has already found, however, that each of the 16 measures
under review, including the ones that Australia identif ies as "ancillary" measures, fulfills on its own
subparagraph (a).1259
7.177 Australia also invokes the US – Export Restraints dispute as a basis for distinguishing
ancillary measures from principal ones that "constitute an instrument with a functional life of [their]
own" because they " do something concrete". 1260 That dispute, however, concerned the
SCM Agreement; it did not involve the SPS Agreement or even alleged SPS measures. In particular,
that dispute did not interpret the definition of Annex A(1) of the SPS Agreement.
7.178 US – Export Restraints took place in a different context from this dispute. The US – Export
Restraints panel was assessing whether instruments acco mpanying and interpreting related but
formally distinct instruments, as well as the "p ractice" under such instruments could "give rise
independently to a violation of WTO obligations." 1261 Conversely, this Panel needs to assess whether
each of the 16 measures spelt out in the same instrument, the IRA, is an SPS measure in its own right.
Further, this Panel does not look at the prac tice implementing the IRA. New Zealand has not
challenged such practice in this dispute.
7.179 Even applying the criteria laid down by the US – Export Restraints panel to the 16 measures
at issue in this dispute could not result in findi ng that some of those individual measures do not
constitute an instrument with a functional life of their own. In fact, it is clear that each of the
16 measures "do[es] something concrete". As anal ysed above, each of the 16 measures establishes a
requirement for specific action to be followed by New Zealand if it intends to export apples into
Australia. Importantly, whether the various instruments at issue in US – Export Restraints amounted

1257 Australia's reply to Panel question 23 after the first substantive meeting.
1258 Australia's reply to Panel question 14 after the first substantive meeting.
1259 See paras. 7.130 to 7.141 above.
1260 Panel Report on US – Export Restraints, para. 8.85 (original emphasis).
1261 Ibid. See also, Panel Report on US – Export Restraints, paras. 2.1-2.11.

to a "requirement"
1262 or "require[d] any particular treatment" 1263 was a key criterion for that panel to
assess whether the instruments in question "d[id] something concrete".
7.180 The Panel notes, as New Zealand also recognizes, that some of the 16 measures are related to
each other. For instance, Measures 1-5 are all concerne d with fire blight symptoms in apple orchards.
Clearly, these measures support each other. In partic ular, some are explicitly adopted to make sure
that compliance with another measure is not jeopardized, circumvented or otherwise made ineffective.
7.181 Unlike US – Export Restraints , however, the relationship betw een the alleged principal and
ancillary measures in the current dispute is not a merely interpretive one. As New Zealand points out,
each of the 16 measures, including Measures 1-5, sets out a distinct and specific requirement for
New Zealand to do something, with a distinct burden specific to compliance with each measure.
1264
Also, each measure may be enforced separately in time. And, as Australia acknowledges, lack of
compliance with any of the 16 measures might l ead to the suspension of apple imports from
New Zealand.1265
7.182 Neither Annex A(1) of the SPS Agreement, nor US – Export Restraints use the terms
"ancillary" and "principal" measures. Australia coined these terms, allegedly based on various
ISPMs.1266 Australia refers in particular to th e definitions of "phytosanitary measure",
"phytosanitary action" and "phyto sanitary procedure" in ISPM No . 5. According to Australia,
"[w]hile the phytosanitary measure has the purpose to 'prevent' or 'limit', the phytosanitary action and
phytosanitary procedure simply implement the phytosanitary measure ; inspections, tests and
surveillance do not 'prevent' or 'limit' the impact of quarantine pests unless there are consequences
attached to their results." 1267 The Panel notes that the SPS Agreement contains no such distinction
between phytosanitary measures, actions and procedur es. Also, some of the actions and procedures
included as examples in the ISPM definitions invoked by Australia, e.g. inspection, testing, quarantine
treatments, also appear as examples in the defin ition of an SPS measure contained in Annex A(1).
Further, the Panel notes that the experts have gi ven diverging responses on which of the 16 measures
might qualify as ancillary and principal in the light of the SPS Agreement and the ISPM definitions
referenced by Australia.1268
7.183 Australia also argues that its IRA follows a "s ystems approach". The IRA refers to ISPM
No. 14 on the use of integrated measures in a systems approach for pest risk management 1269, and it
defines systems approach as follows:
"For some pests, the analysis may indicat e that there is no single risk management
measure that will reduce the risk to 'very low' or 'negligible'. In these cases, it may be
possible to combine individual risk mana gement measures to achieve a sufficient

1262 Panel Report on US – Export Restraints, para. 8. 116.
1263 Panel Report on US – Export Restraints, para. 8.129.
1264 New Zealand's reply to Panel question 19 after the second substantive meeting, para. 33.
1265 See, for example, Australia's reply to Panel question 16 after the first substantive meeting.
1266 Australia's first written submission, Annex 2.
1267 Australia's reply to Panel question 24 after the first substantive meeting.
1268 Dr Deckers's, Dr Paulin's and Dr Schrader's replies to Panel question 48, Dr Deckers's, Dr Latorre's
and Dr Swinburne's replies to Panel question 93, Dr Latorr e's, Dr Schrader's and Dr Sgrillo's replies to Panel
question 139, Dr Latorre's, Dr Sc hrader's and Dr Sgrillo's replies to Panel question 140, Dr Deckers's,
Dr Latorre's, Dr Schrader's and Dr Sgr illo's replies to Panel question 141, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 300-303, 528-529 and 814-834.
1269 Australia's first written submission, para. 118.

level of risk reduction. This is referre d to as a 'systems' approach to risk
management."1270
In addition, ISPM No. 5 defines systems approach (es) as "[t]he integration of different risk
management measures, at least two of which act independently, and which cumulatively achieve the
appropriate level of protection against regulated pests."
7.184 The Japan – Apples (Article 21.5 – US) panel reviewed the various requirements at issue in
that dispute as one single SPS measure taken to comp ly. One of its main reasons for doing this was
that the original Japan – Apples panel did the same "essentially because all the requirements were
presented as part of a systemic approach."1271
7.185 However, the panels in Japan – Apples and Japan – Apples (Article 21.5 – US) reviewed one
pest, whereas the 16 measures in the current dispute relate to three different pests. Further, only in the
context of fire blight does the IRA link some of the 16 measures at issue by referring explicitly to a
"systems approach".
1272 When consulted by the Panel, Australia explicitly uses the expression
"systems approach" only in regard to the fi re blight measures contested by New Zealand. 1273 In fact,
Australia refers to Measures 1-2 and 5-6 arguing th at "[it] has adopted a 'systems approach' with
respect to managing the risks associated with fire blight". 1274 Referring to Measures 3-4 and 7-8,
Australia adds that "[t]he Final IRA Report also recommends a number of ancillary procedures to
support, verify and operationalise this systems approach." 1275 Finally, Australia explicitly rejected the
relevance of a "systems approach" argument for grouping alleged principal and ancillary measures
relating to European canker and to ALCM.1276 This makes it difficult for the Panel to review all of the
16 measures at issue under the logic of Australia's "systems approach" argument.
7.186 Even if the Panel chose to group some or all of the 16 measures together as one single SPS
measure for the purposes of its analysis, it would not be prevented from finding that a specific
element of that single measure, including what Au stralia qualifies as ancillary measures, violates the
SPS Agreement. The Japan – Apples panel reserved that right even though it reviewed the
requirements at issue as one single phytosanitary me asure: "We may of course conclude that one
aspect of a measure is illegal and not others, even when the complainant argu es that the measure as a
whole is illegal. Indeed, since the SPS Agreement establishes different rights and obligations, it may
be also appropriate, depending on the provision at issue, to consider the specific requirements
individually."1277 The Japan – Apples (Article 21.5 – US) panel did the same.1278
7.187 In the light of the foregoing, this Panel rejects Australia's arguments that New Zealand has not
demonstrated that each of the 16 measures, both as a whole and individually, amounts to an
SPS measure covered by the SPS Agreement. A ccordingly, the Panel will assess whether the
16 measures at issue, as a whole or individually, are inconsistent with the relevant provisions of the
SPS Agreement. At the same time, the Panel rese rves the right to assess various related measures
jointly under specific provisions of the SPS Agreement. In fact, in its "[r]eview of each element of
the compliance measure" 1279 as one single SPS measure under Article 2.2 of the SPS Agreement,

1270 Australia's IRA, Part A, p. 9. See also Australia's first written submission, para. 118.
1271 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.29.
1272 Australia's IRA, Part B, pp. 73, 106, 110, 111 and 112.
1273 Australia's reply to Panel question 15 after the first substantive meeting.
1274 Australia's first written submission, para. 139. See also, Ibid., paras. 140, 929 and 936.
1275 Australia's first written submission, para. 140.
1276 Australia's comments on the experts replies to questions, para. 303.
1277 Panel Report on Japan – Apples , para. 8.19. See also, Panel Report on Japan – Apples
(Article 21.5 – US), paras. 8.29-8.30.
1278 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.30.
1279 Panel Report on Japan – Apples (Article 21.5 – US), p. 108, DSR 2005:XVI, 7911, at 8051.

the Japan – Apples (Article 21.5 – US) panel grouped specific elements of the same measure together
because "they relate[d] to different aspects of the same concern"
1280 and because "many elements of
the ... measure are interrelated and justified on the basis of the same scientific evidence."1281
C. NEW ZEALAND'S CLAIMS UNDER ARTICLES 2.2, 5.1 AND 5.2 OF THE SPS AGREEMENT
1. Order of analysis
(a) Summary of the Parties' arguments
7.188 New Zealand argues that Australia's measures for the importation of New Zealand apples are
inconsistent with Australia's obligatio ns under Article 2.2 of the SPS Agreement. 1282 There is no
rational or objective relationship between, on the one hand, the scientific evidence and, on the other
hand, the Australian measures relating to fire blight , European canker and apple leafcurling midge, as
well as the general measures imposed by Austra lia for the importation of New Zealand apples. 1283
Australia imposes these measures in the absence of scientific evidence or in the face of scientific
evidence to the contrary.1284
7.189 New Zealand states that Articles 5.1 and 2.2 of the SPS Agreement are closely related 1285 and
notes that, according to the panels and the Appellate Body in the EC – Hormones dispute, Article 5.1
of the SPS Agreement may be viewed as a speci fic application of the basic obligations in
Article 2.2.1286 New Zealand argues that "[w]hile not ev ery violation of Article 2.2 will necessarily
entail a violation of Article 5.1 1287, Australia's breach of Article 2.2 in this case indicates that it is
likely not to be in compliance with Article 5.1."1288
7.190 New Zealand notes that Article 5.1 contains two elements: (a) there must be a risk
assessment, within the meaning of Article 5.1 and paragraph 4 of Annex A; and, (b) the SPS
measures must be based on that risk assessment. 1289 New Zealand argues that "Australia's IRA is not
a risk assessment within the meaning of Ar ticle 5.1 and paragraph 4 of Annex A". 1290 In
New Zealand's view, Australia has not properly ev aluated the likelihood of entry, establishment or
spread of the three relevant pests, nor has it ev aluated that likelihood according to the SPS measures
which might be applied. 1291 To the extent that a proper risk assessment does not exist to support

1280 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.76.
1281 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.29.
1282 New Zealand's first written submission, para. 1.2.
1283 New Zealand's first written submission, paras. 1.3- 1.6, 4.31, 4.51, 4.54, 4.97, 4.105, 4.139-4.140,
4.144, 4.150. See also, New Zealand's second written submission, paras. 2.99-2.292.
1284 New Zealand's first written submission, para. 4.6.
1285 New Zealand's second written submission, paras. 1.5 and 2.93.
1286 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 36, referring to Appellate Body Report on EC – Hormones , para. 180. See also, Panel Report on EC –
1287 (footnote original) Panel Report, Australia – Salmon, para. 8.52.
1288 New Zealand's first written submission, para. 4.152.
1289 New Zealand's first written submission, para. 4.153.
1290 New Zealand's first wr itten submission, para. 4.158. S ee also, New Zealand's first written
submission, para. 4.153.
1291 New Zealand's first written submission, paras. 1.8, 4.158 and 4.403-4.404. See also,
New Zealand's first written submission, paras. 4.160, 4.204 -4.206, 4.207, 4.265, 4.333, 4.378, 4.383 and 4.402;
and, New Zealand's second written submission, paras. 2.293-2.803.

Australia's measures, even if New Zealand has not made separate arguments under the "based on"
requirement, those measures cannot be said to be "based on" such a risk assessment.1292
7.191 New Zealand argues further that Australia's measures are inconsistent with Article 5.2 of the
SPS Agreement. Australia's IRA failed to give genuine consideration to the relevant scientific
evidence; to the relevant processes and production me thods; to the relevant inspection, sampling and
testing methods; to the prevalence of the relevant diseases or pests; and to the relevant environmental
conditions.1293
7.192 New Zealand submits that, "because [Australia's] measures are not based on a risk
assessment, the measures are [consequentially] also in breach of the requirements of Article 2.2 [of
the SPS Agreement] that measures be 'based on scien tific principles' and not be 'maintained without
sufficient scientific evidence'."1294
7.193 New Zealand rejects the order of analysis pr oposed by Australia for disputes that have
simultaneous claims under Articles 2.2 and 5.1. Ne w Zealand disagrees with Australia's view that
"the question of whether Australia has mainta ined measures 'without scientific evidence' under
Article 2.2 can only be answered by considering whether Australia's measures are based on a valid
risk assessment under Article 5.1". 1295 New Zealand submits that "[t]here is nothing in the text of the
SPS Agreement that suggests that an analysis of Ar ticle 5.1 should logically precede an analysis of
Article 2.2, much less that it must do so in every instance". 1296 Instead, as the Appellate Body held in
EC – Hormones , an approach starting with the "Basic Rights and Obligations" in Article 2 is
"logically attractive".1297 Australia's view is an attempt to lim it the scope of Article 2.2 "in favour" of
Article 5.1. According to Australia, a risk assess ment conducted by a competent authority should be
afforded "considerable deference". If that were co rrect, it would follow that the Panel would have no
mandate to assess whether there is a "rational or objective" relationship between the science and the
SPS measures.1298 Hence, in the circumstances of this case, it would be appropriate for the Panel to
start its examination with Article 2.2.1299
7.194 In response to arguments made by Australia, New Zealand disagrees with the view that
consistency of an SPS measure with Article 5. 1 of the SPS Agreement necessarily establishes

1292 New Zealand's first written subm ission, para. 4.153. See also , New Zealand's reply to Panel
question 117 after the first substantive meeting, para . 257; and, New Zealand's second written submission,
para. 2.794; New Zealand's reply to Panel questions 6, 27, 50 and 117 after the second substantive meeting,
paras. 14, 43, 94 and 187-188.
1293 New Zealand's first written submission, paras. 1.11, 1.12, 4.411-4.428; New Zealand's opening
oral statement at the first substantive meeting of the Panel with the Parties, paras. 113-114. See also,
New Zealand's reply to Panel question 121 after the firs t substantive meeting, paras. 259-265; New Zealand's
second written submission, paras. 2.804 and 2.816; Ne w Zealand's opening oral statement at the second
substantive meeting of the Panel with the Parties, para . 110; New Zealand's reply to Panel question 116 after
the second substantive meeting, paras. 182-186; and New Zealand's comments on Australia's reply to Panel
question 116 after the second substantive meeting, para. 269.
1294 New Zealand's first written submission, para. 4.405.
1295 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 35 (original emphasis). See also, Australia's first written submission, para. 344.
1296 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 36 (original emphasis). S ee also, New Zealand's second wr itten submission, para. 2.97, and
New Zealand's opening oral statement at the second substantive meeting of the Panel with the Parties, para. 38.
1297 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
1298 New Zealand's opening statement at the first substantive meeting of the Panel with the Parties,
paras. 38-40. See also, New Zealand's closing statement at the first substantive meeting of the Panel with the
Parties, para. 5, and New Zealand's second written submission, paras. 1.5, 2.85, 2.96 and 2.100.
1299 New Zealand's second written submission, para. 2.98.

consistency with Article 2.2.
1300 New Zealand argues that "[a] determination that there has been a risk
assessment within the meaning of Article 5.1 do es not resolve the question whether each of the
challenged measures has a rational and objective relati onship with scientific evidence – an issue that
arises under Article 2.2".1301 It is incorrect to assume that New Zealand has "conceded" this issue, just
because it has not made separate arguments in re lation to the "based on" element of Article 5.1. 1302
Articles 2.2 and 5.1 "establish separate legal oblig ations, with which compliance can be separately
assessed".1303
7.195 In New Zealand's view, the question of whether the measures imposed by Australia are
maintained with sufficient scientific evidence can be expressed in terms of both Article 2.2 ("whether
there is a 'rational or objective relationship' be tween the measures and scientific evidence"), and
Article 5.1 ("whether there has been a proper assessme nt of the 'likelihood of entry, establishment and
spread' of the three relevant pests").1304 With respect to whether a measure found to be consistent with
Article 5.1 would necessarily also be consistent w ith Article 2.2, New Zealand makes a distinction
between two different situations. A first situation would be when th e appropriate standard of review
is applied to determine consistency with Article 5.1. In this case, it is likely that an SPS measure that
is consistent with Article 5.1 will also be consistent with Article 2.2. This would be because of the
rational relationship required by both provisions between the science and the SPS measure. Even in
this situation, however, it is possible that consiste ncy with Article 5.1 would not necessarily lead to a
finding of consistency with Article 2.2. A second situation would arise when "considerable
deference" is accorded to a risk assessment under Article 5.1. Becau se this standard allows for no
meaningful review of whether there is a rati onal relationship between the science and the SPS
measure, it would be impossible to say whether a measure found to be consistent with Article 5.1
would also be consistent with Article 2.2. 1305 As to whether a challenged SPS measure found to be
inconsistent with Article 5.1 should also be found to be inconsis tent with Article 2.2, New Zealand
argues that, if the Panel were to find that the measure is inconsistent with Article 5.1, it should find by
implication a breach of Article 2.2, second and third requirements.1306
7.196 Finally, New Zealand notes that, if the Panel finds that Australia's IRA does not meet the
requirements for a valid risk assessment set out in Article 5.1 and Annex A(4) of the SPS Agreement,
and concludes that the measures at issue are in consistent with Article 5.1, the Panel should
nevertheless make findings on all of the other claims before it, in order to "secure a positive solution"
to this dispute.1307
7.197 Australia rejects New Zealand's claims. In its view, the measures contained in the IRA are
consistent with Articles 5.1, 5.2 and 2.2 of the SPS Agreement.1308

1300 Australia's first written submission, para. 919. S ee also, Australia's opening oral statement at the
first substantive meeting of the Panel with the Parties, para. 42.
1301 New Zealand's opening statement at the second substantive meeting of the Panel with the Parties,
para. 39.
1302 New Zealand's opening statement at the second substantive meeting of the Panel with the Parties,
para. 39. New Zealand's reply to Panel question 117 after the second substantive meeting, paras. 187-188.
1303 New Zealand's second written submission, para. 2.80.
1304 New Zealand's closing statement at the first substantive meeting of the Panel with the Parties,
para. 6. See also, New Zealand's opening statement at the second substantive meeting of the Panel with the
Parties, para. 31.
1305 New Zealand's reply to Panel question 123 after the first substantive meeting, paras. 268-270.
1306 New Zealand's reply to Panel question 123 after the first substantive meeting, para. 271.
1307 New Zealand's reply to Panel question 6 after the second substantive meeting, para. 14.
1308 Australia's first written submission, para. 220. See also, Australia's first written submission,
paras. 875-876.

7.198 As regards the order of analysis, Australia notes that Article 5.1 is a specific application of the
basic obligation contained in Article 2.2. 1309 There is a relationship of means and ends between the
two provisions. 1310 Generally speaking, where Members choose to rely on a risk assessment,
"Article 2.2 sets out basic benchmarks of what is required (ie. sufficient scientific evidence), and
Article 5.1 sets out how this can be achieved (ie. through a risk assessment)". 1311 Because of this
relationship, the question of whether there is su fficient scientific evidence under Article 2.2 in the
present dispute can be answered only by assessi ng whether the IRA constitutes a valid risk
assessment.1312 In Australia's words, "Article 5.1, and its associated provisions, elaborate specific
conditions which, if met, will establish the consistency of the relevant measures with Article 2.2".1313
7.199 Australia submits that the scientific validity of its measures cannot and should not be judged
on any other basis but the IRA 1314: "its SPS measures stand or fall with the risk assessments in the
Final IRA Report". 1315 If the Panel finds that the challe nged measures are inconsistent with
Article 5.1, by implication it must also conclu de that the measures are inconsistent with the
requirement of Article 2.2 that measures may not be maintained without sufficient scientific evidence.
Likewise, if the Panel finds that the challenged me asures are consistent with Article 5.1, then by
implication it must also conclude that the m easures are consistent w ith the above-mentioned
requirement of Article 2.2. 1316 Australia submits that these arguments do not imply any legal
hierarchy between Article 2.2 and Article 5.1.1317
7.200 Australia submits that, in its claim under Article 5.1 of the SPS Agreement, New Zealand has
not argued that Australia's measures are not "based on " the IRA. Accordingly, the analysis under this
provision should centre on whether the IRA is a valid risk assessment. 1318 Focusing on the IRA,
Australia draws support from the approach in Australia – Salmon (Article 21.5 – Canada) to contend
that the Panel should find a risk assessment w ould meet the requirements of Annex A(4) and
Article 5.1 of the SPS Agreement "if the complainant fails to establish that the panel should not 'have
reasonable confidence in the evaluation made, in particular in the levels of risk assigned.'" 1319 In
Australia's view, "[d]emonstrating the existence of divergent view is not sufficient to actually 'prevent'
a panel from having reasonable confidence in the evaluation made". 1320 Australia argues that,

1309 Australia's reply to Panel question 125 after the first substantive meeting, recalling the Appellate
Body Report on EC – Hormones, para. 180.
1310 Australia's second written submission, para. 93.
1311 Australia's reply to Panel question 125 after the first substantive meeting (original emphasis).
1312 Australia's first written submission, paras. 3 44 and 919. See also, Australia's opening oral
statement at the first substantive meeting of the Panel w ith the Parties, para. 42; Australia's reply to Panel
question 124 after the first substantive meeting; and Australia's second written submission, paras. 49 and 103.
1313 Australia's opening statement at the first substantive meeting of the Panel with the Parties, para. 42.
See also, Australia's reply to Panel question 125 after the first substantive meeting.
1314 Australia's reply to Panel question 123 after the first substantive meeting. See also, Australia's
second written submission, paras. 446, 607, 704 and 734.
1315 Australia's opening statement at the second substantive meeting of the Panel with the Parties,
para. 25.
1316 Australia's reply to Panel question 123 after the first substantive meeting. See also, Australia's
opening statement at the first substantive meeting of the Panel with the Parties, para. 45; Australia's second
written submission, paras. 97 and 607; and Australia's reply to Panel question 1 after the second substantive
meeting, para. 3.
1317 Australia's second written submission, para. 99.
1318 Australia's first written submission, para. 876. See also, Australia's reply to Panel questions 19 and
117 after the first substantive meeting; Australia's second written submission, paras. 42, 87, 109, 134, 138, 429,
444, 605, 693, 702, 728 and 731; and Australia's comments to New Zealand's replies to Panel questions after
the second substantive meeting, paras. 15, 17.
1319 Australia's first written submission, para. 346. Se e also, Australia's closing statement at the first
substantive meeting of the Panel with the Parties, para. 22.
1320 Australia's first written submission, para. 347.

according to the Appellate Body's more recent guidance in US/Canada – Continued Suspension , a
panel should find a risk assessment to be valid unless the complainant shows that it is not objectively
justifiable because it does not reflect legitimate science, or is not objective and coherent. In order to
raise a prima facie case that a particular risk as sessment is not objectively justifiable, Australia
considers that a complainant would have to identify a nd substantiate serious errors, or flaws, with that
assessment.
1321 In Australia's view, any lack of compre hensive or definitive evidence on a particular
point does not render a risk assessment invalid from a legal point of view. Under the SPS Agreement,
the obligation to take into account scientific evidence is limited to that evidence which is "available".
Australia also adds that data constraints and expert judgment are part of the reality of conducting risk
assessments in the context of a quarantine regulator y system directed at facilitating international
trade.1322 What will be "sufficient" scientific ev idence for the imposition of measures must be
assessed according to the specific facts and circumstances of each pest, taking into account Australia's
ALOP. Full scientific certainty does not exist.1323
7.201 Australia argues that the IRA contains an objec tive and coherent evaluation of the likelihood
of entry, establishment and spread of the relevant pests, according to the SPS measures that may be
applied. Australia rejects New Zealand's argument that the IRA "only provides 'some' evaluation of
the extent to which [the risk reduction factors for the three pests at i ssue] could reduce risk,
particularly in relation to fire blight".1324 Australia contends that "the IRA Team clearly evaluated the
scientific and technical efficacy of the principa l measures recommended to reduce the risks of the
relevant pests to achieve Australia's ALOP, along with evaluating a number of other potential risk
management alternatives".1325
7.202 Australia submits that the analogy drawn by New Zealand between the Japan – Apples case
and the present dispute is inappropriate. A risk assessment is contextual in that it must be
"appropriate to the circumstances".
1326 New Zealand has not been able to prove that the IRA fails to
assess "likelihood" as it should be correctly understood, nor that any of the findings in the IRA lacks
credibility.1327 New Zealand has failed to identify flaws in the methodology used by the IRA Team1328
and it inappropriately purports to present its own risk assessment offering an alternative account of the
evidence.1329 The IRA's assessments on fire blight, European canker and apple leafcurling midge "are
objective and credible and should not be disturbed" 1330, accordingly, these risk assessments are

1321 Australia's replies to Panel question 2 after the second substantive meeting, paras. 6, 7, 8 and 17.
1322 Australia's second written submission, para. 9.
1323 Australia's opening statement at the second substantive meeting of the Panel with the Parties,
paras. 9-10.
1324 New Zealand's first written submission, para. 4.383. The expression used by Australia in its first
written submission was not "objective and coherent", bu t "objective and credible". In later submissions,
Australia referred to the issue of whether the IRA's reas oning was "objective and coherent". See, for example,
Australia's second written submission, para. 34.
1325 Australia's first written submission, para. 853. See also, Australia's first written submission, paras.
855-874.
1326 Australia's first written submission, paras. 243, 250-262.
1327 Australia's first written submission, paras. 263-278.
1328 Australia's first written submission, paras. 288-342.
1329 Australia's first written submission, paras. 279-287.
1330 Australia's first written submission, para. 348. See also, Australia's first written submission, paras.
349-525, for fire blight; 526-719 for European canker; and, 720-851 for apple leafcurling midge.

consistent with Article 5.1 of the SPS Agreement. 1331 The consistency of Australia's measures with
Article 5.1 establishes their consistency with Article 2.2.1332
7.203 Australia submits that it has also acted consiste ntly with Article 5.2 of the SPS Agreement,
since its IRA appropriately took into account all of the factors listed therein. New Zealand's attempt
to convert Article 5.2 into an obligation to give "gen uine consideration" to the factors listed therein is
not grounded in the text of the provision.1333
7.204 Australia submits that, in any event, New Ze aland has failed to establish that Australia's
measures are inconsistent with the requirement in Article 2.2 that measures may not be maintained
without sufficient scientific evidence. 1334 In particular, New Zealand has failed to demonstrate that
the scientific evidence relied upon by the IRA Team w as insufficient for there to be a rational and
objective relationship with the measures at issue a nd that the IRA Team's evaluation of the scientific
evidence was not objective and coherent.1335
(b) The Panel's analysis
7.205 New Zealand's main contentions in the presen t case are "that the Australian measures are not
supported by scientific evidence and that the IR A does not constitute a risk assessment whose
conclusions are objectively justifiable". 1336 These contentions correspond to New Zealand's claims
under Articles 2.2, 5.1 and 5.2 of the SPS Agreement. 1337 New Zealand has advanced separate and
autonomous claims under each of these provisions.1338
7.206 Article 2.2 of the SPS Agreement, entitled Basic Rights and Obligations, reads as follows:
"Members shall ensure that any sanitary or phytosanitary measure is applied only to
the extent necessary to protect human, animal or plant life or health, is based on
scientific principles and is not maintained without sufficient scientific evidence,
except as provided for in paragraph 7 of Article 5."
7.207 Article 5.1, entitled Assessment of Risk and Determination of the Appropriate Level of
Sanitary or Phytosanitary Protection, provides that:

1331 Australia's first written submission, paras. 524-525 for fire blight; 719 for European canker; and
851 for apple leafcurling midge.
1332 Australia's first written submission, paras. 221-237. See also, Australia's second written
submission, paras. 88, 94 and 446.
1333 Australia's first written submission, paras. 12, 877-911. See also, Australia's reply to Panel
questions 119 and 120 after the first substantive meeti ng; Australia's second written submission, paras. 147-
153, 445, 606, 703 and 733; and Australia's reply to Panel question 116 after the second substantive meeting,
paras. 502-508.
1334 Australia's first written submission, para. 919, and Australia's second written submission, para. 103.
1335 Australia's first written submission, paras. 9 25 and 970. See also, Australia's first written
submission, paras. 926-940, for fire blight; 941-952 for European canker; 953-957 for apple leafcurling
midge; and, 958-969 for general measures. The expression used by Australia in its first written submission was
not "objective and coherent", but "objective and credible". In later submissions, Australia referred to the issue
of whether the IRA's reasoning was "objective and cohere nt". See, for example, Australia's second written
submission, para. 34.
1336 New Zealand's opening statement at the second substantive meeting of the Panel with the Parties,
para. 2. See also, New Zealand's closing statement at the first substantive meeting of the Panel with the Parties,
para. 6.
1337 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
1338 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, pp. 3-4.

"Members shall ensure that their sanitary or phytosanitary measures are based on an
assessment, as appropriate to the circumstances, of the risks to human, animal or
plant life or health, taking into account risk assessment techniques developed by the
relevant international organizations."
7.208 In turn, Article 5.2 states that:
"In the assessment of risks, Members sha ll take into account available scientific
evidence; relevant processes and production methods; relevant inspection, sampling
and testing methods; prevalence of specific diseases or pests; existence of pest- or
disease-free areas; relevant ecological and environmental conditions; and quarantine
or other treatment."
7.209 Finally, paragraph 4 of Annex A of the SPS Ag reement contains the following definition of a
"risk assessment":
"Risk assessment – The evaluation of the likelihood of entry, establishment or spread
of a pest or disease within the territory of an importing Member according to the
sanitary or phytosanitary measures which mi ght be applied, and of the associated
potential biological and economic consequences; or the evaluation of the potential
for adverse effects on human or animal h ealth arising from the presence of additives,
contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs."
7.210 This is not the first dispute with simultane ous claims under Articles 2.2 and 5.1 of the
SPS Agreement. Prior panels and the Appellate Body have generally recognized the close link
between the two provisions. As noted by the panels and the Appellate Body in the EC – Hormones
dispute, "Article 5.1 may be viewed as a specific application of the basic obligations contained in
Article 2.2 of the SPS Agreement".
1339 The Appellate Body added that "Articles 2.2 and 5.1 should
constantly be read together" because "Article 2.2 in forms Article 5.1: the elements that define the
basic obligation set out in Article 2. 2 impart meaning to Article 5.1." 1340 I n t h e Canada/US –
Continued Suspension case, the Appellate Body noted further that the requirements contained in
Article 2.2 of the SPS Agreement are made operati ve in other provisions of the SPS Agreement,
"including Article 5.1, which requires SPS measures to be 'based on' a risk assessment".1341
7.211 Similarly, Article 5.2 is inextricably linked to Article 5.1, as the former provision enumerates
a list of factors that must be taken into account by Members when conducting their risk
assessments.
1342 As noted by the panel in Japan – Apples , Articles 5.1 and 5.2 "directly inform each
other, in that paragraph 2 sheds light on the elemen ts that are of relevance in the assessment of risks
foreseen in paragraph 1". 1343 Accordingly, the order of analysis issue in the present case is really
between Articles 2.2 and 5.1 of the SPS Agreement, as Article 5.2 would be considered when looking
at Article 5.1.
7.212 Prior cases do not provide unambiguous guidance regarding the proper order of analysis of
simultaneous claims under Articles 2. 2 and 5.1 of the SPS Agreement. In several such disputes, the

1339 Appellate Body Report on EC – Hormones , para. 180. See also, See also, Panel Report on EC –
Hormones (Canada), para. 8.96; Panel Report on EC – Hormones (US), para. 8.93; Appellate Body Report on
Canada – Continued Suspension, para. 526.
1340 Appellate Body Report on EC – Hormones, para. 180. See also, Appellate Body Report on Canada
– Continued Suspension, para. 526.
1341 Appellate Body Report on Canada – Continued Suspension, para. 674.
1342 Appellate Body Report on Canada – Continued Suspension, para. 527.
1343 Panel Report on Japan – Apples , para. 8.230. See also, Panel Report on US – Continued
Suspension, para. 7.441.

reports started with the more specific Article 5.1. In EC – Hormones, for example, the panel began its
analysis by examining whether the challenged measures were based on relevant international
standards, guidelines or recommendations or ot herwise consistent with Article 3 of the
SPS Agreement. Subsequently, the panel examined the risk assessment under Article 5. After having
found that the measures in dispute were inconsistent with the requirements of Articles 3 and 5, "and
considering that Articles 3 and 5 provide for more specific rights and obligations than the 'basic rights
and obligations' set out in Article 2" the panel saw "no need to further examine whether the...
measures in dispute also [violated] Article 2". 1344 The Appellate Body found no fault with this
approach and agreed with the general consideration that that Article 5.1 can be viewed as a specific
application of the basic obligations in Article 2.2 1345, although it mentioned that an alternative
approach that would have started by the more general Article 2 would appear "logically attractive".1346
In Australia – Salmon , the Appellate Body agreed 1347 with a finding made by the panel, whereby a
violation of Article 5.1 or 5.2 was considered to imply a violation of the more general provision of
Article 2.2.1348 The Appellate Body also agreed with the panel's view that "given the more general
character of Article 2.2 not all violations of Article 2.2 are covered by Articles 5.1 and 5.2". 1349
Likewise, the panel in EC – Approval and Marketing of Biotech Products found that, by maintaining
measures inconsistently with Article 5.1, a Member had by implication also acted inconsistently with
the requirements in Article 2.2. 1350 The compliance panel in Australia – Salmon (Article 21.5 –
Canada) followed the same order and found first that the challenged measures were not based on a
risk assessment, and were therefore inconsistent with Article 5.1. 1351 It went on to find that the same
measures were by implication also inconsistent with Article 2.2.1352
7.213 Some panels, however, have followed a different approach. The compliance panel in Japan –
Apples (Article 21.5 – US), for example, found first that the ch allenged measure was not supported by
sufficient scientific evidence, and was therefore inconsistent with Article 2.2.1353 The panel then went
on to find that the same measure was not based on a risk assessment and was therefore also
inconsistent with Article 5.1. 1354 The original panel in Japan – Apples had followed a similar
approach.1355
7.214 The close link between Articles 2.2, 5.1 and 5.2 of the SPS Agreement does not mean that
these are identical provisions. Otherwise at least one of the provisions would be redundant. The
Panel is aware in this respect that, as noted by the Appellate Body in US – Gasoline, under the general
rule of interpretation contained in the Vienna Convention on the Law of Treaties, "interpretation must
give meaning and effect to all the terms of a treaty " and "[a]n interpreter is not free to adopt a reading
that would result in reducing whole clauses or para graphs of a treaty to redundancy or inutility".
1356
With respect to the specific obligation that SPS measures are based on scientific principles, Article 2.2
directly focuses on the necessary link that must exist between the SPS measure and the scientific
principles and evidence. Under Articles 5.1 and 5.2 of the SPS Agreement, such link is still

1344 Panel Report on EC – Hormones (Canada), para. 8.274. See also, Panel Report on EC – Hormones
(Canada), para. 8.96; Panel Report on EC – Hormones (US), paras. 8.93 and 8.271.
1345 Appellate Body Report on EC – Hormones, para. 180.
1346 Appellate Body Report on EC – Hormones, para. 250.
1347 Appellate Body Report on Australia – Salmon, para. 138.
1348 Panel Report on Australia – Salmon, para. 8.52.
1349 Appellate Body Report on Australia – Salmon , para. 138. Panel Report on Australia – Salmon ,
para. 8.52.
1350 Panel Report on EC – Approval and Marketing of Biotech Products, paras. 7.3393-7.3396.
1351 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.83.
1352 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.85.
1353 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.120.
1354 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.157.
1355 Panel Report on Japan – Apples, paras. 8.199 and 8.290.
1356 Appellate Body Report on US – Gasoline, p. 23.

necessary, but it is indirect as it rests on the re quirement for a risk assessment. Any SPS measure
must be based on a risk assessment, which, in turn, must be based on scientific evidence.
7.215 In the circumstances of the present case, the Pane l will deal with New Zealand's simultaneous
claims under Article 2.2 and Article 5.1 of the SPS Ag reement, beginning its analysis with the "more
specific" claims under Articles 5.1 and 5.2. In the current case, Australia has justified its SPS
measures through a risk assessment. The scientific evidence that supports the measures should be
(and, according to Australia, is) reflected in the risk assessment. Accordingly, the logical starting
point to consider a challenge against the reasoning and scientific basis for the measures is whether the
risk assessment is in conformity with the requirements laid down in the SPS Agreement. By focusing
on Australia's IRA, the Panel can then determ ine whether Australia's SPS measures for the
importation of New Zealand apples are being imposed and maintained without sufficient scientific
evidence. This will entail looking at Australia's IRA in the light of the obligations contained in
Article 5.1, while keeping in mind the factors identified in Article 5.2.
2. Standard of review
(a) Summary of the Parties' arguments
7.216 Recalling the words of the Appellate Body, Aust ralia submits that the Panel should apply a
standard of review that is specific to the SPS Ag reement and the particular obligation in question.
1357
Under this standard, when a Member has acted in good faith to comp ly with its obligations under the
SPS Agreement, a panel should, in its fact-finding ro le, show a degree of deference (but not total
deference) in its review of that Member's regulatory decisions. 1358 Panels would need to show a
relatively low level of deference to a decision by a Member directed at meeting specific requirements
or managing the trade impact of the means by whic h a Member has sought to achieve particular ends,
and not related to matters of scientific or regulatory judgement.1359
7.217 Australia argues that, when "a Member has obtained and relied upon a comprehensive and
transparent risk assessment" for the adoption of SPS measures, the SPS Agreement imposes a
significant limitation on the jurisdiction of a panel. It would not be up to the panel to perform its own
assessment, conducting a de novo review of the scientific evidence, but the panel should instead
accord considerable deference (although not total deference) to the risk assessment.1360 In considering
the scientific basis of that risk assessment, the pa nel's role is to determine whether a valid risk
assessment had been conducted, considering whet her the risk assessor's decision was objective and
credible.1361 A panel need not conduct an intense scrutiny of the scientific evidence, in order to satisfy
its obligation to conduct an "objective assessment of the facts", unless the complainant has established
that the panel cannot have reasonable confidence in the risk assessment, by showing that the risk
assessment is not objective and credible, that th e assessor failed to take into account evidence that
would have led to a lower level of assessed risk, and that any flaws identified are "so serious" as to

1357 Australia's first written submission, paras. 17 6-179, recalling the Appellate Body Report on US –
Softwood Lumber VI (Article 21.5 – Canada) , para. 92; the Appellate Body Report on Argentina – Footwear
(EC), para. 121; the Appellate Body Report on US – Lamb, paras. 102-105; and the Appellate Body Report on
EC – Hormones, para. 115; Australia's closing oral statement at the first substantive meeting of the Panel with
the Parties, paras. 11-14; Australia's reply to Panel questions 55 and 56 after the first substantive meeting.
1358 Australia's first written submission, paras. 180-183.
1359 Australia's first written submission, paras. 189-190.
1360 Australia's first written submission, paras. 191-199; Australia's opening oral statement at the first
substantive meeting of the Panel with the Parties, para. 36. See also, Australia's reply to Panel question 57 after
the first substantive meeting.
1361 Australia's first written submission, paras. 191-199 and 241.

prevent the Panel from having reasonable confidence in the evaluation made. 1362 An indication of the
"seriousness" is "whether it prevents a panel from having reasonable confidence in the overall risk
assessment. That reasonable confidence may be underm ined [if] the flaw in question appears to have
made a material difference to the outcome of the assessment".1363
7.218 Following the establishment of this Panel, the Appellate Body issued its report in
Canada/US – Continued Suspension . Subsequently, Australia noted that, "[g]iven that the Appellate
Body [had] now provided detailed guidance on a pane l's standard of review in respect of risk
assessments, Australia no longer [considered] it necessary to use the terms 'deference' or 'considerable
deference'."1364
7.219 Australia adds that New Zealand has failed to id entify flaws in the IRA, "let alone any flaws
serious enough to prevent the Panel from having 'reas onable confidence' in the evaluation made" with
respect to the IRA's use of a semi-quantitative methodology 1365, to the risk assessment for fire
blight1366, to the risk assessment for European canker 1367, to the risk assessment for apple leafcurling
midge1368 and with respect to the evaluation of the like lihood of entry, establishment or spread of the
relevant pests according to the SPS measures which might be applied.1369
7.220 In response, New Zealand submits that the appropr iate standard of review for this case is set
out in Article 11 of the DSU.1370 The Panel should focus on reviewing the sufficiency of the scientific
evidence underlying Australia's SPS measures, determining whether the IRA is supported by coherent
reasoning and respectable scientific evidence a nd is, in this sense, objectively justifiable. 1371
New Zealand notes that the "cumulative result of all the matters raised by New Zealand in respect of
the risk assessment conducted by the IRA is that Au stralia has failed to comply with its obligations
under Article 5.1 of the SPS Agreement."1372

1362 Australia's first written submission, paras. 206 -207, 346-347 and 875; Australia's opening oral
statement at the first substantive meeting of the Panel with the Parties, para. 39; Australia's closing oral
statement at the first substantive meeting of the Panel with the Parties, para. 15; Australia's second written
submission, paras. 35-40; Australia's opening oral statement at the second substantive meeting of the Panel with
the Parties, paras. 6 and 21; Australia's closing oral statement at the second substantive meeting of the Panel
with the Parties, para. 2. See also , Australia's reply to Panel question 58 after the first substantive meeting;
Australia's second written submission, paras. 1 and 7.
1363 Australia's reply to Panel question 2 after the second substantive meeting, para. 14. Australia's
comments on New Zealand's replies to Panel questions after the second substantive meeting, paras. 33-34.
1364 Australia's second written submission, para. 15, footnote 13. See also, Australia's opening oral
statement at the second substantive meeting of the Panel with the Parties, para. 20.
1365 Australia's first written submission, paras. 288-342. See also, Australia's second written
submission, paras. 10, and 238-312; Australia's opening oral statement at the second substantive meeting of the
Panel with the Parties, paras. 34-58.
1366 Australia's first written submission, paras. 349-525. See also, Australia's second written
submission, paras. 313-452.
1367 Australia's first written submission, paras. 526-719. See also, Australia's second written
submission, paras. 453-612.
1368 Australia's first written submission, paras. 720-851. See also, Australia's second written
submission, paras. 614-700.
1369 Australia's first written submission, paras. 852-874. See also, Australia's second written
submission, paras. 727-729.
1370 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 32; New Zealand's second written submission, paras. 2.43-2.44.
1371 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, paras. 31-32.
1372 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 112. See also, New Zealand's second written s ubmission, paras. 2.297; New Zealand's opening oral

7.221 New Zealand rejects Australia's argument that the Panel should give "considerable deference"
to the IRA. This standard finds no basis in the text of the SPS Agreement or the DSU and no basis in
the previous findings of the Appellate Body and WTO panels.
1373 Australia's contention that, under
Article 5.1, the appropriate role for the Panel is to determine whether its measures are based "on an
objective and credible risk assessment" is closel y related to Australia's proposed standard of
"considerable deference", a standard that has been rejected by panels and the Appellate Body.1374
7.222 New Zealand adds that Australia's argument that New Zealand would have to show "serious
flaws" in the IRA is not supported by the juri sprudence, nor is Australia's suggestion that
New Zealand must demonstrate "serious flaws" at each step of the risk assessment.1375
(b) The Panel's analysis
7.223 The Appellate Body has repeatedly noted that "Article 11 of the DSU 'articulates with great
succinctness but with sufficient clarity the a ppropriate standard of review for panels' 1376 reviewing the
assessment of facts under the SPS Agreement". 1377 In relevant part, Article 11 of the DSU provides
that:
"[A] panel should make an objective assessment of the matter before it, including an
objective assessment of the facts of the cas e and the applicability of and conformity
with the relevant covered agreements, and ma ke such other findings as will assist the
DSB in making the recommendations or in giving the rulings provided for in the
covered agreements."
7.224 The Appellate Body has noted that "so far as fact-finding by panels is concerned, the
applicable standard is 'neither de novo review as such, nor "total deference", but rather the "objective
assessment of facts"'."
1378
7.225 As the Appellate Body noted in its report on Canada/US – Continued Suspension , the task of
a panel reviewing the consistency of an SPS measure with Article 5.1 of the SPS Agreement is to
determine whether that SPS measure is properly b ased on a risk assessment. While it is for the WTO
Member to perform the risk assessment, the panel's t ask is to review that risk assessment. A panel
that goes beyond this mandate and acts as a risk assessor, would be substituting its own scientific
judgement for that of the risk assessor and making a de novo review. Consequently, the panel would
be exceeding its functions under Article 11 of the DSU. "Therefore, the review power of a panel is ...

statement at the second subs tantive meeting of the Panel with the Parties, para. 33; New Zealand's reply to
Panel questions 2 and 3 after the second substantive meeting, paras. 6 and 7-8.
1373 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
paras. 11, 33-34; New Zealand's closing oral statement at the first substantive meeting of the Panel with the
Parties, para. 4; New Zealand's seco nd written submission, paras. 2.45-2.64. See also, New Zealand's reply to
Panel question 56 after the first substantive meeting; New Zealand's opening oral statement at the second
substantive meeting of the Panel with the Parties, paras. 18-22, 27 and 33.
1374 New Zealand's second written submission, paras. 2.299-2.301.
1375 New Zealand's reply to Panel questions 2, 3 and 4 after the second substantive meeting, paras. 6, 7
and 9. New Zealand's comments to Australia's reply to Panel questions 2 and 3 after the second substantive
meeting, paras. 4 and 8.
1376 (footnote original) [Appellate Body Report on EC – Hormones], paras. 115 and 116.
1377 Appellate Body Report on Canada – Continued Suspension , para. 587, quoting Appellate Body
Report on EC – Hormones, paras. 113-114.
1378 Appellate Body Report on Canada – Continued Suspension , para. 589, quoting Appellate Body

to determine whether that risk assessment is supported by coherent reasoning and respectable
scientific evidence and is, in this sense, objectively justifiable."1379
"Accordingly, a panel reviewing the consis tency of an SPS measure with Article 5.1
of the SPS Agreement must, first, identify the scientific basis upon which the SPS
measure was adopted. ... Having identified the scientific basis underlying the SPS
measure, the panel must then verify that the scientific basis comes from a respected
and qualified source. ... A panel should also assess whether the reasoning articulated
on the basis of the scientific evidence is obj ective and coherent. In other words, a
panel should review whether the particul ar conclusions drawn by the Member
assessing the risk find sufficient support in the scientific evidence relied upon.
Finally, the panel must determine whether the results of the risk assessment
'sufficiently warrant' the SPS measure at issue.1380"1381
7.226 In the considerations above, the Panel finds enough guidance on how to review Australia's
SPS measures. The Panel finds no reason to articulate a standard of review that departs from such
guidance. In any event, the Panel notes that, in its second written submission, Australia indicated that
it would no longer insist on its earlier suggestion that , in its analysis of Australia's SPS measures
under Article 5.1, the Panel should accord "considerable deference" to Australia's IRA.1382
7.227 As quoted by Australia, the compliance panel on Australia – Salmon (Article 21.5 – Canada)
pointed out that it had found "difficult to read into the summary definition of risk assessment set out
in paragraph 4 of Annex A – whic h only refers to 'the evaluation of the likelihood' – specific
requirements such that minor flaws or misconceptions at a detailed level would preclude a study from
falling within the SPS definition of risk assessment". 1383 That panel added that "there may be studies
that are flawed or biased to such ex tent that they cannot be said to meet any standard of objectivity.
We do not think that such studies should pass the te st of a risk assessment in accordance with the
SPS Agreement."1384
7.228 The reasoning made by the compliance panel on Australia – Salmon (Article 21.5 – Canada)
does not necessarily clash with the general rules on the appropriate standard of review provided in the
DSB and explained by the Appellate Body. The Panel remains bound to make an objective
assessment of the matter before it. It is only under the circumstances of each case, that a panel can
assess whether any flaws or misconceptions in a ri sk assessment, alleged and demonstrated by the
complainant, are only minor or whether they are se rious enough to conclude that the risk assessment
is not supported by coherent reasoning and respectab le scientific evidence and is, in this sense, not
objectively justifiable. At the same time, a number of "minor flaws or misconceptions at a detailed
level" may have a cumulative effect so as to call into question the coherence and objectivity of the
conclusions drawn by the Member assessing risk.
7.229 The Panel will accordingly turn to reviewing Australia's IRA, c onsidering its scientific basis
and reasoning in the light of the alleged flaws that have been identified by New Zealand, in order to
determine whether New Zealand has articulated a prima facie case that the IRA is not a proper risk
assessment within the meaning of Article 5.1 of the SPS Agreement.

1379 Appellate Body Report on Canada – Continued Suspension, para. 590.
1380 (footnote original) [Appellate Body Report on EC – Hormones], para. 193.
1381 Appellate Body Report on Canada – Continued Suspension, para. 591.
1382 Australia's second written submission, para. 15, footnote 13.
1383 Panel Report on Australia – Salmon (Article 21.5 – Canada) , para. 7.47. See, for example,
Australia's first written submission, para. 206.
1384 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.47.

3. Summary of the Parties' arguments under Articles 5.1 and 5.2 of the SPS Agreement
7.230 As noted above, New Zealand argues that Austra lia's IRA is not a risk assessment within the
meaning of Article 5.1 of the SPS Agreement.
1385 Australia has not properly evaluated the likelihood
of entry, establishment or spread of the three re levant pests, nor has it evaluated that likelihood
according to the SPS measures which might be applied. 1386 In New Zealand's view, "the conclusions
in the IRA do not find sufficient suppor t in the scientific evidence relied upon". 1387 To the extent that
a proper risk assessment does not exist to support Australia's measures, those measures cannot be said
to be "based on" a risk assessment.1388
7.231 New Zealand does not challenge per se Australia's choice to use a semi-quantitative approach
to assess the risk associated with th e three pests at issue in this dispute. New Zealand does, however,
argue that such an approach may provide a mi sleading impression of objectivity and precision. 1389 In
addition, in New Zealand's view, the particular application of the semi-quantitative method used in the
IRA produces a distorted estimate of risk, turning events that "would almost certainly not occur" into
events that "will be expected to occur relativel y frequently" and converting "pathways that did not
exist" into "continuous pathways for the transmission of pests".1390 New Zealand also argues that:
"[W]ith regard to many of the individual steps in the relevant pathways ...
assessments in the IRA significantly overest imate the risk. ... [I]n many instances,
these are events which have never been demons trated to occur, and for which there is
no scientific evidence to suggest they woul d occur. Moreover the numbers actually
assigned in the IRA find no support in the science. The distorting effect is
compounded where a number of these events occur in the same pathway."
1391
7.232 New Zealand identifies three "fundamental methodo logical flaws" in Australia's IRA that, in
combination, would result in a vastly overestimated probability of entry, establishment and spread of
the pests at issue. According to New Zealand: "[t]hese flaws magnify the assessment of risk, turning
what are often the remotest of possibilities into events that are assessed as occurring with some
frequency."1392 The first methodological flaw identified by New Zealand is the IRA's choice of "an
inflated maximum value [of 1 × 10 -6] for the probability of events with a negligible likelihood of
occurring".1393 The second methodological flaw is the "ina ppropriate use of [a] uniform distribution
to model the likelihood of events, particularly those with a 'negligible' likelihood of occurring". 1394

1385 New Zealand's first wr itten submission, para. 4.158. S ee also, New Zealand's first written
submission, para. 4.153.
1386 New Zealand's first written submission, paras. 1.8, 4.158 and 4.403-4.404. See also,
New Zealand's first written submission, paras. 4.160, 4.204 -4.206, 4.207, 4.265, 4.333, 4.378, 4.383 and 4.402;
and, New Zealand's second written submission, paras. 2.293-2.803.
1387 New Zealand's second written submission, para. 2.296.
1388 New Zealand's first written subm ission, para. 4.153. See also , New Zealand's reply to Panel
question 117 after the first substantive meeting, para. 257; and, New Zealand's second written submission,
para. 2.794.
1389 New Zealand's first written submission, para. 4. 165; New Zealand's se cond written submission,
para. 2.327.
1390 New Zealand's first written submission, paras. 4.171-4.173.
1391 New Zealand's second written submission, para. 2.297.
1392 Ibid.
1393 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written
1394 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written

The third methodological flaw is "the overestimation of the projected volume of trade" in
New Zealand apples.1395
7.233 New Zealand states that Australia's measures ar e also inconsistent with Article 5.2 of the
SPS Agreement. At various points, Australia's IR A failed to give genuine consideration to the
relevant scientific evidence; to the relevant processes and production methods; to the relevant
inspection, sampling and testing methods; to the prev alence of the relevant diseases or pests; and to
the relevant environmental conditions.1396
7.234 Australia responds that the IRA is a prope r risk assessment under Article 5.1 of the
SPS Agreement. New Zealand fails to recognize th at risk assessments must confront scientific
uncertainty, which may only be resolved or accommodated "through the exercise of expert judgement
in accordance with the specific requirements of each case". 1397 The legal question that the Panel must
consider is not whether New Zealand's "alternative sc ientific account" is credible or even represents
mainstream opinion, but whether Australia's meas ures are based on an objective and coherent risk
assessment.1398 In this respect, Australia considers that , in order to make a case that the reasoning
articulated in the IRA is not objective and coherent , New Zealand would need to substantiate serious
flaws in that assessment; minor flaws would not be sufficient to undermine the IRA's overall
objectivity and coherence.1399
7.235 Australia also argues that New Zealand fails to appreciate that risk assessments must be
appropriate to the circumstances and, therefore, th at they must take into account country-specific
situations. Because Australia's agricultural sector and biological diversity are both dependent on
Australia's pest and disease status, the risks of pest and disease incursion in Australia are often serious
and irreversible.1400 Australia adds that New Zealand mistakenly attempts to draw a direct analogy
between the findings of the panel in Japan – Apples and the present dispute. The reports in Japan –
Apples do not constitute a risk assessment, and their findi ngs are specific to the circumstances of that
dispute, which are different from the facts of the current case.1401
7.236 Australia rejects New Zealand's contention th at the IRA has not properly evaluated the
likelihood of entry, establishment or spread of the three relevant pests, and that it has not evaluated
that likelihood according to the SPS measures which might be applied. 1402 Australia argues in this
regard that the IRA has properly assigned a quant itative or qualitative estimation of likelihood to

1395 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written
1396 New Zealand's first written submission, paras. 1.11, 1.12, 4.411-4.428; New Zealand's opening
oral statement at the first substantive meeting of the Panel with the Parties, paras. 113-114. See also,
New Zealand's reply to Panel question 121 after the firs t substantive meeting, paras. 259-265; New Zealand's
second written submission, paras. 2.804-2.816; New Zealand's opening oral statement at the second substantive
meeting of the Panel with the Parties, para. 110; Ne w Zealand's reply to Panel question 116 after the second
substantive meeting, paras. 182-186; and New Zealand's comments on Australia's reply to Panel question 116
after the second substantive meeting, para. 269.
1397 Australia's first written submission, para. 233. See also, Australia's first written submission,
paras. 231-235; Australia's second written submission, paras. 111-116.
1398 Australia's first written submission, paras. 240-241.
1399 Australia's second written submission, para. 35.
1400 Australia's first written submission, paras. 243-249. See also, Australia's second written
submission, paras. 117-121.
1401 Australia's first written submission, paras. 250-261. See also, Australia's opening oral statement at
the first substantive meeting of the Panel with the Parties, para. 19.
1402 Australia's first written submission, para. 263.

every step in the risk assessment.
1403 Australia likewise rejects Ne w Zealand's complaint regarding
the IRA's consideration of events with a "negligible" likelihood.1404
7.237 In Australia's view, New Zealand cannot ma ke a prima facie case against the IRA under
Article 5.1 of the SPS Agreement by conducting its own risk assessment according to its own
methodology.1405 Australia argues further that New Zeal and fails to identify flaws in the semi-
quantitative methodology used in the IRA 1406 and that New Zealand's re liance in this regard on a
handbook by the OIE is inappropriate. 1407 Australia submits also that the IRA's use of a probability
interval of 0-10-6 is appropriate 1408, that the IRA's use of uniform distribution did not inflate risk 1409
and that New Zealand's assertions on the volume of trade are based on faulty assumptions.1410
7.238 Regarding New Zealand's argument that the challe nged measures are also inconsistent with
Article 5.2 of the SPS Agreement, Australia responds that the IRA Team took into account all of the
factors listed in Article 5.2, including those identified by New Zealand, and New Zealand has failed to
demonstrate otherwise. Australia argues further that New Zealand's reading of Article 5 as an
obligation to give "genuine consideration" to these factors is not grounded in the text of the provision
and is instead merely a complaint that the IRA Team took a different view to New Zealand's own
view of these factors.1411
7.239 Australia argues finally that the IRA makes an objective and credible evaluation of the
likelihood of entry, establishment and spread of the three relevant pests, as well as the associated
potential biological and economic consequences, and New Zealand fails to prove otherwise. 1412
Australia concludes that its measures are consis tent with Article 5.1 of the SPS Agreement and,
accordingly, also with Article 2.2.1413
4. Requirements regarding fire blight
7.240 The IRA contains a section describing the biol ogy of the bacterial disease fire blight,
a description of the risk scenario, a discussion of th e likelihood of entry, establishment and spread of
fire blight, an assessment of the consequences, a d escription of the unrestricted risk and, finally,
a discussion of risk management measures.1414

1403 Australia's first written submission, paras. 265-268.
1404 Australia's first written submission, paras. 269-275.
1405 Australia's first written submission, paras. 279-287.
1406 Australia's first written submission, para. 288. See also, Australia's second written submission,
paras. 222-237; Australia's opening oral statement at the second substantive meeting of the Panel with the
Parties, paras. 34-35.
1407 Australia's first written submission, paras. 290-294.
1408 Australia's first written submission, paras. 295-311. See also, Australia's second written
submission, paras. 242-246; Australia's opening oral statement at the second substantive meeting of the Panel
with the Parties, paras. 36-46.
1409 Australia's first written submission, paras. 312-318. See also, Australia's second written
submission, paras. 264-274; Australia's opening oral statement at the second substantive meeting of the Panel
with the Parties, paras. 47-52.
1410 Australia's first written submission, paras. 319-341. See also, Australia's second written
submission, paras. 275-311; Australia's opening oral statement at the second substantive meeting of the Panel
with the Parties, paras. 53-57.
1411 Australia's first written submission, paras. 877-880; Australia's second written submission,
paras. 147-153.
1412 Australia's first written submission, paras. 348-874. See also, Australia's second written
submission, paras. 313-444, 453-605, 614-702 and 731-733.
1413 Australia's first written submission, paras. 344, 875-876.
1414 Australia's IRA, Part B, pp. 51-116.

7.241 In its panel request, New Zealand challeng es the following requirements imposed by
Australia with respect to fire blight:
• "The requirement that apples be sourced from areas free from fire blight
disease symptoms.
• The requirement that orchards/blocks be inspected for fire blight disease
symptoms, including that they be inspect ed at an inspection intensity that
would, at a 95% confidence level, detect visual symptoms if shown by 1% of
the trees, and that such inspections take place between 4 to 7 weeks after
flowering.
• The requirement that an orchard/bloc k inspection methodology be developed
and approved that addresses issues such as visibility of symptoms in the tops
of trees, the inspection time needed and the number of trees to be inspected to
meet the efficacy level, and training and certification of inspectors.
• The requirement that an orchard/block be suspended for the season on the
basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of fire
blight.
• The requirement that an orchard/block be suspended for the season on the
basis of detection of any visual symptoms of fire blight.
• The requirement that apples be subject to disinfection treatment in the
packing house.
• The requirement that all grading and pa cking equipment that comes in direct
contact with apples be cleaned and disinfected (using an approved
disinfectant) immediately before each Australian packing run.
• The requirement that packing houses re gistered for export of apples process
only fruit sourced from registered orchards."
1415
7.242 New Zealand argues that:
"The Australian contention that mature, symptomless apples provide a pathway for
transmitting fire blight is not supported by scientific evidence. Such a pathway has
not been shown to exist ... Australia's contention finds no support in science.
Speculation about a transmission pathway do es not constitute 'sufficient scientific
evidence' within the meaning of Article 2.2 [of the SPS Agreement]. The likelihood
of the coincidence of circumstances that would be required to establish such a
pathway for transmission of the diseas e via mature, symptomless fruit is
negligible."1416

1415 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, pp. 1-2. See also, Australia's IRA, Part B, pp. 105-116.
1416 New Zealand's first written submission, paras. 4.7-4.8. See also, New Zealand's first written
submission, paras. 4.10, 4.31-4.32, 4.51 and 4.150; New Zealand's second written submission, paras. 2.104-
2.124.

7.243 In New Zealand's view, "[t]he IRA fails to ev aluate the 'likelihood' of entry, establishment
and spread of fire blight as well as the potentia l biological and economic consequences within the
meaning of paragraph 4 of Annex A. Accordingly Au stralia has failed to comply with its obligations
under Article 5.1 of the SPS Agreement."
1417
7.244 New Zealand adds that Australia is also in viol ation of its obligations under Article 5.1 of the
SPS Agreement because "[t]he IRA fails to provide an evaluation of the likelihood of entry,
establishment or spread of the diseases and pest s of concern 'according to the SPS measures which
might be applied' and, therefore, fails to meet th e third requirement for a risk assessment within the
meaning of paragraph 4 of Annex A."1418
7.245 The Panel will start by considering Australia's re quirements with respect to fire blight under
Articles 5.1 and 5.2 of the SPS Agreement, focusing on the specific alleged flaws in the IRA
identified by New Zealand in its various submissi ons. The Panel will consider whether New Zealand
has properly made the case that:
(a) The IRA contains methodological flaws that result in a vast overestimation of the
probability of entry, establishment and spread of fire blight, as well as of the other
relevant pests in this dispute, into Australia through apples from New Zealand;
(b) The IRA has overestimated the probability of entry, establishment and spread of fire
blight into Australia through apples fro m New Zealand, including through the
estimation of various "importation steps", a nd the IRA's reasoning in this regard is
not properly based on scientific evidence;
(c) The IRA has overestimated the potential biological and economic consequences
associated with the entry, establishment and sp read of fire blight in Australia, and the
IRA's reasoning in this regard is not properly based on scientific evidence;
(d) The IRA has overestimated the unrestricted risk of fire blight from apples from
New Zealand, and the IRA's reasoning in this regard is not properly based on
scientific evidence; and,
(e) Australia's requirements imposed by Austra lia with respect to fire blight are
consequently not properly based on scientific evidence and, consequently,
inconsistent with the SPS Agreement.
Subsequently, and if necessary, the Panel will turn to New Zealand's allegation that the IRA fails to
provide an evaluation of the likelihood of entry, est ablishment or spread of fire blight "according to
the SPS measures which might be applied".
7.246 The Panel will conduct this review beginning wi th the arguments raised by New Zealand
specifically in the context of the IRA's analysis re garding fire blight. The Panel will follow the same
order as the IRA, which is generally the order in wh ich Parties raised their arguments. Accordingly,
the Panel will consider the issues as follows: the eight importation steps described in the IRA; the
IRA's analysis of proximity; the IRA's analysis of exposure; the IRA's analysis of establishment;
the IRA's analysis of spread; the IRA's analysis of the potential associated biological and economic

1417 New Zealand's first wr itten submission, para. 4.265. S ee also, New Zealand's first written
submission, paras. 4.208-4.265 and 4.403-4.404; New Zealand's second written submission, paras. 2.293,
2.368, 2.458
1418 New Zealand's first wr itten submission, para. 4.402. S ee also, New Zealand's first written
submission, paras. 4.403-4.404 and 4.384-4.392; New Zealand's opening oral statement at the first substantive
meeting of the Panel with the Parties, paras. 108-111; New Zealand's second written submission, para. 2.785.

consequences; and, the IRA's analysis of the unrestrict ed risk of fire blight. The Panel will then, if
necessary, turn to New Zealand's arguments regarding the alleged methodological flaws in the IRA.
(a) Alleged overestimation for importation step 1
7.247 Importation step 1 represents the likelihood that the relevant pest is present in the source
orchards.1419
(i) Summary of the Parties' arguments
7.248 Regarding importation step 1 for fire blight, New Zealand argues that the IRA's estimation
that Erwinia amylovora would be present in 100 per cent of source orchards in New Zealand is
incorrect and constitutes a "significant overestimation". 1420 In New Zealand's view, this conclusion is
"based on a misreading of scientific literature and in correct assumptions [and is] not supported by the
scientific evidence".1421
7.249 New Zealand contends that the evidence cite d by the IRA does not demonstrate, as claimed
by the IRA that " E. amylovora was detected in New Zealand both from orchards with fire blight
symptoms ... and those without symptoms." 1422 New Zealand adds that "it is widely accepted in the
scientific literature and by the scientific community th at fruit from orchards with no symptoms of fire
blight do not harbour populations of E. amylovora."1423 New Zealand also rejects the IRA's statement
that "fire blight caused by E. amylovora is widespread in New Zealand and supports the conclusion
that the bacterium would be present in all orchards at harvest throughout the major production
areas".
1424 New Zealand argues instead that "fire blight is not routinely detected in all orchards in
New Zealand; the disease is sporadic in nature."1425
7.250 In response, Australia contends that, because the IRA found that "[t]here is no scientific
literature that indicates that any area of New Zeala nd is free of the fire blight bacteria and MAFNZ
has not provided any information in support of freedom for any apple producing areas in
New Zealand"
1426, it concluded that the likelihood that Erwinia amylovora is present in the source
orchards in New Zealand is 1 (100 per cent).1427
7.251 In Australia's view, New Zealand misunderstands the purpose of importation step 1. This
importation step "is not concerned with the presence of E. amylovora on fruit, nor is it concerned with

1419 Australia's IRA, Part B, pp. 19-21.
1420 New Zealand's first written subm ission, para. 4.212. See also New Zealand's second written
submission, para. 2.402.
1421 New Zealand's first written submission, para. 4.209.
1422 New Zealand's first written submission, para. 4.210. Australia's IRA, Part B, p. 53, referring to
Hale et al., "Occurrence of Erwinia amylovora on apple fruit in New Zealand" (1987), in Exhibit NZ-21; and
Clark et al. , "A DNA approach to Erwinia amylovora detection in large scale apple testing and in
epidemiological studies" (1993), in Exhibit NZ-53.
1423 New Zealand's first written submission, para. 4.210, referring to Thomson, "Epidemiology of fire
blight" (2000), p.17, in Exhibit NZ-05; Roberts et al., "The potential for spread of Erwinia amylovora and fire
blight via commercial apple fruit" (1998), p. 23, in Exhibit NZ-22; and Hale et al. "Occurrence of Erwinia
amylovora on apple fruit in New Zealand" (1987), in Exhibit NZ-21, p. 37.
1424 Australia's IRA, Part B, p. 53.
1425 New Zealand's first written submission, para. 4.211, referring to Thomson and Hale, "A
comparison of fire blight incidence and environment between New Zealand and Western United States (1987),
p. 1, in Exhibit NZ-94.
1426 Australia's IRA, Part B, p. 54.
1427 Australia's first written submission, para. 378.

the occurrence (or non occurrence) of disease symptoms. It is concerned exclusively with the
presence of E. amylovora in source orchards."
1428
7.252 In Australia's words:
"[T]he presence or absence of fire blight symptoms, on their own, are not a good
indicator of the presence or absence of E. amylovora in an orchard. The organism
can be present in orchards even if disease symptoms are not detected, or the orchard
is surrounded by infected alternative hosts. This is precisely the point made in the
discussion under Importation step 1 in the Final IRA Report. 1429 Accordingly,
New Zealand's claim that 'fire blight is not routinely detected in all orchards in
New Zealand' because the 'di sease is sporadic in nature'
1430 is also irrelevant because
it relates entirely to the detection of disease symptoms."1431
7.253 Australia submits that, under Article 5.2 of the SPS Agreement, risk assessors can only
proceed on the scientific evidence available; in that sense, they would not be obliged to make
assumptions on issues such as orchard freedom without reliable proof from the exporting Member that
those orchards are in fact free of Erwinia amylovora . While there was evidence supporting the
conclusion that no orchard could be assumed free of Erwinia amylovora , there was no evidence
demonstrating freedom in any potential export orchard.
1432
7.254 Australia concludes that the IRA "did not mi sread the scientific literature, make incorrect
assumptions or fail to take account of scientific evidence". Accordingly, Australia submits that
"New Zealand has not presented any arguments or evidence that show the conclusions of the IRA
Team in relation to Importation step 1 are flawed."1433
(ii) The Panel's analysis
7.255 The IRA estimates the likelihood that Erwinia amylovora is present in the source orchards in
New Zealand as 1 (100 per cent). 1434 This is based on a consideration that "[t]here is no scientific
literature that indicates that any area of New Zeala nd is free of the fire blight bacteria and MAFNZ
has not provided any information in support of freedom for any apple producing areas in
New Zealand."1435
7.256 An important element of the IRA's analysis in this regard is its consideration that " Erwinia
amylovora was detected in New Zealand both from orchards with fire blight symptoms ... and those
without symptoms."1436 As noted by Dr Paulin, one of the experts assisting the Panel, the assumption
that Erwinia amylovora can be present in orchards even if di sease symptoms are not detected is well
known.1437 The expert explained that the possibility that Erwinia amylovora, after having infected a

1428 Australia's first written submission, para. 379 (original emphasis; footnote omitted).
1429 (footnote original) Final IRA Report, Part B, pp. 53-54.
1430 (footnote original) New Zealand's first written submission, para. 4.211.
1431 Australia's first written submission, para. 382.
1432 Australia's second written submission, para. 364.
1433 Australia's first written submission, para. 383. See also, Australia's second written submission,
para. 365.
1434 Australia's IRA, Part B, pp. 53-55.
1435 Australia's IRA, Part B, p. 54.
1436 Australia's IRA, Part B, p. 53.
1437 Dr Paulin's reply to Panel question 22, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 147 and 150.

plant, may migrate inside the tree is well documented. 1438 This may result in the presence of
undetected bacterial population in the trunks and branch es. Dr Paulin explained, however, that this
population is unlikely to pollute the fruit surface, being internal to the tree. 1439 Another expert,
Dr Deckers and Dr Paulin agreed that another sour ce of bacteria in a healthy orchard could be wind-
driven rain or insects or birds carrying bact eria in ooze from near-by (but possibly unseen)
"alternative" host plants, which may be difficult to survey, and whose presence is sometimes not even
acknowledged.1440 In any event, Dr Paulin noted that these bacteria would soon disappear, because
Erwinia amylovora is generally not a good epiphyte, although they may cause late infection which
may constitute a bacterial population in a symptoml ess orchard. According to Dr Paulin, this
possibiliy is "probably more likely in the case of New Zealand, where the history of fire blight is very
long on the same sites. (The European concept of 'protected zone' is probably not applicable in this
case.)"1441
7.257 Importation step 1 is a very important starting point for Australia's IRA. The following step,
importation step 2, assesses the likelihood th at picked fruit is contaminated with Erwinia amylovora.
The likelihood in step 2 is directly related to the hi story of fire blight in the year of cropping (whether
active symptoms producing inoculum were present) and in the previous years (for the possibility of
internal presence of Erwinia amylovora in the xylem). Consulted by th e Panel, Dr Paulin noted that,
if this latter possibility has very little chance to r esult in internal fruit contamination (especially in
mature symptomless apples), these chances are nil if Erwinia amylovora has not been present in the
orchard for years.1442
7.258 As noted by Dr Paulin, due to the long history of fire blight in New Zealand, it seems difficult
to be sure in advance that any orchard is free from fi re blight. In the Panel's view, the scientific basis
considered by the IRA in this regard comes fro m respected and qualified sources. This does not
mean, however, that each orchard in New Zealand will present Erwinia amylovora or symptoms of
the fire blight disease every year.1443 The probability of one, assigned by the IRA, means that Erwinia
amylovora is present and would always be present, in all of New Zealand source orchards. 1444 The
scientific evidence presented in the IRA does not demons trate that this is true. On the contrary, the
evidence indicates that at least some source orch ards in New Zealand will at times be free from
Erwinia amylovora. Accordingly, while the IRA's basis with respect to this importation step comes
from respected and qualified scientific sources, the IRA' s reasoning in this regard is not coherent and
objective and the resulting likelihood assigned to this st ep is exaggerated. As noted by Dr Paulin,
"[i]f the probability of 1 means that all orchards are contaminated by E amylovora each year, it is
probably a mere exaggeration. ... [E]ach apple orchard symptom-free in New Zealand may be

1438 Thomson, "Epidemiology of fire blight" (2000), in Exhibit NZ-05. See, Reply of Dr Paulin to
Panel question 22, in List of Replies from the scientific experts to questions posed by the Panel, para. 147.
1439 Dr Paulin's reply to Panel question 22, in List of Replies from the scientific experts to questions
1440 Dr Paulin's reply to Panel question 22, in List of Replies from the scientific experts to questions
posed by the Panel, para. 148. See also, Dr Deckers' reply to Panel question 22, in List of Replies from the
scientific experts to questions posed by the Panel, para. 164.
1441 Dr Paulin's reply to Panel question 22, in List of Replies from the scientific experts to questions
1442 Dr Paulin's reply to Panel question 23, in List of Replies from the scientific experts to questions
1443 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 315.
1444 Dr Sgrillo's reply to Panel question 22, in List of Replies from the scientific experts to questions
posed by the Panel, para. 163; Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 319.

temporarily contaminated by E amylovora, not permanently. Therefore the chance for apples to be
sourced from orchards harbouring E. amylovora should be significantly less than one."
1445
7.259 In conclusion, the Panel finds that the IRA's estimation that Erwinia amylovora will always
be present in the source orchards in New Zealand is not sufficiently supported by the scientific
evidence that the IRA relied upon and, accordingly, is not coherent and objective.
(b) Alleged overestimation for importation step 2
7.260 Importation step 2 represents the likelihood that fruit coming from an infected or infested
orchard is infected or infested.
1446
(i) Summary of the Parties' arguments
7.261 Regarding importation step 2 for fire blight, New Zealand argues that the IRA "seriously
overestimates the likelihood of mature fruit be ing infested (let alone infected)" with Erwinia
amylovora.1447 In New Zealand's view, the IRA's probability value for this step "has been assigned on
the basis of a misreading or discounting of the scientific literature". 1448 The papers cited by the IRA
do not support the IRA's estimates of infestation/infection of apples with Erwinia amylovora:1449
"[T]he IRA assigns a probability for infection or infestation of mature fruit that is
over 20 times higher than is justified by th e scientific evidence. In any event, the
numbers of bacteria found on mature fruit are insufficient to be spread to and colonise
a new host to initiate an infection (were su ch spread possible). Indeed, there is no
pathway for the transmission of fire blight by mature, symptomless apples."1450
7.262 New Zealand concludes that "[i]n the absen ce of scientific support for the probability
assigned to this step, the IRA should instead have treated such probability as negligible."1451

1445 Dr Paulin's reply to Panel question 22, in List of Replies from the scientific experts to questions
posed by the Panel, para. 161 (original emphasis). See also, Dr Paulin's reply in Transcript of the Panel's
meeting with experts, para. 315; Dr Paulin's and Dr Sc hrader's replies to Panel question 22, in List of Replies
from the scientific experts to questions posed by the Panel, paras. 152, 157 and 159 and 162.
1446 Australia's IRA, Part B, pp. 19-21.
1447 New Zealand's first written submission, para. 4.217.
1448 New Zealand's first written submission, para. 4.213. Australia's IRA, Part B, pp. 55-65. See also,
Clark et al. , "A DNA approach to Erwinia amylovora detection in large scale apple testing and in
epidemiological studies" (1993), in Exhibit NZ-53; van der Zwet et al., "Population of Erwinia amylovora on
External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31; Hale et al. , "Occurrence of Erwinia
amylovora on apple fruit in New Zealand" (1987), in Exhibit NZ-21; Hale and Taylor, "Effect of Cool Storage
on Survival of Erwinia amylovora on Apple Calyxes" (1999), in Exhibit NZ-24; Dueck, "Survival of Erwinia
amylovora in Association with Mature Apple Fruit" (1974), in Exhibit NZ-96; Roberts et al., "Evaluation of
Mature Apple Fruit from Washington State for the presence of Erwinia amylovora" (1989), in Exhibit NZ-97;
Roberts, "Evaluation of Buffer Zone Size and Inspection Number Reduction on Phytosanitary Risk Associated
with Fire Blight and Export of Mature Apple Fruit" (2002), in Exhibit NZ-20; Roberts et al., "The potential for
spread of Erwinia amylovora and fire blight via commercial apple fruit; A critical review and risk assessment"
(1998), in Exhibit NZ-22; and, Roberts and Sawyer, "An updated pest risk assessment for spread of Erwinia
amylovora and fire blight via commercial apple fruit" (2008), in Exhibit NZ-29.
1449 New Zealand's first written submission, para. 4.213-4.220. See also New Zealand's comments on
Australia's replies to New Zealand's question 1 after the second substantive meeting, paras. 1-5.
1450 New Zealand's first written submission, para. 4.21 9. See, Roberts and Sawyer, "An updated pest
risk assessment for spread of Erwinia amylovora and fire blight via commercial apple fruit" (2008), in Exhibit
NZ-29.
1451 New Zealand's first written submission, para. 4.220.

7.263 In response, Australia contends that New Z ealand's assertions regarding importation step 2
"are without merit".1452 Australia argues that, "[i]n contrast to the comprehensive analysis conducted
by the IRA Team, New Zealand refers to only a hand ful of scientific studies in support of its claims,
and places particular reliance on the conclusions in Roberts and Sawyer (2008)." 1453 Australia makes
a number of arguments in relation to Roberts and Sawyer (2008).1454 Australia argues that none of the
studies relied upon by Roberts and Sawyer (2008) we re sensitive enough to detect very low numbers
of E. amylovora on or in apple fruit. 1455 It argues that the findings in Roberts and Sawyer (2008) are
largely based on studies relevant to the circumstan ces of the trade in apples from the United States to
Japan prior to the Japan – Apples dispute, which involved the use of phytosanitary measures. As
such, these studies are not relevant to the as sessment of unrestricted risk in the IRA. 1456 It also argues
that Roberts and Sawyer (2008) uses data inconsistently.1457
7.264 Australia adds that importation step 2 is re presented by a probability range, and not by a
single value.1458 Contrary to New Zealand's assumption, Australia argues that the IRA "drew a very
clear distinction between internal infection and external infestation of apples". 1459 According to
Australia, the IRA found a paucity of evidence on endoph ytic (internal) infection in mature fruit.
Accordingly, the IRA concludes that the importa tion risk scenario of particular relevance to Erwinia
amylovora is instead one associated with epiphytic external infestation.1460
7.265 Australia argues further that New Zealand's claim "is based on a selective reading of the
evidence which, in places, misrep resents the scientific studies actually relied on by New Zealand." 1461
It is not enough for New Zealand to show that there is an alternative scientific account of a particular
phenomenon. New Zealand has not shown that th e account given in the IRA is not credible.
Australia submits, however, that "even if the alte rnative assessments of like lihood are taken at face
value ... they are nevertheless unconvincing."1462

1452 Australia's first written submission, para. 388.
1453 Ibid.
1454 Australia's first written submission, paras. 363-376; Australia's second written submission,
paras. 330-337 and Annex 1.
1455 Australia's first written submission, para. 401.
1456 Australia's first written submission, para. 365.
1457 Australia's second written submission, Annex 1, paras. 15-24.
1458 Australia's first written submission, paras. 397 and 410.
1459 Australia's first written submission, para. 389. See also, Australia's first written submission,
para. 407.
1460 Australia's first written submission, para. 390. See also, Australia's first written submission,
para. 407.
1461 Australia's first written submission, para. 391.
1462 Australia's first written submission, para. 396. Hale et al., "Occurrence of Erwinia amylovora on
apple fruit in New Zealand" (1987), in Exhibit NZ-21; Hale and Taylor, "Effect of Cool Storage on Survival of
Erwinia amylovora on Apple Calyxes" (1999), in Exhibit NZ-24; van der Zwet et al., "Population of Erwinia
amylovora on External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31; McManus and Jones,
"Detection of Erwinia amylovora by nested PCR and PCR-Dot-Blot and Reverse-Blot Hybridizations" (1995),
in Exhibit AUS-33; and, Sholberg et al., "Occurrence of Erwinia amylovora of pome fruit in British Columbia
in 1985 and its elimination from the apple surface" (1988) , in Exhibit AUS-34; Hale and Clark, "Detection of
Erwinia amylovora from apple tissue by DNA hybridisation" (1990), in Exhibit AUS-35; Roberts and Sawyer,
"An updated pest risk a ssessment for spread of Erwinia amylovora and fire blight via commercial apple fruit"
(2008), in Exhibit NZ-29; and, Ordax et al., "Survival of Erwinia amylovora in mature apple fruit calyces"
(2008), in Exhibit AUS-36.

(ii) The Panel's analysis
7.266 The IRA estimates the likelihood that pick ed fruit is infested or infected with Erwinia
amylovora as a triangular distribution with a minimum value of 10
-3 (1 in 1,000), a maximum value of
5 × 10-2 (5 in 100) and a most likely value of 3 × 10-2 (3 in 100).1463
7.267 The IRA notes that "there is a considerable amount of variation on the infestation rates
reported. ... The IRA Team concluded that it w as appropriate to choose a value for Imp2 that
adequately took into account the range of variation that was reported in this literature ..."1464
7.268 The IRA also notes that the evaluation of this step takes into account that apples could be
sourced from anywhere in New Zealand irrespective of the fire blight status of orchards, including
from orchards with active fire blight, orchards that show few or no symptoms but are very close to
active fire blight in hedgerow plants, or orchards that show no symptoms and are some distance from
an active fire blight host. Because of the widespre ad distribution of fire blight in New Zealand, the
IRA concludes that more weight should be given to studies on apples sourced from orchards that were
showing symptoms of fire blight disease. The IRA acknowledges that certain studies found no
evidence of fire blight bacteria on mature symp tomless apples and that some of these studies were
carried out on orchards showing symptoms of fire blight. However, the IRA points out that, "given
that there are a number of studies that confirm the presence of fire blight bacteria on such fruit, studies
that found no evidence of fire blight bacteria on mature symptomless apples were given much less
weight [in the IRA]".
1465
7.269 Consulted by the Panel, Dr Paulin noted that th e IRA's reasoning regarding infestation at this
step, seems coherent and based on available eviden ce, "although it may tend to exaggerate the risks"
of Erwinia amylovora associated with mature symptomless fruits. 1466 The same expert noted,
however, that "this step, which deal s with epiphytically or surface-inf ested fruit, seems to me of quite
low danger, because this population is low and easy to remove. So that is why I think this step could
be considered as low risk."1467
7.270 Most of the scientific sources cited by the IRA seem respected and credible. 1468 As noted by
Dr Paulin, however, the van der Zwet et al. (1990) study should have been considered with extreme
caution, in the light of the subsequent qua lifications made by its own first author. 1469 In a declaration
made in July 2002, Dr van der Zwet cautioned that the results of his 1990 study were obtained from
fruit harvested in West Virginia, Unite d States, in a situation of severe fire blight. In the view of that
author, the results from the study "are not rele vant for purposes of setting quarantine measures on
exported, mature fruit".
1470 Dr Paulin also noted that other data, such as in the paper from Sholberg

1463 Australia's IRA, Part B, pp. 55-65.
1464 Australia's IRA, Part B, p. 65.
1465 Ibid.
1466 Dr Paulin's reply to Panel question 6, in List of Replies from the scientific experts to questions
posed by the Panel, in List of Replies from the scientific experts to questions posed by the Panel, para. 50. See
also, Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 346.
1467 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 271.
1468 Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to questions
posed by the Panel, in List of Replies from the scientific experts to questions posed by the Panel, para. 175.
1469 Declaration of Tom van der Zwet, 16 July 2002, in Exhibit AUS-32. Van der Zwet et al .,
"Population of Erwinia amylovora on External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31.
Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to questions posed by the
Panel, para. 175. But see, Australia's IRA, Part B, pp. 63.
1470 Declaration of Tom van der Zwet, 16 July 2002, p. 4, in Exhibit AUS-32. Van der Zwet et al.,
"Population of Erwinia amylovora on External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31.
Regarding the van der Zwet et al. (1990) study, see also, New Zealand's first written submission, para. 4.215;

et al. (1988), which found an infestation/infection rate of at least 33 per cent, should be considered
with care as the paper seems to describe a specific case study, which may be different from the normal
situation in an orchard devoted to export of apples.
1471
7.271 The mechanisms described in the IRA for the survival of Erwinia amylovora , such as
exopolysaccharides (EPS), viable but non-culturable state (VBNC), quorum sensing, and sigma
factors, show that E. amylovora cells may survive in adverse cond itions, including on apples sourced
from contaminated orchards. 1472 The scientific data referenced by the IRA in this regard, however,
does not allow a quantitative evaluation.1473 In any event, the data indicates that surviving populations
are of low level, and that their capacity of resusc itation from VBNC to a culturable state is possible,
but has not been demonstrated in natural conditions. As noted by Dr Paulin, these surviving cells can
be expected to be fewer if the apples are sourced from orchards without active symptoms, if the
apples are symptomless, and if no trashes are mixed with mature symptomless apples. 1474 Dr Deckers
noted additionally that, while the "most likely valu e" of 3 in 100 defined by the IRA may reflect a
situation where active fire blight history is presen t, in cases where there is no new infection found in
an orchard during one season, this le vel of bacteria would never be found. 1475 In the words of this
expert, "[the 'most likely value' defined by the IRA] seems to be a quite high rate of picked fruit being
infected with [ Erwinia amylovora]. I think there will be more a gradual distribution of presence of
the fire blight bacteria on the fruits around the [ Erwinia amylovora ] infections present in the
orchards."1476
7.272 There is no adequate justification for the IRA's st atement that more weight should be given to
studies on apples sourced from orchards that were showing symptoms of fire blight disease. 1477 As
noted by Dr Paulin, this statement does not seem to take adequately into account that there is no
indication that fire blight will be present at all ti mes, even in an infected orchard. While it is
reasonable to assume that no orchard in New Zealand is or has been permanently free of fire blight,
that does not mean that all orchards will permanently show active symptoms.
1478 According to the
evidence cited in the IRA, one year with Erwinia amylovora infection may alternate with years with a
much lower fire blight incidence; even in an inf ected orchard, there may be years without fire blight
symptoms.1479 Accordingly, as noted by Dr Paulin:
"[I]t seems that orchards in New Zealand should be considered as a patchwork of
orchards with symptoms, and orchards showing no symptom. Then I do not see why

New Zealand's second written submission, para. 2.408-2.409; and, Australia's first written submission,
paras. 394-395.
1471 Australia's IRA, Part B, pp. 56-57. Dr Paulin's reply to Panel question 24, in List of Replies from
the scientific experts to questions posed by the Panel, para. 175. Sholberg et al., "Occurrence of Erwinia
amylovora of pome fruit in British Columbia in 1985 and its elimination from the apple surface" (1988), in
Exhibit AUS-34.
1472 Australia's IRA, Part B, pp. 57-61.
1473 Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to questions
1474 Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to questions
1475 Dr Deckers's reply in Transcript of the Panel's meeting with experts, para. 325.
1476 Dr Deckers's reply to Panel question 24, in List of Replies from the scientific experts to questions
posed by the Panel, para. 173. See also, Dr Deckers's reply in Transcript of the Panel's meeting with experts,
para. 276.
1477 Australia's IRA, Part B, p. 65.
1478 Dr Paulin's reply to Panel question 25, in List of Replies from the scientific experts to questions
1479 Dr Deckers's reply to Panel question 25, in List of Replies from the scientific experts to questions
posed by the Panel, para. 176. See also, Dr Deckers's reply in Transcript of the Panel's meeting with experts,
para. 323.

more weight should be given to one category (with symptom) only. All the studies,
weighted according to their own scientific value should be considered with the same
level of interest. The exact fire blight s ituation of these orchards analysed in these
papers and the relevance of the techniques used should be the criteria, if some of
them were to be selected as more important than others."
1480
7.273 Dr Paulin also noted that, because the "most lik ely value" proposed by the IRA (3 in 100) is
high, this figure would be "amenable to experiment"; in other words, it would not have been beyond
reach of experimentation by the IRA Team.
1481
7.274 In any event, because of the wide variation in the information reported in the various studies
cited in the IRA, it is not possible to find jus tification from these studies for the probability range
assigned to importation step 2 by the IRA. The results of the various studies are not comparable,
since the papers do not deal with the same type of fruit (some deal with mature fruit, others with
immature fruit, and still others do not indicate with precision the type of fruit). Additionally, each
paper has its own technique of detection of the bacteria. The range of frequencies of contamination of
apples with Erwinia amylovora indicated by Australia, from less than 1 per cent to 75 per cent
indicate that these papers analysed different things in a different manner. 1482 Consulted by the Panel,
Dr Paulin noted that no general and r easonable conclusion for the presence of Erwinia amylovora on
or in mature apple fruit can be based on these disparate results.1483 Indeed, it is not clear from the IRA
how the results of the different studies were aggreg ated in order to arrive at an estimation of a
probability range for this importation step, nor the reasons why, in drawing this estimation, less
weight was given to studies that found lower frequencies of contamination with fire blight.1484
7.275 In conclusion, the Panel finds that the IRA' s estimation of the likelihood that fruit coming
from an infected or infested orchar d is infected or infested with Erwinia amylovora is not coherent
and objective.
(c) Alleged overestimation for importation step 3
7.276 Importation step 3 represents the likelihood that cl ean fruit from infected or infested orchards
is contaminated during picking and transport to the packing house.1485
(i) Summary of the Parties' arguments
7.277 Regarding importation step 3 for fire blight, New Zealand argues that the IRA's conclusion
"has no basis in science. It turns a negligible likelihood into a relatively high probability." 1486
New Zealand submits that it is generally acknowledged that any Erwinia amylovora present on

1480 Dr Paulin's reply to Panel question 25, in List of Replies from the scientific experts to questions
posed by the Panel, para. 177 (original emphasis). See also, Dr Sgrillo's reply to Panel question 25, in List of
Replies from the scientific experts to questions posed by the Panel, para. 178
1481 Dr Paulin's reply in Transcript of the Panel's meeting with experts, paras. 327 and 329.
1482 Table 4 in Australia's first written submission, p. 140.
1483 Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to questions
posed by the Panel, para. 174. See also, Dr Sgrillo's reply to Panel question 24, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 170-172.
1484 Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to questions
posed by the Panel, para. 174; Dr Paulin's reply in Tran script of the Panel's meeting with experts, para. 321.
See also, Dr Sgrillo's reply to Panel question 24, in List of Replies from the scientific experts to questions posed
by the Panel, paras. 170-172.
1485 Australia's IRA, Part B, pp. 19-21.
1486 New Zealand's first written submission, para. 4. 221. See also, New Z ealand's second written
submission, paras. 2.418-2.421.

mature apples at harvest would most likely be on the calyx and thus not available to contaminate other
apples. Additionally, populations of E. amylovora reported on mature fruit, even from severely
infected orchards, have been zero or epidemiologically insignificant. Therefore contamination, if it
occurred, would only have the effect of further diluting already small populations.1487
7.278 New Zealand concludes that the likelihood of contamination by Erwinia amylovora during
picking and transportation to a packing house is ne gligible and the probability value assigned in the
IRA is incorrect. This is an event that would almost certainly not occur.1488
7.279 In response, Australia contends that New Z ealand's assertions regarding importation step 3
"are without merit". 1489 Australia argues that "New Zealand fails to appreciate the range in the
scientific data available in respect of the probability of particular events occurring, with the result that
it seeks to limit a probability distribution to a single figure."1490
7.280 Regarding New Zealand's argument that any Erwinia amylovora would most likely be on the
calyx, Australia notes that importation step 3 is not focussed on bacteria from the calyx as a direct
source of contamination, but rather "surface infestation and E. amylovora on leaves, in the orchard
environment, on the hands of pickers and on bins and machinery".
1491
7.281 Australia adds that, although Erwinia amylovora does not multiply on dry surfaces exposed to
sunlight, "it clearly has the capacity to survive in the environment quite well, rapidly multiplying and
infecting wounds on apples when conditions are favourable".1492
7.282 Australia notes that, as acknowledged by the IR A, the likelihood of contamination arising
from sources such as ooze on trees, hands of pickers, picking bags, bins or machinery is "very small"
and the likelihood of transfer is "even lower". 1493 Australia submits, however that "[t]his is why the
probability range assigned by the IRA Team is skew ed to the lower end of the distribution.
New Zealand has provided no argument as to why th e IRA Team's use of such a range, designed
specifically to reflect the low probability of contamination, should be considered flawed."1494
(ii) The Panel's analysis
7.283 The IRA estimates the likelihood that clean fruit is contaminated by Erwinia amylovora
during picking and transport to the packing house as a triangular distribution with a minimum value of
10-3 (1 in 1,000), a maximum value of 3 × 10-2 (3 in 100) and a most likely value of 10-2 (1 in 100).1495
7.284 According to the IRA, "[t]his range allows for fruit to be infected at picking through wounds
as well as surface contamination that may occur by c ontact with contaminated bins, pickers' hands,
leaves, twigs, etc in the event that rain occurs during harvest."1496
7.285 The values for the distribution were taken by the IRA from two papers: van der Zwet et al.
(1990) and Hetzroni et al. (2004).1497 In the first study, 3 out of 72 (4 per cent) uninoculated and non-

1487 New Zealand's first written submission, para. 4.223.
1488 New Zealand's first written submission, para. 4.224.
1489 Australia's first written submission, para. 388. See also, Australia's second written submission,
paras. 375-377.
1490 Australia's first written submission, para. 413 (original emphasis).
1491 Australia's first written submission, para. 415.
1492 Australia's first written submission, para. 417.
1493 Australia's first written submission, para. 418. Australia's IRA, Part B, p. 69.
1494 Australia's first written submission, para. 418.
1495 Australia's IRA, Part B, pp. 65-71.
1496 Australia's IRA, Part B, p. 71.

disinfested fruit developed blight symptoms; all through injury through puncture treatment.
1498 The
IRA states that this infection presumably took place "through epiphytic bacteria being present on the
surface. The 4% infection rate therefore occurs when 100% of the fruit is wounded."
1499 From this
study, the IRA concludes that 4 per cent of the fruit damaged would be infected with fire blight. As
suggested by Dr Sgrillo, however, the reliability of the van der Zwet et al. study and the
appropriateness of using it as a basis for the IRA' s estimations may be limited, because the sample
size was very small, the variability was not assessed a nd the results may be valid only for artificially
injured fruits.1500
7.286 Dr Sgrillo also suggests that the second paper should be considered with care, as it is only a
four-paragraph abstract with few details about the me thodology and analysis of the results of a study.
According to the IRA, Hetzroni et al. (2004) provides "some information on the percentages of apples
wounded or bruised during picking and transport." 1501 The IRA notes that "[t]he percentage of
damage was lowest (8%) for the careful picking treatment compared with 37% in the whole container
in the packing house."
1502 This abstract, however, contains no specification of how samples were
collected, what methodology was used, and no statistical analysis.1503
7.287 The IRA then used the 4 per cent contamination figure obtained from van der Zwet et al.
(1990) multiplied by the 37 per cent damage figure obtained from Hetzroni et al. (2004), to indicate
the magnitude of the most likely value of the triangular distribution, 1 per cent.
7.288 The experts consulted by the Panel expressed doubts regarding the reliability of the one per
cent figure and the IRA's underlying assumptions. One of the experts noted that such contamination
during picking and transportation would only be possi ble in extreme cases, "when the harvest takes
place in a heavy infected orchard during rainy circum stances". He noted, however, that "the overall
chance of 1% seems to be rather high when the fire blight infections are only sporadically present in
an orchard."1504 The 1 per cent figure would not be realistic , because when present in an orchard fire
blight will not be uniformly distributed. 1505 Another expert agreed that "the evaluation of risk for this
step seems too high, for mature symptomless fruits". 1506 The experts noted that some of the
experiments cited by the IRA describe the initiati on of infections, when bacteria is introduced
artificially at the proper site of the suitable fru it, in optimal conditions for the disease. These
experiments, however, would give "very few useful indications for the description of events taking
place in natural conditions", especially because Erwinia amylovora is not able to multiply on plant

1497 Australia's IRA, Part B, p. 71. See, van der Zwet et al ., "Population of Erwinia amylovora on
External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31; and, Hetzroni et al. , "Mechanical
injuries in apples" (2004).
1498 Van der Zwet et al ., "Population of Erwinia amylovora on External and Internal Apple Fruit
Tissues" (1990), in Exhibit AUS-31.
1499 Australia's IRA, Part B, p. 70. See, Van der Zwet et al., "Population of Erwinia amylovora on
External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31.
1500 See, Dr Sgrillo's reply to Panel question 26, in List of Replies from the scientific experts to
questions posed by the Panel, para. 180.
1501 Australia's IRA, Part B, p. 70. See, Hetzroni et al., "Mechanical injuries in apples" (2004).
1502 Australia's IRA, Part B, p. 70.
1503 Dr Sgrillo's reply to Panel question 26, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 181-182; Dr Sgrillo's reply in Transcript of the Panel's meeting with experts,
para. 280.
1504 Dr Deckers's reply to Panel question 26, in List of Replies from the scientific experts to questions
posed by the Panel, para. 186. See also, Dr Deckers's reply to Panel question 27, in List of Replies from the
scientific experts to questions posed by the Panel, para. 189.
1505 Dr Deckers's reply in Transcript of the Panel's meeting with experts, para. 335.
1506 Dr Paulin's reply to Panel question 26, para. 188 in Replies from the scientific experts to questions
posed by the Panel. See also, Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 333.

surfaces, making it "difficult to imagine conditions conducive to actively growing cells in natural
conditions on the surface of a symptomless apple... [or the] spread of surface population from fruit to
infection sites".1507
7.289 The IRA's estimation of this particular importati on step is based on some scientific evidence.
The two studies on which the calculation of the probab ility range and the most likely value are based,
however, have important limitations, mainly because of the small sample size in the first paper and
the lack of information on the methodology and on the details of the results of the second paper. In
such conditions, these studies cannot constitute an adequate scientific basis for a coherent and
objective analysis.1508
7.290 In conclusion, the Panel finds that the IRA's estimation of the likelihood that clean fruit from
infected or infested orchards is contaminated with Erwinia amylovora during picking and transport to
the packing house does not rely on adequate scientific evidence and, accordingly, is not coherent and
objective.
(d) Alleged overestimation for importation step 4
7.291 Importation step 4 represents the likelihood that in fected or infested fru it remains infected or
infested after routine processing procedures in the packing house.1509
(i) Summary of the Parties' arguments
7.292 Regarding importation step 4 for fire blight, Ne w Zealand argues that the IRA's analysis of
this step "is based on an assumption rather than on scientific data" and that "[t]he likelihood of
arriving at this step is ... negligible."1510 According to New Zealand, there will be insufficient bacteria
to initiate an infection at this stage.1511
7.293 New Zealand also submits that the IRA "ignores th e impact that cold storage would have" on
epiphytic infestations. In New Zealand's view, th e scientific literature strongly indicates that cold
storage at this stage would have a negative influence on the survival of Erwinia amylovora on apple
fruit.1512
7.294 New Zealand concludes that "the proposition that the limited numbers of E. amylovora likely
to be present on apple fruit at harvest would su rvive normal processing procedures is a step that
should have been treated as an event with a much lower probability."1513

1507 Dr Paulin's reply to Panel question 27, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 190-191.
1508 See, for example, Dr Sgrillo's reply to Panel qu estion 26, in List of Replies from the scientific
experts to questions posed by the Panel, para. 179-185; Dr Sgrillo's reply in Transcript of the Panel's meeting
with experts, para. 280.
1509 Australia's IRA, Part B, pp. 19-21.
1510 New Zealand's first written submission, para. 4.225.
1511 New Zealand's first written submission, para. 4. 227. See also, New Z ealand's second written
submission, paras. 2.422-2.423.
1512 New Zealand's first written submission, para. 4.226. See, Hale and Taylor, "Effect of Cool Storage
on Survival of Erwinia amylovora on Apple Calyxes" (1999), in Exhibit NZ-24; Taylor and Hale, "Cold storage
affects survival and growth of Erwinia amylovora on the calyx of apple" (2003), in Exhibit NZ-25; and, Temple
et al., "Evaluation of Likelihood of Co-Occurrence of Erwinia amylovora with Mature Fruit of Winter Pear"
(2007), in Exhibit NZ-98.
1513 New Zealand's first written submission, para. 4.227.

7.295 In response, Australia contends that the "the probability range assigne d to Importation step 4
cannot be reduced to a mere 'assumption'."
1514 Australia argues in this regard that the scientific
literature indicates that, while the number of Erwinia amylovora on or in apples declines with cold
storage, it also shows that they do not disappear. 1515 In Australia's words, "[g]iven the risk scenario
addressed by the IRA Team, E. amylovora will be taken to have survived this step even if only one
bacterium survives routine pack house procedures on any given apple."1516
7.296 Australia also argues that, in its first writte n submission, New Zealand only argued that the
distribution range for this importation step should be revised purely on the basis that there is some
evidence which shows that cold storage h as a negative impact on the survival of Erwinia amylovora.
Accordingly, New Zealand should not be permitted to expand its claims in relation to these issues (for
example, concerning the effects of brushing, waxing, sorting and grading and packaging as considered
by the IRA) at a later stage of the proceedings.
1517
7.297 Australia concludes that "New Zealand has fail ed to show that the probability range assigned
to Importation step 4 is flawed".1518
(ii) The Panel's analysis
7.298 The IRA estimates the likelihood that Erwinia amylovora survives routine processing
procedures in the packing house as a triangular distri bution with a minimum value of 0.3 (30 in 100),
a maximum value of 0.7 (70 in 100) and a most likely value of 0.65 (65 in 100).1519
7.299 According to the IRA:
"None of the processes undertaken at this stage [routine procedures that occur in
New Zealand packing houses, such as pre-cooling, washing, disinfection, brushing,
waxing, sorting and grading, packaging and cold storage] would have a large
influence on the survival of E. amylovora on apple fruit. However, depending on
individual packing house procedures some reduction in the number of fruit carrying
bacteria would be expected because of fact ors such as the use of disinfectants and
grading out of damaged fruit."
1520
7.300 As noted in the arguments section above, most of the discussion between the Parties regarding
New Zealand's argument on the IRA's estimations on importation step 4 for fire blight focus on the
issue of whether cold storage would significantly re duce the amount of bacteria on apples to the point
where they would be insufficient to initiate an infection.
7.301 Most of the evidence cited in the IRA supports the notion that cold storage would reduce the
bacterial population of Erwinia amylovora on apples, but would not completely eliminate such
population. As noted by Dr Paulin:

1514 Australia's first written submission, para. 426.
1515 Australia's first written submission, para. 422; Australia's second written submission, para. 379.
See, Hale and Taylor, "Effect of Cool Storage on Survival of Erwinia amylovora on Apple Calyxes" (1999), in
Exhibit NZ-24; Temple et al., "Evaluation of Likelihood of Co-Occurrence of Erwinia amylovora with Mature
Fruit of Winter Pear" (2007), in Exhibit NZ-98; and, Ordax et al., "Survival of Erwinia amylovora in mature
apple fruit calyces" (2008), in Exhibit AUS-36.
1516 Australia's first written submission, para. 421.
1517 Australia's first written submission, para. 420; Australia's second written submission, paras. 378
and 380.
1518 Australia's first written submission, para. 426. Australia's second written submission, para. 384.
1519 Australia's IRA, Part B, pp. 71-77.
1520 Australia's IRA, Part B, pp. 76-77.

"Data on preservation of bacterial population on apple surface during cold storage
seems to accurately show that there is a decrease in these conditions. It is not
possible to know if this decrease is linked w ith temperature, or only with time ... [I]n
the precise case of risk of transport of bacteria with mature symptomless fruits
anyhow, this has little influence: the cond itions in the packing house will not allow
the population to increase, but will not allow the population to disappear within the
considered period of time."
1521
7.302 Some of the experts consulted by the Panel refe rred to the possible impact that disinfection, a
routine procedure in the packing house different fro m cold storage, could have on the survival of
epiphytic populations of Erwinia amylovora on apples. According to Dr Paulin, "if a disinfectant step
is included in the process, the decrease of the leve l of bacterial population can be expected to be
sharp".1522 Dr Paulin added that "in the case of fruit disinfection, the probability range and pattern
distribution ... seems too high for this step. This applies for mature symptomless apples, but would
not be different for trashes associated with fruits." 1523 Dr Deckers concurred and noted that "[t]he
disinfection process during packaging should reduce th e risk of survival of the epiphytic population
strongly and reduce the distribution pattern substa ntially. But a total removal of the bacterial
population will not be an easy task".1524
7.303 Evidence cited by the IRA confirms that disinfection can have a significant impact in
reducing bacterial population:
"Toivonen et al. (2001) showed that sodium hypochlorite ... or peroxyacetic acid ...
was fully effective in eliminating micro-orga nisms from the surface of apples. They
showed that peroxyacetic acid eliminated microbes from the calyx while sodium
hypochlorite did not, and that it was difficult to remove or kill micro-organisms
present in the stem-end of the fruit using both chemicals. ... [Infested n]aturally-
contaminated mature apples ... when treated with 100 μg per mL of chlorine were not
effectively sanitised, because chlorine did no t reach bacteria in the protected calyx
cavity (Sholberg et al., 1988) probably b ecause of formation of air pockets.
However, a 10 min dip in a solution of [acetic acid and propionic acid] was effective
in completely eliminating bacteria from fruit inoculated with ... E. amylovora by
spraying. Dueck (1974b) also observed that when E. amylovora suspended in
distilled water ... was artificially inoculated by swabbing on apples, bacterial numbers
were reduced but not completely eliminated by chlorine. However, a 10 minute dip
in ... acetic acid completely eliminated E. amylovora from the fruit surface.
Janisiewicz and van der Zwet (1988) reporte d that ... sodium hypochlorite in vitro
totally eradicated E. amylovora in 5 minutes, but, with addition of a surfactant ..., the
amount of sodium hypochlorite required to totally eliminate bacteria in 5 minutes
increased .... However, Janisiewicz and van der Zwet (1988) showed that when
artificially inoculated ... apple fruit was treated with ... sodium hypochlorite plus ...
surfactant, E. amylovora was reduced but not completely killed.

1521 Dr Paulin's reply to Panel question 29, in List of Replies from the scientific experts to questions
posed by the Panel, para. 209. See also, Dr Deckers's and Dr Paulin's replies to Panel questions 14 and 29, in
List of Replies from the scientific experts to questions posed by the Panel, paras. 115 and 208.
1522 Dr Paulin's reply to Panel question 28, in List of Replies from the scientific experts to questions
posed by the Panel, para. 206. See also, Dr Paulin's reply to Panel question 28, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 205-207. But see, Dr Paulin's reply in Transcript of the
Panel's meeting with experts, para. 286.
1523 Dr Paulin's reply to Panel question 28, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 206-207.
1524 Dr Deckers's reply to Panel question 28, in List of Replies from the scientific experts to questions

Roberts and Reymond (1989) artificially i noculated mature apple fruit with
E. amylovora aerosol solutions ... and immersed fruit in different concentrations ... of
sodium hypochlorite or ... acetic acid. The reduction in the E. amylovora population
averaged 6 to 7 log units less than the number applied to the fruit, but significant
differences between treatments were not observed. Roberts and Reymond (1989)
also reported that ... citrate buffer was effective against E. amylovora but because of
its incompatibility with sodium hypochlorite, this could not be used in the dump tank.
These authors reported that treatment with ... sodium hypochlorite in ...
dodecylbenzenesulphonic acid (DBSA) for 10 min significantly reduced
E. amylovora on apple fruit. These reports indicate that chlorine at different
concentrations is effective in reducing but not eliminating the bacterial population.
However, it can be an effective component in systems approaches which integrate
different management measures."
1525
7.304 Accordingly, with respect to disinfection, the evidence cited by the IRA does not seem to
support the general conclusion that "[n]one of the processes undertaken [i n New Zealand packing
houses] would have a large influence on the survival of E. amylovora on apple fruit". 1526 However,
the IRA also notes that "depending on individual packing house procedures some reduction in the
number of fruit carrying bacteria would be exp ected because of factors such as the use of
disinfectants..."
1527 Dr Deckers noted in this regard that, when considering disinfection of the fruit,
"we should be aware that we never take away 100 per cen t of the bacteria present. It is very difficult
to disinfect for 100 per cent in the calyx area."1528
7.305 In the light of the above, the IRA contains sufficient scientific evidence to support its
conclusion that routine procedures that occur in New Zealand packing houses may reduce the
bacterial population on apple fruit, but would not tota lly eliminate bacteria. The experts consulted by
the Panel agreed with this general conclusion, a lthough some considered that the probability range
and pattern distribution estimated by the IRA for th is importation step seems too high, particularly
considering the possible effect of the use of disinfectants. 1529 In any event, New Zealand has not
successfully shown that cold storage would significantly limit the amount of bacteria on apples to the
point where they would be insufficient to initiate an infection.
7.306 Accordingly, the Panel concludes that New Z ealand has not made a case that the IRA's
estimation of the likelihood that Erwinia amylovora survives routine processing procedures in the
packing house is exaggerated and does not rely on adequate scientific evidence.
(e) Alleged overestimation for importation step 5
7.307 Importation step 5 represents the likelihood that clean fruit is contaminated during processing
in the packing house.
1530

1525 Australia's IRA, Part B, pp. 72-73.
1526 Australia's IRA, Part B, p. 76.
1527 Australia's IRA, Part B, pp. 76-77. As noted in the discussion of importation step 5, the IRA notes
that only about half of New Zealand packing houses use some type of disinfectant in the dump tanks. See
para. 7.314 below. Australia's IRA, Part B, pp. 77
1528 Dr Deckers's reply in Transcript of the Panel's meeting with experts, para. 288.
1529 See, for example, Dr Paulin's reply to Panel qu estion 28, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 205-207. See also, Dr Sgrillo's reply to Panel question 28, in List
of Replies from the scientific experts to questions posed by the Panel, paras. 192-196 and 202-203; Dr Paulin's
reply in Transcript of the Panel's meeting with experts, para. 286.
1530 Australia's IRA, Part B, pp. 19-21.

(i) Summary of the Parties' arguments
7.308 Regarding importation step 5 for fire blight, Ne w Zealand submits that the scientific evidence
indicates that the likelihood of mature apples contaminating clean fruit during processing in the
packing house is negligible.
1531
7.309 In response, Australia contends that New Zealand has misunderstood the intention of
importation step 5, and how the importation steps op erate together. Consequently, Australia argues
that New Zealand fails to establish why the IRA's judgement in relation to importation step 5 should
be considered flawed.1532
7.310 With respect to this step, Aust ralia argues that the IRA considered that the most significant
source of fruit contamination in the packing house is the water in the dump tank and the wash water
that apples may be exposed to th rough the grading and packing process. 1533 Australia notes that the
IRA took into account that only 53 per cent of New Zealand packing houses use some sort of
disinfectant in the process water.
1534
(ii) The Panel's analysis
7.311 The IRA estimates the likelihood that clean fruit is contaminated by Erwinia amylovora
during processing in the packing house as a triangular distribution with a minimum value of 10 -3 (1
in 1,000), a maximum value of 5 × 10-2 (5 in 100) and a most likely value of 2.5 × 10-2 (2.5 in 100).1535
7.312 According to the IRA:
"This conclusion was based on the potential for the fruit dump tank to become
contaminated by bacteria and the fact that disinfection of the dump tank water is not a
routine practice in a significant number of New Zealand packing houses. This also
takes into account that unrestricted risk is being assessed and therefore fruit from
orchards with active symptoms could be carrying bacteria that wash off into the dump
tanks."1536
7.313 The IRA notes that "[a]ny bacteria present on fruit, trash (leaves and twigs), harvesting bins
and soil adhering to bottom of bins may get into the dump tank and potentially contaminate clean
fruit".1537 Notwithstanding the above, the evidence cited in the IRA indicates that "there will be a
very high dilution factor in the dump tank water. There are also indications that E. amylovora has
difficulty surviving in water."1538
7.314 As stated by Australia, the IRA notes that 53 per cent of New Zealand apple packing houses
use some sort of disinfectant in the process water: 37 per cent use chlorine in the dump tanks, with an
additional 16 per cent using an alternative such as peroxyacetic acid or bromo-chloro-
dimethylhydantoin.1539 The IRA notes further that 73 per cent of New Zealand apple packing houses

1531 New Zealand's first written submission, para. 4. 228; New Zealand's se cond written submission,
para. 2.426.
1532 Australia's first written submission, para. 429.
1533 Australia's first written submission, para. 427; Australia's second written submission, para. 386.
1534 Australia's first written submission, para. 427.
1535 Australia's IRA, Part B, pp. 77-79.
1536 Australia's IRA, Part B, pp. 78-79.
1537 Australia's IRA, Part B, pp. 77.
1538 Australia's IRA, Part B, pp. 77. Crosse et al. , "Leaf damage as a predisposing factor in the
infection of apple shoots by Erwinia amylovora" (1972).
1539 Australia's IRA, Part B, pp. 77.

use high-pressure and high-volume washing with jets of clean water to rinse apples after washing in
the dump tank, which would likely remove any surface contamination of clean fruit with bacteria or
trash.
1540
7.315 As stated in the IRA:
"Ceroni et al. (2004) immersed pear fruit for 15 min in a suspension of E. amylovora
with 108 cfu/mL and could not detect bacter ia on the surface after just a few days,
with small numbers remaining for longer periods only in the calyx. These authors
concluded that bacterial survival on the fruit surface is very short and has a negligible
epidemiological role. If E. amylovora gets into the core in the dump tank, one would
expect some internal infection to develop but this has neve r been reported. Sapers
(1999) carried out some apple washing trials in a commercial cider mill and found
that for apples inoculated by dipping in E. coli solutions, bacteria were not washed
out into the dump tank, the dump tank water did not get contaminated and no cross
contamination took place in the dump tank. This behaviour of E. coli is different to
E. amylovora, which has been shown in several studies to be easily washed from
contaminated surfaces. This clearly demonstrates the differing behaviours of the two
bacteria and the dangers of extrapolating from one to the other. In contrast to
observations of Sapers (1999) for E. coli, we have concluded that a very small level
of cross contamination as infestation in the dump tank may be possible for
E. amylovora."1541
7.316 The IRA notes that, compared to the dump tank, th e rest of the packing line is considered to
be a less significant contamination source.1542
7.317 The IRA reaches the conclusion, on the basis of the evidence cited, that there is a possibility
that a small level of cross contamination of apples by Erwinia amylovora may occur in the fruit dump
tank. The evidence cited by the IRA, however, indicates that the liquid medium in which mature
apple fruits are immersed during processing in the pack ing house, even without disinfectant, is a poor
culture medium for Erwinia amylovora . The evidence also suggests that such liquid medium would
have a dilution effect.
1543
7.318 Dr Paulin found the IRA's estimation regard ing this importation step to be strongly
exaggerated.1544 In the words of Dr Paulin, "[o]nly if decaying apples (s upposedly decaying from
E. amylovora infection – then immature and not "symptomless") or large amount of infected trashes,
were present, the dilution effect in a non-disinfectant medium could lead to a significant amount of
bacterial cells on fruit surfaces. This seem s very unlikely in practical conditions." 1545 As noted by
Dr Deckers, the scientific eviden ce indicates that the likelihood that contamination of clean apples

1540 Australia's IRA, Part B, pp. 77.
1541 Australia's IRA, Part B, pp. 78. Ceroni et al., "Survival of Erwinia amylovora on pears and on fruit
containers in cold storage and outdoors" (2004); Sapers, "Research on decontamination of apples by washing
with detergents and sanitizing agents" (1999).
1542 Australia's IRA, Part B, pp. 77.
1543 Dr Paulin's reply to Panel question 30, in List of Replies from the scientific experts to questions
1544 Dr Paulin's reply to Panel question 30, in List of Replies from the scientific experts to questions
posed by the Panel, para. 216; Dr Paulin's reply in Tran script of the Panel's meeting with experts, para. 341.
See also, Dr Sgrillo's reply to Panel question 30, in List of Replies from the scientific experts to questions posed
by the Panel, paras. 211-214.
1545 Dr Paulin's reply to Panel question 30, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 216-217. See also, Dr Deckers's reply in Transcript of the Panel's meeting with
experts, para. 362; Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 360.

happens during processing is negligible when the water during processing is disinfected. 1546 In this
regard, the IRA does not properly explain its reasons for seemingly disregarding the conclusions of
studies such as Ceroni et al. (2004) and the Sapers (1999) study for E. coli 1547 when deducing its
estimates of likelihood for this importation step.
7.319 Dr Paulin noted further that, even in the latte r case, the scientific evidence is that, in an
artificial medium, Erwinia amylovora would not compete successfully against natural antagonistic
bacteria (such as Pantoea agglomerans or Pseudomonas fluorescens). These natural antagonistic
bacteria are naturally found in high concentrati on on plant and on fruit surfaces, and would prevent a
multiplication of Erwinia amylovora, if present.1548
7.320 The IRA contains sufficient evidence from respect ed and qualified sources with respect to its
consideration of this importation step. There is no indication in the IRA, however, of how the results
of these scientific studies were were taken into account in arriving at an estimation of a probability
range for this importation step. There is, for example, no indication of how the IRA took into account
the evidence regarding the potential for the fruit dump tank to become contaminated by Erwinia
amylovora bacteria and to become a contamination source for clean fruit during processing in the
packing house. Accordingly, the Panel finds that the IRA's estimation of the likelihood that clean
fruit is contaminated by Erwinia amylovora during processing in the packing house is not coherent
and objective.
(f) Alleged overestimation for importation step 6
7.321 Importation step 6 represents the likelihood that in fected or infested fru it remains infected or
infested during palletization, quality inspection, containerization and transportation to Australia.1549
(i) Summary of the Parties' arguments
7.322 New Zealand submits that the IRA has attribut ed an inflated likelihood in its calculations
regarding importation step 6 for fire blight. 1550 In its view, "[t]he IRA does not take account of the
fact that containerisation and transportation involves cold storage which significantly reduces the
viability of E. amylovora."
1551
7.323 New Zealand states that the fact that it is possible for bacteria to survive the time and
conditions of transit does not imply they will su rvive in epidemiologically significant numbers. 1552
"[I]n rejecting the concept of an epidemiologica lly significant number of bacteria, Australia also

1546 Dr Deckers's reply to Panel question 30, in List of Replies from the scientific experts to questions
1547 Ceroni et al., "Survival of Erwinia amylovora on pears and on fruit containers in cold storage and
outdoors" (2004); Sapers, "Research on decontamination of apples by washing with detergents and sanitizing
agents" (1999). Australia's IRA, Part B, pp. 78.
1548 Dr Paulin's reply to Panel question 30, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 216-217.
1549 Australia's IRA, Part B, pp. 19-21.
1550 New Zealand's first written submission, para. 4.231.
1551 New Zealand's first written submission, para. 4.229. Hale and Taylor, "Effect of Cool Storage on
Survival of Erwinia amylovora on Apple Calyxes" (1999), in Exhibit NZ-24; Taylor and Hale, "Cold storage
affects survival and growth of Erwinia amylovora on the calyx of apple" (2003), in Exhibit NZ-25; and, Temple
et al., "Evaluation of Likelihood of Co-Occurrence of Erwinia amylovora with Mature Fruit of Winter Pear"
(2007), in Exhibit NZ-98.
1552 New Zealand's first written submission, para. 4.229.

rejects the notion that there is a significant diffe rence between the potential risk associated with the
presence of one bacterium on an apple and the presence of 10,000 bacteria."
1553
7.324 In response, Australia contends that New Z ealand has failed to establish that the IRA's
assessment of importation step 6 is flawed. 1554 In its view, "New Zealand ... fails to demonstrate a
proper understanding of the importation scenario exam ined by the IRA Team. Much of the evidence
presented [by New Zealand] in fact supports Australi a's claim that the IRA Team was correct in its
assessment of likelihood for Importation step 6."1555
7.325 Australia argues in this regard that the IRA t ook into account the fact that bacteria are not
visible and the evidence presented for importation step 4 that bacteria will survive cold storage
conditions.1556 While scientific evidence demonstrates that b acteria decline in cold storage, the same
evidence also demonstrates that some bacteria can survive. Australia submits that the discussion in
this regard in the context of importation st ep 4 applies equally to importation step 6. 1557 Australia
emphasizes that importation step 6 does not test whether Erwinia amylovora will survive in
epidemiologically significant numbers. "It is concerned with the likelihood that any bacteria will
survive quality controls, storage and transport." 1558 In the light of this, the IRA Team concluded that
none of the processes at importation step 6 are likely to directly impact on the survival of Erwinia
amylovora on fruit.1559
(ii) The Panel's analysis
7.326 The IRA estimates the likelihood that Erwinia amylovora survives palletization, quality
inspection, containerization and transportation to Australia as a triangular distribution with a
minimum value of 0.7 (70 in 100), a maximum value of 1 (100 in 100) and a most likely value of 0.8
(80 in 100).1560
7.327 The IRA notes that "[b]acteria are not visible and will survive quality inspection and
palletisation."1561 Transportation of apple fruit in contai ners from New Zealand to Australia would
take a minimum of 10 days. The IRA cites evid ence that, although some reduction in numbers of
bacteria and number of infested fruit would be expe cted during transportation of apples in containers
from New Zealand to Australia, bacteria can survive on fruit for periods longer than 10 days.1562
7.328 As noted in the arguments section above, the discussion between the Parties regarding the
IRA's estimations on importation step 6 for fire bli ght replicates the earlier discussion on cold storage
in the context of importation step 4. Again, a ma in point of contention between the Parties is the
extent to which cold storage would limit the amount of bacteria on apples. An important difference in
the discussion of these two importation steps is that disinfection procedures, which can have a
significant impact in reducing bacterial population, are not relevant for importation step 6.

1553 New Zealand's second written submission, para. 2.428.
1554 Australia's first written submission, para. 437; Australia's second written submission, para. 391.
1555 Australia's first written submission, para. 437.
1556 Australia's first written submission, para. 430.
1557 Australia's first written submission, para. 433; Australia's second written submission, para. 390.
1558 Australia's first written submission, para. 433.
1559 Australia's first written submission, para. 430.
1560 Australia's IRA, Part B, p. 79.
1561 Ibid.
1562 Australia's IRA, Part B, p. 79. Ceroni et al., "Survival of Erwinia amylovora on pears and on fruit
containers in cold storage and outdoors" (2004); Hale and Taylor, "Effect of Cool Storage on Survival of
Erwinia amylovora on Apple Calyxes" (1999), in Exhibit NZ-24.

7.329 The Panel has already noted that most of th e evidence cited in the IRA supports the notion
that cold storage would reduce the bacterial population of Erwinia amylovora on apples, but would
not completely eliminate such population.1563
7.330 In the light of the above, the IRA contains sufficient scientific evidence to support its
conclusion that, although some reduc tion in numbers of bacteria and number of infested fruit would
be expected during transportation of apples in cont ainers from New Zealand to Australia, bacteria can
survive on fruit for periods longer than 10 days. The experts consulted by the Panel agreed with this
general conclusion, although Dr Deckers noted that "[t]he survival of the [ Erwinia amylovora ]
bacteria during palletization, containerization and tran sport is considered to be low, surely after the
external disinfection of the fru its during the packaging process". 1564 In any event, New Zealand has
not successfully shown that cold storage occurring during containerization and transportation at this
stage would significantly reduce the viability of Erwinia amylovora.
7.331 Accordingly, the Panel concludes that New Z ealand has not made a case that the IRA's
estimation of the likelihood that Erwinia amylovora survives palletization, quality inspection,
containerization and transportation to Australia is in flated or that it is not based on a coherent and
objective reasoning.
(g) Alleged overestimation for importation step 7
7.332 Regarding the pests reviewed in the IRA, im portation step 7 represents the likelihood that
clean fruit will become contaminated during palleti zation, quality inspection, containerization and
transportation.1565
(i) Summary of the Parties' arguments
7.333 New Zealand submits that "[t]his is another ev ent with an exceedingly small probability of
occurrence."1566 New Zealand argues that "[t]his step is a further reiteration of steps 3 and 5, the
assumption that clean fruit can become contaminated with E. amylovora during the process from
picking to arrival at its export destination. Just as the assumptions behind steps 3 and 5 are
unsupportable, equally step 7 is without support."
1567
7.334 New Zealand argues that this is "another exampl e of Australia using a probability range with
a maximum value that is not justified by the scientific evidence, with the effect of inflating the overall
probability of entry, establishment and spread".1568
7.335 In response, Australia contends that New Zeal and has not demonstrated serious flaws in the
IRA's analysis with respect to this importation step. Australia submits that New Zealand has not
shown why the probability range assigned to this step is inconsistent with the scientific evidence cited
by the IRA, or indeed, with its own view that the likelihood is "exceedingly small".
1569

1563 See para. 7.301 above. See also, Dr Deckers's and Dr Paulin's replies to Panel questions 14 and 29,
in List of Replies from the scientific experts to questions posed by the Panel, paras. 115, 208 and 209.
1564 Dr Deckers's reply to Panel question 31, in List of Replies from the scientific experts to questions
posed by the Panel, para. 218. See also, Dr Paulin's reply to Panel question 31, in List of Replies from the
scientific experts to questions posed by the Panel, para. 219.
1565 Australia's IRA, Part B, pp. 19-21.
1566 New Zealand's first written submission, para. 4.232.
1567 Ibid.
1568 New Zealand's second written submission, para. 2.431.
1569 Australia's second written submission, para. 394.

7.336 Australia notes New Zealand's contention that the event covered by this importation step
would have an exceedingly small probability of occu rrence, similar to importation steps 3 and 5.
Australia argues in this regard th at, according to the IRA's methodolog y, the qualitative descriptor for
"negligible" events corresponds with a probability interval between 0 and 10
-6. This is precisely the
probability interval assigned to importation step 7. Accordingly, in Australia's view, New Zealand
should have no complaint with importation step 7.1570
7.337 Australia notes that the IRA considered that the only contamination risk under this step arose
from bacterial ooze from internally infe cted fruit. "Given that it considered internal infection to be a
'rare event', and that rotten fruit is highly likely to be discarded at harvest, at the packing line or
during quality inspection, the IRA Team consider ed there was little opportunity for fruit to be
contaminated at this stage."1571
(ii) The Panel's analysis
7.338 The IRA estimates the likelihood that clean fruit is contaminated by Erwinia amylovora
during palletization, quality inspection, containerizat ion and transportation as a triangular distribution
with a minimum value of 0, a maximum value of 10 -6 (1 in 1,000,000) and a most likely value of 5 ×
10-7 (5 in 10,000,000).1572
7.339 The IRA notes that "[a]fter consideration of the technical information the IRA Team
concluded that there was little opportunity for fruit to be contaminated at this stage":
"Surface contamination of clean fruit can occur only if bacteria ooze out from
internally infected fruit. Such fruit are rare ly found ... as rotten fruit is not harvested.
If harvested, such fruit is rejected before entering the packing line. If rotten fruit is
present after cold storage, it is discarded at quality inspection.
Packed fruit is kept under secure conditions , not exposed to elements and therefore
not exposed to bacterial inoculum."1573
7.340 Dr Deckers and Dr Paulin highlighted that inte rnally infected mature fruits are not able to
produce bacterial ooze; these fruits will immediat ely be invaded by fungal infections. Ooze
production would only occur on immature fruits, where the starch of the imma ture fruits is used by
the Erwinia amylovora bacteria during the multiplication phase. 1574 In any event, as noted by the
IRA1575, internally infected fruits producing ooze, if a ny, would have been discarded well before this
step and before entering the packing line.
7.341 In its analysis of this step, the IRA does not provide any scientific evidence that external
pollution can happen as described in this importa tion step, except in the case of oozing fruits. 1576 The
only reference to any scientific evidence at all in the IRA's analysis concerning this importation step is

1570 Australia's first written submission, para. 439.
1571 Australia's first written submission, para. 438 (footnote omitted).
1572 Australia's IRA, Part B, p. 79.
1573 Ibid. See also, Van der Zwet et al., "Population of Erwinia amylovora on External and Internal
Apple Fruit Tissues" (1990), in Exhibit AUS-31.
1574 Dr Deckers's and Dr Pau lin's replies to Panel question 33, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 229 and 230.
1575 Australia's IRA, Part B, p. 79.
1576 Dr Deckers's, Dr Paulin's and Dr Sgrillo's replies to Panel question 32, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 226, 227-228 and 220-225.

to the van der Zwet (1990) study. The Panel has al ready noted the limitations of this paper, in the
light of the comments made by its own first author.1577
7.342 The quantitative range assigned by the IRA for th e likelihood of the event represented by this
importation step corresponds to the IRA's definition of "negligible" (i.e., "the event would almost
certainly not occur"). The IRA's conclusion that the likelihood that clean fruit is contaminated by
Erwinia amylovora during palletization, quality inspection, containerization and transportation is
negliglible appears to be coherent and objective. The Panel will turn later, in the context of
New Zealand's allegations regarding the IRA's alle ged methodological flaws, to the issue of whether
the IRA's choice of a probability interval of zero to one in one million for events with a "negligible"
likelihood of occurring is in itself supported by ad equate scientific evidence and is, accordingly,
coherent and objective.
(h) Estimation for importation step 8
7.343 Importation step 8 represents the likelihood that in fected or infested fru it remains infected or
infested after on-arrival minimum border procedures.1578
(i) Summary of the Parties' arguments
7.344 New Zealand submits that "it is difficult to disagree" with the IRA's conclusion that the
likelihood that Erwinia amylovora survives and remains with the fruit after on-arrival minimum
border procedures should be 1. 1579 New Zealand argues in this regard that "[i]f E. amylovora is
present when apples arrive at the border it seems hardly likely that 'on-arrival minimum border
procedures' could have any effect on it." 1580 It adds, however, that this statement "is hardly
meaningful. It, too, depends on the assumption that a pathway exists for the transmission of
E. amylovora, an assumption for which there is no supporting scientific evidence."1581
7.345 In New Zealand's view, "importation step 8 h as no purpose, other than to indicate that
Australia's border procedures are not designed to eliminate any E. amylovora that might be carried on
imported apples. Nor, in New Zealand's view, need they be designed to do so."1582
7.346 In response, Australia contends that New Zealand's argument regarding importation step 8 "is
irrelevant ... as New Zealand agrees with the IRA Team that it is certain that any E. amylovora present
by this step will survive to the next stage."1583
(ii) The Panel's analysis
7.347 The IRA estimates the likelihood that Erwinia amylovora survives and remains with the fruit
after on-arrival minimum border procedures is 1 (100 per cent).1584

1577 See para. 7.285 above. Declaration of Tom van der Zwet, 16 July 2002, in Exhibit AUS-32.
Dr Paulin's reply to Panel question 32, in List of Replies from the scientific experts to questions posed by the
Panel, paras. 227-228; Dr Paulin's reply to Panel question 24, in List of Replies from the scientific experts to
questions posed by the Panel, para. 175. But see, Australia's IRA, Part B, pp. 63.
1578 Australia's IRA, Part B, pp. 19-21.
1579 New Zealand's first written submission, para. 4.233.
1580 Ibid.
1581 New Zealand's first written submission, para. 4.234.
1582 New Zealand's second written submission, para. 2.433.
1583 Australia's first written submission, para. 440. See also, Australia's second written submission,
para. 395.
1584 Australia's IRA, Part B, p. 80.

7.348 The IRA notes that "[b]acteria present on the surf ace, in the calyx or internally will not be
detected at on-arrival border procedures. Standard on-arrival inspection procedures would not be able
to detect the presence of bacteria. Fruit carrying bacteria would not show any symptoms of fire
blight."
1585
7.349 New Zealand has not called into question the IR A's estimation of the likelihood of the event
represented by this particular importation step. In any event, there is no reason to believe that such
estimation is not coherent and objective in the light of the scenario addressed by the IRA.
(i) Alleged overestimation for the overall probability of importation
7.350 The overall probability of importation represents the likelihood that an imported apple is
infected or infested; it results from the sum of the proportions associated with the ten individual
importation pathways.1586
(i) Summary of the Parties' arguments
7.351 New Zealand argues that the overall probability of importation is a greatly inflated figure. 1587
In New Zealand's view, this figure "exceeds the maximum reported infestation in New Zealand, which
was from a severely infected orchard." 1588 New Zealand suggests that, based on scientific evidence,
the value assigned to the overall probability of importation should be considerably lower.1589
7.352 In response, Australia argues that the infestation rate of imported apples from New Zealand,
corresponding to the overall probability of importing Erwinia amylovora, was estimated by inserting
the likelihoods for each importation step into the risk simulation model.1590
(ii) The Panel's analysis
7.353 Regarding the overall probability of importation of Erwinia amylovora, the IRA notes that:
"When the above likelihoods [for each of the importation steps] were inserted into the
risk simulation model, the probability of importation of E. amylovora was estimated
as being 3.9 × 10 -2 (mean), 2.2 × 10 -2 (5th percentile) and 5.6 × 10 -2 (95th percentile).
Therefore, the infestation rate for E. amylovora was estimated to be 3.9% (mean) of
the total proposed number of apples imported from New Zealand annually."1591
7.354 The experts have confirmed that, arithmetically, the overall figure of 3.9 per cent is correct, as
it results from adding the different individual lik elihoods represented by each of the ten potential
importation paths. 1592 However, Dr Paulin noted that the exercise of trying to reach an overall

1585 Australia's IRA, Part B, p. 80.
1586 Australia's IRA, Part B, pp. 23-24.
1587 New Zealand's first written submission, para. 4. 235; New Zealand's se cond written submission,
para. 2.434.
1588 New Zealand's first written submission, para. 4.235.
1589 Ibid. See also, New Zealand's second written submission, para. 2.434. Roberts et al. , "The
potential for spread of Erwinia amylovora and fire blight via commercial apple fruit" (1998), p. 23, in Exhibit
NZ-22; and, Roberts and Sawyer, "An updated pest risk assessment for spread of Erwinia amylovora and fire
blight via commercial apple fruit" (2008), in Exhibit NZ-29.
1590 Australia's second written submission, para. 396.
1591 Australia's IRA, Part B, p. 80.
1592 Dr Deckers's and Dr Sgrillo's replies to Panel qu estion 34, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 237 and 236.

likelihood of importation by estimating individual probabilities for each importation pathway may be
flawed:
"[I]f one can speculate or discuss on the likelihood of any event involved in the
possible transport of E. amylovora with apples, the quantification of probabilities of
each one of these events is just not feasible. This quantification relies on an arbitrary
estimation, which, even in the best- documented case, is just hidden behind a
'scientific' explanation, which is never completely relevant, if only because the
conditions in the laboratory are only partia lly mimicking natural conditions. This
quantification of probability may have a merit in trying to assess the relative risks
attached to each step, as compared to each other. The overall figure resulting from
the combination of these probabilities is just not credible: if the 3.9% figure had any
consistency, it is a figure that could be qu ite easily checked experimentally (as is, for
example, spread through planting material). Such an experiment would have been
more convincing than the present efforts by IRA to demonstrate what cannot be really
demonstrated."
1593
7.355 Irrespective of whether this exercise of tryi ng to reach an otherwise unsupported overall
likelihood of importation by aggregating probabilities for individual importation paths is flawed, some
of the figures estimated by the IRA Team are problem atic. Indeed, if the estimations of one or more
of the individual likelihoods are questionable, b ecause those estimations are either not supported by
adequate scientific evidence or not based on a c oherent and objective reasoning, the overall figure
necessarily becomes questionable.
7.356 Moreover, the IRA does not attempt to find jus tification for the estimated overall probability
of importation, other than the aggregation of the different individual likelihoods represented by each
importation step. 1594 Consulted by the Panel, Dr Decker s expressed the view that this overall
probability is a relatively high value and is probably overestimated. 1595 Dr Paulin emphasized that,
because the IRA does not present data to support it s estimation regarding the overall likelihood of
importation, it is impossible to consider whether this estimation is or is not ex aggerated and, if it is,
the seriousness of the exaggeration. 1596 Indeed, commenting on the risk assessment methodology,
Dr Sgrillo notes that "quantitative methods should be applied only when ther e are sufficient data to
support the choice of probability ranges and probability shapes." 1597 Dr Sgrillo suggests in this regard
that the data in the IRA "is not adequate to genera te the kind of numbers that the people need to
proceed with the model." 1598 Ultimately, any figures estimated would subsequently need to be
compared with the reality to verify that the model adequately reflects the real world.1599
7.357 In the light of the conclusions reached earlier by the Panel regarding the IRA's estimations of
individual importation steps 1600, and of the lack of any separate justification and evidence in the IRA
regarding the estimated overall likelihood of importati on, the Panel finds that the IRA's estimation of

1593 Dr Paulin's reply to Panel question 34, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 238-239 (original emphasis).
1594 Australia's IRA, Part B, p. 80. See also, Table 4 in Australia's IRA, Part B, p. 24. See, reply of
Dr Sgrillo in Transcript of the Panel's meeting with experts, para. 269.
1595 Dr Deckers's reply to Panel question 34, in List of Replies from the scientific experts to questions
posed by the Panel, para. 237. See also, Dr Sgrillo's reply to Panel question 34, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 231-235. But see, Dr Deckers's reply in Transcript of
the Panel's meeting with experts, para. 259.
1596 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 258.
1597 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 122.
1598 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 143.
1599 Dr Sgrillo's replies in Transcript of the Panel's meeting with experts, paras. 34 and 136.
1600 See paras. 7.259, 7.275, 7.290, 7.320 and 7.342 above.

the overall probability of importation does not rely on adequate scientific evidence and, accordingly,
is not coherent and objective.
(j) IRA's analysis of the probability of entry, establishment and spread of fire blight
7.358 Factors relevant to the estimation of the pr obability of entry, establishment and spread
include: the probability of importation (in accordan ce with the different importation steps); the
proximity value; the probability of exposure; the probability of establishment; and the probability of
spread.
1601
(i) Summary of the Parties' arguments
7.359 New Zealand argues that, just as the IRA does not contain an evaluation of the likelihood of
entry of fire blight, it also fails to evaluate th e likelihood of the "establishment or spread of the
disease" within the meaning of paragra ph 4 of Annex A to the SPS Agreement. 1602 New Zealand
submits that, "[a]s a result, Australia has not comp lied with its obligations under Article 5.1 of the
SPS Agreement."1603 In New Zealand's view, "Australia's risk assessment fails to meet the
requirements of Article 5.1 because it does not assess the actual risk of introduction of fire blight via
mature, symptomless apples".
1604 It is based on a hypothetical pathway, "one based on a hypothesis,
supposed or assumed but not necessarily real or true".1605
7.360 New Zealand submits that there is no scientific evidence of a dispersal mechanism to move
the bacteria to a susceptible host, so that once apples infested or infected with Erwinia amylovora
arrive in Australia, the disease may be transmitted to host plants. In New Zealand's view, the IRA's
analysis in this regard "rests on remote possi bilities and not on probabilities based on scientific
evidence".1606 New Zealand contends that the IRA assigns values "in a seemingly arbitrary manner"
to various utility points from which there could be transfer of bacteria from infested apples to host
plants1607: "events that have an extremely low lik elihood ... are nevertheless assigned probability
values which suggest they are likely to occur".1608
7.361 New Zealand alleges some "further, specific problems" with the IRA's analysis of
"establishment and spread". First, the IRA ignor es that bacterial populations on apples "will greatly
decline" during cold storage in Australia before retail sale and distribution. 1609 Second, the IRA cites
no scientific basis for its assumption that there can be multiplication of Erwinia amylovora on a
discarded apple, or that such bacteria could be spread to a susceptible host by browsing insects. 1610
Available scientific evidence rather shows that populations of Erwinia amylovora associated with

1601 Australia's IRA, Part B, p. 80. See also, Australia's IRA, Part B, p. 17.
1602 New Zealand's first written submission, para. 4.238.
1603 New Zealand's first written submission, para. 4.252.
1604 New Zealand's second written submission, para. 2.437.
1605 New Zealand's second written submission, para. 2.439.
1606 New Zealand's first wr itten submission, para. 4.239. S ee also, New Zealand's first written
submission, paras. 4.247-4.248.
1607 New Zealand's first written submission, paras. 4.240-4.241.
1608 New Zealand's first written submission, para. 4.241.
1609 New Zealand's first written submission, para. 4.24 2, referring to Taylor and Hale, "Cold storage
affects survival and growth of Erwinia amylovora on the calyx of apple" (2003), in Exhibit NZ-25; and, Temple
et al., "Evaluation of Likelihood of Co-Occurrence of Erwinia amylovora with Mature Fruit of Winter Pear"
(2007), p. 1272, in Exhibit NZ-98.
1610 New Zealand's first written submission, para. 4.243, referring to Taylor et al., "Survival of the fire
blight pathogen, Erwinia amylovora, in calyxes of apple fruit discarded in an orchard" (2003), in Exhibit NZ-28;
and, Hale et. al ., "Ecology and Epidemiology of fire blight in New Zealand" (1996), in Exhibit NZ-27.
See also, New Zealand's second written submission, paras. 2.442-2.444.

mature fruit would have a negligible probability of infecting a host, even if the host were receptive.1611
Nor is there any scientific evidence cited to support th e theory of mechanical transfer via workers or
equipment leading to infection.1612 Additionally, in New Zealand's view, the IRA wrongly claims that
there is no accepted threshold number of Erwinia amylovora required to initiate an infection. 1613
Third, the IRA's argument about the dispersal mechanism is based on the wrong assumption that
laboratory conditions will be replicated in a natural orchard environment. 1614 New Zealand argues in
this regard that, in real life, "even under conditio ns conducive for infection, bacterial populations are
unlikely to reach such high inoculum levels in such a short period".1615 In New Zealand's view:
"The IRA's contention that E. amylovora can spread via mature fruit not only requires
that each of [a number of] unproven events mu st occur but that they must all occur in
sequence in a short period of time when a host blossom is susceptible and the climate
is conducive to infection by E. amylovora. ... The probability of each of these never
demonstrated events occurring is negligible ; the probability of them occurring in the
correct sequence at the correct time has to be very close to zero."1616
7.362 According to New Zealand, the IRA's estimate of the likelihood of transfer of Erwinia
amylovora from a single infested or infected apple to a susceptible host (exposure value) is "grossly
exaggerated". The only scientific evidence of the probability of such events occurring assigns values
of one event per several thousand years.1617
7.363 In response, Australia argues that New Zeala nd's argument that establishment and spread of
fire blight through mature apples has never been demonstrated and lacks merit, as does the argument
that the IRA's evaluation in this regard is "hypothetical" and "grossly exaggerated". 1618 In Australia's
view, just because a pathway has never been histori cally proven, is not determinative that it can never
happen.1619 Australia submits that the proper enquiry is whether the likelihoods assigned by the IRA
are credible and objective. In this regard, Australia states that, "at each stage in the pathway relating
to establishment and spread, the IRA Team made a cr edible assessment on the basis of the scientific
evidence and accordingly, its evaluation should stand".1620
7.364 Australia argues that, in accordance with inte rnational standards, in circumstances of
scientific uncertainty a risk assessment may explore hypothetical pathways, although it is important
for transparency to document the areas and the degree of uncertainty in the assessment, and to indicate

1611 New Zealand's first written submission, para. 4.243, referring to Taylor et al., "Survival of the fire
blight pathogen, Erwinia amylovora, in calyxes of apple fruit discarded in an orchard" (2003), in Exhibit NZ-28;
and, Hale et. al., "Ecology and Epidemiology of fire blight in New Zealand" (1996), in Exhibit NZ-27. See
also, New Zealand's second written submission, paras. 2.442-2.444.
1612 New Zealand's second written submission, paras. 2.445-2.446.
1613 New Zealand's first written submission, para. 4. 244, referring to Thomson and Gouk, "Influence of
Age of Apple Flowers on growth of Erwinia amylovora and Biological Control Agents" (2003), in Exhibit NZ-
54; and, Taylor et al., "Effect of inoculum dose on infection of apple ( Malus domestica) flowers by Erwinia
amylovora" (2003), in Exhibit NZ-23.
1614 New Zealand's first written submission, para. 4.245.
1615 Ibid.
1616 New Zealand's first written submission, paras. 4.246-4.247.
1617 New Zealand's first written submission, pa ras. 4.249-4.250, referring to Roberts et al. , "The
potential for spread of Erwinia amylovora and fire blight via commercial apple fruit" (1998), p. 23, in Exhibit
NZ-22; Roberts and Sawyer, "An updated pest risk assessment for spread of Erwinia amylovora and fire blight
via commercial apple fruit" (2008), in Exhibit NZ-29.
1618 Australia's first written submission, paras. 442-443.
1619 Australia's first written submission, para. 443.
1620 Australia's first written submission, para. 447. See also, Australia's second written submission,
para. 403.

where expert judgement has been used.
1621 In this regard, Australia argues that "[t]he SPS Agreement
does not require a risk assessment to establish a minimum magnitude of risk and permits reliance
upon a range of scientific opinions emanating from qualified and respected sources."
1622
7.365 Australia contends that New Zealand's analysis of the steps necessary for fire blight to
establish and spread in Australia, including New Zeala nd's assumptions that apple fruit must arrive in
Australia with significant quantities of Erwinia amylovora in the calyx, that browsing insects are the
only vector for transmission of Erwinia amylovora to a host, and that bacteria must multiply to 10 6 in
a short period during conducive weather conditions, has "significant shortcomings".1623
7.366 Australia argues further that New Zealand's clai ms in relation to the IRA Team's proximity
analysis are weak and should be dismissed.1624 In its view, New Zealand makes an unsupported vague
statement and does not challenge any particular as signment of likelihood in this regard, except the
combination of urban retailers and commercial fruit crops.1625
7.367 With respect to cold storage, Australia argues that the scientif ic evidence clearly shows that
Erwinia amylovora can survive on apples for periods considerably longer than those needed to import,
distribute and sell apples in Australia.1626
7.368 Australia also argues that the studies consider ed in the IRA are evid ence that the minimum
number of Erwinia amylovora needed to start fire blight is much lower than that claimed by
New Zealand. Such minimum number varies gr eatly and is highly dependent on environmental
conditions and host factors. 1627 Australia adds that "[t]o the exte nt that New Zealand relies on this
claim to support its objection to the entire risk scen ario, Australia submits that this objection should
be found wholly without support."1628
7.369 Australia argues further that the ability of Erwinia amylovora to rapidly multiply in the
environment on or in apple fruit, increasing the ch ance that an effective inoculum dose will be
available is substantiated and therefore is a credible part of the risk assessment.1629
7.370 Regarding transmission of Erwinia amylovora from apples to hosts by browsing insects,
Australia argues that the eviden ce available to the IRA Team demonstrated that there was a
likelihood, albeit small, that insect -vectored transmission could occur. 1630 The evidence cited by
New Zealand, which detected no spread of fire blight when apples contaminated with

1621 Australia's first written submission, paras. 444-446; Australia's second written submission,
para. 401. Pest risk analysis for quarantine pests, including analysis of environmental risks and living modified
organisms, 2004 (ISPM No. 11, FAO, Rome), submitted as Exhibit AUS-6.
1622 Australia's first written submission, para. 446.
1623 Australia's first written submission, para. 449.
1624 Australia's first written submission, para. 456.
1625 Australia's first written submission, paras. 454-455.
1626 Australia's first written submission, para. 457.
1627 Australia's first written submission, paras. 458-462. Van der Zwet et al ., "Evaluation of the
MARYBLYT Computer Model for Predicting Blossom B light on Apple in West Virginia and Maryland"
(1994), in Exhibit AUS-28; Hildebrand, "Infectivity of the Fire-Blight Organism" (1937), in Exhibit AUS-29;
and, Cabrefiga and Montesinos, "Analysis of Aggressiveness of Erwinia amylovora Using Disease-Dose and
Time Relationships" (2005), in Exhibit AUS-37.
1628 Australia's first written submission, para. 462.
1629 Australia's first written submission, paras. 463-471. Longstroth, "Fire Blight Symptoms" (2007), in
Exhibit AUS-42; van der Zwet et al., "Population of Erwinia amylovora on External and Internal Apple Fruit
Tissues" (1990), in Exhibit AUS-31; and, Sholberg et al., "Occurrence of Erwinia amylovora of pome fruit in
British Columbia in 1985 and its elimination from the apple surface" (1988), in Exhibit AUS-34.
1630 Australia's first written submission, paras. 472-475; Australia's second written submission,
para. 399.

Erwinia amylovora were placed in orchards, is of limited value, because the sample size in these
experiments was insufficient to detect rare events. 1631 In this regard, "[s]ince the pathway being
examined is hypothetical, the IRA Team was not obliged to disregard a potential vector simply
because it has never been shown to 'demonstrate' transmission of E. amylovora."1632
7.371 Australia adds that the IRA Team also identifie d mechanical processes, such as tools, hands,
machinery, etc., as a means of transmission of the disease. 1633 Australia notes that New Zealand did
not address this mode of transmission in its first submission and therefore failed to establish that the
IRA's conclusions on this issue should be doubted.1634
7.372 Regarding the IRA's conclusion on exposure, Au stralia submits that "while the chain of
events required for a successful exposure only has a small chance of occurring, the scientific evidence
demonstrates that such exposure events can happen." 1635 In its view, the probability of exposure has
been estimated at a range that is equivalent to the qualitative descriptor for a "negligible" event and,
accordingly, New Zealand should have no objection to the IRA's judgement in this regard.1636
7.373 Australia argues that New Zealand did not ma ke any claims relating to fire blight
establishment under Article 5.1 in its first written submission, and should no t be permitted to make
any such claims at a later stage. 1637 Australia adds that the IRA refers to studies that show that a
number of major apple and pear growing areas in Australia would have suitable conditions for the
establishment of fire blight and that major Australia n cities such as Sydney have many fire blight host
plants and highly suitable c onditions for fire blight. 1638 Australia also notes that Erwinia amylovora
survival is highly variable and that the IRA shoul d not be judged against New Zealand's alternative
account based on selective scientific evidence.1639
7.374 Finally, Australia argues that the IRA's spread analysis examined the ability of the pathogen
to spread to other susceptible hosts, once the dis ease has established on a host plant in Australia.
Because New Zealand did not make any claims relating to fire blight spread under Article 5.1 in its
first written submission, it should not be permitted to make any such claims at a later stage.1640
(ii) The Panel's analysis
7.375 In its estimation of the probability of entry, establishment and spread of fire blight, the IRA
has taken into account the following factors: the probability of importation, that has already been
discussed with respect to the different importation st eps; the proportion of utility points near host
plants susceptible to the pest in each exposure grou p, titled "proximity"; the probability of exposure
of a susceptible host plant in the ex posure group to the pest by an infested/infected apple discarded
near it, titled "exposure"; the probability of establishment; and the probability of spread."1641

1631 Australia's first written submission, para. 475.
1632 Australia's first written submission, para. 473.
1633 Australia's first written submission, paras. 472 and 476, referring to Thomson, "Epidemiology of
fire blight" (2000), p.17, in Exhibit NZ-05.
1634 Australia's first written submission, para. 476.
1635 Australia's first written submission, para. 477. Roberts and Sawyer, "A n updated pest risk
assessment for spread of Erwinia amylovora and fire blight via commercial apple fruit" (2008), in Exhibit NZ-
29. See also, Australia's second written submission, para. 402.
1636 Australia's first written submission, paras. 477-479.
1637 Australia's first written submission, para. 481.
1638 Australia's first written submission, para. 482.
1639 Australia's first written submission, para. 483.
1640 Australia's first written submission, paras. 484-485.
1641 Australia's IRA, Part B, p. 80. See also, Australia's IRA, Part B, p. 17.

7.376 The probability of importation, combined with the proximity and the exposure analyses, result
in the overall probability of entry. In turn, the expos ure analysis takes into account factors such as:
viability of the pest, survival of the pest, tran sfer mechanism of the pest, inoculum dose, host
receptivity and environmental factors.
1642 All scenarios subsequent to the probability of importation
that has been discussed above are only rele vant under the assumption that some viable Erwinia
amylovora bacteria would still be present on imported apples from New Zealand.
Proximity
7.377 Under its proximity analysis, the IRA assesses "how apples from New Zealand would be
distributed, used and subsequently disposed of." 1643 With respect to fire blight, the term "proximity"
in the IRA refers to the likelihood that one of the major handlers and users of apples (a utility point) is
sufficiently close to a host plant in a particular exposure group, for the likelihood of transfer of
bacteria to a host to be greater than zero. 1644 The IRA considers the following utility points: orchard
wholesalers, urban wholesalers, retailers, food services and consumers. It also considers the
following exposure groups: commercial fruit crops, nursery plants, household and garden plants and
wild and amenity plants. The IRA describes is sues specific to each utility point and estimates
proximity ratings for the combination of each utility point with exposure groups (proximity
values).
1645 The IRA considers two scenarios regarding proximity. Under the first scenario, 70 to 100
per cent of imported apples are distributed to or chard packing houses and the remainder to urban
wholesalers, while under the second scenario, only 0.1 to 5 per cent of imported apples are distributed
to orchard packing houses.1646
7.378 As noted above, New Zealand has submitted few ar guments to contest the IRA's analysis on
proximity. It has mainly argued that the IRA ha s assigned proximity values in a seemingly arbitrary
manner.1647
7.379 Consulted by the Panel, the experts expressed scepticism regarding some of the scenarios
considered under the IRA's proximity analysis. With respect to the likelihood and implications of
New Zealand apples being repacked at rural packing houses in close proximity to orchards,
Dr Deckers considered that the IRA's analysis "is not convincing and seems not to be based on
objective criteria".1648 Dr Paulin noted that, while the IRA's assessment is "apparently coherent", he
could not see how the relative levels of pr obability for each situation were evaluated. 1649 More
importantly, as noted by Dr Paulin, the issue of proximity is likely to be of " minor importance for fire
blight risks", if apples from New Zealand are imported as retail-ready, because they would probably
not be processed at rural packing houses in proximity to host plants.
1650 In the words of Dr Paulin,
"the time of import (whether it takes place during a pe riod of receptivity of host plants or not) is more
important in the risk assessment than the site of import and (hypothetical) packaging".1651
7.380 Although the IRA offers little explanation and supporting evidence for its reasoning regarding
the estimation of the different proximity values, the Panel finds that New Zealand has not made a

1642 Australia's IRA, Part B, pp. 80-90. See also, Australia's IRA, Part B, pp. 17 and 27.
1643 Australia's first written submission, para. 451. See, Australia's IRA, Part B, pp. 24-27.
1644 Australia's IRA, Part B, p. 80; Australia's IRA, Part B, pp. 24-27 and 29.
1645 Australia's IRA, Part B, pp. 80-85; Australia's IRA, Part B, pp. 24-27.
1646 Australia's IRA, Part B, pp. 25-26 and 97. See also, para. 7.432 below.
1647 New Zealand's first written submission, para. 4.241.
1648 Dr Deckers's reply to Panel question 46, in List of Replies from the scientific experts to questions
1649 Dr Paulin's reply to Panel question 46, in List of Replies from the scientific experts to questions
1650 Ibid. (original emphasis).
1651 Ibid..

prima facie case that the IRA's discussion on utilit y points and estimated pr oximity ratings for the
combination of each utility point with exposure groups (proximity values) is not objectively
justifiable.
Exposure
7.381 Under its exposure analysis, the IRA assesses "t he likelihood of transfer of the pathogen from
infested or infected apples (wast e) to a susceptible host plant." 1652 According to the IRA, "[a]n
analysis of key steps in the sequence of events that would need to occur for successful exposure
includes a consideration of factors such as" viab ility of the pest, survival mechanism of the pest,
transfer mechanism of the pest, inoculum dose, host receptivity and environmental factors. 1653 After
discussing these factors, the IRA estimates that "the e xposure value for an individual apple for all five
utility points by four exposure groups combinati ons should be in the range of Uniform (0, 10 -6). This
range is based on the IRA team's views on both mechanical and insect mediated transmission and
explicitly acknowledges that in some circumstances the chances of exposure would be zero."
1654
7.382 The Panel will consider each of these factors in turn.
Viability
7.383 With respect to viability, the IRA notes that "[ b]acteria, especially those present in the calyx,
may survive cold storage and transport". 1655 The IRA adds that " E. amylovora is known to survive in
calyces of mature apple fruit at harvest, from severely blighted orchards or when severe fire blight
was present in the area."1656
7.384 As noted by Dr Paulin, not all the papers incl uded in the IRA with respect to survival of
Erwinia amylovora provide perfectly established results and some of them, such as van der Zwet et al.
(1990) are difficult to understand due to the complexity of the design of the paper. "Nevertheless, the
possibility of the presence of a limited surviving pop ulation of bacteria on the surface of mature fruits
issued from severely infected environment, give n by the whole data presented, seems to be
acceptable."1657
7.385 Dr Deckers noted that the scientific evidence c ited by the IRA is strongest with respect to
survival of Erwinia amylovora bacteria in the calyx of mature apple fruit.1658 It should be noted again,
however, that this viability scenario is only relevant under the assumption that some Erwinia
amylovora bacteria would still be present on imported apples from New Zealand. The Panel has
already discussed in this regard, for example, the reduction of bacterial populations that would occur
through routine procedures that occur in New Zeal and packing houses, such as disinfection and cold
storage. Disinfection, in particular, has been noted to have a significant impact in reducing bacterial
populations, even in the calyx.1659

1652 Australia's IRA, Part B, p. 85. See also, Australia's IRA, Part B, p. 27.
1653 Australia's IRA, Part B, p. 27. See also, Australia's IRA, Part B, pp. 85-90.
1654 Australia's IRA, Part B, p. 90.
1655 Australia's IRA, Part B, p. 86.
1656 Ibid. See also, Van der Zwet et al., "Population of Erwinia amylovora on External and Internal
Apple Fruit Tissues" (1990), in Exhibit AUS-31; and, Sholberg et al., "Occurrence of Erwinia amylovora of
pome fruit in British Columbia in 1985 and its elimination from the apple surface" (1988), in Exhibit AUS-34.
1657 Dr Paulin's reply to Panel question 6, in List of Replies from the scientific experts to questions
1658 Dr Deckers's reply in Transcript of the Panel's meeting with experts, para. 227.
1659 Australia's IRA, Part B, p. 72. Toivonen et al ., "Factors involved in developing apple slices"
(2001).

7.386 With respect to viability of Erwinia amylovora on the surface of mature fruits, Dr Paulin
explained that this bacterium is not a true epiphyte . The term "epiphyte" would be reserved for those
microorganisms that are able to multiply, and ther efore to reach a high level of population on leaves
or plant surfaces, without producing symptoms.
1660 "Such a capacity does not exist in the case of
E. amylovora (Thomson 2000), except on stigma in flowers. Therefore the bacterial cells eventually
present on the fruit surface could not multiply on the same site."1661
7.387 Because Erwinia amylovora can only survive, and not multip ly, on plant surfaces and in the
calyx, the likelihood that this epiphytic population of bacteria serves as a new source of infestation in
the orchard is very small and not supported on scientific evidence.
1662 As noted by Dr Deckers,
"[t]here will be no multiplication of the epiphytic bacterial population on the fruit surface or in the
calyx tissue. The fire blight bacteria are not su rviving well as an epiphytic bacterial population. ...
The chance for such a successful transfer and multiplication of bacteria will be rather exceptional."1663
7.388 In other words, mature apple fruits can harbour viable Erwinia amylovora bacteria
epiphytically on the fruit skin and, especially, in the calyx of the fruit. But, despite the IRA's
statement that bacteria "may surv ive cold storage and transport", th e bacteria will not survive well.
On the fruit skin, the bacteria will dry out easily and die, while in the calyx end they will be able to
survive for a longer period. In any event, there w ill be no multiplication of bacteria, even in the calyx
end of the fruits. The level of epiphytic populations of Erwinia amylovora bacteria on apple fruits
will remain low.1664
7.389 The Panel has already noted that most of th e evidence cited in the IRA supports the notion
that cold storage would reduce any bacterial population of Erwinia amylovora on apples, but would
not completely eliminate such population, although bacteria will not multiply.1665
7.390 In conclusion, the scientific evidence cited in the IRA supports the assumption that viable
Erwinia amylovora found on apple fruit, if there were any at this stage, could survive cold storage and
transport, albeit in reduced numbers.
Survival
7.391 With respect to survival, the IRA notes that:
"Waste material should either have an ade quate inoculum dose in a viable state or
bacteria must multiply to a concentration that could initiate an infection. When cores
are discarded into the environment, nutrients released from damaged cells in apple
cores could encourage viable bacteria in the calyx to multiply. The availability of
nutrients could also encourage other saprophytic micro-organisms to multiply at the

1660 Dr Paulin's replies to Panel questions 19 and 26, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 140 and 187-188; Dr Paulin's reply in Transcript of the Panel's meeting
with experts, para. 230.
1661 Dr Paulin's reply to Panel question 19, in List of Replies from the scientific experts to questions
posed by the Panel, para. 140 (original emphasis).
1662 Dr Deckers's replies to Panel questions 7 and 18, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 62 and 135-136.
1663 Dr Deckers's reply to Panel question 19, in List of Replies from the scientific experts to questions
1664 Dr Deckers's replies to Panel questions 7 and 37, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 62 and 252.
1665 See para. 7.301 above.

same time. When cores are discarded into the general soil environment,
E. amylovora can survive for a limited period".1666
7.392 The available evidence suggests that Erwinia amylovora bacteria may survive in diminishing
populations. As noted by Dr Paulin, "long-term con servation of bacteria in a steady state" is well
documented: "in some cases, say in dried ooze, fo r example, the bacteria is able to survive for
months, in certain conditions".1667
7.393 No evidence is cited in the IRA, however, fo r the proposition that these surviving bacteria
would be able to multiply in the calyx. Instead, as discussed above when considering the issue of
viability, the evidence indicates that any Erwinia amylovora bacteria found epiphytically on the fruit
skin and in the calyx of the fruit will not survive we ll. On the fruit skin, the bacteria will dry out and
die, while in the calyx end they will be able to surv ive for a longer period. In any event, the evidence
suggests that there will be no multiplication of bacteria, even in the calyx.1668
7.394 Dr Paulin noted that there is no scienti fic evidence to support the proposition that Erwinia
amylovora bacteria may multiply on decaying fruit discarded in the open and exposed to the elements,
but that such proposition cannot be ruled out. "Deca ying fruit, as far as [its] chemical composition ...
can be a suitable medium for the multiplication of Erwinia amylovora , although this remains to be
demonstrated".1669
7.395 In any event, as has been noted before, any Erwinia amylovora bacteria would have to
compete against natural antagonistic bacteria. These antagonistic bacteria are naturally found in high
concentrations on plant and on fruit surfaces a nd, according to Dr Paulin, would prevent a
multiplication of Erwinia amylovora, if present.1670
7.396 In conclusion, the scientific evidence cite d in the IRA supports the assumption that Erwinia
amylovora found on apple fruit, if there were any at this stage, could presumably survive in the
environment. Evidence also suggests that any bacterial population would decrease over time and
would likely not be able to multiply.
Transfer mechanisms
7.397 With respect to the transfer mechanism, the IRA considers two possibilities: browsing insects
and mechanical transmission, for example, by the exposure of workers and equipment to bacteria.
1671
7.398 According to the IRA:
"Fire blight bacteria do not have a speci fic dispersal mechanism. To transfer
E. amylovora to a susceptible host, a vector must pick up the bacteria in a sufficient

1666 Australia's IRA, Part B, p. 86. Ark, "The behaviour of Bacillus amylovorus in soil" (1932);
Hildebrand et al., "Survival studies with the fire blight pathogen Erwinia amylovora in soil and in a soil-
inhabiting insect" (2001); and, Thomson, "The overwintering of fire blight bacteria outside of living tissue in
Utah" (1969).
1667 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 389.
1668 See para 7.388 above. Dr Deckers's replies to Panel questions 7 and 37, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 62 and 252.
1669 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 395. See also, Dr Paulin's
reply to Panel question 21, in List of Replies from the scientific experts to questions posed by the Panel,
para. 146; Dr Paulin's replies in Transcript of the Panel's meeting with experts, paras. 364 and 366.
1670 See para 7.319 above. Dr Paulin's replies to Panel questions 21 and 30, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 146 and 216-217.
1671 Australia's IRA, Part B, pp. 87-88.

concentration to initiate a new infection. ... The most likely mechanism of transfer of
bacteria from discarded apples to a receptive site in a susceptible host is by browsing
insects (AQIS, 1998a). Discarded apples are attractive to a wide range of insects and
this attraction may be increased by rotting. ... Rotting of the apple could involve
multiplication of fire blight bacteria resulting in the production of bacterial ooze. ...
Mechanical transmission of fire blight bacteria could also be possible. For example,
packing of New Zealand fruit in packing houses closely associated with apple
orchards could result in the exposure of workers and equipment to fire blight bacteria.
Initiation of disease could then occur by tr ansfer of bacteria to wounds caused by
normal orchard operations such as pruning."
1672
7.399 The IRA cites no evidence for its proposition of a mechanical transmission of fire blight
bacteria, for example, through exposure of workers and equipment to Erwinia amylovora bacteria.
Dr Deckers and Dr Paulin found this scenario to be "extremely unlikely".1673 Bacteria on workers and
equipment, if any, would have to compete with other micro-organisms and bacteria. Being a poor
competitor, there is no indication that Erwinia amylovora bacteria would survive or multiply to be
transferred, as confirmed by the experts.1674
7.400 Dr Deckers and Dr Paulin considered instead that the only relevant transfer mechanism of
Erwinia amylovora bacteria from discarded apples to a receptive site in a susceptible host would be
that of browsing insects. 1675 The transfer mechanism of br owsing insects suggested by the IRA
seems, however, to be very unlikely, although not completely impossible. As noted by Dr Paulin, this
mechanism "is conceivable through an apparently logical succession of events, each of them being
questionable, but never completely impossible ."
1676 To begin with, the level of the bacterial
population present on the fruits would be in any event low or very low and most likely located in the
calyx, and so these cells would not be easily accessible. "In addition, bacterial cells on fruit are
probably not embedded in ooze (as they are when actively multiplying from active lesions) and
therefore not well protected from adverse conditions , and, which is more, probably have not the
adhesive capacity, which is said to be a facilitating factor for transportation by insects."
1677
7.401 In other words, the theoretical possibility of an insect taking a few bacterial cells to the
hypantium of a flower of an host plant:
"[R]emains unlikely because trace bacterial populations (not multiplying) will be
hardly grasped by insects (it would be easier in the case of a multiplying population,
where cells are embedded in exudate). Finally the likelihood of successful
multiplication on the hypantium and infection would be extremely low. In addition, it

1672 Australia's IRA, Part B, pp. 87-88 . See also, Australian Quarantine and Inspection Service, "Final
Import Risk Analysis of the New Zeala nd Request for the Access of Apples ( Malus pumila Miller var.
domestica Schneider) into Australia (1998).
1673 Dr Deckers's reply to Panel question 20, in List of Replies from the scientific experts to questions
posed by the Panel, para. 142. See also, Dr Paulin's reply to Panel questions 20 and 35, in List of Replies from
the scientific experts to questions posed by the Panel, paras. 143-144 and 241-244.
1674 Dr Deckers's reply in Transcript of the Panel' s meeting with experts, para. 237. See also,
Dr Paulin's reply in Transcript of the Panel's meeting with experts, paras. 234 and 236.
1675 Dr Deckers's and Dr Paulin's replies in Transcript of the Panel's meeting with experts, paras. 293
and 255.
1676 Dr Paulin's reply to Panel question 35, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 241-244 (original emphasis).
1677 Dr Paulin's reply to Panel question 18, in List of Replies from the scientific experts to questions
posed by the Panel, para. 138 (original emphasis).

would be necessary that such open flower be available when these surface polluted
fruits are present. All this cannot be considered to constitute an evidence."1678
7.402 The scientific literature does not consider browsing insects to be a factor in the spread of fire
blight from apples on the ground to new host plants. As noted by Dr Deckers, "[a]n insect feeding on
a discarded fruit is not considered to be a normal way of spreading the disease between an infected
fruit and an other host plant. The chance that th e epiphytic bacteria will be transmitted to the
susceptible organs of a host plant on the appropria te moment to realise an infection is rather
small."1679
7.403 In conclusion, the IRA cites no evidence in support of its proposition of a mechanical
transmission of fire blight bacteria. There is al so scant scientific evidence in the IRA to support the
scenario of browsing insects as a transfer mechanism of Erwinia amylovora bacteria from discarded
apples to a susceptible host. The browsing insects scenario, however, is based on events that cannot
be completely dismissed. In any event, the probability value assigned to such event should be
commensurate to the extremely low likelihood of transmission through the browsing insects scenario.
Inoculum dose
7.404 The IRA states that "[t]here is no accepted threshol d number of bacteria required to initiate an
infection, and this may vary with environmental and host factors." 1680 It then reports different studies,
including one to the effect that "a single bacter ium was sufficient to cause infection in detached
flowers when placed directly in the hypanthium and incubated under optimal conditions in the
greenhouse, and that this success rate increased with higher doses of inoculum". 1681 The IRA adds
that "[l]ow populations of E. amylovora inoculated on to healthy stigmas can multiply rapidly to high
populations".1682
7.405 Notwithstanding the above, the IRA refers to the figure of 38 cells needed to initiate an
infection on apple shoots, as obtained by Crosse et al. (1972).1683 As noted by Dr Paulin, this figure
proposes a basis for the minimal number of cells ab le to initiate an infection, "when introduced
artificially at the proper site of the suitable plant, in optimal conditions for the disease". 1684 The same
expert adds that the figure:
"Unfortunately it gives very few useful indications for the description of events taking
place in natural conditions. ... E. amylovora is not able to multiply on plant surface
(except for a short time, on the hypantium of stigmates in flowers). It is difficult to
imagine conditions conducive to actively gr owing cells in natura l conditions on the
surface of a symptomless apple. The spread of surface population from fruit to
infection sites is similarly hard to imag ine, especially because these non-multiplying
cells are not embedded in exudate, and ther efore not attractive to insects or other

1678 Dr Paulin's reply to Panel question 19, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 140-141.
1679 Dr Deckers's reply to Panel question 35, in List of Replies from the scientific experts to questions
1680 Australia's IRA, Part B, p. 88.
1681 Ibid.. See also, Hildebrand, "Studies on fire blight ooze" (1939).
1682 Australia's IRA, Part B, p. 88. Thomson, "The role of the Stigma in fire blight infections" (1986),
in Exhibit AUS-40; Thomson et al., "Rapid epiphytic colonization of apple flowers and the role of insects and
rain" (1999), in Exhibit AUS-39.
1683 Australia's IRA, Part B, pp. 69-70. Crosse et al. , "Leaf damage as a predisposing factor in the
infection of apple shoots by Erwinia amylovora" (1972).
1684 Dr Paulin's reply to Panel question 27, in List of Replies from the scientific experts to questions

vectors. In artificial inoculations, bacterial populations at low level need to be placed
very precisely at the right site of infection, to successfully infect its host plant (Crosse
et al.). This is probably a difficulty impossi ble for the bacteria to tackle in natural
conditions."
1685
7.406 The number of bacteria present on a fruit is not i rrelevant when considering the likelihood of
initiating an infection. In the words of Dr Sgrillo:
"Usually a number of conditions have to occur simultaneously to allow infection.
The probability that an infected fruit, with one bacterium, starts an infection is
different from the probability of a fruit that is infested with 10,000 bacteria. It is
known that the probability of establishment is a function of the initial population size.
The dose-response curve may present a thres hold for the inoculums concentration,
below which no infection will occur."
1686
7.407 Moreover, as emphasized by Dr Paulin, ther e is no guarantee that multiplication rates
obtained in the laboratory will be replicated in the orchard.1687
7.408 In conclusion, the IRA's discussion on inoculum dose is supported by adequate evidence and
generally coherent. The IRA, however, fails to recognize the importance of the number of bacteria
when considering the likelihood of initiating an inf ection. The IRA's statement of a study reporting
that a single bacterium was sufficient to cause infec tion, another reference to five bacteria being
sufficient to cause fire blight symptoms, as well as th e reference to the figure of 38 cells needed to
initiate an infection on apple shoot, all fail to not e the difference between experiments taking place
under ideal conditions in the laboratory, and natural circumstances.
Host receptivity
7.409 With respect to host receptivity, the IRA notes the following:
"[S]ufficient inoculum must be transferred to a receptive site in a susceptible host,
mainly confined to the sub-family Malo ideae of the family Rosaceae. There are at
least 16 host genera susceptible to E. amylovora, each containing several species
(AQIS, 1998a). There are species not belonging to the sub-family Maloideae (for
example, Prunus spp.) which are also hosts of E. amylovora. ... In host plants, the
most susceptible site is the stigma in fl owers ... Flowers are abundant in spring in
pome and other susceptible fruit trees, and at other times on some susceptible amenity
plants. The flowering stage is the only stag e when injury to tissue is not required for
insects or wind-driven rain to cause infection by E. amylovora. ...
For E. amylovora to establish initially, factors such as availability, numbers and
distribution of susceptible hosts are importan t considerations. In Australia, abundant
susceptible apple plants are grown as monocu ltures in orchards. A large number of

1685 Dr Paulin's reply to Panel question 27, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 190-191 (original emphasis).
1686 Dr Sgrillo's reply to Panel question 28, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 197-200. See also, New Zealand's reply to Panel question 63 after the first
substantive meeting, paras. 101-107; Australia's reply to Panel question 63 after the first substantive meeting;
Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 287.
1687 Dr Paulin's reply to Panel question 40, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 262-263. Dr Paulin's reply in Transcript of the Panel's meeting with experts,
para. 337.

alternative hosts are also present in a pple growing areas in hedgerows and along
roadsides."1688
7.410 The issue of host receptivity constitutes an important part of the exposure analysis. To a large
degree, the likelihood of establishment and spread of the disease will depend on the availability of a
host plant in a susceptible stage. Even if transfer is possible, no infection will occur unless host plants
are in a susceptible stage.1689
7.411 Dr Paulin found the IRA's analysis on host receptivity in principle to be coherent. 1690 With
respect to the maximum period of susceptibility to an introduction of Erwinia amylovora, however, he
noted that, although it is difficult to tell when an in troduction of the bacteria would be most prone to
turn into a natural infection, "it can be assumed that most of the time during the year most host plants
should not be at a receptive stage when the import of apple would take place". 1691 Dr Paulin added
that, realistically, the risk of introduction would only be high:
"[I]n spring and early summer, with a po ssible additional dangerous period in
summer and late summer if some hosts such as certain cultivars of apple and mainly
of pears produce secondary blossoms (blo ssoms opening after the normal blossom
period, usually associated with some physiological disorder). In addition, the
probability of infection will be associated with the number of hosts at the suitable
stage at the moment of introduction. In this respect, the maximum period of
susceptibility to an introduction of E. amylovora will be the full bloom period of
pears, and then of apples."
1692
7.412 Dr Paulin considered, therefore, that the IRA maximizes the real risks of exposure by
considering too many host plants and not taking ad equately into account the discontinuity in the
receptivity of susceptible host plants during the year.1693 He added that:
"This is quite common in countries without fire blight. They consider that any apple
or any pear varieties are equally susceptib le to the disease and will be host of the
disease, which is scientifically sound and r easonable, but when you are in a country
with fire blight you know well that actually this is not true and only a quite weak,
fortunately, weak percentage of the cultivars are actually common hosts of the disease
and do show a real damage. So that is why the term of host has a different scientific
and practical meaning: any cultivar of pear, for example, is a host for fire blight, but
economically only few cultivars are to be considered as such, in such a case."1694
7.413 In conclusion, the IRA reasoning with respect to host receptivity seems generally coherent,
although it tends to exaggerate th e number of potential host plants and does not take into account the
discontinuity in the receptivity of susceptible host plants during the year.

1688 Australia's IRA, Part B, pp. 88-89.
1689 Dr Deckers's reply in Transcript of the Panel's meeting with experts, para. 295.
1690 Dr Paulin's reply to Panel question 10, in List of Replies from the scientific experts to questions
1691 Dr Paulin's reply to Panel question 10, in List of Replies from the scientific experts to questions
1692 Dr Paulin's reply to Panel question 10, in List of Replies from the scientific experts to questions
1693 Dr Paulin's reply to Panel question 10, in List of Replies from the scientific experts to questions
1694 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 391.

Environmental factors
7.414 The IRA describes the environmental conditions required for successful disease
establishment, in addition to the host and the pathogen:
"E. amylovora is capable of growing between 3ºC to 37ºC, with optimum temperature
conditions spanning 25ºC to 27ºC (Billing et al., 1961). Immediately after a wetting
event caused by rain or heavy dew, coloni sed flowers would be infected when the
average daily temperature is equal to or greater than 16 ºC and petals are intact
(Steiner et al., 2000). Rain or dew facilitates the movement of E. amylovora from the
stigmas to the hypanthium where infection may occur (Thomson, 1986; Thomson
and Gouk, 1992). Steiner (1990) and Lightne r and Steiner (1993) demonstrated that
rain, hail, wind and dew could act as initiators of epidemics of fire blight.
Successful infection could take place if viable bacteria were present to infect
susceptible host tissues under favourable e nvironmental conditions, provided that
each step listed above is completed. If there is a low likelihood of the entire chain of
events being completed, then there is a lo w risk of establishment of fire blight.
However, a break in any step of this chai n of events would prevent the establishment
of the disease."
1695
7.415 The IRA's review of evidence on the environmen tal conditions needed for successful transfer
and establishment of the disease seems generally ade quate. Dr Deckers noted that the question of
whether the climatological conditions (temperature an d relative humidity) are present at the time that
the fruits from New Zealand arrive in Australia is an essential part of the analysis. Emphasizing that
the Erwinia amylovora bacteria cannot multiply on the epiphy tic surfaces of the fruits, the expert
cautioned that "multiplication can only occur on sus ceptible organs like immature fruitlets or on the
stigma of the flowers and only when the climatological conditions (temperature and relative humidity)
are optimal for bacterial growth. The question here is if these circumstances will be present at the
time that the fruits from New Zealand arrive in Australia."1696
7.416 In any event, the IRA reasoning with respect to the environmental conditions required for
successful disease establishment seems generally coherent.
Conclusion on exposure
7.417 As noted above, the scientific evidence cited in the IRA supports the viability and the survival
conclusions. Both conclusions, however, rest on th e assumption that there will be some bacterial
populations on mature apples from New Zealand. Additionally, both conclusions must be qualified
by the caveat that any bacterial populations would decrease over time and unlikely to be able to
multiply. The IRA's conclusions on the transfer m echanisms are not supported by scientific evidence,
most especially for the proposed mechanical tr ansmission mechanism. The browsing insect
mechanism, while not totally unreasonable, seems to correspond to a highly unlikely scenario. The
IRA's conclusions on inoculum dose and host receptivity are supported by evidence and seem
generally coherent; although the first fails to r ecognize the importance of the number of bacteria for

1695 Australia's IRA, Part B, p. 89. Billing et al., "Characteristics of English isolates of Erwinia
amylovora" (1961); Steiner et al., "Fire blight, Erwinia amylovora" (2000); Thomson, "The role of the Stigma
in fire blight infections" (1986), in Exhibit AUS-40; Thomson and Gouk, "The effect of rain on the
development of Erwinia amylovora and E. herbicola populations on apple flowers" (1992); Steiner, "Predicting
apple blossom infections by Erwinia amylovora using the MARYBLYT model" (1990); and, Lightner and
Steiner, "An update on version 4.1 of the MARYBLYT
TM computer program for predicting fire blight" (1993).
1696 Dr Deckers's reply to Panel question 40, in List of Replies from the scientific experts to questions

the likelihood of initiating an infection and the second tends to exaggerate the number of potential
host plants and does not take into account the discon tinuity in the receptivity of host plants. Finally,
the IRA's conclusions on environmental conditions seem generally coherent. In the light of the
shortcomings and qualifications that affect a number of sections of the IRA's conclusions on
exposure, the Panel finds that overall these conclusi ons do not rely on adequate scientific evidence
and, accordingly, are not coherent and objective.
Establishment
7.418 The IRA derives its conclusions regarding the probability of establishment from "a
comparative assessment of those factors in the sour ce country and the 'PRA area' that are considered
pertinent to the ability of a p est to survive and propagate". 1697 These factors would include: the
availability of suitable hosts, alternate hosts and vectors in the PRA area; the suitability of the
environment; the cultural practices and control m easures; and other characteristics of the pest
affecting the probability of establishment. 1698 In the case of analysis of the probability of
establishment for fire blight, the other factors incl ude: the potential for adaptation of the pest; the
reproductive strategy of the pest; the minimum population needed for establishment; and the method
of pest survival.1699
7.419 A significant part of the IRA's discussion of the different factors regarding the probability of
establishment has not been contested by New Zeala nd. This includes, for example, the general
description of the availability of suitable hosts, alternate hosts and vectors in the PRA area 1700, the
description of the suitability of the environment1701, the potential for adaptation of the pest 1702 and the
cultural practices and control measures.1703 One factor noted in the discussion on the suitability of the
environment is the occurrence of hailstorms in pom e fruit growing areas in Australia. The IRA notes
that these hailstorms "cause injuries on plant tissues, predisposing them to infection". 1704 The experts
consulted by the Panel have also noted the importance that hailstorm injuries on plants would have for
the likelihood of the initiation and establishment of fire blight disease under natural conditions.1705
7.420 The IRA's discussion on the minimum population needed for establishment 1706 reflects an
assumption that has already been addressed by the Pa nel, regarding the alleged capacity of such low
bacterial populations to initiate an infection. This assumption is an important factor in any conclusion
regarding the probability of establishment of fire bl ight. It has been found by the Panel not to be
supported by scientific evidence nor based on a coherent and objective reasoning.
Spread
7.421 The IRA derives its conclusions regarding th e probability of spread from "a comparative
assessment of those factors in the source country and 'PRA area' considered pertinent to the expansion

1697 Australia's IRA, Part B, p. 30.
1698 Ibid.
1699 Australia's IRA, Part B, pp. 90-93.
1700 Australia's IRA, Part B, pp. 90-91.
1701 Australia's IRA, Part B, p. 91.
1702 Australia's IRA, Part B, pp. 91-92.
1703 Australia's IRA, Part B, p. 93.
1704 Australia's IRA, Part B, p. 91. Brooks, "Studies of the epidemiology and control of fireblight of
apple" (1926); Keil et al., "Role of injury and longevity of Erwinia amylovora in the epidemiology of fire blight
of pear" (1966).
1705 See, for example, Dr Deckers's replies to Panel questions 15 and 18, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 117 and 135-136; Dr Deckers's and Dr Paulin's replies
in Transcript of the Panel's meeting with experts, paras. 229, 307 and 351.
1706 Australia's IRA, Part B, p. 92.

of the geographical distribution of a pest".
1707 These factors would include: the suitability of the
natural and/or managed environment for natural spread of the pest; the presence of natural barriers;
the potential for movement with commodities or co nveyances; the intended use of the commodity;
the potential vectors of the pest in the PRA area; a nd the potential natural enemies of the pest in the
PRA area.1708
7.422 Part of the IRA's discussion on the different factors regarding the probability of spread has not
been contested by New Zealand. This includes, fo r example, the general description of the suitability
of the natural and/or managed environment 1709, part of the discussion on natural barriers 1710, the
intended use of the commodity 1711 and the potential natural enemies of the pest. 1712 Dr Deckers and
Dr Paulin concur with the IRA's assertion, in its section on the suitability of the environment, that
hailstorm injuries on plants would have a significant effect on the likelihood for spread of fire blight
disease under natural conditions.1713
7.423 Accordingly, the IRA's conclusions regardi ng the probability of spread seem generally
coherent. In any event, the value assigned to such probability should be commensurate to the
extremely low likelihood of transmission through the browsing insects scenario.
Partial probability of establishment and spread
7.424 Having discussed factors such as the viability of the pest, survival me chanism of the pest,
transfer mechanism of the pest, inoculum dose, host receptivity and environmental factors, the IRA
presents its conclusions regarding exposure:
"The IRA team concluded that the exposure value for an individual apple for all five
utility points by four exposure group combina tions should be in the range of Uniform
(0, 10
–6). This range is based on the IRA team's views on both mechanical and insect
mediated transmission and explicitly acknowledges that in some circumstances the
chances of exposure would be zero."
1714
7.425 As noted by Dr Deckers, "[t]he step of the tr ansfer from these infected fruits to the possible
host plant stays the most critical step and will be difficult to prove." 1715 The exposure value estimated
by the IRA is supported on the preceding analysis regarding the different relevant factors.
7.426 Based on the discussion of the factors described earlier, the IRA also estimates the partial
probabilities of establishment and spread for spec ific exposure groups: commercial fruit crops,
establishment – uniform (0.7, 1), spread – unifo rm (0.7, 1); nursery plants, establishment –
uniform (0.7, 1), spread – uniform (0.7, 1); household and garden plants, establishment –

1707 Australia's IRA, Part B, p. 31.
1708 Australia's IRA, Part B, pp. 31 and 93-95.
1709 Australia's IRA, Part B, pp. 93-94.
1710 Australia's IRA, Part B, p. 94.
1711 Australia's IRA, Part B, p. 95.
1712 Ibid.
1713 Australia's IRA, Part B, p. 94. See, for example, Dr Deckers's replies to Panel questions 15 and 18,
in List of Replies from the scientific experts to qu estions posed by the Panel, paras. 117 and 135-136;
Dr Deckers's and Dr Paulin's replies in Transcript of the Panel's meeting with experts, paras. 229, 307 and 351.
1714 Australia's IRA, Part B, p. 90.
1715 Dr Deckers's reply to Panel question 37, in List of Replies from the scientific experts to questions

uniform (0.3, 0.7), spread – uniform (0.3, 0. 7); wild and amenity plants, establishment –
uniform (0.3, 0.7), spread – uniform (5 × 10-2, 0.3).1716
Conclusions regarding entry, establishment and spread
7.427 The IRA combines in an @RISK model the partial probability estimate for importation, the
estimated volume of apples and the partial probabi lity estimates for establishment and spread, to
obtain an overall value for the annual probability of entry, establishment and spread (PEES). The
median simulated value for this probability of entr y, establishment and spread is estimated under the
first scenario (if 70 to 100 per cent of imported a pples are distributed to orchard packing houses and
the remainder to urban wholesalers) as (4.5 × 10 -2) and under the second scenario (if 0.1 to 5 per cent
of imported apples are distributed to orchard pack ing houses and the remainder to urban wholesalers)
as (4.4 × 10-2), both corresponding to the qualitative description of "very low".1717
7.428 The Panel has already noted that, with respect to several aspects of its discussion on exposure,
establishment and spread, the IRA's reasoning seems at first glance generally coherent. This is the
case, for example, of the discussion on exposure regarding whether viable Erwinia amylovora found
on apple fruit could survive cold storage and transport (viability), whether Erwinia amylovora found
on apple fruit could survive in the environment (s urvival), and with respect to the environmental
conditions required for successful disease establishment. Similarly, with respect to a significant part
of the IRA's discussion on establishment regarding th e availability of suitable hosts, alternate hosts
and vectors, the description of the suitability of th e environment, the potential for adaptation of the
pest and the cultural practices and control measures. Likewise, with respect more generally to the
IRA's discussion on spread. All of these sections, how ever, rest on the assumption that at least some
imported apples will be infested with Erwinia amylovora bacteria.
7.429 Throughout the discussion of the different factors, the IRA tends to exaggerate the risk, by not
taking into account that any bacterial populations woul d likely be small, diminishing and not able to
multiply and that no infection can occur unless host plants are in a susceptible stage meaning that they
can be infected. The IRA instead emphasizes a num ber of factors that would tend to increase the
likelihood of entry, establishment and spread, desp ite the lack of adequate scientific evidence to
support these factors or even in the face of available evidence to the contrary.
7.430 Parties have extensively discussed the conclusions that should be derived in this regard from
studies by Hale et al. (1996) and Taylor et al. (2003).
1718 New Zealand argues that these studies show
that populations of Erwinia amylovora associated with mature fruit would have a negligible
probability of infecting a host, even if the host were receptive. 1719 Australia responds that these
studies are of limited value, because the sample size was insufficient to detect rare events. 1720
Dr Deckers and Dr Paulin noted that it is normal th at the size of the samples for such detailed studies
would be limited.1721 While the experts cautioned that the size of the sample was probably not enough
to detect " very rare events" and extrapolation of data to the spread of the disease under different
natural conditions on a larger scale should be consider ed with prudence, they considered nevertheless
that the studies allowed interesting conclusions concerning the survival rate under different

1716 Australia's IRA, Part B, pp. 95-97.
1717 Australia's IRA, Part B, p. 97.
1718 Taylor et al., "Survival of the fire blight pathogen, Erwinia amylovora, in calyxes of apple fruit
discarded in an orchard" (2003), in Exhibit NZ-28; and, Hale et. al., "Ecology and Epidemiology of fire blight
in New Zealand" (1996), in Exhibit NZ-27.
1719 New Zealand's first written submission, para. 4.243.
1720 Australia's first written submission, paras. 472-476; Australia's second written submission,
para. 400.
1721 Dr Deckers's and Dr Pau lin's replies to Panel question 43, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 274 and 275-276.

circumstances.
1722 At least, the studies demonstrate "tha t the fruits picked from a tree showing
symptoms are usually not surface contaminated with the bacteria, in these experimental
conditions."1723 Moreover, if anything, the studies maximized the theoretical risk of introduction of
Erwinia amylovora with potentially infested apples fruits , because each of the apples, placed in a
blooming orchard, were inoculated with a significant level of bacterial population. It is possible to
conclude from these studies "that the 'leak ' of bacteria from fruit to blossoms does not normally take
place".1724
7.431 The Parties have also discussed extensively th e conclusions that should be derived from a
study by Roberts and Sawyer (2008). 1725 New Zealand argues that this study shows that the risk of
importing Erwinia amylovora on commercial apple fruit and the concomitant risk of establishing an
outbreak of fire blight is so small as to be insigni ficant. Australia responds that this study is not
relevant to the circumstances of the dispute, becau se it does not consider an unrestricted risk scenario,
relies on flawed experimental data, and it applie s inappropriate confidence limits. Dr Paulin
expressed his opinion that the Roberts and Sawyer (2008) paper is "an interesting piece of serious
reasoning about the quantification of the probabilit y of transport of fire blight with fruits." 1726 In his
view, from the data collected, "the authors did their best to construct a sound reasoning with
appropriate calculation". 1727 Notwithstanding this, Dr Paulin c onsidered that, because of the many
assumptions adopted, this paper would not "help objectively in the dispute" and found it impossible to
tell if the paper over or under-estimates the fire blight risk associated with fruits. 1728 Dr Deckers
agreed that the paper would not be helpful for th is Panel's analysis, because the samples considered
are not representative of the New Zealand orchard s ituation of fire blight, because some fire blight
control measures were taken but are not clearly descr ibed in the paper, and because some bacteria
could be present as viable but not culturable (VBNC) or could be present at low levels difficult to
detect.1729
7.432 Little information is provided in the IRA on how the extensive discussion and review of
different factors associated with the entry, estab lishment and spread, is then translated into
quantitative estimates. The Panel cannot attempt to recalculate these estimates, as this would
constitute a de novo review exercise. It cannot fail to note, however, that many of these estimations
do not find support in the available scientific eviden ce and are not based on a coherent and objective
reasoning. In this respect, the Panel finds puzz ling that, under two, widely different scenarios
regarding proximity, the IRA reaches relatively si milar conclusions on the probability of entry,
establishment and spread. As noted above, the IR A considers a first scenario, under which 70 to 100

1722 Dr Deckers's replies to Panel question 43, in List of Replies from the scientific experts to questions
1723 Dr Paulin's reply to Panel question 43, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 275-276 (original emphasis).
1724 Dr Paulin's reply to Panel question 43, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 275-276 (original emphasis). See also, Dr Paulin's and Dr Deckers's replies in
Transcript of the Panel's meeting with experts, paras. 382 and 383.
1725 Roberts and Sawyer, "An updated pe st risk assessment for spread of Erwinia amylovora and fire
blight via commercial apple fruit" (2008), in Exhibit NZ-29. See, for example, New Zealand's first written
submission, paras. 4.26 and 4.251; New Zealand' s second written submission, paras. 2.387-2.398;
New Zealand's reply to Panel's question 64 after the first substantive meeting, paras. 108-113; Australia's first
written submission, paras. 363-376 and 401; Australia's second written subm ission, paras. 330-337 and
Annex 1.
1726 Dr Paulin's reply to Panel question 41, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 268-270.
1727 Ibid.
1728 Ibid.
1729 Dr Deckers's reply to Panel question 41, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 264-267.

per cent of imported apples are distributed to or chard packing houses and the remainder to urban
wholesalers, and a second scenario, under which only 0.1 to 5 per cent of imported apples are
distributed to orchard packing houses. The fact that imported infested apples are brought to rural
packing houses in proximity to orchards could be critical, as compared to apples being handled at
urban wholesalers. The IRA, however, reaches broadly similar conclusions, corresponding to the
qualitative description of "very low", and estimates almost identical probability values under both
scenarios.1730
7.433 The Panel recognizes that, in conducting risk assessments, Members frequently confront
limitations in the availability of the data necessary for their models. 1731 This is a real and a serious
problem. Members may try to estimate the answers if there is no data available, through the use of
expert judgement. Indeed, Australia argues that th is is how probabilities were estimated for several
steps.1732
7.434 In this respect, as cited by both Parties, the use of expert judgement in pest risk analysis is
mentioned in ISPM No. 2 and ISPM No. 11. 1733 ISPM No. 2 acknowledges that: "Uncertainty is a
component of risk and therefore important to recognize and document when performing PRAs.
Sources of uncertainty with a particular PRA may include: missing, incomplete, inconsistent or
conflicting data; natural variability of biological systems; subjectiveness of analysis; and sampling
randomness."1734
7.435 ISPM No. 2 recognizes that "[w]here information is insufficient or inconclusive, expert
judgement may be used if appropriate." 1735 ISPM No. 2 also adds, however, that "[t]he nature and
degree of uncertainty in the analysis should be documented and communicated, and the use of expert
judgement indicated."1736
7.436 In accordance with ISPM No. 11, expert judge ment may be used to assess the probability of
establishment or to assess the probability of spread. 1737 In both cases, however, the estimation of
those probabilities is to be based on "reliable biol ogical information ... obtained from the area where
the pest currently occurs". 1738 With respect to the assessment of economic consequences, ISPM
No. 11 indicates that "useful analyses can be based on non-monetary valuati ons ... or [on] expert
judgement, if the analyses follow documented, consistent and transparent procedures ".1739 Again, the

1730 Dr Sgrillo's reply to Panel question 46, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 296-297; Dr Sgrillo's reply in Transcript of the Panel's meeting with experts,
para. 40. See also, Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 42.
1731 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 191.
1732 See, for example, Australia's first written subm ission, paras. 477 and 5 25; Australia's second
written submission, para. 401. See also, Australia's opening oral statement at the second substantive meeting of
the Panel with the Parties, para. 12.
1733 Australia's reply to Panel questions 29 and 31 af ter the second substantive meeting, paras. 152-153
and 166-168.
1734 Framework for pest risk analysis, 2007 (ISPM No. 2, FAO, Rome), p. 13, para. 3.1.
1735 Framework for pest risk analysis, 2007 (ISPM No. 2, FAO, Rome), p. 13, para. 3.2.
1736 Framework for pest risk analysis, 2007 (ISPM No. 2, FAO, Rome), p. 13, para. 3.1.
1737 Pest risk analysis for quarantine pests, including analysis of environmental risks and living
modified organisms , 2004 (ISPM No. 11, FAO, Rome), in Exhibit AUS-6, pp. 124 and 126, paras. 2.2.2
and 2.2.3.
1738 Ibid.
1739 Pest risk analysis for quarantine pests, including analysis of environmental risks and living
modified organisms, 2004 (ISPM No. 11, FAO, Rome), in Exhibit AUS-6, p. 129, para. 2.3.2.4.

standard notes that "[i]t is im portant to document the areas of uncertainty and the degree of
uncertainty in the assessment, and to indicate where expert judgement has been used."
1740
7.437 The IRA contains a brief general section, in an appendix titled "Overview of Bureau of Rural
Sciences involvement in New Zealand Apple Impor t Risk Assessment Process, on the "Elicitation of
expert opinion", which states the following:
"There were multiple discussions with the panel and Biosecurity Australia staff about
the eliciting of expert opinion. Three considerations were stressed by BRS
[Australia's Bureau of Rural Sciences]. They were:
That Biosecurity Australia should be completely satisfied that the bounds of
distribution chosen to represent their views would contain the true value.
That the chosen distribution shape should re present expert views. The interpretation
of prior distributions in terms of gambling odds was discussed, and the uniform,
triangular and Pert distributions presented as starting points.
It was made clear that qualitative likelihood ranges should not constrain their options
and that BRS was available to assist in expressing the experts' views if necessary.
The issue of expressing divergent opinions was also discussed and different
approaches to handling divergence of opinion were canvassed."
1741
7.438 In response to a question from the Panel, Australia argued that:
"[Because] expert judgment is used when there is limited evidence or where the
underlying biological process is naturally highly variable, Australia does not believe
it is correct to refer to 'errors' in expert judgment. The use of the term 'error' assumes
that there is a conclusive body of eviden ce against which the expert judgment can be
assessed and the degree of 'error' determined. However, the existence of such a body
of evidence would mean that the use of expert judgment would not have been
required to begin with."
1742
7.439 The Panel disagrees with this interpretation. Australia's argument seems to assume that risk
assessments can occur in two distinct scenarios. Th ere is either a conclusive body of evidence and
expert judgement is not required or, on the contrary, such body of evidence does not exist and the use
of expert judgement is not subject to scrutiny. Rea lity is likely to be more complex. On particular
issues, a risk assessor may have the benefit of mo re or less abundant scientific evidence and yet still
confront a degree of uncertainty on specific points, and the need to resort to expert judgement. It may
be relevant to note that, compared to other pome fruit diseases, there seem to be significantly more
scientific studies on fire blight, as evidenced in the reference list of the IRA itself.
1743

1740 Pest risk analysis for quarantine pests, including analysis of environmental risks and living
modified organisms, 2004 (ISPM No. 11, FAO, Rome), in Exhibit AUS-6, pp. 129-130, para. 2.4.
1741 Australia's IRA, Part B, p. 332. See also, comment by Australia in Transcript of the Panel's
meeting with experts, para. 146.
1742 Australia's reply to Panel question 30 after the second substantive meeting, para. 162.
1743 Australia's IRA, Part B, pp. 347-376. In the Japan – Apples dispute, for example, which related to
fire blight, the Panel noted that on specific scientific que stions (such as the absence of endophytic bacteria in
mature apple fruit and the risk of transmission of fire blig ht by apple fruit), "there is a large volume of relevant
scientific evidence". Panel Report on Japan – Apples, para. 8.220. See also, Appellate Body Report on Japan –
Apples, para. 181.

7.440 In any event, while expert judgement may be an important tool for the risk assessor, it is not a
substitute for scientific data, especially for the purpose of estimating the likelihood of entry,
establishment and spread of a pest. In accordance with the relevant ISPMs, recourse to expert
judgement does not substitute for the use of the ava ilable information. The use of expert judgement
must be documented and transparent; it must be ba sed on the relevant reliable scientific information,
even when that information is limited. As noted by one of the experts, if there is no data available,
Members can refer to other available information, for example to other pests, where there may be
some data.1744 Non-compliance with these requirements, may produce errors in the exercise of expert
judgement. It is not enough to claim, as Australia has done, that "[t]he IRA Team applied its expert
judgment and elaborated its reasoning at every step in the Final IRA Report". 1745 Rather, Australia
would have had to demonstrate that the exercise of expert judgement was documented, transparent
and based on the relevant reliable scientific information.
7.441 The statements above should not be interpreted as an a priori criticism of Australia's decision
to resort to a semi-quantitative methodology fo r assessing the likelihood of entry, establishment and
spread of the pests at issue. Under the SPS Agreement, Members are free to choose either a
qualitative or a quantitative methodology, in accordance with the appropriate applicable standards.
However, as noted by the experts consulted by the Panel, a quantitative methodology should only be
used "when reliable specific numeric data are ava ilable" to support the choice of probability ranges
and probability shapes.1746 In the absence of sufficient data, and particularly if numbers are chosen in
an arbitrary manner, a quantitative method would only give a misleading impression of objectivity
and precision.
1747
7.442 Because of the lack of scientific evidence for many issues in the IRA, the experts consulted
by the Panel were sceptical of the estimations for the exposure likelihood. Dr Deckers, for example,
noted that, for this aspect "there is no sufficient sci entific data available that describes the likelihood
of this transfer possibility".1748 Dr Paulin added that "only some fragments of events are supported by
scientific evidence. Very often suppositions or speculations are proposed rather than certitudes". 1749
In the words of Dr Deckers, "you have no proof availa ble that this transfer can occur. So, it is indeed
speculation with, for me, a low leve l of likelihood to be a reality." 1750 Dr Paulin concluded that,
because these problems have never been addressed scientifically or at least experimentally, it is not
possible "to rely objectively on any figure for the likelihood of this 'exposure' step."
1751

1744 Dr Schrader's reply in Transcript of the Panel's meeting with experts, para. 195.
1745 Australia's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 16. See also, Australia's first written submission, paras. 74, 218 and 239.
1746 Dr Sgrillo's reply to Panel question 128, in List of Replies from the scientific experts to questions
posed by the Panel, para. 728. See also, Dr Sgrillo's re ply in Transcript of the Pa nel's meeting with experts,
para. 122; Dr Schrader's reply to Panel question 124, in List of Replies from the scientific experts to questions
1747 Dr Sgrillo's reply to Panel question 128, in List of Replies from the scientific experts to questions
posed by the Panel, para. 730. See, OIE, "Handbook on Import Risk Analysis for Animals and Animal
Products. Volume 1: Introduction and qualitative risk assessment" (2004), pp. 27-28, in Exhibit NZ-47.
1748 Dr Deckers's reply to Panel question 36, in List of Replies from the scientific experts to questions
posed by the Panel, para. 245. See also, Dr Sgrillo's reply to Panel question 36, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 247-251.
1749 Dr Paulin's reply to Panel question 36, in List of Replies from the scientific experts to questions
1750 Dr Deckers's reply in Transcript of the Panel's meeting with experts, para. 242.
1751 Dr Paulin's reply to Panel question 36, in List of Replies from the scientific experts to questions
posed by the Panel, para. 246. See also, Dr Paulin's reply in Transcript of the Panel's meeting with experts,
para. 240.

7.443 Generally speaking, the experts were sceptical of the likelihood of introduction of fire blight
through mature apple fruit. None of the experts consulted found any adequate scientific evidence in
the IRA to support the proposition that this has occurred or could occur.
1752 There is even less
evidence for the further step of transfer from this imported bacterial population to a new plant in
Australia.1753 Dr Paulin acknowledged that, as a scientist , he could not exclude that such scenario
may happen1754:
"Australia has shown that you can imagine a system in which mature apple fruits can
carry the bacteria from New Zealand to Austra lia. The point is that it is difficult to
estimate the value of 'can'. Is it a rare possibility, a frequent event or something
exceptional? This is far more difficult to tell. ... [A]nything which goes from
New Zealand or from a contaminated c ountry to another country 'can' carry
something including bacteria, including pathogenic bacteria, that is the minimum
level. Then you may have specific transport of specific bacteria, e.g., with rootstock
material which would be the maximum dange r for the installation of the disease in a
new country. So, the apple fruit, which is in-between these two limits, cannot be
excluded. That that can be considered as a real risk, is the matter in question."
1755
7.444 Dr Deckers agreed that, in other countries trying to limit the risk of introduction of fire blight,
"they are not talking in the first place about fruits , they are talking more about plant material and
potential infections on plant material, root stock or variety materials".1756
7.445 In other words, the experts did not consider that the IRA contains adequate scientific evidence
to support the proposition that the introduction of fire blight via mature apple fruit has occurred or
could occur. At the same time, th ey agreed that there is a theoretic al possibility of the importation of
bacteria with apple fruit. They found even less lik ely the further step of transfer from this imported
bacterial population to a new plant in Australia. Th e likelihood of introduction via mature apple fruit
would, in any event, be less than that of introduction via plant material or root stock. In the words of
Dr Paulin:
"[T]he risk represented by the total pro cess, is probably of the same order of
magnitude as the transport of contaminated insects by natural way from New Zealand
to Australia by air jet or things like that. ... [T]here is a possibility [of introducing
Erwinia amylovora through mature apple fruit] which level of risk is not far higher
than the natural spreading possibility of the bacteria to go from place to another with
something else ... which has no connection with trade of apples."
1757
7.446 In the light of the above, the Panel finds that New Zealand has not successfully made a prima
facie case that the IRA's estimation of the likelihood that Erwinia amylovora survives routine
processing procedures in the packing hou se (importation step 4); and that Erwinia amylovora
survives palletization, quality inspection, containeri zation and transportation to Australia (importation

1752 Dr Paulin's reply to Panel question 37, in List of Replies from the scientific experts to questions
1753 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 380.
1754 Dr Paulin's reply to Panel question 37, in List of Replies from the scientific experts to questions
posed by the Panel, para. 253. See also, reply of Dr Paulin in Transcript of the Panel's meeting with experts,
para. 380.
1755 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 226. See also, reply of
Dr Paulin in Transcript of the Panel's meeting with experts, para. 254.
1756 Dr Deckers's reply in Transcript of the Panel' s meeting with experts, para. 379. See also,
Dr Deckers's reply to Panel question 16, in List of Replies from the scientific experts to questions posed by the
Panel, para. 123.
1757 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 380.

step 6), are exaggerated, and that these estimations do not rely on adequate scientific evidence or are
not coherent and objective. The Panel finds also that the IRA's conclusion that the likelihood that
clean fruit is contaminated by Erwinia amylovora during palletization, quality inspection,
containerization and transportation (importation step 7) is negliglible appears to be coherent and
objective. The Panel finds additionally that New Zealand has not made a prima facie case that the
IRA's discussion on utility points and estimates of proximity ratings for the combination of each
utility point with exposure groups (proximity values) , or that the IRA's conclusions regarding the
probability of spread, do not rely on adequate scientific evidence or are not coherent and objective.
7.447 The Panel finds, however, that the IRA's estimation that Erwinia amylovora will be always
present in the source orchards in new Zealand (importation step 1); that fruit coming from an infected
or infested orchard is infected or infested with Erwinia amylovora (importation step 2); that clean
fruit from infected or infested or chards is contaminated with Erwinia amylovora during picking and
transport to the packing house (importation step 3); and that clean fruit is contaminated by Erwinia
amylovora during processing in the packing house (importation step 5); do not find sufficient support
in the scientific evidence relied upon and, accordingly, are not coherent and objective. In the light of
these findings and the absence of any separate just ification and evidence in the IRA regarding the
estimated overall likelihood of importation, the Panel finds additionally that the IRA's estimation of
the overall probability of importation is not su pported by adequate sci entific evidence and,
accordingly, is not coherent and objective.
7.448 The Panel also notes that a significant pa rt of the IRA's discussions on exposure,
establishment and spread of fire blight, rests on a number of assumptions and qualifications. As noted
above, some of these assumptions and qualifications are not convincing, which leads to reasonable
doubts about the evaluation made by the risk asse ssor. The IRA has not properly considered a
number of factors that could have a major impact on the assessment of this particular risk.
Accordingly, the Panel finds that the reasoning artic ulated in Australia's IRA, with respect to the
likelihood of entry, establishment and spread of fire blight, including the IRA's estimation of the value
for the respective probabilities, does not rely on adeq uate scientific evidence and, accordingly, is not
coherent and objective.
(k) Potential biological and economic consequences associated with fire blight
(i) Summary of the Parties' arguments
7.449 New Zealand argues that the IRA's conclusi on that the overall consequence of the
introduction and establishment of fire blight would be "high" is "reached on the basis of selectively
chosen evidence and on assumptions that have no basis in scientific evidence or fact".
1758
7.450 New Zealand considers that the IRA's estim ates of monetary losses from a fire blight
incursion across Australia are based on unsubstant iated assumptions on the rate and scope of the
disease that lead to exaggerated estimat es of the nationwide impact and losses. 1759 New Zealand also
disputes the IRA's proposition that the impact of fire blight will be severe every year. 1760 It notes the
existence of commercially available products for re ducing the incidence of fire blight, as well as the
presence of other bacteria that would aggressively compete with Erwinia amylovora for nutrients and
space on a susceptible host. 1761 New Zealand also submits that the impact of fire blight on pipfruit

1758 New Zealand's first written submission, para. 4.254.
1759 New Zealand's first written submission, para. 4.255.
1760 New Zealand's first written submission, para. 4.256.
1761 New Zealand's first written submission, para. 4.257.

production in New Zealand in non-outbreak years is inconsequential.
1762 In New Zealand's view, the
evidence shows that pipfruit production losses from a fire blight outbreak are not discernible at the
national and regional level, and are lik ely to be minor at a district and local level in most years. Such
production losses may occasionally be significant at a local level only. 1763 New Zealand also rejects
Australia's contentions on the indirect impact on control or eradication, surveillance/monitoring and
compensation strategies. 1764 Finally, New Zealand argues that the IRA's estimates of the indirect
impact on international trade, and on communities in Australia, amount to no more than
conjecture.
1765
7.451 In New Zealand's view, the result is that the IRA overestimates the consequences of the
establishment and spread of fire blight. "A more realistic assessment, relying on the actual experience
of countries where fire blight is present, would ha ve resulted in the overall consequences being 'very
low'."1766
7.452 Finally, New Zealand argues that it "accepts that fire blight certainly can have serious
consequences". In its view, however, "the important thing to bear in mind is that the disease is not
spread by exports of mature fruit."1767
7.453 In response, Australia argues that the IRA's analysis of the potential consequences of the
introduction and establishment of fire blight is objective and credible. Australia submits in this regard
that "fire blight is one of the most serious diseases of pome fruit trees in the world".1768 Australia adds
that: "[c]ontrol action in orchards against fire blight would be costly, requiring expenditure on
chemical inputs, pruning and other aspects of plant hygiene. Indirect costs include ongoing
surveillance and, if an outbreak were to occur, the costs of attempting eradication, as well as flow-on
losses to other industries."
1769
7.454 Australia argues further that the IRA comprehensively addressed relevant factors and
evidence in evaluating the consequences from fire blight. 1770 The IRA evaluated reported losses from
fire blight outbreaks in New Zealand and othe r countries, in particular, the United States. 1771
New Zealand ignores the range of reports considered by the IRA 1772; instead, it relies on a few
selective examples that, taken in isolation, misrepresent the potential impact of the disease, in order to
attempt to downplay the potential production losses. 1773 In Australia's view, significant numbers of
trees can be lost in a fire blight outbreak. 1774 Australia adds that New Zealand assumes that its own

1762 New Zealand's first written submission, paras. 4.256-4.258. New Zealand's reply to Panel question
67 after the first substantive meeting, paras. 144 and 148.
1763 New Zealand's first written submission, paras. 4.259-4.261.
1764 New Zealand's first written submission, paras. 4.262-4.263.
1765 New Zealand's first written submission, para. 4.2 64; New Zealand's reply to Panel question 67
after the first substantive meeting, para. 151.
1766 New Zealand's first written submission, para. 4.264.
1767 New Zealand's reply to Panel question 67 after the first substantive meeting, para. 141. See also,
New Zealand's second written submission, paras. 2.455-2.456.
1768 Australia's first written submission, para. 493.
1769 Australia's first written submission, para. 494.
1770 Australia's first written submission, para. 496.
1771 Australia's first written submission, para. 498.
1772 Australia's first written submission, paras. 500-505.
1773 Australia's first written submission, para. 497.
1774 Australia's first written submission, para. 499.

experience with fire blight will be replicated in Australia. 1775 At the same time, however,
New Zealand discounts the impact of the fire blight outbreak in Hawke's Bay in 1998.1776
7.455 Australia submits that New Zealand downplays th e costs of control, eradication and tree
replacement.1777 It also overplays its own international tr ade experience; despite its claim that other
countries do not constrain access for its apples, Au stralia argues that there are examples to the
contrary.1778
7.456 On the basis of these arguments, Australia re jects New Zealand's claim that the IRA Team
failed to evaluate the potential biological and economic consequences of fire blight in Australia. In its
view, New Zealand has failed to engage with the lit erature and evidence considered by the Team; it
has instead sought to build an alternate case th at rests on an assumption that New Zealand's
experience of fire blight will be replicated in Australia. 1779 Australia also argues that New Zealand
made no substantive argument on the issue of the con sequences of fire blight, either in its second
written submission or at the second substantive meeting with the Panel; therefore, Australia considers
that the point is undisputed.1780
7.457 Australia concludes that New Zealand failed to identify any flaws in the IRA Team's
conclusions on consequences, let alone any flaws serious enough to prevent the Panel from having
"reasonable confidence" in the risk assessment.1781
(ii) The Panel's analysis
7.458 The assessment in the IRA of the potential biological and economic consequences associated
with fire blight is based on the consideration of a number of direct and indirect criteria. The direct
criteria include plant life or health, human life or health and any other aspect s of the environment.
The indirect criteria include control or eradication, domestic trade or industry, international trade,
environment and communities. The IRA allocates impact scores for each direct and indirect criterion.
The impact scores are from the least significant "A" to the most significant "G".
7.459 Regarding the direct criteria. On plant life or health, the IRA allocates an impact score of
"F". The IRA considers the consequences of fire bli ght affecting plant life or health to be significant
at a national level, and highly significant at a regional level. 1782 On human life or health, the IRA
allocates an impact score of "A". The IRA not es that there are no known direct impacts of Erwinia
amylovora on human life or health.1783 On any other aspects of the environment, the IRA allocates an
impact score of "A". The IRA notes that there are no known other direct impacts of Erwinia
amylovora on the environment.1784

1775 Australia's first written submission, paras. 506-507; Australia's second written submission,
paras. 411-412 and 420-424.
1776 Australia's first written submission, paras. 508-512. See also, Australia's second written
submission, paras. 417-418.
1777 Australia's first written submission, paras. 513-518; Australia's second written submission,
para. 419.
1778 Australia's first written submission, paras. 519-521.
1779 Australia's first written submission, paras. 522-523.
1780 Australia's closing oral statement at the second substantive meeting of the Panel with the Parties,
para. 12.
1781 Australia's first written submission, para. 523; Australia's second written submission, para. 425.
1782 Australia's IRA, Part B, pp. 98-100.
1783 Australia's IRA, Part B, p. 100.
1784 Ibid.

7.460 Regarding the indirect criteria. On control and eradication, the IRA allocates an impact score
of "E". The IRA considers that the indirect impact of fire blight on new or modified eradication,
control, surveillance/monitoring and compensation strategies would be minor at a national level,
significant at a regional level and highly significant at the district level.
1785 On domestic industry, the
IRA allocates an impact score of "E". The IRA considers that the indirect impact of fire blight on
domestic trade or industry would be minor at a national level, significant at a regional level and highly
significant at the district level. 1786 On international trade, the IRA allocates an impact score of "D".
The IRA considers that the indirect impacts of fire blight on international trade would be unlikely to
be discernible at a national level, would be of minor significance at a regional level, significant at the
district level and highly significant at the local level when the economy of the respective levels is
considered.
1787 On the environment, the IRA allocates an impact score of "A". The IRA notes that
any indirect impacts of fire blight on th e environment are unlikely to be discernible. 1788 O n
communities, the IRA allocates an impact score of "D". The IRA considers that the indirect impact of
fire blight on communities would be unlikely to be discernible at a na tional level, would be of minor
significance at a regional level, significant at the district level and highly significant at the local
level.1789
7.461 Considering these impact scores, the IRA concludes that the overall potential biological and
economic consequences should be rated as "high".1790
7.462 Furthermore, by combining the value for the annual probability of entry, establishment and
spread and the outcome of overall consequences, th e IRA estimates that the unrestricted annual risk
for imported apples from New Zealand is "low". Th e rating of "low" unrestricted annual risk is the
same under the two different scenarios considered by the IRA. As noted above, the IRA considers a
first scenario, under which 70 to 100 per cent of impo rted apples are distributed to orchard packing
houses and the remainder to urban wholesalers, a nd a second scenario, under which only 0.1 to 5 per
cent of imported apples are distributed to orchard packing houses. This rating of "low" is above
Australia's ALOP of "very low". Accordingly, th e IRA concludes that "risk management would be
required for this pest".
1791
7.463 The experts consulted by the Panel are sceptical about the impact scores assigned by the IRA
to some criteria. Dr Paulin noted that it may be easier to know in advance what the susceptibility is of
a plant to a particular pest: whether the plant is r eceptive to the disease or not. It is also possible to
know if bacteria are present or not, but:
"It is far more difficult to predict what will be the severity of the disease, in terms of
damage which is expected. For example, in Europe we have been quite surprised to
see that fire blight is a very serious disease of apple in Germany, where it was
expected to be a serious disease of pear in the South of France, if you just look at the
climatic conditions and the susceptibility of th e cultivars. That means that there are
some elements which are just missing and you can predict for sure that the disease
will be able to develop, but it is far more difficult to quantify this development in
terms of economic loss."
1792

1785 Australia's IRA, Part B, pp. 100-101.
1786 Australia's IRA, Part B, p. 102.
1787 Australia's IRA, Part B, pp. 102-103.
1788 Australia's IRA, Part B, p. 103.
1789 Australia's IRA, Part B, pp. 103-104.
1790 Australia's IRA, Part B, p. 104.
1791 Australia's IRA, Part B, pp. 104-105.
1792 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 300.

7.464 Dr Paulin was particularly critical of the most severe impact scores assigned by the IRA to
some of the criteria. Regarding the consequences of fire blight affecting plant life or health, which the
IRA rated "F", one of the most severe scores, Dr Paulin expressed doubts about fire blight being
considered the most serious disease of apple: "A pple scab would be probably considered as more
costly in many areas. But fire blight is undoubtedly the most serious bacterial disease of apple and
pear."
1793 The expert also noted that it is "impossibl e to predict the economical consequences of the
introduction of fire blight in a new area".1794 "The severity of the disease (the importance of damages)
is the result of the combination of three factors (at least) at the local level: climate, cultivar
susceptibility (genetic), cultivar r eceptivity. If each can be evaluated (at least for trends) the
combination of the three to give a reasonable prediction is non realistic."1795
7.465 In any event, Dr Paulin noted th at it is just not possible, and it has never been seen, that fire
blight would be devastating to the same degree in every place and on every plant as soon as
introduced in a new area. Moreover, the spread of the disease, even if not eradicated, would be
relatively slow, and the invasion, if any, should be progressive. The damage to crops would be
difficult to estimate. Dr Paulin noted further that in France, there have not been a large number of
bearing trees of apple killed by fire blight, in spite of the high susceptibility of some French varieties.
The situation is different for pear varieties, but the disappearance of entire trees due to fire blight
remains limited to only a few varieties. The overa ll production of fruits in a whole country has never
been seriously decreased, even by a severe fire blight epidemic, even if the damage can be very costly
at the local level, in certain years for certain varieti es. The expert concluded that "the impact score of
'F' could be exaggerated."
1796
7.466 Regarding the consequences of fire blight affec ting domestic trade, which the IRA rated with
a severe score "E", Dr Paulin noted that: "[g]iven the likely low impact at the national level of the
disease on overall production, the losses for domestic trade or industry look exaggerated and
unrealistic."1797
7.467 Regarding the consequences of fire blight aff ecting international trade, which the IRA rated
with a severe score "D", Dr Pau lin noted that the impact could be significant on the export of
nurseries, due to quarantine restrictions. This, however, is not considered in the IRA. "The impact on
fruit trade will be limited, especially if the eradica tion methods are effective (it will not be possible to
consider any apple orchard of Australia as infected by fire blight). Again the rating of 'D' seems too
high."1798
7.468 It is not the Panel's role to reassess the imp act scores assigned by the IRA to specific criteria
and propose different scores. In any event, most of New Zealand's arguments with respect to the
IRA's estimation of consequences assume that fire bl ight would behave in the same way if introduced
in Australia as has been observed in other regions. As noted by Dr Paulin, however, it is "impossible
to predict the economical consequences of the introduction of fire blight in a new area".1799

1793 Dr Paulin's reply to Panel question 11, in List of Replies from the scientific experts to questions
1794 Ibid.
1795 Ibid.
1796 Ibid. But see, Dr Deckers's reply to Panel question 11, in List of Replies from the scientific experts
to questions posed by the Panel, para. 85.
1797 Dr Paulin's reply to Panel question 11, in List of Replies from the scientific experts to questions
1798 Dr Paulin's reply to Panel question 11, in List of Replies from the scientific experts to questions
1799 Dr Paulin's reply to Panel question 11, in List of Replies from the scientific experts to questions

7.469 It must be noted that, according to the experts consulted by the Panel, the IRA has a tendency
to overestimate the severity of the consequences of fi re blight in certain aspects. This overestimation
affects in particular two of the criteria, which in the IRA are assigned the most severe scores of "F"
and "E" (plant life or health and domestic trade or industry, respectively).
7.470 In the light of the above, the Panel concludes that the IRA's evaluation of the potential
consequences associated with the en try, establishment or spread of fire blight into Australia does not
rely on adequate scientific evidence and, accordingly, is not coherent and objective.
(l) Overall conclusions with respect to the requirements regarding fire blight
7.471 For the reasons stated above, the Panel finds that, with respect to its analysis of the likelihood
of entry, establishment and spread of fire blight, an d of the potential consequences associated with the
entry, establishment or spread of fire blight in to Australia, Australia's IRA is not a proper risk
assessment within the meaning of Article 5.1 and paragraph 4 of Annex A of the SPS Agreement.
The flaws described above also constitute a failure by the IRA to take sufficiently into account factors
such as the available scientific evidence, th e relevant processes and production methods in
New Zealand and Australia, and the actual prevalence of fire blight, as required by Article 5.2 of the
SPS Agreement.
7.472 Accordingly, Australia's requirements regard ing fire blight on New Zealand apples are
inconsistent with Articles 5.1 and 5.2 of the SPS Ag reement. Since the requirements are not based on
a risk assessment as provided in Article 5.1 of the SPS Agreement, these measures can be presumed,
more generally, not to be ba sed on scientific principles within the meaning of Article 2.2.
1800
Accordingly, the Panel finds that Australia's re quirements regarding fire blight on New Zealand
apples are, by implication, also inconsistent with Article 2.2 of the SPS Agreement".
(m) Alleged methodological flaws identified by New Zealand
7.473 The Panel has found that, with respect to its an alysis of the likelihood of entry, establishment
and spread of fire blight, Australia's IRA is not a proper risk assessment and, consequently, Australia's
requirements regarding fire blight on New Zealand ap ples are inconsistent with Articles 2.2, 5.1 and
5.2 of the SPS Agreement. Normally, there would be no need to proceed further with an examination
of New Zealand's additional argument that the IRA contains methodological flaws that result in a vast
overestimation of the probability of entry, establishment and spread of fire blight into Australia
through apples from New Zealand. However, Ne w Zealand's arguments regarding methodological
flaws in the IRA would concern, not only Australia's requirements regarding fire blight, but also the
requirements regarding European canker and the "gen eral" requirements. Accordingly, the Panel will
examine New Zealand's arguments regarding the methodological flaws in the IRA.
(i) Choice of maximum value for negligible events
Summary of the Parties' arguments

7.474 New Zealand has identified the IRA's choice of the maximum value for the probability of
events with a negligible likelihood of occurring, as a methodological flaw that, in combination with
other flaws, would result in an overestimation of th e probability of entry, establishment and spread of
the pests at issue.1801

1800 Appellate Body Report on Australia – Salmon, paras. 137-138.
1801 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written

7.475 New Zealand contends that the numerical ranges adopted under the IRA as probability
intervals for the qualitative descriptions of various ev ents were assigned arbitrarily. Little insight was
provided as to how those ranges were determined. 1802 In the case of even ts with a "negligible"
likelihood of occurring ("the event would almost cert ainly not occur"), the maximum value was set at
one in a million (1 × 10-6).
7.476 New Zealand argues that the maximum value of 1 × 10 -6 is "substantially greater" and "at
least three orders of magnitude (i.e. 1,000 times) greater" than can be concluded on the basis of
known data".1803 In New Zealand's view: "the effect of Australia's choice of 1 × 10 -6, combined with
[the] choice of the uniform distribution to model ke y events with a negligible likelihood of occurring,
is that events that 'almost certainly will not occur' ar e turned into events that will be expected to occur
["relatively frequently", i.e.,] approximately once in every two million apples imported."1804
7.477 In response, Australia argues that "any choice of intervals is arbitrary". 1805 In Australia's
view, because the term "negligible" is define d in the IRA through numbers represented by a
probability interval, the focus should be on t hose numbers and not on the word "negligible". 1806
Australia adds that the IRA focused on the interval between 0 and 10 -6 as a uniform distribution, and
not on the maximum value of 10 -6.1807 In Australia's view, "[t]his means that the probability of a
particular event occurring is equally likely to be any probability value within the interval bounded by
the minimum and maximum values of the distribution. In other words, the probability of an event
happening is equally likely to be zero as one in a million or any value in between."
1808
7.478 Australia finally argues that there are a numbe r of flaws in New Zealand's reliance on trade
data to support its position regarding the use of 1 × 10 -6 as the maximum value for "negligible". To
begin with, the IRA had to assess the potential volume of trade that would occur between
New Zealand and Australia, and not the existing tr ade between New Zealand and Chinese Taipei.
Further, it is unclear whether in its argument New Zealand has gone beyond th e trade data to address
factors within Chinese Taipei, such as the occurrence of fire blight host plants, environmental factors,
distribution systems, consumption patterns, disposal routes and location of packing houses.1809
The Panel's analysis
7.479 The IRA uses a semi-quantitative approach to assess the risk associated with the three pests at
issue in this dispute, including fire blight. The semi-quantitative appro ach combines a quantitative
estimation of the probability of entry, establishm ent and spread of the pest with a qualitative
evaluation of the associated potential consequences. 1810 Table 12 of Part B of the IRA sets out the
"[n]omenclature for qualitative likelihoods, co rresponding semi-quantitative probability intervals". 1811
This table shows for example that a "negligible " likelihood corresponds to the qualitative descriptor
"[t]he event would almost certainly not occur", a probability interval of 0 to 10 -6 (zero to one in one
million), and a midpoint (if uniform distribution is used) of 5 x 10 -7 (0.5 in one million, or one in two
million).1812

1802 New Zealand's first written submission, para. 4.175.
1803 New Zealand's first written submission, paras. 4.182-4.186.
1804 New Zealand's first written submission, para. 4.178.
1805 Australia's second written submission, para. 246.
1806 Australia's first written submission, para. 298.
1807 Australia's first written submission, paras. 299-300 and 307.
1808 Australia's first written submission, para. 300.
1809 Australia's first written submission, paras. 308-311.
1810 See para. 2.61 above.
1811 Australia's IRA, Part B, p. 43. See para. 2.65 above.
1812 Australia's IRA, Part B, p. 43. Australia's first written submission, para. 115. See para. 2.65 above.

7.480 Both Parties agree that the IRA's choice of a pr obability interval of zero to one in one million
for events with a "negligible" likelihood of o ccurring was arbitrary. Just because the choice was
ultimately arbitrary, however, does not mean that the values chosen should not have been based on
relevant information, including available scientific evidence. Moreover, the Panel is not convinced by
Australia's argument that words are irrelevant a nd that the focus should only be on the numbers
representing probability intervals in the IRA. If a category of events is defined as "negligible" and the
IRA describes that category as representing events that "would almost certainly not occur", any
numbers that are assigned to the corresponding quant itative probability intervals should be consistent
with that definition. Otherwise, ad absurdum , Australia's argument could lead to negligible events
being assigned a quantitative representation of one, m eaning that in practice the event would always
happen.
7.481 Unfortunately, the IRA provides little insight on how the probability values were assigned to
each of the six qualitative descriptors, including the "negligible" category.
1813 In particular, there is no
explanation of why events that would almost cer tainly not occur were assigned a numerical maximum
value of one in a million. As noted by Dr Sgrillo, "[t]here is no scientific base to support the
exclusive choice of 1E-6 because other ranges, as 0 to 1E-9 or to 2E-6, could also [have been] used …
without violating any scientific principle". 1814 The same expert noted that "[t]he probability interval
seems to have been arbitrarily chosen to repres ent the qualitative descriptors. There are no perceived
criteria for assigning probabilities intervals to the qua litative scale. No mathematical relationship
between the categories was found … This approach see ms to be based in an arbitrary choice and not
in scientific principles".1815 Dr Sgrillo added:
"[I]n the case of assigning numbers to probabilities, the numbers you are assigning
represent a hypothesis about the real process in the world. And when you assign
these numbers you should be based on numbers from sampling of the reality.
Otherwise you are elaborating on the subject. ... [I]f you don't have numbers that were
sampled in the real world, you have no guarantee that the numbers that you are
assigning are representative. It's a hypothesis, after all. A common sense hypothesis,
an elaborated hypothesis, but it follows that it's a hypothesis, no guarantee."
1816
7.482 Accordingly, the first failing in the IRA's defi nitions of quantitative probability intervals for
qualitative likelihoods is the lack of information on how those numbers were assigned. Additionally,
the Panel must determine whether New Zealand has properly made the case that the interval
corresponding to "negligible" events is greater than can be justified and that this would result in an
overestimation of the probability of entry, establishment and spread of the pests at issue.
7.483 In this respect, Dr Latorre identified "the ra nge used to numerically explain the negligible
descriptor"as "[o]ne of the main weaknesses" in the IRA. 1817 The term "negligible" is not defined in
the WTO agreements with respect to the likeli hood of biological events under the SPS Agreement,
nor are there any relevant international standards, guidelines or recommendations to define this term,
nor on the number or width of probability intervals that may be used. 1818 In any event, the ordinary

1813 Dr Latorre's reply to Panel question 133, in List of Replies from the scientific experts to questions
1814 Dr Sgrillo's reply to Panel question 134, in List of Replies from the scientific experts to questions
1815 Dr Sgrillo's reply to Panel question 133, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 755 and 765.
1816 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 34.
1817 Dr Latorre's reply to Panel question 133, in List of Replies from the scientific experts to questions
1818 Dr Schrader's and Dr Sgrillo's replies in Transcri pt of the Panel's meeting with experts, paras. 46
and 204. See also, Dr Sgrillo's reply to Panel question 13 3, in List of Replies from the scientific experts to

meaning of the term "negligible" is something that is "[a]ble to be negl ected or disregarded;
unworthy of notice or regard; so small or insignificant as to be ignorable". 1819 In other words,
"negligible" is something so small that it can be ignored. 1820 The IRA itself defines "negligible"
events as events that "would almost certainly not occur". In other words, the probability of a
negligible event would be close to zero, but different from zero.1821 As noted by Dr Latorre:
"[B]y no means can a negligible event range from 0 to a maximum of 1 × 10 -6 with a
midpoint of 5 × 10 -7. In doing so, the likelihood of a particular biological event is
overestimated. As stated before, 5 × 10 -7 is a relatively high probability value, even
considering the lowest possible total volume of apples (50,000,000, AUS-2 p.19) that
can ultimately be imported from New Zealand."
1822
7.484 Considering that the likelihood of negligible ev ents is defined in the IRA as events that
"would almost certainly not occur" and not as events that "would not occur", the numerical equivalent
should be different from zero. Accordingly, such cat egory can be included in the model. It should,
however, "be included with values coherent with the definition of negligible".
1823 Because there is
little indication in the IRA on how the numerical pr obability values were assigned to the "negligible"
category, such values are not properly justified in the IRA and would tend to overestimate the
probability of entry, establishment and spread of the pests at issue. As noted by Dr Latorre:
"[T]he probability values given in Table 12 [should be reviewed] accepting that the
maximum probability to be assigned to a neglig ible event should be such that one can
be almost certain that this event will not occur in a given population, and that the
minimum value should be different from zero. Then probability values for other
descriptors can be assigned, considering th at if an event has a probability of one,
there is certainty that the event will occur."1824
(ii) Use of uniform distribution to model the likelihood of events
Summary of the Parties' arguments
7.485 As noted above, New Zealand has identified th e IRA's "inappropriate use of [a] uniform
distribution to model the likelihood of events, par ticularly those with a 'negligible' likelihood of
occurring" as a methodological flaw that, in comb ination with other flaws, would result in an
overestimation of the probability of entry, establishment and spread of the pests at issue.1825
7.486 New Zealand argues that "[a] uniform distribution ... is the crud est possible distribution for
modelling a range of estimates. In this distribu tion every value between the maximum and minimum
value is equally likely to occur. There is no 'most likely' value." 1826 Under the IRA, "negligible"
events were given a uniform distribution with zero as the minimum and one in a million as the

questions posed by the Panel, para. 753; and Dr Sgrillo 's replies in Transcript of the Panel's meeting with
experts, paras. 50 and 206.
1819 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. II, p. 1900.
1820 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 50.
1821 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 48.
1822 Dr Latorre's reply to Panel question 133, in List of Replies from the scientific experts to questions
1823 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 138.
1824 Dr Latorre's reply to Panel question 133, in List of Replies from the scientific experts to questions
1825 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written
1826 New Zealand's first written submission, para. 4.189.

maximum; the mid-point of this distribution is set at one event in every two million samples.
New Zealand notes that, under this approach, "an even t that 'would almost certainly not occur' will in
fact be expected to occur on average approximately once in every two million samples. ... Negligible
is no longer negligible under this approach."
1827
7.487 New Zealand concludes that "[t]he result of applying a uniform distribution to model events
with a negligible likelihood of occurring is that Australia predetermined that the value chosen was
weighted towards the event occurring. As a result, Australia has artificially inflated the risks of such
events occurring in most if not all cases."1828
7.488 In New Zealand's view, the IRA could have avoided this by either choosing a lower
maximum value for negligible events, with a correspondingly lower mid-point, with a resulting
smaller probability range. In this case, the probabi lity values used as inputs by the model would have
reflected this smaller range and lower mid-point. Alternatively, the IRA Te am could have applied a
triangular or Pert distribution with a most likely value at or below the mid-point, which would have
resulted in fewer values at the upper end of the distribution carried through in the analysis.
1829
7.489 Australia responds that New Zealand fails to unde rstand that it is the values in the interval
between 0 and 10 -6, and not any one value in that interval that were considered by the IRA and are
applied on the basis of the uniform distribution. "T his means that the probability of a particular event
occurring is equally likely to be any probability va lue within the interval bounded by the minimum
and maximum values of the distribution. In other words, the probability of an event happening is
equally likely to be zero as one in a million or any value in between."
1830
7.490 Australia adds that:
"Where the IRA Team believed it had suffici ent information to identify a most likely
value in an interval, it used a triangular distribution, represented by a minimum value,
a maximum value and a most likely value. Where the IRA Team considered it had
insufficient information to identify the most likely value in an interval, it adopted a
uniform distribution, using a minimum value and a maximum value."
1831
7.491 Australia further argues that New Zealand has not acknowledged that uniform distributions
may be appropriately used, as stated by Dr Schrader.1832
The Panel's analysis
7.492 The IRA Team used uniform, triangular and Pert probability distributions.1833 By definition, a
uniform distribution has a minimum and a maximum valu e. No most likely value is identified. In
principle, any value contained in the continuous range between the minimum and maximum values
occurs with equal probability. The IRA states that a uniform distribution was used where insufficient
information was available to determine the most lik ely value. As compared to other models of

1827 New Zealand's first written submission, para. 4. 191. See also, New Z ealand's second written
submission, paras. 2.353 and 2.356.
1828 New Zealand's first written submission, para. 4.193.
1829 Ibid. See also, New Zealand's reply to Panel question 107 after the first substantive meeting,
1830 Australia's first written submission, para. 300.
1831 Australia's first written submission, para. 304.
1832 Australia's second written submission, para. 271, re ferring to Dr Schrader's reply to Panel question
135, in List of Replies from the scientific experts to questions posed by the Panel, para. 781.
1833 Australia's first written submission, paras. 93-94 and 99. See also para. 2.66 above.

distribution, a uniform distribution is the simplest, bu t in the circumstances of this case, as noted by
Dr Schrader and Dr Sgrillo, it tends to generate less realistic samples.1834
7.493 In contrast, a triangular distribution has a minimu m, maximum and a most likely value. It is
not necessarily symmetrical, but can be skewed in fa vour of the most likely value. According to the
IRA, this distribution was used when information (such as literature and e xpert opinion) on the most
likely value was available. 1835 Finally, the Pert distribution also has three parameters: a minimum
value, a maximum value, and a most likely value, but it has a different, more rounded shape than a
triangular distribution. The Pert distribution generates a smooth distribution curve that resembles
more closely a realistic probability distribution and places progressively more emphasis on values
close to the most likely value. Dr Schrader and Dr Sgrillo suggested that, from the three options, the
Pert distribution is expected to be the more realis tic. The Pert distribution was used in the IRA to
estimate the volume of apples likely to be imported.
1836
7.494 As noted above, New Zealand argues that the use of a uniform distribution to model the
likelihood of certain events, particularly those with a "negligible" likelihood of occurring would result
in an overestimation of the probability of entry, establishment and spread of the pests at issue.
7.495 In principle, under a uniform distribution, an y value contained in the range between the
minimum and maximum values occurs with equal probab ility. This means that the model will tend to
over represent the numbers in the higher end of the c hosen range, instead of clustering closer to zero,
which the experts have explained w ould be more appropriate in the case of events with a "negligible"
likelihood in the biological world. The use of a uniform distribution with a maximum of one in a
million results in the likelihood of so-called "neglig ible" events estimated to occur more frequently
than, according to the IRA's qualitativ e descriptors, they should be exp ected to occur (i.e., the events
would "almost certainly not occur"). As noted by Dr Sgrillo, there is merit in New Zealand's
argument that a triangular distribution would have been preferable to avoid overestimating the
likelihood of "negligible" events. In the words of the expert, the IRA "could have considered a
triangular distribution with the most probable value zero and the maximum value one times ten in the
power of minus six. This will correct the kind of distortion (of bias) in generating random samples in
this range."1837
7.496 In other words, the use of a uniform distribution to model the likelihood of "negligible"
events, in combination with the assignment of a high maximum level for the respective probability
interval that is not adequately justified, would te nd to overestimate the likelihood of such "negligible"
events.
(iii) Overestimation of the projected volume of trade in New Zealand apples
Summary of the Parties' arguments
7.497 As noted above, New Zealand has identified the alleged exaggeration of the projected volume
of trade in New Zealand apples as the third methodological flaw that, in combination with other flaws,

1834 Australia's IRA, Part B, p. 42. See para. 2.66 above; Dr Schrader's and Dr Sgrillo's replies to Panel
question 135, paras. 776 and 781.
1835 Australia's IRA, Part B, p. 42. See para. 2.66 above; Dr Schrader's and Dr Sgrillo's replies to Panel
question 135, paras. 772, 777 and 782.
1836 Australia's IRA, Part B, p. 42. See para. 2.66 above; Dr Schrader's and Dr Sgrillo's replies to Panel
question 135, in List of Replies from the scientific experts to questions posed by the Panel, paras. 774, 778
and 783.
1837 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 136. See also, Dr Sgrillo's
reply in Transcript of the Panel's meeting with experts, para. 199.

would result in an overestimation of the probability of entry, establishment and spread of the pests at
issue.
1838
7.498 New Zealand notes that, under the semi-quantitative method used in the IRA, the assigned per
apple probability of a pest being imported is then multiplied by Australia's estimate of the annual
volume of trade in New Zealand apples, to give an estimated number of infested or infected apples
imported. From this value, an overall assessed level of risk is calculated. Accordingly, "the higher
the estimated volume of trade, the higher the overall assessed risk".1839
7.499 New Zealand adds in this regard that the IRA misconceives actual demand for apples from
New Zealand. In New Zealand's view, the IRA has not taken into account that currently all Australian
domestic demand for apples is supplied from local sources and that local supermarkets tend to provide
support for Australian-grown produce, as well as th at most of the apple varieties favoured by
Australian consumers are produced only in limited quantities in New Zealand. 1840 New Zealand also
notes that any attempt by New Zealand to capture a la rge market share in Australia would lead to a
large fall in prices that would quickly make exports uneconomic. 1841 Finally, New Zealand argues
that supply-side constraints in New Zealand would al so limit the number of fresh apples that could be
exported to Australia, because its exporters are committed in long-term contracts to Northern
Hemisphere customers.1842
7.500 New Zealand concludes that the IRA's estima tion of a "most likely" value of 150 million
apples per year to be imported from New Zealand, or 15 per cent of the market, "is out of all
proportion with the trade that would be likely to occur in fact". 1843 In New Zealand's view, "such a
value bears no relationship to the reality of lik ely Australian demand for New Zealand apples or
New Zealand's capacity to supply that demand". 1844 New Zealand considers instead that the lower
value in Australia's range, 50 million apples per year, should in fact be the "most likely" value.1845
7.501 Australia responds that New Zealand's assertions on volume of trade lack economic and
commercial substance and should be disregarded by the Panel.1846 Australia argues that New Zealand
has misunderstood the process followed by the IRA. Australia notes that the IRA acknowledges the
difficulty of estimating the volume of trade in the absence of existing trade. It suggests, however, that
the most likely value was calculated on the basis of a range of economic and commercial factors.
Australia adds that the volume of trade is expressed as a Pert distribution. Because "the most likely
value of 150 million apples is closer to the mini mum value of 50 million apples than the maximum
value of 400 million apples, the shape of the curve gives greater weight to values toward the lower
end of the scale".1847

1838 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written
submission, paras. 4.194-4.203; New Zealand's second written submission, paras. 2.359-2.367.
1839 New Zealand's first written submission, para. 4.195.
1840 New Zealand's first written submission, paras. 4.197-4.199. Apple & Pear Australia Limited,
"Public Submission to ACCC Grocery Inquiry by Apple & Pear Australia Limited on 11 March 2008", p. 8, in
Exhibit NZ-51. See also, New Zealand's second written submission, paras. 2.361-2.363.
1841 New Zealand's first written submission, paras. 4.200-4.201. See also, New Zealand's second
written submission, para. 2.364.
1842 New Zealand's first written submission, paras. 4.200-4.202. See also, New Zealand's second
written submission, paras. 2.365-2.366.
1843 New Zealand's first written submission, para. 4.196.
1844 Ibid.
1845 New Zealand's second written submission, paras. 2.360. See also, New Zealand's first written
submission, para. 4.203.
1846 Australia's first written submission, paras. 319 and 341.
1847 Australia's first written submission, paras. 320-324.

7.502 Australia also rejects New Zealand's argument that Australian consumers would not buy the
main types of apples produced in New Zealand. 1848 Australia argues in this regard that "there is no
reason to believe that the current composition of Au stralian production provides a template for what
New Zealand fruit Australian consumers would choose to import." 1849 With respect to its
supermarkets, Australia argues that a preference for Australian products is only one of several key
considerations in deciding on the source of any product; New Zealand apples would compete on
quality, quantity and price, just as in any other market. 1850 Regarding the alleged effect of imports of
apples on domestic prices, Australia notes that th e ABARE report cited by New Zealand concludes
that, because Australian producers always have the option of exporting, imports would not
significantly drive down the Australian price. 1851 Australia also submits that New Zealand's
supposition that its exporters are tied up in long term contracts to Northern Hemisphere customers to
such a point that they would not export significant quantities of apples to Australia "does not appear
to accord with available evidence and expected future market developments".1852
The Panel's analysis
7.503 As noted by both Parties, the IRA's assessment is based on a projected volume of trade in
New Zealand apples for one year, taking into account that apples might be imported in packed cartons
for table consumption, but also in bulk bins for re packing or for processing into fruit juices or other
products. Australia assumed that the volume of a pple imports from New Zealand would be between
50 million and 400 million apples per year, with a most likely value of 150 million. These values
represent approximately 5 per cent, 40 per cent and 15 per cent of domestic fresh fruit, or 2.5 per cent,
20 per cent and 7.5 per cent of Australia's total average apple production, respectively.
1853
7.504 The projected volume of trade of New Zealand apples into Australia is a crucial element in
the IRA. As noted by Dr Latorre:
"[T]he risk of entrance would be related to the size of the population. In this case, it
will depend on the total volume of mature a pples annually imported by Australia. In
general, as the volume increases, so does the probability that a given biological event
may occur, increasing the chan ces that [the relevant pest] will gain entrance into
Australia. Therefore, it is very important for an accurate IRA to define objectively
the eventual volume of mature apple that Australia would be importing from
New Zealand annually."
1854
7.505 The IRA acknowledges that, "[b]ecause there is no existing trade in apple fruit from
New Zealand, the volume of apples that might be imported during 12 months was difficult to
estimate."1855 For such a counterfactual exercise to have some validity, the IRA would need to
formulate a hypothesis on the basis of the best available informati on and then validate the hypothesis
with factual data, as trade begins to develop or better information becomes available. Indeed, the

1848 Australia's first written submission, paras. 326-330.
1849 Australia's first written submission, para. 327. See also, Australia's second written submission,
paras. 276-283.
1850 Australia's first written submission, paras. 331- 333. Communication from Coles Myer Ltd to the
Agriculture and Food Policy Reference Group, Department of Agriculture, Fisheries and Forestry of Australia
(25 August 2005), p. 3, in Exhibit AUS-22. See also, Australia's second written submission, paras. 284-289.
1851 Australia's first written submission, paras. 334-336. See also, Australia's second written
submission, paras. 290-310.
1852 Australia's first written submission, paras. 337-340.
1853 Australia's IRA, Part B, pp. 17-19. See also Australia's first written submission, paras. 98-99.
1854 Dr Latorre's reply to Panel question 137, in List of Replies from the scientific experts to questions
1855 Australia's IRA, Part B, p. 18.

values proposed by the IRA as higher and lower scen arios, as well as most likely value, should be
seen as hypotheses that need to be tested with actual trade data, as soon as imports of New Zealand
apples start entering into Australia.
7.506 The Panel is not convinced by New Zealand' s objections to the IRA's estimation of the
projected volume of trade of New Zealand apples into Australia. New Zealand contends that
Australian supermarkets support local produce, that Australian consumers favour apple varieties that
are produced in limited quantities in New Zealand, th at New Zealand varieties would be unlikely to
attract significant market share, and that New Zeal and apple exporters would be unlikely to divert
sales from current customers to Australia. All of these contentions rest on the assumption that current
tendencies that may have developed in the absence of bilateral trade in apples will persist if trade is
allowed. It is just as reasonable to expect the opposite: that once the Australian market is open for
imported apples from a geographically close partner with otherwise intense patterns of trade, the
behaviour of consumers and superm arkets in Australia and exporters in New Zealand would change
so as to benefit from the new opportunities. Irresp ective of the apple varieties that are grown in
Australia or even the current local consumer prefer ences, if Australian consumers are attracted by the
quality, the price or the taste of New Zealand vari eties, they may change their current consumption
patterns. Similarly, and irrespective of any statements made in support of local production, there is no
reason to assume that supermarkets in Australia would not rationally decide to purchase apples on the
basis of factors such as price, quality and consumer demand. Nor is there any reason to suppose that
New Zealand exporters will not rationally shift sales over time to the market that offers them better
returns to their investment.
7.507 Assuming that the IRA's projected volume of trade is a hypothesis that will have to be tested
with actual trade data when imports of New Zeala nd apples start entering into Australia, the Panel is
not convinced by New Zealand's objections regardi ng an alleged overestimation of such projected
volume of trade.
1856
(iv) Conclusion regarding the methodological flaws identified by New Zealand
7.508 For the reasons explained above, the Panel concl udes that the choice of a probability interval
of 0 to 10 -6 (zero to one in one million), and a midpoint (if uniform distribution is used) of 5 × 10 -7
(0.5 in one million) for events with a "negligib le" likelihood of occurri ng (corresponding to the
qualitative descriptor "the event would almost certainly not occur") is not properly justified in the IRA
and leads to an overestimation of the probability of entry, establishment and spread of the pests at
issue. Likewise, the Panel concludes that the combination of this probability interval for events with a
"negligible" likelihood of occurring, with the IR A's use of a uniform distribution to model the
likelihood of these events, would tend to result in an additional overestimation of the likelihood of
such "negligible" events. The Panel agrees with New Zealand that these two flaws "magnify the
assessment of risk, turning what are often the remote st of possibilities into even ts that are assessed as
occurring with some frequency."1857
7.509 The Panel concludes additionally that New Ze aland has not successfully made a prima facie
case that the IRA's projected volume of trade is necessarily exaggerated and that such exaggeration
would result in an overestimated probability of entry, establishment and spread of the pests at issue.
7.510 The Panel finds that, because of the methodological flaws that magnify the assessment of risk,
described above, Australia's IRA is not a proper risk assessment within the meaning of Article 5.1 and
paragraph 4 of Annex A of the SPS Agreement. Th ese flaws also constitute a failure by the IRA to

1856 New Zealand's first wr itten submission, para. 4.172. S ee also, New Zealand's first written
submission, paras. 4.194-4.203; New Zealand's second written submission, paras. 2.359-2.367.
1857 New Zealand's second written submission, para. 2.297.

adequately take into account the available scientif ic evidence, as required by Article 5.2 of the
SPS Agreement. Accordingly, becau se of these flaws, Australia's requirements regarding fire blight
on New Zealand apples are inconsistent with Articl es 5.1 and 5.2 of the SPS Agreement. Since the
requirements are not based on a risk assessment as provided in Article 5.1 of the SPS Agreement,
these measures can also be presumed, more generally, not to be based on scientific principles within
the meaning of Article 2.2. 1858 Accordingly, the Panel finds that Australia's requirements regarding
fire blight on New Zealand apples are, by implica tion, also inconsistent with Article 2.2 of the
SPS Agreement".
5. Requirements regarding European canker
7.511 The IRA contains a section describing the bi ology of the disease European canker caused by
the fungus Neonectria galligena, a description of the risk scenario, a discussion of the likelihood of
entry, establishment and spread of European canke r, an assessment of the consequences, a description
of the unrestricted risk and, finally, a discussion of risk management measures.1859
7.512 In its panel request, New Zealand challeng es the following requirements imposed by
Australia with respect to European canker:
• "The requirement that apples be sour ced from export orchards/blocks free of
European canker (pest free places of production).
• The requirement that all trees in expo rt orchards/blocks be inspected for
symptoms of European canker, includi ng that orchards/blocks in areas less
conducive for disease are inspected for symptoms by walking down every
row and visually examining all trees on both sides of each row, and that areas
more conducive to the disease are in spected using the same procedure
combined with inspection of the upper limbs of each tree using ladders (if
needed), and that such inspections take place after leaf fall and before winter
pruning.
• The requirement that all new planting stock be intensively examined and
treated for European canker.
• The requirement that an orchard/block be suspended for the season on the
basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of
European canker.
• The requirement that exports from an orchard/block be suspended for the
coming season on the basis of detec tion of European canker and that
reinstatement would require eradi cation of the disease, confirmed by
inspection."
1860

1858 Appellate Body Report on Australia – Salmon, paras. 137-138.
1859 Australia's IRA, Part B, pp. 117-155.
1860 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2. See also, Australia's IRA, Part B, pp. 150-155. As
noted above, New Zealand and Australia reached an agre ement with respect to one of the measures that had
been identified by New Zealand in its panel request (namely, the requirement that an orchard/block be
suspended for the season on the basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of European canker). See, para. 2.96 above.

7.513 New Zealand argues that the IRA's measures regarding European canker are maintained
without sufficient scientific evidence, in breach of Article 2.2 of the SPS Agreement:
"The pathway proposed by Australia for the transmission of N. galligena has never
been reported or observed in any of th e scientific literature, nor has it been
demonstrated to have occurred anywhere in the world. In particular, the Australian
contention is not based on scientific eviden ce about the incidence of fruit infection in
New Zealand caused by N. galligena. It also fails to take into account the relevant
climatic conditions in New Zealand and Aust ralia. Further, the Australian contention
is not based on scientific evidence relati ng to the production and spread of spores
from mature apple fruit. In short, there is no scientific evidence to support Australia's
contention and accordingly there can be no rational or objective relationship between
the scientific evidence and the measures imposed by Australia in respect of European
canker for New Zealand apples. The meas ures are therefore maintained without
sufficient scientific evidence, in breach of Article 2.2 of the SPS Agreement."
1861
7.514 In New Zealand's view, "[t]he IRA has faile d to evaluate the 'likelihood' of entry,
establishment and spread of European canker as well as the potential biological and economic
consequences within the meaning of paragraph 4 of Annex A. A ccordingly Australia has failed to
comply with its obligations under Article 5.1 of the SPS Agreement."1862
7.515 New Zealand adds that Australia is in viola tion of its obligations under Article 5.1 of the
SPS Agreement also because "[t]he IRA fails to pr ovide an evaluation of the likelihood of entry,
establishment or spread of the diseases and pest s of concern 'according to the SPS measures which
might be applied' and, therefore, fails to meet th e third requirement for a risk assessment within the
meaning of paragraph 4 of Annex A."1863
7.516 The Panel will start by considering Australia's requirements with respect to European canker
under Articles 5.1 and 5.2 of the SPS Agreement, fo cusing on the specific alleged flaws in the IRA
identified by New Zealand in its various submissi ons. The Panel will consider whether New Zealand
has properly made the case that:
(a) The IRA contains methodological flaws that result in a vast overestimation of the
probability of entry, establishment and spr ead of European canker into Australia
through apples from New Zealand;
(b) The IRA has overestimated the probability of entry, establishment and spread of
European canker into Australia through apples from New Zealand, including through
the estimation of various "importation steps", and the IRA's reasoning in this regard is
not properly based on scientific evidence;
(c) The IRA has overestimated the potential biological and economic consequences
associated with the entry, establishment and spread of European canker in Australia,
and the IRA's reasoning in this regard is not properly based on scientific evidence;
(d) The IRA has overestimated the unrestricted risk of European canker from apples from
New Zealand, and the IRA's reasoning in this regard is not properly based on
scientific evidence; and,

1861 New Zealand's first written submission, paras. 4.53-4.54.
1862 New Zealand's first written submission, para. 4. 333. See also, New Z ealand's second written
submission, para. 2.459.
1863 New Zealand's first written submission, para. 4.402.

(e) Australia's requirements imposed by Australia with respect to European canker are
consequently not properly based on scientific evidence and, therefore, inconsistent
with the SPS Agreement.
Subsequently, and if necessary, the Panel will turn to New Zealand's allegation that the IRA fails to
provide an evaluation of the likelihood of entry, establishment or spread of European canker
"according to the SPS measures which might be applied".
7.517 The Panel will conduct this review beginning wi th the arguments raised by New Zealand
specifically in the context of the IRA's analysis on European canker. The Panel will follow the same
order as the IRA, which is generally the order in wh ich Parties raised their arguments. Accordingly,
the Panel will consider the issues as follows: the eight importation steps described in the IRA; the
IRA's analysis on proximity; the IRA's analysis on exposure; the IRA's analysis on establishment;
the IRA's analysis on spread; the IRA's analysis on the potential associated biological and economic
consequences; and, the IRA's analysis on the unrest ricted risk of European canker. The Panel will
then, if necessary, turn to New Zealand's argument s regarding the alleged methodological flaws in the
IRA.
(a) Estimation for importation step 1
7.518 Importation step 1 represents the likelihood that the relevant pest is present in the source
orchards.1864
(i) Summary of the Parties' arguments
7.519 Regarding importation step 1 for European canke r, New Zealand "does not take issue" with
the IRA's estimation that Neonectria galligena would be present in source orchards in New Zealand.
New Zealand points out, however, "the importance of climatic factors to the distribution of European
canker in New Zealand".1865
(ii) The Panel's analysis
7.520 The IRA estimates the likelihood that Neonectria galligena is present in the source orchards
in New Zealand as a triangular di stribution with a minimum value
of 10 -2 (1 in 100), a maximum value of 5 × 10 -2 (5 in 100) and a most likely value of 3 × 10 -2 (3
in 100).1866 The IRA notes that "[t]his range takes into account the variations in climatic conditions
across New Zealand, and the information indicating that about 95% of the apple export production in
New Zealand comes from orchards in areas where the disease has either never been recorded or the
disease occurs only sporadically in very wet seasons."1867
7.521 As noted above, New Zealand has not called into question the IRA's estimation of the
likelihood of the event represented by this particular importation step.

1864 Australia's IRA, Part B, pp. 19-21.
1865 New Zealand's first written submi ssion, para. 4.269. See also, Australia's first written submission,
para. 528.
1866 Australia's IRA, Part B, pp. 118-121.
1867 Australia's IRA, Part B, p. 121.

(b) Alleged overestimation for importation step 2
7.522 Importation step 2 represents the likelihood that fruit coming from an infected or infested
orchard is infected or infested.
1868
(i) Summary of the Parties' arguments
7.523 Regarding importation step 2 for European ca nker, New Zealand argues that there is no
scientific support in the IRA for the estimation of the likelihood of mature apples being infested or
infected with Neonectria galligena .1869 New Zealand submits that the IRA contains no scientific
evidence of the occurrence of latent European canke r infections in picked fruit in New Zealand;
instead, the IRA relies primarily on research in the United Kingdom and Northern Europe, where
climatic conditions are more conducive to infection. 1870 The lack of appropriate weather conditions
during summer in New Zealand would result in an "e xtremely low incidence of fruit infection caused
by N. galligena".1871 Pre harvest fruit rots caused by Neonectria galligena are extremely rare in
New Zealand.1872 New Zealand concludes that "the IRA s hould ... have treated the probability of this
step as negligible and should not have assigned the probability values it did."1873
7.524 In response, Australia contends that "New Zeal and failed to identify any flaws in the [IRA's]
conclusions on Importation step 2." 1874 Australia argues that New Zealand's assertion in this regard
"is wrong as it ignores the [IRA's] extensive discussion on Importation step 2 with numerous
references to relevant scientific literature".
1875
7.525 Australia submits that New Zealand relies on a narrow climate analysis, focused only on
environmental criteria, that can lead to incorrect predictions.1876 Australia also argues that, contrary to
New Zealand's assertion, the IRA "identifies four re levant studies in relation to fruit rot caused by
N. galligena in New Zealand". 1877 Australia rejects New Zealand's contention that there is no
scientific evidence of latent Neonectria galligena infections occurring in New Zealand. 1878 Australia

1868 Australia's IRA, Part B, pp. 19-21.
1869 New Zealand's first written submission, paras. 4. 270 and 4.275. See also, New Zealand's second
written submission, paras. 2.466 and 2.490.
1870 New Zealand's first written submission, paras. 4.272-4.274. See also, New Zealand's second
written submission, paras. 2.479-2.485.
1871 New Zealand's first written submission, para. 4. 271. See also, New Z ealand's second written
submission, paras. 2.467-2.477.
1872 New Zealand's first written submission, para. 4. 271. See also, New Z ealand's second written
submission, paras. 2.467-2.477.
1873 New Zealand's first written submission, para. 4.275.
1874 Australia's first written submission, para. 547. See also, Australia's second written submission,
para. 494.
1875 Australia's first written submission, para. 530. See also, Australia's second written submission,
paras. 486-487.
1876 Australia's first written submission, paras. 531-534 and 542.
1877 Australia's first written submission, para. 536. See, Atkinson, "Bacterial diseases of pip fruit"
(1971) in Diseases of tree fruits in New Zealand , in Exhibit AUS-52; Brook and Bailey, "Control of European
canker" (1965), in Exhibit AUS-53; Braithwaite , "The occurrence of fruit rots caused by Nectria galligena
(European canker) in New Zealand and a comparison of brown rot strains between New Zealand and Australia"
(1996), in Exhibit NZ-34; and, communication from Biosecurity New Zealand, Ministry of Agriculture and
Forestry (16 May 2005), in Exhibit AUS-51.
1878 Australia's first written submission, paras. 539-541. See also, Australia's second written
submission, paras. 474-475 and 494.

finally notes that New Zealand's own research suppo rts the IRA's conclusions on the possibility of
latent infections.1879
(ii) The Panel's analysis
7.526 The IRA estimates the likelihood that picked fruit is infested or infected with Neonectria
galligena as a uniform distribution with a minimum value of 10 -6 (1 in 1,000,000) and a maximum
value of 10-3 (1 in 1,000).1880
7.527 According to the IRA, "under New Zealand c onditions fruit is only occasionally attacked and
this generally results in rotting of the fruit. Rotted fruit would not be picked. There is some
likelihood of fruit getting infected late in the season and remaining latent, but this likelihood would be
extremely low."1881
7.528 The IRA notes that:
"The widespread adoption of integrated fruit production (IFP) by 85–90% of
New Zealand export orchards ... largely controls the establishment and spread of
European canker ...
The New Zealand IFP Manual recommends a combination of systemic fungicides ...
for control of European canker ... Cooke ( 1999) reported the above fungicides reduce
cankers by 65–90%, but suggested spray treatments alone cannot eradicate existing
infections and must be supplemented by cutting out cankers and treating wounds with
a fungicide paint. ...
In New Zealand, European canker is primarily a disease of trees, with fruit only
occasionally being attacked ... [L]eaf scar tissue is the main infection site in
New Zealand orchards, particularly duri ng the establishment phase of infection.
Similarly ... fruit spurs and leaf scars in autumn present the main infection sites for
the disease in New Zealand apple orchards.
Foliage is not affected ... and leaf trash is unlikely to present a significant threat,
unless twigs with active cankers are picked with the fruit. Fruit infection will only
occur when the disease is pr esent on the tree or within the orchard ... and conditions
of temperature and free moisture are suitable ... Fruit rot caused by N. galligena has
been reported in New Zealand ... but limited data is available on the incidence of fruit
infection in New Zealand. ...
Various disease management measures to control summer fruit rots in New Zealand
orchards, including cultural practices (removal of diseased wood and rotting fruit
from trees and orchard floors) and the use of fungicides from late November/early
December until withholding periods ... would greatly reduce the likelihood of N.
galligena infections being present. European ca nker is reported to be a problem only
in high rainfall areas of Auckland and the Waikato as well as periodically in Nelson
during wet years ...

1879 Australia's first written submission, paras. 543-546. See also, Australia's second written
submission, paras. 480-485.
1880 Australia's IRA, Part B, pp. 121-123.
1881 Australia's IRA, Part B, p. 123.

Fruit infection will only occur if cankers ar e present in the orchard ... Almost 90% of
export orchards in New Zealand use di sease management programs and fungicide
programs to control apple scab and other apple diseases, and this would minimise the
possibility of European canker ... being present during fruit development and the
harvest period. Given that climatic conditions typically reported for Hawke's Bay and
Nelson during the harvest periods are normally dry and not conducive to spore release
and winters are not too wet ... fruit infection is very unlikely to occur. In the higher
rainfall areas of Auckland and the Waikato region, where European canker is present
and climatic conditions are more conducive to spore production mainly due to wetter
winters ... fruit could become infected during the harvest period. Fruit infected late in
the season, and showing no obvious rot symptoms, could be picked from these
orchards. Braithwaite (1996), in a repor t to MAFNZ, acknowledged the possibility
that European canker could go unnoticed at harvest or during the early part of storage,
and therefore could be transmitted in fruit as latent infections. ...
In cooking varieties and immature fruit, fruit infections can remain latent and express
themselves after 3–7 months of storage ... esp ecially if contamination occurs towards
the end of the season ... An infection occurring in young, immature fruit will not grow
... However, as acidity decreases and sugar le vels increase with ripening, the toxicity
of benzoic acid decreases and the fungus resumes growth. The likelihood of latent
infections occurring in mature fruit is re duced, except when inf ection occurs just
before harvesting. New Zealand does not export significant volumes of immature or
cooking varieties.
Fungicidal dips before storage of fruit are not used in New Zealand ... indicating that
storage rots may not be a significant issue in New Zealand. However ... fruit rot is
recorded in the New Zealand Plant Pr otection Centre (NZPPC) records and the
fungus has been associated with storage rot of apples, suggesting that latent infections
also occur in New Zealand. ...
[The likelihood of fruit being contaminated through infections on hosts other than
Malus and Pyrus] is negligible because there is no evidence that the disease is well
established in other hosts in New Zealand. Further, as stated before, infection or
infestation of fruit is likely only when the disease is present on the trees or within the
orchard. ...
[In more than 450 fresh apples intercepted at the barrier by AQIS staff between 1988
to 2003, including 53 apples from New Zealand c]ommon fruit rotting fungi were
isolated and identified on about 30% of the fruit but there were no records of N.
galligena being isolated."
1882
7.529 As noted above, New Zealand's major arguments against the IRA's reasoning with respect to
importation step 2 are: that the IRA contains no scientific evidence of the occurrence of latent
European canker infections in picked fruit in New Zealand and that the research in this respect from
the United Kingdom and Northern Europe is not relevant because of the weather conditions in
New Zealand; that weather conditions during summer in New Zealand would result in an "extremely
low incidence of fruit infection caused by N. galligena"; and that pre-harvest fruit rots caused by
Neonectria galligena are extremely rare in New Zealand.
7.530 In its discussion relating to the likelihood of this particular importation step, the IRA cites
several studies. However, as noted by Dr Lato rre, "none of [these st udies] report information

1882 Australia's IRA, Part B, pp. 121-123.

regarding the frequency of apple infection and latency in New Zealand or elsewhere". 1883 N o
experimental data were presented in the IRA th at would support the probability values chosen. 1884
Dr Swinburne, noted that:
"The implication of there being one infect ed fruit per thousand (max), coupled with
the fact that 95% of exported fruit comes from orchards with little or no tree cankers
(IRAb p121), is that fruit from infected orchar ds has in the order of 2% apples that
will rot with N. galligena each year. That this would escape the attention of research
centres in NZ seems extraord inary, if true. Alternatively, the arbitrary probability
maximum set in the IRA is too high."1885
7.531 On the basis of scientific ev idence cited in the IRA, it is possible to conclude that
Neonectria galligena may cause fruit rots in areas or years with frequent summer rainfalls at harvest.
As noted by Dr Latorre, the prevalence and sever ity of inoculum production and fruit infection could
vary considerably, according to weather conditions. 1886 I t i s n o t o n l y t h e a m o u n t o f r a i n t h a t i s
important, but mostly the hours of "leaf wetness" a nd whether rainfall occurs during critical periods.
As mentioned by Dr Swinburne:
"Rainfall impacts at every stage of the infection cycle of N. galligena, beginning with
the production of spores from existing lesions. This is particularly evident in regions
that have distinct 'rainy seasons'. ... However, it is not the absolute volume of rain that
correlates with the numbers of spores released (both ascospores and conidia) but the
duration of 'leaf wetness', (i.e. the presence of free water on the plant surface)
(Swinburne, 1971). Thus a short storm in which several centimetres of rain falls in an
hour would be much less conducive to spore release than when the same volume falls
over a period measured in days. Likewise, even after the arrival of viable spores in
the infection court (e.g. leaf scars) a con tinuing period of leaf wetness is required for
successful infection. Dubin & English ( 1974) working in California found that no
infections developed unless leaf-wetness was maintained for at least 6 hours. More
recently Latorre et al (2002) in Chile found that this could be as little as 2 hours at the
optimum temperature, and demonstrated the interaction between temperature and
wetness. The number of days with rain will give a much more accurate indicator of
the likelihood of infection, especially wh en examined in terms of the seasonal
frequency of rain days."
1887
7.532 Dr Swinburne notes that the IRA focuses on total an nual rainfall. "Total annual rainfall is an
unsatisfactory measure of infection risk, but is relied upon heavily in the IRA and in the arguments
presented in Annex 2 of Australia's FWS (see Q56)."1888

1883 Dr Latorre's reply to Panel question 75, in List of Replies from the scientific experts to questions
1884 Ibid. See also, Dr Sgrillo's reply to Panel question 75, in List of Replies from the scientific experts
to questions posed by the Panel, para. 434.
1885 Dr Swinburne's reply to Panel question 75, in List of Replies from the scientific experts to
questions posed by the Panel, para. 439. See also, Dr Deckers's reply to Panel question 75, in List of Replies
from the scientific experts to questions posed by the Panel, para. 436.
1886 Dr Latorre's reply to Panel question 57, in List of Replies from the scientific experts to questions
1887 Dr Swinburne's reply to Panel question 56, in List of Replies from the scientific experts to
questions posed by the Panel, para. 353.
1888 Dr Swinburne's reply to Panel question 72, in List of Replies from the scientific experts to
questions posed by the Panel, para. 419. See also, Dr Swinburne's reply to Panel questions 56 and 66, in List of
Replies from the scientific experts to questions posed by the Panel, paras. 353, 355 and 399.

7.533 With respect to whether rain occurs during "critical periods", Dr Latorre notes that:
"Annual rainfall provides a general indicati on of areas with climates conducive to
European canker. It has been postulated th at annual rainfalls higher than 1000 mm
are indicative of climate conditions highly conducive to the development of European
canker. However, European canker occurs in areas with less annual rainfall. Rainfall
is important for infection during two critical periods: (i) during leaf fall, because
infection may occur through leaf scars, resulti ng in twig and stem cankers that appear
during the next growing season, and (ii) dur ing harvest, because rainfall favours fruit
infection and eventually latent infection in mature fruits. Knowledge of the rainfall
distribution, during the growing season, is important for understanding the
epidemiology [of] European canker on apples."
1889
7.534 Dr Latorre adds that "[f]requent summer ra infalls are necessary for inoculum production,
dissemination and infection. If summer rainfalls ar e frequent, it would be reasonable to assume that
some of the infected fruits may develop symptoms on the tree, and other fruits may be latently
infected, developing symptoms after several weeks or even months in cold storage."1890
7.535 There is no indication that these climatological conditions are present in New Zealand. In
Dr Latorre's view, "it appears that summer conditi ons in New Zealand are very unfavourable for the
development of European canker, and that fruit infection would be an extremely rare event.
Therefore, the likelihood of latent infection on ma ture apple fruits would be extremely low or
negligible."1891
7.536 With respect to latent infections, Dr Latorre notes that "latent infections would be extremely
unlikely in apples from orchards free of European canker in the absence of summer rains. Under
these circumstances, the risk of latent infection is close to zero (in practice zero)."1892
7.537 Referring to the Braithwaite (1996) study cited by the IRA, Dr Latorre suggests that "[n]o
new objective data is reported in this paper... [I]t is not a reliable and relevant reference to support the
hypothesis that latent infections may also occur in mature apple in New Zealand." 1893 With respect to
this study, Dr Swinburne suggests that the propos ition that rotted fruit can transmit infection can be
disregarded:
"Braithwaite (1996) contains an unc onfirmed report that fruit rotting with
[Neonectria galligena] has been detected in NZ, and it seems to be accepted by both
parties that this does occur occasionally, although it is by no means clear if these
reports refer to pre- or postharvest. Braith waite then goes on to speculate that rotted
fruit can transmit infection, basing his argument on European observations on the
formation of ascospores on mummified fruit. This is a very rare occurrence, and

1889 Dr Latorre's reply to Panel question 56, in List of Replies from the scientific experts to questions
posed by the Panel, para. 352. See also, Dr Deckers's reply to Panel question 56, in List of Replies from the
scientific experts to questions posed by the Panel, para. 350.
1890 Dr Latorre's reply to Panel question 57, in List of Replies from the scientific experts to questions
posed by the Panel, para. 357. See also, Dr Latorre's reply to Panel question 66, in List of Replies from the
scientific experts to questions posed by the Panel, para. 398.
1891 Dr Latorre's reply to Panel question 57, in List of Replies from the scientific experts to questions
posed by the Panel, para. 358. See also, Dr Latorre's reply to Panel question 67, in List of Replies from the
scientific experts to questions posed by the Panel, para. 401.
1892 Dr Latorre's reply to Panel guideline (g), in List of Replies from the scientific experts to questions
1893 Dr Latorre's reply to Panel question 54, in List of Replies from the scientific experts to questions

most unlikely to be found in the climates of NZ or Australia ... For these reasons this
aspect of the paper can be disregarded."1894
7.538 Dr Latorre cautions that care should be exer cised when attempting to draw conclusions for
New Zealand from the research conducted in Europe and cited by the IRA:
"Australia's IRA based their risk assessm ent on the information already published
from studies in Northern Ireland (Swinburne, 1964, 1975, Exhibits NZ-11 and NZ-9,
respectively). These results were obtaine d on apple varieties quite different from
those produced today in New Zealand a nd under environmental conditions that
appear to be far more conducive to fruit in fection (in Northern Ireland) than those in
New Zealand. Although this does not inva lidate the risk assessment analysis, and it
does not reject the hypothesis that latent in fections may occur in mature fruits in
New Zealand, it is a factor that should be ta ken into consideration by Australia's IRA.
Latent infection on mature fruits should not be under discussion, but the probability
of latent infection in many apple culti vars produced under different environmental
conditions in New Zealand is of utmost interest."1895
7.539 Dr Swinburne concurs. In his opinion, it is important to consider, not only annual rainfall, but
rainfall patterns, in order to determine whether there are sufficiently long periods of leaf wetness:
"The essential weakness of the approach in the IRA is that it assumes that inoculum
(spores) for infection is always available, and all that is required is a suitable period
(hours of leaf wetness within given temperature limits) for infection to occur. The
major flaw in this argument is the assum ption that regions can be compared on the
basis of annual rainfall, without regard to rainfall patterns. Even in regions such as
N. Ireland (Loughgall) with rain in all seas ons, more than 5hrs of leaf wetness was
required following a few dry days before ascospore discharge resumed (Swinburne,
1971b). The situation in regions with a pronounced dry season, such as California
and the Pacific Northwest in the USA, spore formation does not even begin until
some time (as yet undetermined) into the ra iny period (Zeller, 1926, Wilson, 1966/8).
For such an area data relating only to simple 'infection periods' would greatly
overestimate the risk of disease establishment."
1896
7.540 Dr Swinburne notes that, in New Zealand, rots in fruit attributable to N. galligena should not
be common:
"The limited information available in both FWS documents suggests that rots
attributable to N. galligena in fruit grown in New Zealand are by no means as
common as they are in Europe, and (of course) are seemingly confined to regions of
NZ where tree cankers are present. The weather data presented in Annex 2 of the NZ
FWS would accord with a low incidence of fruit infection, and, based on Wilson's
(1966) observations in California, even c onidial production from stem cankers may
be sparse during summer. It is perhaps si gnificant that in what was described as an
epidemic of canker in Auckland that Br ooke& Bailey (1965) only found occasional

1894 Dr Swinburne's reply to Panel questions 54 and 55, in List of Replies from the scientific experts to
questions posed by the Panel, para. 349.
1895 Dr Latorre's reply to Panel question 55, in List of Replies from the scientific experts to questions
1896 Dr Swinburne's reply to Panel question 66, in List of Replies from the scientific experts to
questions posed by the Panel, para. 399. See, Swinburne, "The seasonal release of spores of Nectria galligena
from apple cankers in Northern Ireland" (1971), in Exhibit AUS-76; Wilson, "Development of European canker
in a California apple district" (1966), in Exhibit NZ-64.

fruit rots. Unfortunately that paper does not record whether the rots were found
before or after harvest."
1897
7.541 Dr Latorre agrees with New Zealand that, under the climatic conditions of New Zealand, the
IRA may have overestimated the likelihood of this importation step:
"Considering the epidemiological characteris tics of European canker, the probability
intervals given in Table 12 [for an even t with an 'extremely low' likelihood of
occurrence] are too conservative for areas with dry summer conditions, although they
may be acceptable for areas with frequent summe r rains. Therefore, the figures may
overestimate the likelihood of each even t to occur under dry summer conditions,
particularly if fruit infection is extremely close to zero."1898
7.542 The importance of adequate climatological conditi ons is highlighted by Dr Swinburne. "Both
parties seem to agree that the frequency of fru it rotting is low, given the paucity of positive
identifications. That this is so, even from regions with tree cankers (e.g. Auckland) this must be
attributable to unfavourable weather conditions, especially the absence of rain, during the summer
months."1899 Dr Swinburne recalls the situation of locations, "such as Northern Ireland, which
represents an extreme environment in which apples are produced, there are no dry periods at all. Rain
falls fairly evenly throughout the year and in some locations on every day of the year." He then
contrasts this situation with that of other locations , "California in particular... and to a more limited
extent ... Kent, [and] perhaps more extremely ... Ne w Zealand [where] you have very pronounced dry
periods and very few, relative to Northern Ireland, days of leaf wetness." In Dr Swinburne's view,
"[i]t is that difference which makes a difference in the pulse of the disease. The availability of the
inoculum in relation to those leaf-wetness periods is crucial. ... In a location such as California, and I
am assuming also New Zealand, that pulse is in terrupted by pronounced dry periods, particularly
during the summer months."1900 Dr Latorre concurs and notes that:
"Weather conditions are also very, very important during summer time for inoculum
production and then for inoculum disseminati on, infestation ... and finally infection.
In some places of the world where appl es are produced, like Chile, California and
New Zealand, summers are very dry, no rain at all. If it ever happens, there are very
short rainy periods and not enough to fulfil perhaps inoculum production."1901
7.543 As cited above, Dr Swinburne finally notes that it would seem "extraordinary, if true" that a
high proportion of apples rotted with Neonectria galligena would go unnoticed by research centres in
New Zealand and that "[a]lternatively, the arbitrary probability maximum set in the IRA is too
high."1902

1897 Dr Swinburne's reply to Panel question 57, in List of Replies from the scientific experts to
questions posed by the Panel, para. 361. See, Wilson, "Development of European canker in a California apple
district" (1966), in Exhibit NZ-64.
1898 Dr Latorre's reply to Panel question 75, in List of Replies from the scientific experts to questions
posed by the Panel, para. 437. Dr Swinburne's reply to Panel question 75, in List of Replies from the scientific
experts to questions posed by the Panel, para. 439. See also, Dr Deckers's reply to Panel question 57, in List of
Replies from the scientific experts to questions posed by the Panel, para. 356.
1899 Dr Swinburne's reply to Panel question 75, in List of Replies from the scientific experts to
questions posed by the Panel, para. 438.
1900 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 525.
1901 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 526.
1902 Dr Swinburne's reply to Panel question 75, in List of Replies from the scientific experts to
questions posed by the Panel, para. 439. See also, Dr Deckers's reply to Panel question 75, in List of Replies
from the scientific experts to questions posed by the Panel, para. 436.

7.544 In conclusion, the IRA contains respected and qualified scientific evidence regarding the
possibility of Neonectria galligena causing fruit rots in areas or years with frequent summer rainfalls
at harvest. It does not, however, contain adequate scientific evidence that would allow an estimation
of the frequency of apple infection and latency in New Zealand or elsewhere. Moreover, the studies
on fruit infection cited in the IRA are based on r esearch conducted in areas or periods with frequent
summer rainfalls at harvest. The IRA fails to properly take into account the existence of
climatological conditions in New Zealand that would be necessary for inoculum production,
dissemination and infection.
7.545 Accordingly, the Panel finds that the IRA's estimation of the likelihood that fruit coming from
an infected or infested orchard is infected or infested with Neonectria galligena is not sufficiently
supported by the scientific evidence that the IRA re lied upon and, therefore, is not coherent and
objective.
(c) Alleged overestimation for importation step 3
7.546 Importation step 3 represents the likelihood that cl ean fruit from infected or infested orchards
is contaminated during picking and transport to the packing house.1903
(i) Summary of the Parties' arguments
7.547 Regarding importation step 3 for European canker, New Zealand argues that the IRA's
analysis "is based on the assumption that N. galligena spores could be transferred to clean fruit. This
is an event that has never b een recorded and that would almost certainly not occur." 1904 New Zealand
submits that there would be no way for fruit contamin ation to occur, because the likelihood of mature
fruit being latently infected with Neonectria galligena is negligible and, in any event, "latently
infected but symptomless fruit would not have any rot and therefore could not generate spores".1905
7.548 New Zealand adds that weather conditions in most areas of New Zealand during the
harvesting season would not be favour able for spore production and disp ersion and, even if conidia
were to be dispersed by rain onto the surface of a mature apple, they would be unlikely to survive
without continued moisture.1906 New Zealand rejects the assumption that mummified fruit could be a
source of contamination, "as formation of perith ecia takes place during winter and they are not
therefore even present at harvest".1907
7.549 New Zealand finally submits that the IRA's s uggestion "that contamination from alternative
hosts is possible during harvest in the 'wetter districts of Auckland and the Waikato' ... is nothing
more than unsubstantiated speculation, since the event has never been observed to occur."
1908
7.550 New Zealand concludes that "the likelihood of contamination of clean fruit during picking
and transport is negligible, an event that would almo st certainly not occur, and not an event with the
most likely probability value of 1 in 100,000 apples assigned to it by the IRA."1909

1903 Australia's IRA, Part B, pp. 19-21.
1904 New Zealand's first written submission, para. 4. 277. See also, New Z ealand's second written
submission, paras. 2.492 and 2.494-2.496.
1905 New Zealand's first written submission, para. 4.277.
1906 New Zealand's first written submission, para. 4. 278. See also, New Z ealand's second written
submission, paras. 2.492 and 2.506-2.513.
1907 New Zealand's first written submission, para. 4. 279. See also, New Z ealand's second written
submission, paras. 2.499-2.505.
1908 New Zealand's first written submission, para. 4.280.
1909 New Zealand's first written submission, para. 4.281.

7.551 In response, Australia contends that "New Zeal and failed to identify any flaws in the [IRA's]
conclusions on Importation step 3."
1910 Australia argues in this regard that there is scientific support
for the IRA's expert judgement on the estimati on of the likelihood for this importation step. 1911 In its
view, New Zealand "[ignores] the fact that there can be more than one credib le interpretation of the
[scientific] evidence."1912
7.552 In this regard, Australia acknowledges that "lat ently infected fruit would not generate spores
for contamination of clean fruit during picking and tr ansport to the packing house as such infections
develop after a period in storage."1913
7.553 Australia argues, however, that the IRA identified various other means for fruit contamination
to occur during picking and transport to the pack ing house, such as: contaminated hands or
equipment of workers; spores carried by rain splash or wind; and trash.1914
7.554 Australia rejects New Zealand's contention about the lack of suitable weather conditions in
New Zealand for the production and dispersion of spores. 1915 Australia notes that the IRA refers to
"evidence of occasional European canker fruit rot in New Zealand due to wet conditions during
harvest in the summer ... This rotting fruit can produce spore pustules bearing numerous conidia." 1916
Australia also disputes New Zealand's arguments regarding the alleged impossibility of mummified
fruit to serve as a source of contamination.1917
(ii) The Panel's analysis
7.555 The IRA estimates the likelihood that clean fruit is contaminated by Neonectria galligena
during picking and transport to the packing house as a triangular distribution with a minimum value of
10-6 (1 in 1,000,000), a maximum value of 10 -4 (1 in 10,000) and a most likely value of 10 -5 (1
in 100,000).1918
7.556 According to the IRA, "[t]his range allows for a small number of fruit to be contaminated but
recognises that conditions in most areas of New Zealand during the harvesting season are not
favourable for spore production."
1919
7.557 The IRA notes that:
"Clean fruit could be surface-contaminated by: pickers' hands or gloves
contaminated with spores... spores carried in rain splash or wind currents during
harvesting and transport ... trash with ac tively sporulating fungus and spores making
contact with fruit in bins. Clean fru it displaying no obvious rot symptoms and
recently infected but symptomless fruit woul d be extremely unlikely to contaminate
other fruit during the picking or trans port process because the fungus does not
actively sporulate until fruit becomes badly ro tted or mummified ... Infected fruit that
drops before harvest, or that remains on trees and becomes mummified during winter

1910 Australia's first written submission, para. 563.
1911 Ibid.
1912 Australia's first written submission, para. 562. See also, Australia's second written submission,
para. 466.
1913 Australia's first written submission, para. 549 (footnote omitted).
1914 Ibid.
1915 Australia's first written submission, paras. 551-557.
1916 Australia's first written submission, para. 553.
1917 Australia's first written submission, paras. 558-559 (footnote omitted).
1918 Australia's IRA, Part B, pp. 124-125.
1919 Australia's IRA, Part B, p. 125.

can develop perithecia in spring, producing ascospores that could contaminate other
fruit. ... Foliage is not affected and trash presents an extremely small likelihood of
contamination unless twigs with active cankers are picked along with fruit ... Infected
twigs or branches that have been cut and le ft on the orchard floor can sustain cankers
for long periods and produce abundant spores ...
Spores contaminating bins are unlikely to present a significant likelihood for infection
as conidia and ascospores are sensitive to desiccation even at high relative
humidity. ...
Because N. galligena has a large host range, contamin ation could come from canker
infections on susceptible hosts planted n ear export orchards. ... Although fungicides
are widely used in orchards, alternative hos ts planted as hedgerows and infected with
N. galligena could produce conidia during the harvest period and, under the right
climatic conditions, could contaminate cl ean fruit during picking and transport.
Conidia can be dispersed up to 125 m in wet and windy storm conditions ... and if
cankers were present on alternative hosts, fruit could become contaminated. In
New Zealand, there are 54 records of N. galligena occurring primarily on Malus and
Pyrus and isolated from stem cankers. The f ungus has also been recorded on loquats
(Eriobotrya japonica ), coprosma ( Coprosma areolate ) and kowhai ( Sophora
microphylla) however there are no details of whether these detections originated from
cankers from these species or if any disease symptoms were present. There is also no
information in the literature indicating these species are hosts of N. galligena and
there is no evidence the disease has become established on these species. ... Climatic
conditions typically experienced during harvest periods in most New Zealand
orchards are not conducive to spore release and infection, but in the wetter districts of
Auckland and the Waikato region, conditions favour these processes."
1920
7.558 As noted above, New Zealand's major arguments against the IRA's reasoning with respect to
importation step 3 are: that the transfer of Neonectria galligena spores to clean fruit has never been
recorded and "would almost certainly not occur", esp ecially since latently infected but symptomless
fruit would not have any rot and therefore could not ge nerate spores; that w eather conditions in most
areas of New Zealand during the harvesting season w ould not be favourable for spore production and
dispersion and, in any event, conidia would be unlikely to survive without continued moisture; and
that mummified fruit would not be a source of cont amination, because formation of perithecia takes
place during winter and they are not therefore even present at harvest.
7.559 The IRA's analysis regarding importation step 3 is based on an assumption that Neonectria
galligena spores can be transferred to clean fruit. Dr Latorre expressed his doubts:
"The assumption that N. galligena spores could be transferred to clean fruit should be
considered as a hypothesis th at needs to be probed. To my knowledge, there is no
scientific literature addressing this point. Based on general disease knowledge, it is
an extremely unlikely event. It is difficult to accept and may be impossible to support
the probability values assigned to this step, 1 × 10
-6 and 1 × 10-4."1921

1920 Australia's IRA, Part B, pp. 124-125.
1921 Dr Latorre's reply to Panel question 78, in List of Replies from the scientific experts to questions
posed by the Panel, para. 452. See also, Dr Deckers's a nd Dr Sgrillo's replies to Panel question 78, in List of
Replies from the scientific experts to questions posed by the Panel, paras. 451 and 446.

7.560 In particular, Dr Latorre considers "highly unlik ely" the proposition that latently infected but
symptomless fruit could develop rot and generate spores.
1922 He notes that "[l]atently infected fruits
[would] develop symptoms before producing conidia." 1923 In Dr Latorre's view, "[t]here are not
qualified scientific sources to support the view that mature apple fruit can be infested (surface-
contaminated) with spores at harvest, including via wind currents. If this event would happen it
would be extremely rare and would not necessarily result in infected fruits, unless enough spores land
on damaged mature fruits."1924
7.561 Dr Latorre notes further the lack of evidence that European canker can develop from rotten
fruit. "In my experience, rotten fruit is very rare, almost never occurs in our conditions and
sometimes we do see it after several months or weeks of cold storage in a very low proportion and
never sporulated on the surface of the fruit. If this fruit are not sporulating it is impossible to admit
that it can spread at least easily to the clean fruit."1925
7.562 Dr Latorre additionally notes that "[t]he reasoni ng in Australia's IRA with respect to the view
that latently infected but asymptomatic mature a pple fruits may develop rot and thus generate spores
of N. galligena during picking and transport to the packing house (although objective) is highly
unlikely."1926 In his opinion, the IRA's analysis in this regard "overestimates the risk of inoculum
dispersal".1927 Dr Latorre adds that the IRA's analysis overestimates the risk of inoculum dispersal:
"Australia does not provide objective data regarding spore (conidia, ascospore)
production and release under the environmenta l conditions of New Zealand. There
are not qualified scientific sources to support the view that mature apple fruit can be
infested (surface-contaminated) with spores at harvest, including via wind currents.
If this event would happen it would be extremely rare and would not necessarily
result in infected fruits, unless enough spores land on damaged mature fruits. Conidia
are not wind dispersed; they are dispersed by rains and rain-splash. Ascospores can
be dispersed by wind currents to rather short distances (metres from the inoculum
source). However, it would be possible that rain-splashes containing spores may be
carried several metres by winds. In my opinion this analysis overestimates the risk of
inoculum dispersal."
1928
7.563 Dr Swinburne concurs and notes that "[t]here are no reports which imply that rotted apples
are in any way involved in the transfer of infection with N. galligena to 'clean' orchards".1929
7.564 Notwithstanding the above, if spores were to be produced and disseminated onto susceptible
fruits, Dr Swinburne explains that, in accordance with the general experience in many fruit growing

1922 Dr Latorre's reply to Panel question 77, in List of Replies from the scientific experts to questions
posed by the Panel, para. 444. See also, Dr Deckers's reply to Panel question 77, in List of Replies from the
scientific experts to questions posed by the Panel, para. 443.
1923 Dr Latorre's reply to Panel question 77, in List of Replies from the scientific experts to questions
1924 Dr Latorre's reply to Panel question 67, in List of Replies from the scientific experts to questions
1925 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 413.
1926 Dr Latorre's reply to Panel question 77, in List of Replies from the scientific experts to questions
posed by the Panel, para. 444. See also, Dr Deckers's reply to Panel question 77, in List of Replies from the
scientific experts to questions posed by the Panel, para. 443.
1927 Dr Latorre's reply to Panel question 67, in List of Replies from the scientific experts to questions
1928 Ibid.
1929 Dr Swinburne's reply to Panel questions 54 and 55, in List of Replies from the scientific experts to
questions posed by the Panel, para. 347.

regions in Europe, a "sufficient period of leaf-w etness" would be necessary "to allow the deposited
spore to germinate and colonise limited areas within the calyx or lenticels". 1930 Indeed, the Panel has
already noted the opinion expressed by the experts that "[f]requent summer rainfalls are necessary for
inoculum production, dissemination and infection." 1931 There is no indication that these
climatological conditions are present in New Zealand. Dr Latorre expressed his view that the
proposition that spores could survive without continued moisture, if they were produced and dispersed
by rain onto the surface of susceptible fruits, "has no credibility".1932
7.565 As noted above, New Zealand has also disputed the IRA's assertion that "[i]nfected fruit that
drops before harvest, or that remains on trees and becomes mummified during winter can develop
perithecia in spring, producing ascospor es that could contaminate other fruit." 1933 In this respect,
Dr Latorre submits that, while "[i]t is possible that perithecia play a minor role in the establishment
and dissemination of N. galligena from rotted fruit, if this ever happe ns", in his opinion, "there is not
enough scientific evidences supporting the role of pe rithecia (ascospores), eventually developed on
rotted fruits, [in] the overall epidemiology of European canker."1934
7.566 As noted by Dr Latorre, the most important i noculum for European canker would be conidia,
"and conidia are only formed under very wet conditions in the orchard, mainly in the cankers and
almost never, or never at least in my experience, on the fruit". 1935 "[P]erithecia only occur under
certain conditions and most often they are not impor tant from the epidemiologic point of view. The
development of the [European canker] disease is as sociated to the production of the asexual spores,
namely conidia, but not to the production of the sexual part of the fungi, which is the so-called
production of perithecia and ascospores".1936
7.567 Both Dr Latorre and Dr Swinburne explain that there is no evidence of perithecia forming on
rotten fruit. As explained by Dr Latorre:
"I have no information indicating that Eur opean canker can develop from rotten fruit.
In my experience, rotten fruit is very rare, almost never occurs in our conditions and
sometimes we do see it after several months or weeks of cold storage in a very low
proportion and never sporulated on the surface of the fruit. If this fruit are not
sporulating it is impossible to admit that it can spread at least easily to the clean fruit.
Well, I think the observation about perithecia on the fruit is something that has to be
reviewed. We have never seen perithecia form on the fruit. I don't have any good

1930 Dr Swinburne's reply to Panel question 57, in List of Replies from the scientific experts to
questions posed by the Panel, para. 360.
1931 Dr Latorre's reply to Panel question 57, in List of Replies from the scientific experts to questions
1932 Dr Latorre's reply to Panel question 68, in List of Replies from the scientific experts to questions
posed by the Panel, para. 403. See, Puia et al., "Effect of Ozone Exposure on Phytopathogenic Microorganisms
on Stored Apples" (2004), in Exhibit AUS-56. See also, Dr Swinburne's reply to Panel questions 67 and 68, in
List of Replies from the scientific experts to questions posed by the Panel, para. 404; Dr Deckers's replies to
Panel questions 68 and 78, in List of Replies from th e scientific experts to questions posed by the Panel,
paras. 402 and 451; and New Zealand's second written submission, paras. 2.514-2.516.
1933 Australia's IRA, Part B, p. 124.
1934 Dr Latorre's reply to Panel question 70, in List of Replies from the scientific experts to questions
1935 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 413.
1936 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 459. See also, reply of
Dr Swinburne in Transcript of the Panel's meeting with experts, para. 461.

paper that can really demonstrate that in the recent years they have seen perithecia in
very susceptible varieties, but not in today's apple varieties."
1937
7.568 Dr Swinburne concurs and notes that:
"[T]here is in fact no evidence in the literature that infected apples which rot with this
fungus are responsible subsequently for the dissemination of the disease to other
hosts, to further hosts. Much of the ev idence that has been presented concerns
observations made in the 1920s by Dillon-Western concerning a variety known as
Worcester, which is an extremely early variety, which does rot on the tree and
produces mummified fruits. In the 40-odd years that I have worked on this, I never
have had the privilege of seeing such a thing and I have attempted in the past to
produce perithecia and ascospores from rotted apples for experimental purposes and
failed. Fruit which rot with Nectria as I will call it, does produce conidia if it is
incubated under moist humid conditions to a limited extent in the centre of the lesion.
It is not a prolific source of spores for s ubsequent release and I fear that nobody has
actually done the experiment of determining whether a rotted apple can release spores
into a new orchard situation and bring about disease. It is amenable to
experimentation, along the lines of an experiment which we made in East Malling not
too long ago with discarded canker wood which we pulverized and placed under
potted trees of the most susceptible variety that I know, namely Spartan, and we
failed to induce a single canker as a result of pulverizing several, maybe 50 kilos, of
cankers underneath them."
1938
7.569 Dr Latorre concludes that there is no scientific evidence to support th e hypothesis of fruit
contamination with spores of Neonectria galligena during picking and transport to the packing house:
"The likelihood that … spores may contaminat e fruits superficially is extremely rare,
and the probability that spores contaminati ng the surfaces of mature fruits will cause
infection is negligible. In conclusion, fruit contamination with spores of N. galligena
during picking and transport to the packing house should be disregarded. There is no
scientific evidence on this subject to strongly support this hypothesis."1939
7.570 Regarding the IRA's assertion that "[i]n the higher rainfall areas of Auckland and the Waikato
region, where European canker is present and c limatic conditions are more conducive to spore
production mainly due to wetter winters ... fruit coul d become infected during the harvest period",
Dr Swinburne notes that:
"The majority of fruit infections in the European context are to be found either at the
stem end or the calyx end, and generally speaking it means that the core has been
infected. The time at which that infecti on occurs [would be] surprisingly early on in
the fruits development. It isn't at the time of harvest, it isn't in the dump tank. That
core rot is taking place at some stage when either the calyx or the stem end is
enabling an entry point for conidia whic h are washing down over the surface of the
tree and either accumulating it in the stem well or going around and entering the
calyx. I don't have any information which would ever suggest that infestation of

1937 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 413. See also, reply of
Dr Swinburne in Transcript of the Panel's meeting with experts, para. 461.
1938 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 411.
1939 Dr Latorre's reply to Panel question 77, in List of Replies from the scientific experts to questions
posed by the Panel, para. 445. See also, Dr Latorre's reply in Transcript of the Panel's meeting with experts,
para. 486.

apples at harvest, and I stress that point, or even after harvest leads to any significant
level of rotting in commercial conditions."1940
7.571 Dr Swinburne adds that "it is most unlikely that conidia which simply contaminate the surface
of fruit would play any part in an infection pathway". 1941 A s n o t e d b y b o t h D r L a t o r r e a n d
Dr Swinburne, conidia are poor epiphytes; they will not survive as a surface contaminant.1942
7.572 In conclusion, the IRA does not contain scien tific evidence regarding the possibility that
latently infected but symptomless fruit could develop rot and generate Neonectria galligena spores,
which could then be transferred to clean fruit. Ther e is also no indication in the IRA of the existence
of climatological conditions in New Zealand that are necessary for inoculum production,
dissemination and infection of clean fruit during pick ing and transport to the packing house. The
IRA's discussion fails to take into account that co nidia are poor epiphytes. There is no scientific
evidence in the IRA to support the proposition that pe rithecia would play a role in the contamination
of clean fruit.
7.573 Accordingly, the Panel finds that the IRA's est imation of the likelihood that clean fruit is
contaminated by Neonectria galligena during picking and transport to the packing house is not
sufficiently supported by the scientific evidence th at the IRA relied upon and, accordingly, is not
coherent and objective.
(d) Alleged overestimation for importation step 4
7.574 Importation step 4 represents the likelihood that in fected or infested fru it remains infected or
infested after routine processing procedures in the packing house.
1943
(i) Summary of the arguments of the Parties
7.575 Regarding importation step 4 for European canke r, New Zealand argues that, "[g]iven that
routine packing house processes would almost certainly reduce any external contamination, and in the
absence of any relevant scientific evidence relati ng to latent survival for mature, symptomless
New Zealand apple fruit, there is simply no scientific basis for the IRA's claim that there is an 85%
likelihood that N. galligena would survive processing."1944
7.576 According to New Zealand, there is no relevant scientific evidence on which to determine the
IRA's estimation for this likelihood. In New Zeal and's view, "[t]he scien tific data relied on by
Australia in the IRA to support its theories are simply not applicable." 1945 New Zealand adds that the
IRA does not provide any scientific evidence of latent survival or storage rots in relation to mature,
symptomless New Zealand apples.1946
7.577 New Zealand argues that the IRA's analysis of importation step 4 "is based on an assumption
that fruit entering the packing house will be infect ed or infested – an event which itself has a

1940 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 441.
1941 Dr Swinburne's reply to Panel questions 67 and 68, in List of Replies from the scientific experts to
questions posed by the Panel, para. 405.
1942 Dr Latorre's and Dr Swinburne's replies in Tr anscript of the Panel's meeting with experts,
paras. 434-435.
1943 Australia's IRA, Part B, pp. 19-21.
1944 New Zealand's first written submission, para. 4. 287. See also, New Z ealand's second written
submission, paras. 2.536-2.539.
1945 New Zealand's first written submission, para. 4. 283. See also, New Z ealand's second written
submission, para. 2.524.
1946 New Zealand's first written submission, para. 4.284.

negligible likelihood of occurring".
1947 Moreover, because the majority of consignments of
New Zealand apples would be "retail-ready", "if late ntly infected fruit were to develop visible rot
symptoms in storage, this would be detected and removed at the time of packaging while the fruit was
still in New Zealand and accordingly would not enter Australia."1948
7.578 Concerning infestation, New Zealand submits th at the IRA fails to take into account that
New Zealand export packing houses use water dump tanks at the start of their packing line, generally
followed by high-volume, high-pressure water washing, in order to remove debris and sessile and
motile insects. These processes would be "h ighly effective in removing other external
contaminants".1949
7.579 In response, Australia contends that "New Zeal and failed to identify any flaws in the [IRA's]
conclusions on Importation step 4." 1950 Australia argues in this rega rd that New Zealand makes an
"unsustainable" attempt to "summarily dismiss the IRA Team's exercise of expert scientific judgment"
in relation to this importation step. 1951 Contrary to New Zealand's a llegation, "there is scientific
support for the IRA Team's expert judgment" regarding the estimation of the likelihood of importation
step 4.1952
7.580 Australia rejects the proposition that latent inf ection and storage rot do not occur in mature,
dessert varieties of apples. 1953 Regarding New Zealand's arguments, Australia submits that the
product at issue in the dispute is mature apples from New Zealand free of trash and not "mature,
symptomless" apples from New Zealand. Australia a dds that the IRA contains numerous references
to scientific literature on "latent survival or storage rots". 1954 Australia also reiterates the view,
expressed in the context of importation step 2, that scientific research about latent infection in the
United Kingdom and Northern Europe is relevant to the importation of apples from New Zealand.1955
7.581 Notwithstanding New Zealand's arguments, Aust ralia considers it unlikely that New Zealand
would ship apples to Australia as "retail-ready" and "just-in-time". 1956 In its view, New Zealand has
been "ambivalent" regarding the mode of trade it would use in its exports of apples. Australia
considers it unlikely that New Zealand exporters would ship apples in "retail ready" form with
returnable plastic crates; instead it suggests that they are likely to opt for shipping fruit in bulk
bins.1957 Australia adds that, in any event, impor ting apples from New Zealand "retail-ready" and
"just-in-time" would actually reduce the likelihood of detecting latent infections caused by Neonectria
galligena and increase the likelihood of th e pathogen reaching Australia.1958 Australia finally submits

1947 New Zealand's first written submission, para. 4.282.
1948 New Zealand's first written subm ission, para. 4.285. See also , New Zealand's reply to Panel
question 8 after the first substantive meeting, paras. 13-15; New Zealand's second written submission,
paras. 2.525-2.535.
1949 New Zealand's first written submission, para. 4. 286. See also, New Z ealand's second written
submission, paras. 2.536-2.539.
1950 Australia's first written submission, para. 580.
1951 Australia's first written submission, para. 568.
1952 Australia's first written submission, para. 580. See also, Australia's first written submission,
para. 568.
1953 Australia's first written submission, para. 572.
1954 Australia's first written submission, para. 574.
1955 Australia's first written submission, para. 571. See also, Australia's first written submission,
paras. 540-541.
1956 Australia's first written submission, para. 576.
1957 Australia's first written submission, para. 576. See also, Australia's reply to Panel question 9 after
the first substantive meeting.
1958 Australia's first written submission, para. 577.

that washing would not remove surface fungal spor es and that it would have no effect on internal
infections.1959
(ii) Analysis of the Panel
7.582 The IRA estimates the likelihood that Neonectria galligena survives routine processing
procedures in the packing house as a triangular distri bution with a minimum value of 0.7 (70 in 100),
a maximum value of 1 (100 in 100) and a most likely value of 0.85 (85 in 100).1960
7.583 According to the IRA, "[t]his range largely reflect s the fact that internal and latent infections
are unlikely to be visible and none of the processe s in the packing house are likely to substantially
reduce infections."1961
7.584 The IRA notes that:
"Most apple exporters in New Zealand routinely use a pre-cooling step in the packing
house process ... Rapid cooling after harvest reduces the incidence of decay in storage
... However, the short period of pre-cooling would not significantly affect the survival
of latent infections, and the number of infected fruit would not be significantly
reduced.
Initial washing of fruit in a dump tank an d subsequent high-volume, high-pressure
water washing (if available) may remove surface spores but will have no effect on
internal infections, and the fungus will survive these procedures. Several export
packing houses in New Zealand use chlorine or other disinfectants ... in the dump
tanks to reduce microbial populations ... Although there is no specific data to indicate
their effectiveness against N. galligena, it is likely these chemicals used at the correct
dosage rates (concentration and time) woul d have varying degrees of effectiveness.
However, internal infections will not be affected by such treatments ... and the fungus
will survive these procedures.
Brushing would not remove fungi present in internal tissues or at the stem and calyx-
ends of fruit, as these areas are inaccessible.
Conidia will survive low temperature waxing and waxing could help hold conidia or
hyphae onto the fruit.
Sorting and grading will remove fruit with visible rots and blemishes, but latent
infections or surface contamination will not be detected by visual examination.
Post-harvest fungicide treatments are not used in New Zealand before cold storage ...
Neonectria galligena can survive at temperatures between 2°C and 30°C ... and
would readily tolerate cool storage temper atures. ... Any temporary cold storage soon
after harvest and before processing begins is lik ely to be very short, a few days at the
most, and this period of storage will be to o short for significant expression of latent
infections. ... Fruit becomes more susceptib le to rotting from latent infections as

1959 Australia's first written submission, para. 579.
1960 Australia's IRA, Part B, pp. 125-126.
1961 Australia's IRA, Part B, p. 126.

storage times increase ... Any infection or infestation that remains at the end of
packing house procedures will survive cold storage."
1962
7.585 As noted above, New Zealand's major arguments against the IRA's reasoning with respect to
importation step 4 are: that the IRA does not provide scientific evidence of latent survival or storage
rots in relation to mature, symptomless New Ze aland apples; that, because the majority of
consignments of New Zealand apples would be "ret ail-ready", if latently infected fruit were to
develop visible rot symptoms in storage, this would be detected and removed at the time of
packaging; and, concerning infestation, that the use of water dump tanks, generally followed by high-
volume, high-pressure water washing, would be highly effective in removing external contaminants.
7.586 Dr Swinburne notes initially that "any conidi a deposited on the surface of an apple during
harvesting operations would not survive for any length of time ... and may be discounted from all
subsequent calculations."
1963 In his opinion, "[s]imilar cons iderations would apply to conidia
redistributed from trash. There is, for example, no evidence to support assertions ... such as [that]
'spores would survive waxing' or 'brushing', because these processes are irrelevant to the inherent
inability of conidia to survive for long periods."1964
7.587 The experts agree in principle with the proposition that:
"Although there is no relevant scientific eviden ce, it is acceptable to consider that no
aspect of the process in the packing house reduces the number of latently infected
fruits. Once the fungus has penetrated mature fruits, the normal post-harvest
management including brushing, waxing, sorting and grading, cold storage and even
fungicide treatments, will be unable to a rrest the fungus inside the fruits. Cold
temperature would only be able to retard symptom development by lowering the rate
of fungal growth."
1965
7.588 Dr Latorre agrees with New Zealand that the use of water dump tanks, followed by high-
volume, high-pressure water washing, would be effective in removing external contaminants.1966 This
is noted in the IRA. 1967 In the words of the expert, "[t]he likelihood that inocula contaminating the
surface of the fruits can survive this process, attach ed to the fruit surface, is negligible or zero and it
should be disregarded from the risk analysis."1968
7.589 Dr Latorre and Dr Swinburne caution that the IRA fails to take into account the effect of store
conditions and the duration of storage. Dr Swinburne has explained that:
"It is usual for dessert apples to be harveste d into bulk bins that are transported to on-
site CA (controlled atmosphere) stores, where they are cooled, and sealed in

1962 Australia's IRA, Part B, pp. 125-126.
1963 Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of Replies from the scientific experts
to questions posed by the Panel, para. 458.
1964 Ibid.
1965 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 454. See also, Dr Deckers's reply to Panel question 79, in List of Replies from the
scientific experts to questions posed by the Panel, para. 453.
1966 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 456. See also, Dr Sgrillo's reply to Panel question 80, in List of Replies from the
scientific experts to questions posed by the Panel, para. 463.
1967 Australia's IRA, Part B, p. 125.
1968 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 456. See also, Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of
Replies from the scientific experts to questions posed by the Panel, para. 458.

chambers with adjusted CO2 and O2 con centrations. At intervals dictated by
marketing strategies they are removed from these stores and dispatched to specialist
pack houses, where the operations of washi ng, grading and packed for retail. The
process may extend over many months, which has not been factored into the IRA
model. Any infections present may develop into rots during this time, and this will be
strongly influenced by both the store temperature and environment (Berrie et al 2007,
appendix 1). At grading these would be removed, so the numbers of infected fruit
will diminish with time, consequently th e statement that 'none of the pack house
measures would reduce infection' is incorr ect, as it must also embrace the CA store
period."
1969
7.590 Dr Swinburne concludes that "the store conditi ons and the duration of the holding period will
be a factor in any subsequent development of any quiescent infections that may be present (Berrie, Xu
& Johnson 2007 in appendix)."
1970
7.591 Dr Latorre concurs and notes that "symptoms may ap pear after several weeks of cold storage.
If lots of mature asymptomatic fruits are kept for se veral weeks in cold storage in New Zealand, it
would be possible to remove infected fruits be fore export to Australia, lowering the risk of
entrance."1971
7.592 Dr Latorre and Dr Swinburne find no justification in the IRA for the likelihood values
assigned to this importation step. In the words of Dr Swinburne, "[t]he probabilities assigned in the
IRA to these steps are all difficult to reconcile with the observations above, especially as they all omit
the factor of time."
1972 Dr Latorre concurs, stating that, in hi s view, "[t]here is no scientific literature
to support" the likelihoo d values estimated by the IRA for importation step 4. 1973 This likelihood
"falls within a range that is difficult to legitimize, if this assumption implies that the inoculum must
remain on the fruit surface. Rather, it would be possible for the inoculum to be present internally in
the fruit."
1974
7.593 In conclusion, notwithstanding New Zealand's arguments, the IRA notes that processing
procedures in the packing house would be effective in removing external contaminants. With respect
to the small effect that processes in the packing house would have on the number of latently infected
fruits, the IRA's discussion seems generally coherent and suported by the scientific evidence cited.
The IRA, however, fails to take into account the effect that store conditions and the duration of
storage would have on the likelihood that Neonectria galligena survives routine processing
procedures in the packing house. Regarding Australi a's argument that the estimation of the likelihood
of this importation step was reached through the exercise of expert judgement by the IRA Team, the

1969 Dr Swinburne's reply to Panel questions 78, 80, 81, 82 and 83, in List of Replies from the scientific
experts to questions posed by the Panel, para. 482. See also, Dr Swinburne's reply to Panel questions 77, 78
and 79, in List of Replies from the scientific experts to questions posed by the Panel, para. 459.
1970 Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of Replies from the scientific experts
to questions posed by the Panel, para. 459. See also, Dr Deckers's reply to Panel question 80, in List of Replies
from the scientific experts to questions posed by the Panel, para. 461.
1971 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 455. See also, Dr Deckers's reply to Panel question 79, in List of Replies from the
scientific experts to questions posed by the Panel, para. 453.
1972 Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of Replies from the scientific experts
to questions posed by the Panel, para. 460.
1973 Dr Latorre's reply to Panel question 80, in List of Replies from the scientific experts to questions
posed by the Panel, para. 462. See also, Dr Sgrillo's reply to Panel question 80, in List of Replies from the
scientific experts to questions posed by the Panel, para. 467.
1974 Dr Latorre's reply to Panel question 80, in List of Replies from the scientific experts to questions

Panel has already noted that the use of expert j udgement must be documented and transparent and it
must be based on the relevant reliable scientific information.
1975 In this regard, the IRA does not
provide any explanation for its estimation that th ere would be a minimum 70 per cent likelihood that
Neonectria galligena survives routine processing procedures in the packing house, and a most likely
value of 85 per cent.
7.594 Accordingly, the Panel finds that the IRA's estimation of the likelihood that Neonectria
galligena survives routine processing procedures in the packing house is not objectively justifiable.
(e) Alleged overestimation for importation step 5
7.595 Importation step 5 represents the likelihood that clean fruit is contaminated during processing
in the packing house.1976
(i) Summary of the Parties' arguments
7.596 Regarding importation step 5 for European ca nker, New Zealand submits that the IRA's
estimation, like that for step 3, rests on the assu mption that infested or infected mature apples,
assuming they exist, would contaminate clean fruit. New Zealand argues, however, that the scientific
evidence suggests that the likelihood of this ha ppening during processing in the packing house is
negligible.1977
7.597 New Zealand notes that the IRA acknowledges that latent fruit infections have a "minimal
likelihood" of contamination in the processing pa thway, because spores do not develop on infected
fruit until they become severely rotted or mummified. 1978 In New Zealand's view, the IRA's assertion
that there is a probability, albeit "extremely low", of clean fruit becoming contaminated by twigs or by
washing in the dump tank, is "unsubstantiated speculation", not supported by scientific evidence.1979
7.598 In response, Australia contends that "New Zeal and failed to identify any flaws in the [IRA's]
conclusions on Importation step 5." 1980 Australia argues in this rega rd that, just as in the case of
New Zealand's arguments in relation to importation step 3, it also rejects New Zealand's assertion that
the IRA should have treated the probability of importation step 5 as "negligible".
1981 Australia adds
that New Zealand mistakenly focuses on the qualita tive descriptors and not on the IRA's quantitative
estimates.1982
7.599 Australia submits that, in its arguments New Ze aland ignores the evidence that latent fruit rot
caused by Neonectria galligena occurs in New Zealand and its likelihood has increased. 1983 Australia
also argues that conidia from external infections can be washed off in the dump tank water, potentially
contaminating clean fruit. In addition, post harvest washing would not alter the incidence of storage

1975 See para. 7.440 above.
1976 Australia's IRA, Part B, pp. 19-21.
1977 New Zealand's first written submission, paras. 4. 288 and 4.292. See also, New Zealand's second
written submission, para. 2.541.
1978 New Zealand's first written submission, para. 4. 289. See also, New Z ealand's second written
submission, para. 2.542.
1979 New Zealand's first written submission, para. 4. 291. See also, New Z ealand's second written
submission, paras. 2.545-2.548.
1980 Australia's first written submission, para. 594.
1981 Australia's first written submission, para. 582.
1982 Australia's first written submission, para. 588.
1983 Australia's first written submission, para. 586.

rots in uninjured fruit, although apples with wounds would be prone to storage rots in the presence of
high fungal concentration.1984
7.600 Finally, Australia argues that the IRA consider ed evidence of the possibility that fruit can be
contaminated by twigs in the dump tank. In any ev ent, the likelihood of clean fruit getting infected in
this manner was found to be "extremely low" and the IRA took this into account when estimating the
probability range for importation step 5.1985
(ii) The Panel's analysis
7.601 The IRA estimates the likelihood that clean fruit is contaminated by Neonectria galligena
during processing in the packing house as a triangular distribution with a minimum value of 10 -5 (1
in 100,000), a maximum value of 10 -4 (1 in 10,000) and a most likely value of 5 × 10 -5 (5 in
100,000).1986 According to the IRA, "[t]his allows for the presence of a small number of spores in the
packing processes that could contaminate fruit".1987
7.602 The IRA notes that:
"Given the extremely small likelihood of fruit being infested/infected with
N. galligena, the probability of surface spor es being present on fruit and
contaminating the dump water is similarly ex tremely small. Foliage is not affected
and leaf trash presents an insignificant c ontamination pathway unless fruit is picked
along with twigs that have small cankers ...
N. galligena spores are not able to penetrate intact apple fruit cuticle, although
conidial contamination could take place th rough the calyx, lenticels, scab lesions or
wounds caused by bruising. Polishing could create minute damage on the surfaces of
fruit, and this could assist the spread of inf ection. However, the use of chlorine and
other disinfectants in dump tanks and high-pressure apple washers when applied
would remove epiphytic microbes to varying degrees. Severely rotted fruit and twigs
are largely eliminated during harvesting. ...
[T]here would be a very large dilution of spores in the tank and surface contamination
could be washed off in any subsequent hi gh pressure wash. Where disinfectants such
as chlorine are used in dump tanks, spores in the dump tanks will be quickly killed ...
Cankers on the stalk of the apple have neve r been reported. Further, to become
established the organism must penetrate the cambium ... and it is not likely that a
significant number of fruit stalks on the trees would be damaged to expose the
cambium.
Latent fruit infections present a minimal likelihood of contamination in the
processing pathway because spores do not develop on infected fruit until they become
severely rotted or mummified ...
The remainder of the processing in the packing house presents an insignificant
likelihood of fruit contamination."
1988

1984 Australia's first written submission, paras. 587-589.
1985 Australia's first written submission, paras. 590-593.
1986 Australia's IRA, Part B, pp. 126-127.
1987 Australia's IRA, Part B, p. 127.
1988 Ibid.

7.603 As noted above, New Zealand's major arguments against the IRA's reasoning with respect to
importation step 5 are: that the scientific evidence s uggests that the likelihood of infested or infected
mature apples, assuming they exist, contaminati ng clean fruit during processing in the packing house
is negligible; and that the IRA's assertion that th ere is a probability, albeit "extremely low", of clean
fruit becoming contaminated by twigs or by w ashing in the dump tank, is only unsubstantiated
speculation, not supported by scientific evidence.
7.604 The whole discussion in the IRA regarding importation step 5 supports the conclusion that the
probability that clean fruit is contaminated by Neonectria galligena during processing in the packing
house is extremely small. As noted above, the IR A concludes that "[g]iven the extremely small
likelihood of fruit being infested/infected with N. galligena, the probability of surface spores being
present on fruit and contaminating the dump water is similarly extremely small".
1989 Regarding
Australia's statement that the IRA considered evidence of the possibility that fruit can be
contaminated in the dump tank, Dr Swinburne notes that "[it] is not necessarily Nectria that we are
talking about ... [This is something that is known to happen] for a number of other pathogens that
cause rot, notably Penicillium expansum , the blue mould rot." 1990 The IRA concludes that "[t]he
likelihood of clean fruit getting infected due to twigs at this stage would be extremely low."1991
7.605 Considering these statements, Dr Latorre opine d that the IRA's estimation of the likelihood
values for this importation step is not supported on scientific evidence. "There is no scientific
literature to support the assumption that the rate of clean fruit contamination with N. galligena would
vary between 10 -4 and 10 -5 (most likely value of 5 × 10 -5) (importation step 5) in the packing
house."1992 In his view, "[b]ased on disease knowledge, [this contamination] is extremely unlikely to
occur under normal fruit management. This should be disregarded from the risk analysis."1993
7.606 In conclusion, there is no support in the IRA for the estimation made for the likelihood of this
importation step either in the scientific evidence cite d in the IRA, nor on the IRA's discussion in this
regard. Accordingly, the Panel finds that the IR A's estimation of the likelihood that clean fruit is
contaminated by Neonectria galligena during processing in the packing house is not sufficiently
supported by the scientific evidence that the IR A relied upon and is accordingly not coherent and
objective.
(f) Alleged overestimation for importation step 6
7.607 Importation step 6 represents the likelihood that in fected or infested fru it remains infected or
infested during palletization, quality inspection, containerization and transportation to Australia.1994
(i) Summary of the Parties' arguments
7.608 Regarding importation step 6 for European ca nker, New Zealand submits that, "[i]n the
absence of any supporting scientific data that could resolve this question for N. galligena, the

1989 Australia's IRA, Part B, p. 127. See also, reply of Dr Sgrillo to Panel question 81, in List of
Replies from the scientific experts to questions posed by the Panel, para. 468.
1990 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 456.
1991 Australia's IRA, Part B, p. 127. See also, Dr Sg rillo's reply to Panel question 81, in List of Replies
from the scientific experts to questions posed by the Panel, para. 468.
1992 Dr Latorre's reply to Panel question 81, in List of Replies from the scientific experts to questions
posed by the Panel, para. 473. See also, Dr Sgrillo's reply to Panel question 81, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 469-470.
1993 Dr Latorre's reply to Panel question 81, in List of Replies from the scientific experts to questions
posed by the Panel, para. 473. See also, Dr Deckers's reply to Panel question 81, in List of Replies from the
scientific experts to questions posed by the Panel, para. 472.
1994 Australia's IRA, Part B, pp. 19-21.

estimation of likelihood [for this step] can only be speculative but it must certainly be lower
than '1'."1995
7.609 New Zealand argues that the likelihood value est imated by the IRA for this step is an
overestimation. "[B]ecause, even assuming that some fruit could be latently infected at the point of
palletisation, a proportion of fruit with latent inf ection would never develop symptoms ... The actual
proportion of fruit with latent infection that might eventually develop symptoms would be much less
than 100%."1996
7.610 In response, Australia contends that "New Zeal and failed to identify any flaws in the [IRA's]
conclusions on Importation step 6." 1997 In this regard, Australia rejects that the likelihood value
assigned to importation step 6 is an overestimation or is "speculative". 1998 Australia argues that the
study cited by New Zealand in support of its asser tion that some fruit with latent infection would
never develop symptoms, is not entirely relevant as it does not deal with Neonectria galligena .
Australia adds that infections in latently infected fruit will often not manifest until after three to seven
months in storage.1999
7.611 Australia also rejects New Zealand's assertion that the probability assigned to importation
step 6 must certainly be lower than 1. In its vi ew, there is scientific support for the IRA's judgement
of the likelihood value for this step.2000
(ii) The Panel's analysis
7.612 The IRA estimates the likelihood that Neonectria galligena survives palletization, quality
inspection, containerization and transportation to Australia as 1 (100 per cent).2001
7.613 According to the IRA:
"Some infected fruit not detected during sorting may be identified at quality
inspection. However, quality inspection will not detect latent infections or any
surface infestation, and these will survive pa lletisation, containerisation and transport
because there are no mechanisms in these procedures to remove them.
The time between Imp4 and Imp6 will not be long enough for latent infection to
express itself to a significant level. Because spores are microscopic, any remaining
surface infestation will also remain undetected and survive."
7.614 As noted above, New Zealand's major arguments against the IRA's reasoning with respect to
importation step 6 are: that, in the absence of supporting scientific data, the estimation of the
likelihood for this step is only speculative but "mus t certainly be lower than 1"; and that, even
assuming that some fruit could be latently infected at the point of palletisation, a proportion of fruit
with latent infection would never develop symptoms and therefore the actual proportion of fruit with
latent infection that might eventually develop symptoms would be much less than 100 per cent.

1995 New Zealand's first written submission, para. 4. 295. See also, New Z ealand's second written
submission, paras. 2.556-2.558.
1996 New Zealand's first written submission, para. 4.294. See, Biggs, "Detection of Latent Infections in
Apple Fruit with Paraquat" (1995), in Exhibit NZ-62.
1997 Australia's first written submission, para. 598.
1998 Australia's first written submission, paras. 596 and 598.
1999 Australia's first written submission, para. 596.
2000 Australia's first written submission, para. 598.
2001 Australia's IRA, Part B, pp. 127-128.

7.615 The IRA cites no scientific evidence in support of its proposition that all Neonectria galligena
would survive palletisation, quality inspection, containerisation and transportation to Australia.
2002
The IRA states that "[t]he time between Imp4 and Im p6 will not be long enough for latent infection to
express itself to a significant level".2003
7.616 Dr Latorre notes that it would be reasonable to assume that post-harvest processing does not
affect survival of latently infected fruits. Therefor e, a value of 1 could be acceptable for the survival
likelihood of the internal inocula.2004 With respect to the study cited by New Zealand in support of its
assertion that "a proportion of fruit with latent in fection would never develop symptoms", the expert
notes that Biggs (1995) is not relevant as it does not deal with Neonectria galligena.2005
7.617 Notwithstanding the IRA's statement on the short time between importation steps 4 and 6, the
conditions and the duration of stor age could have an effect on the subsequent development of any
quiescent infections that may be present. 2006 This effect was discussed earlier with respect to
importation step 4. 2007 The IRA dismisses this effect, noting that it would not "express itself to a
significant level". As Australia has repeatedly ar gued, however, that the likelihood of an event is
extremely low or even negligible does not necessa rily make it equal to zero. Indeed, the IRA
acknowledges that "[s]ome infected fruit not detected during sorting may be identified at quality
inspection."2008
7.618 Notwithstanding his comment on the survival of la tently infected fruits, Dr Latorre explains
that the situation would be different for external inoculum. "[T]hese post-harvest processes can affect
survival of the external inoculum, epiphytical ly contaminating the fruit surface, which may be
negligible. Then a value of 1 would be unacceptable."2009
7.619 In conclusion, New Zealand has not properly substantiated its argumen t for this importation
step that a proportion of fruit with latent infecti on at the point of palleti sation would never develop
symptoms. At the same time, however, the IRA ack nowledges that some infected fruit not detected
during sorting may be identified at quality inspection. Additionally, the IRA fails to take into account
the effects that the processes occurring during this step could have on external infestation. The
scientific evidence cited in the IRA does not support the estimation made for the likelihood of this
importation step. The IRA's estimation that there would be a 100 per cent likelihood that Neonectria
galligena survives palletisation, quality inspection, c ontainerization and transportation to Australia
does not seem a coherent and objective conclusion from the IRA's discussion. The likelihood of the
removal of some surface contamination in fruits an d the detection of some latently infected apples
during this step may be very small, but it would be different from zero.

2002 Dr Latorre's reply to Panel question 82, in List of Replies from the scientific experts to questions
2003 Australia's IRA, Part B, p. 127.
2004 Dr Latorre's reply to Panel question 82, in List of Replies from the scientific experts to questions
2005 Ibid.
2006 See, for example, Dr Swinburne's reply to Panel question 91, in List of Replies from the scientific
experts to questions posed by the Panel, para. 523.
2007 See para. 7.593 above. See also, Dr Swinburne's replies to Panel questions 77, 78 and 79, in List of
Replies from the scientific experts to questions posed by the Panel, para. 460; Dr Latorre's reply to Panel
question 79, in List of Replies from the scientific expe rts to questions posed by the Panel, para. 455; and
Dr Deckers's reply to Panel questions 79, 80 and 82, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 453, 461 and 474.
2008 Australia's IRA, Part B, p. 127. See also, Dr Sg rillo's reply to Panel question 82, in List of Replies
from the scientific experts to questions posed by the Panel, paras. 476 and 477.
2009 Dr Latorre's reply to Panel question 82, in List of Replies from the scientific experts to questions

7.620 In conclusion, the Panel finds that the IRA's estimation of the likelihood that Neonectria
galligena survives palletization, quality inspection, cont ainerization and transportation to Australia is
not sufficiently supported by the scientific evidence that the IRA relied upon and, accordingly, is not
coherent and objective.
(g) Alleged overestimation for importation step 7
7.621 Regarding the pests reviewed in the IRA, im portation step 7 represents the likelihood that
clean fruit is contaminated during palletizat ion, quality inspection, containerization and
transportation.2010
(i) Summary of the Parties' arguments
7.622 Regarding importation step 7 for European ca nker, New Zealand submits that the IRA's
estimation "has no basis in science". 2011 New Zealand argues that, although the IRA estimates the
likelihood of the event as "negligible" and "sta tes clear reasons why" it would be so, once the
likelihoods assigned to this step are used in the model, this results "in a negligible event being
mischaracterised as an ev ent that is likely to occur – approximately one in every two million apples
imported from New Zealand".2012
7.623 In response, Australia contends that "New Zeal and failed to identify any flaws in the [IRA's]
conclusions on Importation step 7." 2013 In this regard, Australia argues that New Zealand mistakenly
focuses on the qualitative descriptors and not on the IRA's quantitative estimates.2014
7.624 Australia rejects New Zealand's assertion that the probability range for importation step 7
"has no basis in science". In its view, the IRA Team exercised its expert judgement when determining
the likelihood of this importation step.2015
(ii) The Panel's analysis
7.625 The IRA estimates the likelihood that clean fruit is contaminated by Neonectria galligena
during palletization, quality inspection, containeri zation and transportation as a uniform distribution
with a minimum value of 0 and a maximum value of 10-6 (1 in 1,000,000).2016
7.626 According to the IRA, "[p]acked fruit woul d be securely stored and would present a
'negligible' likelihood of becoming contaminated during the palletisation, quality inspection and
transportation. The short period of storage and temperatures maintained during transportation would
not be conducive to spore production."2017
7.627 As noted above, New Zealand's main argument against the IRA's reasoning with respect to
importation step 7 is that the numerical range assigned to this step is inconsistent with the IRA's
conclusion that the likelihood of the event represented by this importation step is negligible and that
the IRA's estimation has no basis in science.

2010 Australia's IRA, Part B, pp. 19-21.
2011 New Zealand's first written submission, para. 4. 296. See also, New Z ealand's second written
submission, paras. 2.561-2.564.
2012 New Zealand's first written submission, para. 4. 296. See also, New Z ealand's second written
submission, paras. 2.560 and 2.565.
2013 Australia's first written submission, para. 601.
2014 Australia's first written submission, para. 600.
2015 Australia's first written submission, para. 601.
2016 Australia's IRA, Part B, p. 128.
2017 Ibid.

7.628 As noted above, the IRA concludes that the likelihood of clean fruit becoming contaminated
during palletization, quality inspection, contai nerization and transportation is "negligible".
2018
Dr Latorre notes that there is no scientific evidence in the IRA to suggest that the likelihood of the
event represented by this importation step should be greater than zero:
"There is no experimental evidence allowi ng us to assume that the likelihood that
packed clean fruit is contaminated with N. galligena would be different from zero, at
Step 7. Comments: (i) At this stage it is unlikely that latently infected fruits develop
symptoms and less likely that N. galligena sporulates on the surface of latently
infected fruits. (ii) Even if the inoc ulum (conidia) is present, post-harvest
dissemination by fruit contact would be extremely unlikely because fruit injuries are
needed for infection. (iii).This evaluation (S tep 7) falls within a range that could not
be considered legitimate. I suggest discounting this step from the risk analysis."2019
7.629 Nevertheless, while New Zealand does argue that the likelihood of this event should be zero;
it does not contest the IRA's conclusion that the likel ihood would be "negligible". In New Zealand's
words, "[t]he key point made in New Zealand's first written submission regarding importation step 7
concerned the incongruity between the description in the IRA of the risk of contamination at this stage
as 'negligible', and the application of a probab ility range with a midpoint of one in two million
apples."2020
7.630 After defining the likelihood of the event associat ed with this importation step as negligible,
the IRA does not provide any scientific evidence to s upport its choice of estimation. In any event, the
Panel has already concluded that the IRA's choice of the probability interval "for events with a
'negligible' likelihood of occurring (corresponding to the qualitative descriptor 'the event would
almost certainly not occur') is not properly justif ied in the IRA and would tend to overestimate the
probability of entry, establishment and spread of the pests at issue".2021
7.631 Accordingly, the Panel finds that the IRA's est imation of the likelihood that clean fruit is
contaminated by Neonectria galligena during palletization, quality in spection, containerization and
transportation is not supported by a coherent and objective reasoning.
(h) Estimation for importation step 8
7.632 Importation step 8 represents the likelihood that in fected or infested fru it remains infected or
infested after on-arrival minimum border procedures.2022
(i) Summary of the Parties' arguments
7.633 New Zealand submits that "it is difficult to fa ult the IRA's logic" regarding the estimation for
this particular importation step. 2023 New Zealand adds, however, that the IRA's conclusion on this
step "is hardly meaningful". "It depends on an assumption about mature, symptomless apple fruit

2018 Australia's IRA, Part B, p. 128.
2019 Dr Latorre's reply to Panel question 83, in List of Replies from the scientific experts to questions
posed by the Panel, para. 479. See also, Dr Deckers's reply to Panel question 83, in List of Replies from the
scientific experts to questions posed by the Panel, para. 478.
2020 New Zealand's second written submission, para. 2.560.
2021 See para. 7.508 above.
2022 Australia's IRA, Part B, pp. 19-21.
2023 New Zealand's first written submission, para. 4.298.

being a pathway for the transmission of European canker for which there is no scientific evidence, and
for which the likelihood has been demonstrated to be negligible."2024
7.634 Australia notes that New Zealand "does not contest this importation step". 2025 A u s t r a l i a
submits, nevertheless, that the product at issue in th is dispute is "mature apples free of trash, either
packed or sorted and graded bulk fruit from New Zealand", and not "mature, symptomless apples".2026
Australia also argues that New Zealand's allegation on the lack of scientific evidence that "mature,
symptomless apple fruit" are a pathway for transmissi on of European canker is inconsistent with an
earlier statement to the contrary by the Chief Plants Officer of New Zealand's Ministry of
Agriculture.2027 Australia finally states that New Zealand has not demonstrated that the likelihood of
"mature, symptomless, apples" being such a pathway is "negligible" in accordance with
New Zealand's definition of that term.2028
(ii) The Panel's analysis
7.635 The IRA estimates the likelihood that Neonectria galligena survives and remains with the
fruit after on-arrival minimum border procedures is 1 (100 per cent).2029
7.636 The IRA notes that "[o]n-arrival inspections of documentation would fail to detect fruit rot
symptoms or latent infections, and these would re main when the fruit arrives in Australia. The
likelihood rating for this importation step would not be significantly reduced by any normal on-arrival
procedure."2030
7.637 New Zealand has not called into question the IR A's estimation of the likelihood of the event
represented by this particular importation step.
(i) Alleged overestimation for the overall probability of importation
7.638 The overall probability of importation represents the likelihood that an imported apple is
infected or infested; it results from the sum of the proportions associated with the ten individual
importation pathways.
2031
(i) Summary of the Parties' arguments
7.639 Regarding the IRA's analysis of the like lihood of importation of European canker,
New Zealand argues that "there is no objectiv e and rational relationship between the scientific
evidence and the probability value th at is chosen at each step". 2032 In New Zealand's view,
"frequently a value is chosen in the absence of any scientific support at all".2033
7.640 New Zealand submits that the IRA's analysis of the probability of importation of European
canker is inconsistent with Article 5.1 of the SPS Agreement:

2024 New Zealand's first written submission, para. 4.298.
2025 Australia's first written submission, para. 602.
2026 Australia's first written submission, para. 603.
2027 Ibid.
2028 Ibid.
2029 Australia's IRA, Part B, p. 128.
2030 Ibid.
2031 Australia's IRA, Part B, pp. 23-24.
2032 New Zealand's first wr itten submission, para. 4.267. S ee also, New Zealand's first written
submission, para. 4.300.
2033 New Zealand's first written submission, para. 4.267.

"The IRA's analysis of the probability of importation rests on a flawed contention that
mature, symptomless apples provide a path way for the transmission of European
canker, a contention which has been demonstrated to be unsupported by scientific
evidence. In support of this contention, it treats as probable a series of events that are
no more than possible. As a result, the IRA's analysis is not an analysis of likelihood
at all. Rather, it is speculation on the possibility of entry, and does not conform to the
obligation under Article 5.1 of the SPS Agreement."
2034
7.641 In response, Australia contends that, contrary to New Zealand's assertion, "there is an
objective or rational relationship between the scientif ic evidence and the pr obability value that is
chosen at each step of the importation scenario."2035
7.642 Australia notes that the infestation/infection rate of imported apples from New Zealand,
corresponding to the overall probability of importing Neonectria galligena, was estimated by inserting
the likelihoods for each importation step into the risk simulation model.2036
(ii) Analysis of the Panel
7.643 Regarding the overall probability of importation of Neonectria galligena, the IRA notes that:
"When the above likelihoods [for each of the importation steps] were inserted into
the risk simulation model, the probability of importation of N. galligena was
estimated as being 6.8 × 10 –5 (mean), 3.5 × 10 –5 (5 th percentile) and 10 –4 (95 th
percentile). Therefore, the infestation/infection rate for N. galligena was estimated to
be 0.0068% (mean) of the total proposed number of apples imported from
New Zealand annually."
2037
Arithmetically, the overall figure of 0.0068 per cent would result from adding the different individual
likelihoods represented by each of the ten potential importation paths.
7.644 When considering the manner in which the IRA reached an estimation for the probability of
importation of Erwinia amylovora, the Panel noted generally the experts' criticism of trying to reach a
overall likelihood of importation by estimating i ndividual probabilities for each importation pathway
and combining them. 2038 Consulted by the Panel, Dr Paulin noted that such exercise was "just not
credible".2039 Dr Paulin added that, if the overall figure "h ad any consistency, it is a figure that could
be quite easily checked experimentally ... Such an experiment would have been more convincing than
the present efforts by IRA to demonstrate what cannot be really demonstrated." 2040 The same
criticism would be applicable to the overall estimation of importation of Neonectria galligena.
7.645 Regarding the IRA's estimation for some specific importation steps for European canker,
Dr Latorre notes that "[the] IRA assigned a proba bility value to each [importation] step. However,
some of these steps (e.g., Steps 3, 5 and 7) are inde ed mere possibilities (hypot hesis rather than true

2034 New Zealand's first wr itten submission, para. 4.268. S ee also, New Zealand's first written
submission, paras. 4.299-4.300; New Zealand's second written submission, para. 2.566-2.572.
2035 Australia's first written submission, para. 526.
2036 Australia's second written submission, para. 527.
2037 Australia's IRA, Part B, p. 128.
2038 See para. 7.354 above.
2039 Dr Paulin's reply to Panel question 34, in List of Replies from the scientific experts to questions
posed by the Panel, para. 239 (original emphasis).
2040 Ibid.

facts) that need to be confirmed. In such cases, a probability equal to zero should be assigned or even
better, disregard the steps considered almost certain not to occur."2041
7.646 Irrespective of whether this exercise of tryi ng to reach an otherwise unsupported overall
likelihood of importation by aggregating probabilities for individual importation paths is flawed, some
of the figures estimated by the IRA Team are problem atic. Indeed, if the estimations of one or more
of the individual likelihoods are questionable, b ecause those estimations are either not supported by
adequate scientific evidence or not based on a c oherent and objective reasoning, the overall figure
necessarily becomes questionable. Moreover, the IR A does not attempt to find justification for the
estimated overall probability of importation, other than the aggregation of the different individual
likelihoods represented by each importation step. 2042 As noted by Dr Sgrillo, "[t]he result of a
mathematical model is as good as the value assigned to its variables. Many of the parameters used in
the simulation were considered overestimated be cause they didn't reflect the meaning of the
qualitative category in the population. As con sequence, the final result could also be
overestimated."2043
7.647 Dr Latorre noted that the overall value for th e likelihood of importation falls out of the range
that could be considered legitimate on the basis of general knowledge regarding European canker:
"Considering that mature apple fruits are from areas where climate conditions are not
particularly conducive for fruit infection, a mean infection/infestation rate of
0.0068% falls out off the range that could be considered legitimate on the basis of
general knowledge regarding the European ca nker. This value may not explain the
real infection/infestation rate; theref ore, it needs to be validated before
acceptance."2044
7.648 Dr Swinburne agreed and noted that:
"The end point of this analysis, predic ting that 0.0068% of apples imported will
'carry' the disease is predicated on a starti ng point presumption of a probability that
each picked fruit is infected between 10 × E-6 & 10 × E-3, which at best is far too large
to be credible. (see Q75). Given all the uncertainty in the calculations for the
intermediate steps (see Q78-83) this outcome does not inspire confidence."2045
7.649 In the light of the conclusions reached earlier by the Panel regarding the IRA's estimations of
individual importation steps 2046, and of the lack of any separate justification and evidence in the IRA
regarding the estimated overall likelihood of importati on, the Panel finds that the IRA's estimation of
the overall probability of importation is not supporte d by the scientific evid ence that the IRA relied
upon and, accordingly, is not coherent and objective.

2041 Dr Latorre's reply to Panel question 138, in List of Replies from the scientific experts to questions
2042 Australia's IRA, Part B, p. 128. See also, Table 4 in Australia's IRA, Part B, p. 24; Dr Sgrillo's
reply to Panel question 84, paras. 483-486; Dr Sgrillo's reply in Transcript of the Panel's meeting with experts,
para. 269.
2043 Dr Sgrillo's reply to Panel question 84, in List of Replies from the scientific experts to questions
2044 Dr Latorre's reply to Panel question 84, in List of Replies from the scientific experts to questions
2045 Dr Swinburne's reply to Panel questions 84 and 85, in List of Replies from the scientific experts to
questions posed by the Panel, para. 497.
2046 See paras. 7.545, 7.573, 7.594, 7.606, 7.620 and 7.631 above.

(j) IRA's analysis of the probability of entry, establishment and spread
(i) Summary of the Parties' arguments
7.650 Factors relevant to the estimation of the pr obability of entry, establishment and spread
include: the probability of importation (in accordan ce with the different importation steps); the
proximity value; the probability of exposure; th e probability of establishment; and, the probability
of spread.
2047
7.651 New Zealand argues that, just as the IRA fails to evaluate the likelihood of entry of European
canker, it also fails to evaluate the likelihood of the "establishment or spread" of the disease within the
meaning of paragraph 4 of Annex A to the SPS Agreement.2048 New Zealand submits that, as a result,
Australia "failed to comply with its obliga tions under Article 5.1 [of the SPS Agreement]." 2049 I n
New Zealand's view, "the evaluation in the IRA of the likelihood of entry, establishment and spread of
European canker was not an evaluation of likelihood in terms of the definition of 'risk assessment' in
the SPS Agreement."2050
7.652 Regarding proximity and exposure, New Zealand su bmits that the IRA's analysis is based on
assumptions about production and dispersal of spores, which find no support in science. 2051 The IRA
assigns probability values in a seemingly arbitrar y manner to various utility points based on their
likelihood to be proximate to host plants, describ ing events that have a very low likelihood of
occurring.2052 New Zealand adds that, without any scien tific evidence that this could occur under
Australian conditions, the IRA assumes that a suffici ent quantity of spores could be produced from an
infected apple and dispersed under suitable clim atic conditions to infect a susceptible host. 2053 This
would fail to take into account that not all late ntly infected fruit would express symptoms and
symptomless fruit do not produce spores; furthermore, even if symptoms were to develop, there is no
evidence that conidia spores are produced from storag e rots or rots which develop after removal from
cold storage from latently infected fruit.2054 Moreover, surface spores are short-lived because they are
prone to desiccation without continued moisture a nd would likely be dead well before arrival in
Australia.2055 New Zealand also argues that, taking into account the scientific evidence cited by the
IRA, under Australian conditions the likelihood of perithecia development and thus ascospore
production would be negligible.2056
7.653 New Zealand submits that, even if latently infected New Zealand fruit could produce spores
in Australia, these spores would need to be transferre d to a host plant. Dispersal of conidia would
primarily be by rain splash and thus only a few metres from a discarded apple. Otherwise, the IRA
would rely on airborne transfer of spores, but th ere is no evidence that airborne spores would develop

2047 Australia's IRA, Part B, p. 129. See also, Australia's IRA, Part B, p. 17.
2048 New Zealand's first written submission, paras. 4.301 and 4.325; New Zealand's second written
submission, paras. 2.658-2.661.
2049 New Zealand's first written submission, para. 4.325.
2050 New Zealand's second written submission, para. 2.686.
2051 New Zealand's first written submission, para. 4.325.
2052 New Zealand's first written submission, para. 4. 302; New Zealand's se cond written submission,
para. 2.574.
2053 New Zealand's first written submission, paras. 4.303-4.304.
2054 New Zealand's first written submission, para. 4. 305; New Zealand's se cond written submission,
paras. 2.580 and 2.583-2.592.
2055 New Zealand's first written submission, para. 4.309.
2056 New Zealand's first written submission, paras. 4.306-4.307; New Zealand's second written
submission, paras. 2.580 and 2.593-2.608.

from mature, symptomless New Zealand apples. 2057 New Zealand notes that most infection studies
for host plant receptivity were conducted under artificial conditions.2058
7.654 New Zealand submits that, notwithstanding the fact that for infection to occur, the number of
spores must be at or above a certain threshold, there is no connection in the IRA between the
quantitative data from the literature cited and th e ultimate assignment of probability values for
exposure.2059 Moreover, the IRA misconstrues the relevant literature regarding the climate conditions
necessary for infection, is inconsistent with in formation from countries where European canker is
present and fails to note that the climatic conditio ns in Australia are not conducive to European
canker.2060 In New Zealand's view, the IRA contains no evidence to support the suggested pathway
via discarded apples on the ground: "[T]he IRA's analysis of transfer of N. galligena from a single
discarded apple to a susceptible host is in rea lity a consideration of a series of remote
possibilities."2061
7.655 Regarding establishment and spread, New Zealand argues that the IRA's analysis is based on
assumptions about climatic similarity and alte rnative hosts that have no support in science. 2062 The
IRA's consideration of alternative hosts for Neonectria galligena for its contention for the likelihood
of establishment and spread of European canker rela tes to northern hemisphere hardwood forest trees
and uses information from the United Kingdom, Northe rn Europe and Nova Sc otia. It would not
necessarily follow that Neonectria galligena will cause disease in these hosts in New Zealand and
Australia where climatic conditions are less suitable for the disease. 2063 New Zealand submits that, in
its discussion of the outbreak of European canker in Spreyton, Tasmania, the IRA overestimates the
significance of the eradication program. In New Zealand's view, the main reasons why European
canker did not spread into other apple growing regions or alternative hosts during the outbreak,
despite unrestricted movement of fruit from affected orchards, is that fruit are not a pathway for the
disease under New Zealand and Australian conditions, and that the climate of Tasmania, as that of the
rest of Australia, is not suitable for the establishment and spread of European canker.2064
7.656 Finally, New Zealand submits that the IRA's conc lusion that for each of the scenarios there is
a moderate or high likelihood of establishment and spread, which assumes these events "would be
expected to occur with an even probability or that [they] would be very likely to occur", is not
supported by scientific evidence. 2065 New Zealand concludes that, even if there were a pathway for
the transmission of European canker to Australia by mature, symptomless apples, the IRA fails to
establish that the disease could subsequently establish or spread.2066

2057 New Zealand's first written submission, paras. 4.311-4.312; New Zealand's second written
submission, paras. 2.580 and 2.609-2.615.
2058 New Zealand's first written submission, para. 4.313.
2059 New Zealand's first written submission, para. 4. 314; New Zealand's se cond written submission,
paras. 2.580 and 2.618-2.626.
2060 New Zealand's first written submission, paras. 4. 315 and 4.87-4.92; New Zealand's second written
submission, paras. 2.580 and 2.616-2.617.
2061 New Zealand's first written submission, para. 4.317.
2062 New Zealand's first written submission, para. 4. 325; New Zealand's se cond written submission,
para. 2.636.
2063 New Zealand's first written submission, paras. 4.318-4.321; New Zealand's second written
submission, paras. 2.638-2.646 and 2.650-2.655.
2064 New Zealand's first written submission, paras. 4.322-4.323; New Zealand's second written
submission, paras. 2.647-2.649.
2065 New Zealand's first written submission, para. 4. 324; New Zealand's se cond written submission,
paras. 2.656-2.657.
2066 New Zealand's first written submission, para. 4.325.

7.657 With regard to the IRA's analysis of proximity for Neonectria galligena, Australia responds
that New Zealand does not address the issues raised in the IRA's discussion, but only asserts that the
IRA used arbitrary proximity values. Australia rejects that assertion and submits that the IRA
provides a justification for all of the proximity ratings; many of the events in relation to proximity are
assigned in the IRA a "very low" or an "extremely low" likelihood of occurring.
2067
7.658 Australia argues that New Zealand exporters are lik ely to ship fruit in bulk bins that could be
repacked and distributed in Austra lia for specific markets. Australian retail outlets often display
apples on tables or in crates, rather than in smal ler "retail ready" boxes. Also, although one of
Australia's largest supermarket chains introduced a sy stem of returnable plastic crates, it is unlikely
that empty crates would be sent from Australia to Ne w Zealand in order for New Zealand exporters to
pack their apples for Australia. Orchard wholesal ers who would repack such fruit are in close
proximity to commercial fruit crops. In Australia's view, this explanation justifies the IRA Team's
proximity rating for commercial fruit crops and orchard wholesalers.2068
7.659 Regarding the IRA's exposure analysis, Australia rejects New Zealand's assertion that there is
no scientific evidence to show the likelihood that a sufficient quantity of spores could be produced
from an infected apple and dispersed under suitable climatic conditions to infect a susceptible host.2069
Australia argues that "there is no doubt that some latently infected apples will arrive in Australia". 2070
The IRA cites studies showing that fruit rot caused by Neonectria galligena occasionally occurs in
New Zealand and the Chief Plants Officer of the New Zealand Ministry of Agriculture has endorsed
the fact that "apple fruit are a pot ential pathway for the introduction of European canker, as the fruit
can develop latent or storage rots". 2071 Australia also reiterates the IRA's views that rotting fruit in
Australia would be discarded as waste and could be a source of inoculum and give rise to infections in
new areas, if discarded near susceptible hosts. 2072 Likewise, that infected fruit which become
mummified can produce perithecia with mature ascospores and become a source of further infection.
Similarly, that rotting fruit, particularly with the New Zealand strain of Neonectria galligena can
produce both conidia and perithecia with ascospores. Also that there is no reason why perithecia
would not form on discarded rotting fruit in Australia in August.
2073
7.660 Australia submits that it is well accepted that spores are dispersed by rain splash and wind and
such dispersal could similarly apply to rotting fruit discarded as waste nearby a suitable host plant.
Birds and insects could also be a potential agent to transfer the spores from infected fruit, carried on
their beaks or feet, to branches of hosts where the fungus is known to establish easily.
2074 Dispersal

2067 Australia's first written submission, paras. 606-607. See also, Australia's second written
submission, para. 521.
2068 Australia's first written submission, paras. 608-611.
2069 Australia's first written submission, paras. 612-613. See also, Australia's second written
submission, paras. 507-510 and 520.
2070 Australia's first written submission, para. 613.
2071 Australia's first written submission, para. 613. See, Atkinson, "Bacterial diseases of pip fruit"
(1971), in Exhibit AUS-52; Brook and Bailey, "Control of European canker" (1965), in Exhibit AUS-53;
Braithwaite, "The occurrence of fruit rots caused by Nectria galligena (European canker) in New Zealand and a
comparison of brown rot strains between New Zealand and Australia" (1996), in Exhibit NZ-34;
communication from Biosecurity New Zealand, Ministry of Agriculture and Forestry (16 May 2005), in Exhibit
AUS-51; and communication from New Zealand's Ministry of Agriculture (15 July 1996), in Exhibit AUS-54.
See also, Australia's first written submission, para. 670, Australia's second written submission, paras. 469 and
480-485.
2072 Australia's first written submission, para. 614. See also, Australia's second written submission,
paras. 511-519.
2073 Australia's first written submission, para. 614.
2074 Australia's first written submission, paras. 615 and 635-636.

by "a few metres" is all that would be needed for a rotting apple in orchard wholesaler waste, or in a
backyard compost heap, to transfer to a susceptible host plant.
7.661 Australia argues that New Zealand's climate anal ysis suggesting a lack of climate conditions
necessary for exposure is too narrow. 2075 Neonectria galligena causes infection over a range of
temperatures under field conditions. 2076 Australia's climate modelling would indicate that Australian
climatic conditions are conducive to European canker, as the potential distribution of European canker
in Australia covers a much larger area than suggested by New Zealand's climate analysis. 2077 Under
Australian conditions, conidia and ascospores would be produced.2078 One of the probable reasons for
the limited spread of the disease during the Tasmania n outbreak, is that the Tasmanian strain of
Neonectria galligena was a unique strain that require d another mating type for sexual
reproduction.2079
7.662 Regarding New Zealand's criticism of the IRA's ex posure analysis, Australia submits that the
product at issue is not mature, symptomless apples 2080, that fruit rot after removal from cold storage
has been shown 2081, and that spores can be dispersed from mummified apples on the ground. 2082
Australia also rejects what it considers to be New Zealand's attempt to impose its own methodology
on other WTO Members, by focusing on qualitative d escriptors and not on the numbers contained in
the IRA.2083
7.663 Australia argues further that not all conidia s uperficially present on fruit would be killed by
desiccation.2084 Australia submits that the laboratory st udies of pathogens taken into account by the
IRA were relevant for the discussion on host plant receptivity and the IRA Team took into account the
fact that they had been conduc ted under laboratory conditions. 2085 Australia adds that discarded
apples can survive long enough to develop rots and produce spores 2086 and that New Zealand
misrepresents the threshold number of spores required to initiate infection.2087
7.664 Australia concludes that the exposure values in the IRA are supported by scientific evidence
and New Zealand has failed to establish any flaws. Australia rejects New Zealand's assertion that
there is no connection between the literature cited a nd the IRA's assignment of exposure values. The
IRA would provide a justification for all of the exposure values for Neonectria galligena; in the IRA
most of the exposure events are assigned a "negligible" likelihood of occurring.2088
7.665 Regarding the IRA's analysis for the probability of Neonectria galligena establishing on a
host plant and the probability of it spreading to ot her hosts, Australia argues that the IRA provides a
justification for all the probabilities. With the ex ception of the likelihood of spread to wild and
amenity plants, all the scenarios described in th e IRA have a "moderate" or "high" likelihood of

2075 Australia's first written submission, para. 616.
2076 Australia's first written submission, para. 627.
2077 Australia's first written submission, paras. 616 and 627-629.
2078 Australia's first written submission, para. 630.
2079 Australia's first written submission, paras. 631-632.
2080 Australia's first written submission, para. 618.
2081 Australia's first written submission, paras. 619-621.
2082 Australia's first written submission, paras. 622-623.
2083 Australia's first written submission, paras. 624-626.
2084 Australia's first written submission, paras. 633-634.
2085 Australia's first written submission, paras. 637-638.
2086 Australia's first written submission, paras. 639-640.
2087 Australia's first written submission, paras. 641-642.
2088 Australia's first written submission, paras. 643-644. See also, Australia's second written
submission, para. 521.

occurring.
2089 Australia rejects New Zealand's complaint that the IRA's conclusions on the likelihood
of establishment and spread are not supported by scientific evidence.2090
7.666 In this respect, Australia argues that Neonectria galligena affects alternative hosts in
New Zealand and elsewhere, and studies from other countries in this regard are not irrelevant. 2091
New Zealand's allegation that there is no eviden ce of European canker causing pathogenic symptoms
in other host plants would seem incons istent with evidence showing that Neonectria galligena causes
considerable damage to trees in private gardens in New Zealand.2092
7.667 As with respect to the exposure analysis, Australia argues that New Zealand's climate analysis
suggesting a lack of climate conditions necessary for the establishment and spread of European canker
is too narrow. In its view, Australian climatic c onditions are suitable for the establishment and spread
of European canker. 2093 Australia argues that the IRA Team did not overestimate the significance of
the eradication program in Tasmania. It reiterates some reasons for the limited scope of the
Tasmanian outbreak, including the existence of a unique strain of Neonectria galligena and that
conidia were the only mechanism for disease spread, in the absence of sexually produced
ascospores.
2094
7.668 Finally, Australia argues that New Zealand's pr oposition that the export trade over the last 15
years provides no evidence for spread of European canker is "hollow, given that the vast majority of
New Zealand's exports have been to countries that already have the disease."2095
7.669 Australia concludes that New Zealand has failed to identify any flaws in the IRA's assessment
of establishment and spread, "let alone any flaws serious enough to prevent the Panel from having
'reasonable confidence' in the risk assessment".2096
(ii) The Panel's analysis
7.670 In its estimate of the probability of entry, est ablishment and spread of European canker, the
IRA has taken into account the following factors: the probability of importation, that has already been
discussed with respect to the different importation st eps; the proportion of utility points near host
plants susceptible to the pest in each exposure grou p, titled "proximity"; the probability of exposure
of a susceptible host plant in the ex posure group to the pest by an infested/infected apple discarded
near it, titled "exposure"; the probability of establishment; and, the probability of spread."2097
7.671 The probability of importation, combined with the proximity and the exposure analyses, result
in the overall probability of entry. All scenarios s ubsequent to the probabilit y of importation that has
been discussed above are only relevant under th e assumption that imported apples from New Zealand
would be either internally latently infected or superficially contaminated with Neonectria galligena.

2089 Australia's first written submission, para. 645.
2090 Australia's first written submission, paras. 646-647.
2091 Australia's first written submission, paras. 648-649. See also, Australia's second written
submission, paras. 522-531.
2092 Australia's first written submission, paras. 650-653.
2093 Australia's first written submission, paras. 650 an d 656-659. See also, Australia's second written
submission, paras. 532-550.
2094 Australia's first written submission, paras. 655 an d 660-669. See also, Australia's second written
submission, paras. 551-570.
2095 Australia's first written submission, para. 671.
2096 Australia's first written submission, para. 672.
2097 Australia's IRA, Part B, p. 129. See also, Australia's IRA, Part B, p. 17.

Proximity
7.672 Under its proximity analysis for European canker, the IRA assesses "the likelihood that a
utility point is sufficiently close to a host plant in a particular exposure group, to allow for a non-zero
likelihood of transfer of [ Neonectria galligena] to a host to occur." 2098 More specifically, "[t]he IRA
Team assessed the proximity of major handlers and users of apples to host plants for N. galligena."2099
The IRA considers the following utility points: orchard wholesalers, urban wholesalers, retailers,
food services and consumers. It also considers the following exposure groups: commercial fruit
crops, nursery plants, household and garden plants and wild and amenity plants. The IRA describes
issues specific to each utility point and estimates pr oximity ratings for the combination of each utility
point with exposure groups (proximity values).2100
7.673 New Zealand has submitted few arguments to contest the IRA's analysis on proximity. It has
mainly argued that the IRA has assigned proximity values in a seemingly arbitrary manner.
7.674 As noted above with respect to the proximity an alysis for fire blight, when consulted by the
Panel the experts expressed scepticism regarding so me of the scenarios considered under the IRA's
proximity analysis. 2101 Most of these concerns are also rele vant for the IRA's proximity values for
European canker, since those values are the same as the ones estimated for fire blight. Most
importantly, as noted by Dr Paulin, while the IRA's as sessment is "apparently coherent", it is not clear
how the relative levels of probabilit y for each situation were evaluated. 2102 In the case of European
canker, Dr Latorre coincides with Dr Paulin in that the IRA would overemphasize the importance of
the scenario where apples are repacked at rura l packing houses if apples from New Zealand are
imported as retail-ready, because in this case they would probably not be processed in proximity to
host plants.2103 In the words of Dr Latorre, "[t]he assessm ent and implication of the repacked apples
at rural packing houses in close proximity to the or chards is a possibility that cannot be denied.
However, the impact of repacked fruits can be mini mized if fruit is exported in retail-ready packs, as
New Zealand has suggested."2104
7.675 Although the IRA offers little explanation and supporting evidence for its reasoning regarding
the estimation of the different proximity values, the Panel finds that New Zealand has not made a
prima facie case that the IRA's discussion on utilit y points and estimated pr oximity ratings for the
combination of each utility point with exposure groups (proximity values) is not objectively
justifiable.
Exposure
7.676 Under its exposure analysis, the IRA assesses "t he likelihood of transfer of the pathogen from
infested or infected apples to a susceptible host plant." 2105 According to the IRA, the following
factors were taken into account in its exposure analys is for European canker: waste disposal, location
of fungi, survival and viability of the fungus in or on the fruit, transfer mechanism, availability of

2098 Australia's IRA, Part B, pp. 129-134, 24-27 and 29.
2099 Australia's first written submission, para. 606.
2100 Australia's IRA, Part B, pp. 129-134; Australia's IRA, Part B, pp. 24-27.
2101 See para. 7.379 above.
2102 Dr Paulin's reply to Panel question 46, in List of Replies from the scientific experts to questions
2103 Dr Paulin's reply to Panel question 52, in List of Replies from the scientific experts to questions
2104 Dr Latorre's reply to Panel question 91, in List of Replies from the scientific experts to questions
posed by the Panel, para. 521. See also, Dr Paulin's reply to Panel question 46, in List of Replies from the
scientific experts to questions posed by the Panel, para. 295.
2105 Australia's IRA, Part B, p. 134. See also, Australia's IRA, Part B, p. 27.

entry points, inoculum dose, host plant receptivity, environmental factors and features specific to each
exposure group (commercial fruit crops, nursery plan ts, household and garden plants and wild and
amenity plants).
2106 After discussing these factors, the IR A estimates the probabilities of exposure for
all utility point-exposure group combinations for Neonectria galligena, as summarized in Table 33 of
the IRA. The IRA states that "[a] significant exposure factor for N. galligena is the fact that the
fungus has a specific mechanism for spore dispersal."2107
Waste disposal
7.677 With respect to waste disposal, the IRA notes th at "[m]ost consumer waste is disposed into
landfills, presenting a very small ri sk for subsequent exposure of N. galligena ; however, an
increasing amount is being disposed of in backyard compost heaps. Some waste is also disposed
directly into the environment along roadsides a nd recreational areas, presenting potential inoculum
sources for transfer to susceptible host plants."2108
7.678 New Zealand has not disputed the IRA's asser tion that an increasing amount of consumer
waste could be disposed of in backyard compost heaps and that some consumer waste may also be
disposed directly into the environment along roadsi des and recreational areas. In any event, the IRA
does not cite any particular evidence to support its analysis of waste disposal for the purpose of
European canker exposure. Nor is any evidence cited for the IRA's proposition that such waste would
present "potential inoculum sources for transfer to susceptible host plants".
Location of fungi
7.679 With respect to the location of fungi, the IRA notes that:
"Fruit infection typically takes place at th e blossom end of the fruit through the open
calyx or stem end, as well as through lenticels and scab lesions (Swinburne, 1975;
Bondoux and Bulit, 1959). This infection l eads to the development of a rot and has
been reported to spread to the seed cavity (Bondoux and Bulit, 1959), although this
was not observed in California (McCartney, 1967). As the rot progresses, the fruit
may become mummified followed by the development of perithecia in autumn,
releasing ascospores in winter and spring (Munson, 1939; Grove, 1990a)."
2109
7.680 New Zealand has not disputed the IRA's assertions regarding the location of fungi in infected
apple fruit. Nevertheless, the Panel has alread y noted the flaws in the IRA's assertions on the
mummification of fruits, the development of perithecia and the release of ascospores. With regard to
the IRA's discussion of importation step 2, the Pa nel has noted Dr Swinburne's statement that the
paper by Braithwaite (1996) "[speculates] that rotte d fruit can transmit infection, basing his argument
on European observations on the formation of ascospores on mummified fruit." 2110 Dr Swinburne

2106 Australia's IRA, Part B, pp. 134-139. See also, Australia's IRA, Part B, pp. 17 and 27.
2107 Australia's IRA, Part B, p. 138.
2108 Australia's IRA, Part B, p. 134.
2109 Australia's IRA, Part B, p. 134. See, Swinburne, "European Canker of Apple ( Nectria galligena)"
(1975), in Exhibit NZ-9; Bondoux and Bu lit, "Sur la pourriture des pommes due au Cylindrocarpon mali (all.)
Wr." (1959), in Exhibit AUS-61; McCartney, "An unusual occurrence of eye rot of apple in California due to
Nectria galligena" (1967), in Exhibit NZ-10; Munson, "Observations on apple canker. I. The discharge and
germination of spores of Nectria galligena Bres." (1939), in Exhibit NZ-37; Grove, "Nectria canker" (1990), in
Exhibit NZ-7.
2110 See para. 7.537 above. Dr Swinburne's reply to Panel questions 54 and 55, in List of Replies from
the scientific experts to questions posed by the Panel, pa ra. 349. See, Braithwaite, "The occurrence of fruit rots
caused by Nectria galligena (European canker) in New Zealand and a comparison of brown rot strains between
New Zealand and Australia" (1996), in Exhibit NZ-34.

suggests that "[t]his is a very rare occurrence, and most unlikely to be found in the climates of NZ or
Australia ... For these reasons this asp ect of the paper can be disregarded." 2111 In response to a
different question, Dr Swinburne confirmed his view : "[i]t is most unlikely that rotted fruit would
produce ascospores so [ascospores] need not be considered further here." 2112 Regarding the IRA's
discussion of importation step 3, the Panel also noted the views of Dr Latorre and Dr Swinburne that
there is no evidence of the development of pe rithecia and the release of ascospores from rotted
fruit.2113 The Panel concluded with regard to those importation steps that the IRA does not contain
scientific evidence regarding the possibility that latently infected but symptomless fruit could develop
rot and generate Neonectria galligena spores, which could then be transferred to clean fruit; nor is
there scientific evidence in the IRA to support the pr oposition that perithecia would play a role in the
contamination of clean fruit.2114
Survival and viability of the fungus in or on the fruit
7.681 With respect to the survival and viability of the fungus in or on the fruit, the IRA notes that:
"N. galligena can readily survive at temperatures between 2 to 30°C (Munson, 1939;
Butler, 1949) although Latorre et al. (2002) demonstrated under controlled
environmental conditions using high fungal i noculum levels (106 conidia/mL), that
no infection occurred at 5°C regardless of wetness duration. The cool storage and
transport process would not adversely aff ect the viability of the fungus. Latent
infections could remain, with fungal grow th and fruit rot resuming when fruit is
removed from the cool chain, sold to cons umers and stored at room temperature. ...
The fungus has been associated with storag e rots of apples suggesting that latent
infections also occur in New Zealand fruit an d such fruit if discarded near susceptible
hosts could be a source of inoculum for inf ections in new areas. Fruit discarded into
the environment could further rot, beco me mummified and develop viable fungal
inoculum, conidia or perithecia that coul d initiate new infection although perithecia
rarely develop on infected fruit in waste dumps ...
Apple waste disposed of in landfills and compost may be subjected to high
temperatures (60°C), which may kill the f ungus – many fungi are killed within a few
days during composting ... Apple waste dis posed of in landfills or compost heaps
would be rapidly contaminated and col onised by saprophytic microorganisms,
hastening the decay process and minimising the likelihood of perithecia development.
Similarly insects, mammals or birds could consume apple waste.
N. galligena does not produce resting cells and spores are killed by prolonged
desiccation from high temperature and low relative humidity (Dubin and English,
1975a). Liquid phase water is required for germination of conidia and their viability

2111 Dr Swinburne's reply to Panel questions 54 and 55, in List of Replies from the scientific experts to
questions posed by the Panel, para. 349.
2112 Dr Swinburne's reply to Panel question 73, in List of Replies from the scientific experts to
questions posed by the Panel, para. 426.
2113 See paras. 7.567-7.568 above. Dr Latorre's replies to Panel questions 70 and 77, in List of Replies
from the scientific experts to questions posed by the Panel, paras. 410 and 444-445; Dr Swinburne's reply to
Panel questions 67 and 68, in List of Replies from th e scientific experts to questions posed by the Panel,
para. 404; Dr Latorre's replies in Transcript of the Panel's meeting with experts, paras. 413, 459 and 486;
Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 461.

is sharply reduced when exposed to relati ve humidity between 85 to 100% for 3 to 12
hours at 11°C and 19°C (Dubin and English, 1975a)."
2115
7.682 The Panel has already noted the experts' statem ents that the fungus would not survive as a
surface contaminant. 2116 As explained by Dr Latorre, "[t]here is no information demonstrating that
conidia or ascospores of N. galligena can survive epiphytically (as surface contaminant) on mature
apple fruits. It is important to consider that c onidia survive desiccation for relatively short periods
and it would be very unlikely that conidia and asco spores, contaminating apple surfaces, can survive
post-harvest fruit management."2117
7.683 Dr Latorre has added that, "in order for the fruit to be infected ... you have to have some other
conditions at the same time. There are some weat her requirements that are very important, but more
important than that, you have to have a susceptible hos t and you have to have injuries. Otherwise, the
infestation means nothing, that is the end of the inoculum. It will not survive for a very long time."2118
7.684 The evidence cited in the IRA suggests, howev er, that it is possible that the fungus could
survive internally, even after cold storage. In the words of Dr Latorre: "Australia states that cool
storage and transport processes would not adversely affect the viability of the fungus. This may be
true only for the fungus inside the fruit ... In other words, mycelia can surviv e in latently infected
fruits; growth may resume after cool storage a nd eventually the fungus may sporulate on the surface
of mummified fruits."2119
7.685 In this respect, New Zealand argues that th e IRA misconstrues the relevant literature
regarding the climate conditions necessary for infection. 2120 Dr Swinburne notes that "[t]here is no
information on the effect of temperature on spor e formation or discharge, only for infection." 2121 In
his view, in regions of intermittent rainfall it w ould be incorrect to assume that spores would be
produced at all times.2122
7.686 In any event, the survival and viability of the fungus, however, would require specific
climatological conditions. The Panel has already noted, with regard to the IRA's discussion of
importation steps 2 and 3, that certain climatological conditions are necessary for inoculum
production, dissemination and infection. 2123 Regarding the survival and viability of the fungus,
Dr Latorre adds that "favourable climatic cond itions are compulsory for sporulation (inoculum

2115 Australia's IRA, Part B, pp. 134-135. See, Munson, "Observations on apple canker. I. The
discharge and germination of spores of Nectria galligena Bres." (1939), in Exhibit NZ-37; Butler, "Apple
canker, Nectria galligena Bres." (1949), in Exhibit AUS-60; Latorre et al ., "The effect of temperature and
wetness duration on infection and a warning system for European canker ( Nectria galligena) of apple in Chile"
(2002); Dubin and English, "Effects of temperature, relative humidity, and dessication on germination of
Nectria galligena conidia" (1975), in Exhibit NZ-12.
2117 Dr Latorre's reply to Panel question 49, in List of Replies from the scientific experts to questions
posed by the Panel, para. 308. See also, Dr Swinburne's reply to Panel question 49, in List of Replies from the
scientific experts to questions posed by the Panel, para. 310.
2118 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 452.
2119 Dr Latorre's reply to Panel question 71, in List of Replies from the scientific experts to questions
2120 New Zealand's first written submission, paras. 4. 315 and 4.87-4.92; New Zealand's second written
submission, paras. 2.580 and 2.616-2.617.
2121 Dr Swinburne's reply to Panel question 56, in List of Replies from the scientific experts to
questions posed by the Panel, para. 354.
2122 Dr Swinburne's reply to Panel question 56, in List of Replies from the scientific experts to
questions posed by the Panel, para. 354.
2123 See paras. 7.544 and 7.572 above.

production, mainly conidia), dissemination and survival of the inoculum." 2124 These climatic
conditions require a combination of adequate temperatures and wetness.
7.687 Dr Swinburne notes that:
"Data from Northern Europe, California and Chile on the basic weather conditions for
infection (in the strict sense) have b een determined from artificial inoculation
experiments (summarised in Swinburne, 1975; CAB 2001, and Latorre et al 2001).
This data will be relevant to all apple grow ing regions, but as they refer to just one
aspect of the cycle of events, can not be u sed alone to predict the suitability of any
region for the disease. The essential weakness of the approach in the IRA is that it
assumes that inoculum (spores) for infection is always available, and all that is
required is a suitable period (hours of l eaf wetness within given temperature limits)
for infection to occur."2125
7.688 Based on the available evidence, Dr Latorre notes that "temperatures and rainfalls are
relatively unfavourable for N. galligena during summer and early fall in Australia, which may be the
most critical period for infection."2126 The Panel has also noted, on the basis of the available evidence
and the opinions of the experts, that the IRA does not contain scientific evidence regarding the
possibility that latently infected but symp tomless fruit could deve lop rot and generate Neonectria
galligena spores, which could then be transferred to new hosts. The Panel has also concluded that
there is no scientific evidence in the IRA to support the proposition that perithecia would play a role
in the contamination of new hosts.2127
7.689 Dr Swinburne notes further that, under climatic conditions in Australia, it is unlikely that
rotted apples discarded by consumers would become infectious units:
"[Response to question] 99 by Australia [after the first meeting with the Panel] makes
it clear that the IRA indicates that fruit discarded by consumers constitutes the
greatest threat for the disease to enter the country. Fruit out of store would be held at
considerably less than 100%RH. To become infectious units, discarded apples would
require a period of 'leaf wetness' to develop spores. It is most unlikely that in the
prevailing climate all rotted apples so discarded would become infectious units."
2128
7.690 In conclusion, the IRA contains respected and qualified scientific evidence regarding the
possibility of Neonectria galligena surviving internally in fru its under certain conditions of
temperature and wetness. The IRA, however, seems to assume that inoculum for infection would be
always available, a proposition for which there is no adequate support in the evidence. There is also
no evidence to support the IRA's proposition regardi ng the possibility of contamination of new hosts
from rotten fruit.
Transfer mechanism
7.691 With respect to the transfer mechanism, the IRA notes that:

2124 Dr Latorre's reply to Panel question 66, in List of Replies from the scientific experts to questions
2125 Dr Swinburne's reply to Panel question 66, in List of Replies from the scientific experts to
questions posed by the Panel, para. 399.
2126 Dr Latorre's reply to Panel question 66, in List of Replies from the scientific experts to questions
2127 See paras. 7.568, 7.572 and 7.680 above.
2128 Dr Swinburne's reply to Panel question 91, in List of Replies from the scientific experts to
questions posed by the Panel, para. 524.

"N. galligena produces two types of spores: aerially dispersed ascospores and water-
splashed conidia. No studies exist in th e literature to demonstrate long-distance
disease spread from fruit infections, but as indicated above, severely rotted or
mummified fruit are capable of developing perithecia producing aerially disseminated
ascospores. ...
Transfer of European canker across borders or districts results from the movement of
infected nursery stock (Cooke, 2003). Although wind disperses some conidia in the
absence of rain (Swinburne, 1971b) they are mainly splash-dispersed (Munson,
1939). The most probable maximum distance for dispersal by rain splash is 10 m
(Marsh, 1940) although one report suggests this might actually be as much as 125 m
under stormy conditions (Swinburne, 1975). ... [D]istances are likely to be far less for
conidia originating from infected fruit on the ground. ...
Involvement of birds and insects as vectors is suspected, although transfer has not
been demonstrated and N. galligena does not have any specific insect vectors or
mechanisms to allow transmission from apples to a suitable host. ..."
2129
7.692 The IRA's analysis for the transfer of spores is that "severely rotted or mummified fruit"
would develop perithecia and produce aerially disseminated ascospores. The Panel has already noted,
on the basis of the available evidence and the opinions of the experts, that the IRA does not contain
scientific evidence regarding the possibility that latently infected but symptomless fruit could develop
rot and generate Neonectria galligena spores, which could then be transferred to new hosts. In the
words of Dr Swinburne:
"[R]otted fruit incubated unde r conditions of high humidity can produce conidia, but
it is extremely unlikely that they would pr oduce perithecia, still less that ascospores
would be released. The importance of high humidity to conidia production has to be
stressed. The surface of fruit held in cold stores is usually moist, and fully developed
rots usually produce conidia. Fruits rotting subsequently in retail packs or in a
domestic environment at less than 100% [relative humidity] are not likely to produce
conidia."
2130
The Panel has also concluded that there is no sci entific evidence in the IRA to support the proposition
that perithecia would play a role in the contamination of new hosts.2131
7.693 The IRA suggests that "wind disperses some conidia", but it subse quently dismisses this
dispersal mechanism. Dr Swinburne concurs that "[w]ind dispersal releases so few viable conidia
(Swinburne, 1971) that these can be discounted."2132
7.694 The possibility of dispersal of conidia by rain splash is documented. However, as noted by
the IRA, this dispersal would be limited to shor t distances. In Dr Latorre's view, New Zealand's
proposition that "[a]ny dispersal of conidia would pr imarily be by rain splash and would likely only

2129 Australia's IRA, Part B, pp. 135-136.
2130 Dr Swinburne's reply to Panel question 69, in List of Replies from the scientific experts to
questions posed by the Panel, para. 408.
2131 See paras. 7.568, 7.572 and 7.680 above.
2132 Dr Swinburne's reply to Panel questions 67 and 68, in List of Replies from the scientific experts to
questions posed by the Panel, para. 404. See also, Dr Swinburne's reply to Panel question 61, in List of Replies
from the scientific experts to questions posed by the Pane l, para. 381; and Dr Deckers's reply to Panel question
67, in List of Replies from the scientific experts to questions posed by the Panel, para. 400.

be a few metres from a discarded apple ... is a cr edible conclusion supported by experimental
evidence, published previously."2133
7.695 Dr Swinburne adds that the dispersal of conidia by rain usually occurs within the same tree.
"That some conidia production during summer does occur is indicated by the detection of fruit rots in
NZ, albeit rarely. These spores would be deposited in rain-off within the affected tree (Swinburne,
1971), or less likely from a neighbouring tree by splash dispersal (Munson 1939)."
2134
7.696 As noted by Dr Swinburne, "[t]he dispersal distances for rain splashed conidia quoted in the
literature referred to in Australia's IRA are the maxi mum estimates, and refer to conidia released from
tree cankers above ground level." 2135 In other words, for fruit rotting on the ground, and as the IRA
itself acknowledges, "it is reasonable to exp ect that the distances would be smaller." 2136 Moreover,
"for splash dispersal to operate from a rotted apple on the ground the lesion has to be facing upwards;
thus subject to further chance."2137
7.697 In other words, as stated by Dr Latorre:
"Although the reasoning in Australia's IRA w ith respect to the dispersal range for
conidia was objective and coherent and b ased on respected and qualified scientific
sources, the information provided demons trates only that conidia (and possibly
ascospores) of N. galligena are short-distance disseminated. Conidial dispersal can
be expected within the infected tree (rai n-splash and runoff), from infected trees to
healthy neighbouring trees (splash, wind-spl ash), and between neighbouring orchards
(wind-splash)."2138
7.698 In order to achieve transfer, dispersal of coni dia would additionally require the existence of
certain climatic conditions. As noted by Dr Swi nburne, "[c]onidia are dispersed by rain splash, over
relatively short distances, especially so from ground le vel. Thus to successfully transfer infection
fruit would have to be very close to a susc eptible host and have th e appropriate weather
conditions."2139 Dr Latorre adds that "temperatures a nd rainfalls are relatively unfavourable for
N. galligena during summer and early fall in Australia, which may be the most critical period for
infection".2140
7.699 The IRA cites no evidence to support its asserti on that the "involvement of birds and insects
as vectors [in the transfer of Neonectria galligena ] is suspected". 2141 Consulted by the Panel,
Dr Latorre noted that "[t]here is no scientific evidence demonstrating that birds and insects can
disperse N. galligena. These considerations are not acceptable and would not be legitimate according

2133 Dr Latorre's reply to Panel question 73, in List of Replies from the scientific experts to questions
posed by the Panel, para. 425. See, New Zealand's first written submission, para. 4.311.
2134 Dr Swinburne's reply to Panel questions 67 and 68, in List of Replies from the scientific experts to
questions posed by the Panel, para. 404.
2135 Dr Swinburne's reply to Panel question 73, in List of Replies from the scientific experts to
questions posed by the Panel, para. 426.
2136 Ibid.
2137 Ibid.
2138 Dr Latorre's reply to Panel question 73, in List of Replies from the scientific experts to questions
2139 Dr Swinburne's reply to Panel question 58, in List of Replies from the scientific experts to
questions posed by the Panel, para. 366.
2140 Dr Latorre's reply to Panel question 66, in List of Replies from the scientific experts to questions
2141 Australia's IRA, Part B, p. 136.

to the standards of the scientific community."
2142 Dr Swinburne concurred and stated that "[t]here is
no scientific evidence that birds or other vectors are involved in the dissemination of infective agents
of N. galligena."2143
7.700 In conclusion, there is no adequate scien tific evidence to support the IRA's discussion
regarding the transfer mechanism for Neonectria galligena. The Panel has already noted that the IRA
does not contain scientific evidence regarding the po ssibility that latently infected but symptomless
fruit could develop rot and generate Neonectria galligena spores, which could then be transferred.
The possibility that wind can serve as a dispersal mech anism for conidia in the absence of rain is also
not supported by scientific evidence. Dispersion of conidia by rain splash would be very limited and,
in order to achieve transfer, would also require cer tain climatic conditions, which are unlikely to be
present in Australia, particularly during the most criti cal periods for infection. Finally, there is no
support in the IRA for the possibility that birds or insects could be involved as vectors in the transfer
of Neonectria galligena.
Availability of entry points
7.701 With respect to the availability of entry points, the IRA notes that:
"Entry points for infection by N. galligena are available throughout most of the year
... with wound sites caused by leaf fall in au tumn and leaf cracks from onset of spring
bud burst presenting natural infection sites ... Winter pruning cuts ... and lesions
caused by other pathogens ... present other entry points for infection ... Infection can
also be initiated in the absence of wounds through natural openings for example, the
calyx end of fruit or via lenticels ..."
2144
7.702 As noted by Dr Swinburne, conidia are poor epi phytes; they will not survive as a surface
contaminant:
"The conidia are relatively short lived in any event, particularly in a dry climate, and
they cannot survive on the unbroken surface of an apple. They do require an entry
point in order to infect. Conidia merely contaminating the surface of fruit at harvest
will not play a part in any future latent in fection. Those infections will already have
taken place, as is known in the European cont ext, either through the calyx end, stem
end or under very rare circumstances thr ough open lenticels, because in very wet
climates the lenticels on the fruit are actually open, enabling spores to enter."2145
Inoculum dose
7.703 With respect to the inocolum dose, the IRA notes that:

2142 Dr Latorre's reply to Panel question 88, in List of Replies from the scientific experts to questions
2143 Dr Swinburne's reply to Panel question 88, in List of Replies from the scientific experts to
questions posed by the Panel, para. 508. See also, Dr Deckers's reply to Panel question 88, in List of Replies
from the scientific experts to questions posed by the Panel, para. 506.
2144 Australia's IRA, Part B, p. 136. With respect to the issue of the availability of entry points in
Australia, see, New Zealand's second wr itten submission, paras. 2.627-2.634. See also, Dr Latorre's reply to
Panel question 58, in List of Replies from the scientific experts to questions posed by the Panel, para. 364;
Dr Swinburne's reply to Panel questions 84 and 85, in Li st of Replies from the scientific experts to questions
2145 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 434.

"The number of conidia required to in itiate an infection varies depending on
environmental and host factors. CABI (2003) reports that approximately 1000
conidia are required for leaf scar infection; however, in artificial inoculations under
optimal laboratory conditions as few as 10 or 12 conidia ... have produced infections
and these numbers are considered to resemble natural situations (McCraken et al.,
2003b). Dubin and English (1974) found that five conidia were insufficient to initiate
infection, while 50 to 500 did so readily. Latorre et al. (2002) suggested that
European canker is more aggressive in areas where abundant ascospores are produced
during leaf fall."
2146
7.704 Dr Latorre noted that the factors considered by the IRA regarding the inoculum dose
necessary for infection "are acceptable". 2147 The expert noted, however, that "it is difficult to judge
the likelihood assigned to each parameter. Although it is described in [page 136 of the IRA], it is not
clear how Australia's IRA relates the inoculum dose necessary for infecti on and the pr obability of
exposure to susceptible host plants."2148
7.705 The IRA also fails to adequately recognize the importance of the number of spores for the
likelihood of initiating an infection. In this respec t, Dr Swinburne noted that, although in theory one
cell can initiate infection, in practice the likelihood of an infection increases with the dose. "In theory
one spore can initiate infection; in practice the pr obability of successful infection with one spore is
very small. The literature cited in the IRA (p136) all indicate that the probability of securing infection
increases with dose, and that at approximately 1000 spores per fresh leaf scar almost 100% infection
will occur."2149
7.706 The likelihood of infection will also depend on other factors, like the host cultivar. "More
recent data (Lolas, 1999, Ph.D. thesis University of London) also demonstrates that the number of
conidia needed to achieve 50% infection varies with cultivar; another factor."2150
Host plant receptivity
7.707 With respect to host plant receptivity, the IRA notes that:
"A large number of suitable hosts for European canker infection are widely
distributed throughout Australia, with apples ( Malus spp.) and pears ( Pyrus spp.)
grown commercially in most states. In a ddition there are more than 20 other genera
susceptible to N. galligena, each containing several species ... Entry sites are
available throughout most of the year, alt hough the age of leaf scars and wound sites
is of importance to infection."2151

2146 Australia's IRA, Part B, p. 136. See, CABI, "Crop Protection Compendium" (2003), in Exhibit
AUS-84; McCraken et al ., "Relative significance of nursery infe ctions and orchard inoculum in the
development and spread of apple canker ( Nectria galligena) in young orchards" (2003), in Exhibit AUS-77;
Dubin and English, "Factors affecting apple leaf scar infections by Nectria galligena Conidia" (1974), in Exhibit
AUS-67; and, Latorre et al., "The effect of temperature and wetness duration on infection and a warning system
for European canker (Nectria galligena) of apple in Chile" (2002).
2147 Dr Latorre's reply to Panel question 85, in List of Replies from the scientific experts to questions
2148 Ibid.
2149 Dr Swinburne's reply to Panel questions 84 and 85, in List of Replies from the scientific experts to
questions posed by the Panel, para. 498.
2150 Dr Swinburne's reply to Panel questions 84 and 85, para. 498. See also, Dr Deckers's reply to Panel
question 85, in List of Replies from the scientific experts to questions posed by the Panel, para. 491.
2151 Australia's IRA, Part B, p. 136.

7.708 As noted by Dr Swinburne, "for dispersal to l ead to an infection any adjoining host has to
have sites receptive to conidia."
2152
7.709 Regarding leaf scars, the IRA notes the conc lusion from Wilson (1966) that "infection could
occur up to 4 weeks post leaf fall". The IRA also notes, however, that according to Crowdy (1952)
"leaf scars are highly susceptible to infection within the first hour after leaf fall and become much less
susceptible over the next hour".2153 Dr Swinburne refers to his own review of the different studies and
notes that "[a]ll studies made under field conditions c onclude that leaf scars are susceptible only for a
few hours after leaf fall (reviewed in Swinburne, 19 75), leading to the conclusion that the growth
cabinets used by Wilson lead to conditions not normally encountered in nature."2154
Environmental factors
7.710 With respect to environmental factors, the IRA notes that:
"Climatic conditions are critical for disease development, both for inoculum
production and infection by N. galligena (Dubin and English, 1974). Temperature
and duration of wetness are critical factors contributing to transfer and successful
infection (Swinburne, 1975; Latorre et al., 2002). N. galligena readily survives at
temperatures from 2ºC to 30°C (Munson, 1939; Butler, 1949) with the optimum
temperature for disease development being be tween 20ºC to 25ºC. These conditions
are quite common in temperate and subtropical parts of Australia. A minimum 2 to 6
h wetness duration is required at the op timum temperature (20°C) with a longer
wetting period required at lower temperatures (Latorre et al., 2002; Grove, 1990a). ...
Some regions in Australia (including the Adelaide Hills, Manjimup and Perth)
experience annual rainfall over 1000 mm and this may be conducive to infection
periods. Environmental conditions in nurser ies, including use of overhead irrigation,
may create favourable microclimates and be conducive to disease infection."
2155
7.711 The Panel has already noted that certain cl imatic conditions, such as a combination of
adequate temperatures and wetness, are necessary for inoculum production, dissemination and
infection.2156 Dr Swinburne notes further that:
"There is no information on the effect of temperature on spore formation or
discharge, only for infection. Latorre et al (2002) demonstrated an interaction
between temperature and the hours of leaf wetness required for the successful
infection of leaf scars following artificial inoculation, which forms the basis for
predictive model used in Chile. The hours required decreased linearly with increases
in temperature between 10 and 20 C, and at 20 C only 2 hours was needed, the
shortest time so far recorded. It has to be noted that a predictive model for leaf-scar
infection such as that from Chile is based on the presumption (probably valid there)
that conidia would be available at all times. In regions of intermittent rainfall this
would be incorrect (Wilson 1966), and therefore using for example the number of

2152 Dr Swinburne's reply to Panel question 73, in List of Replies from the scientific experts to
questions posed by the Panel, para. 427.
2153 Australia's IRA, Part B, p. 136. Wilson, "Development of European canker in a California apple
district" (1966), in Exhibit NZ-64; Crowdy, "Observations on apple canker IV. The infection of leaf scars"
(1952).
2154 Dr Swinburne's reply to Panel question 73, in List of Replies from the scientific experts to
questions posed by the Panel, para. 427.
2155 Australia's IRA, Part B, p. 137 (footnote omitted).
2156 See paras. 7.544 and 7.572 above.

rain days with suitable temperatures for l eaf-scar infection without allowing for spore
production could overestimate the likelihood of infection.2157
The Panel has concluded that those climatic c onditions are unlikely to be present in Australia,
particularly during summer and early fall, the most critical periods for infection.2158
Features specific to different exposure groups
7.712 The IRA discusses features specific to differe nt exposure groups, namely: commercial fruit
crops; nursery plants; household and garden plants; and, wild and amenity plants.
Conclusion on exposure
7.713 The IRA summarizes the estimated probabilities of exposure for all combinations of utility
points and exposure groups in Table 33.2159 The IRA notes that "[a] significant exposure factor for N.
galligena is the fact that the fungus has a specific mechanism for spore dispersal".2160
7.714 The IRA states that the exposure values "are based on the IRA team's view taking into
account all the factors discussed above." 2161 As noted by Dr Sgrillo, however, it is not clear how the
discussion in the IRA of the different factors was tr anslated into quantitative estimates. In the words
of the experts, "[t]he minimum and maximum para meters elected for the Exposure are not directly
derived from the source data. … The IRA Team do es not explain how the available data were
used."2162
7.715 The Panel has already found that the IRA's reas oning with respect to several of the factors
taken into account in its exposure analysis for Eu ropean canker is either not based on scientific
evidence or not based on a coherent and objective reasoning. With respect to waste disposal, for
example, the IRA's assertion that consumer wa ste would present "potential inoculum sources for
transfer to susceptible host plants" is not supported by evidence. The IRA's exposure analysis also
rests on assertions regarding the possibility that late ntly infected but symptomless fruit could develop
rot and generate Neonectria galligena spores, the mummification of fruits, and the possibility that
perithecia would play a role in the contamination of new hosts that do not find sufficient support in
the scientific evidence relied upon. With respect to the survival and viability of the fungus, there is no
support in the evidence for the IRA's apparent assumption that inoculum for infection would always
be available. With respect to the transfer mechanism for Neonectria galligena , the IRA does not
contain scientific evidence that wind can serve as a dispersal mechanism for conidia in the absence of
rain. The IRA's reasoning is not coherent and object ive as it fails to take into account that dispersion
of conidia by rain splash would be very limited and, in order to achieve transfer, would also require
certain climatic conditions, which are unlikely to be present in Australia, particularly during the most
critical periods for infection. There is no evidence in the IRA in support of the possibility that birds
or insects could be involved as vectors in the transfer of Neonectria galligena. The IRA's discussion
on the availability of entry points fails to take into account that conidia are poor epiphytes and will not
survive as a surface contaminant. Regarding th e discussion on inoculum dose, the IRA fails to

2157 Dr Swinburne's reply to Panel question 56, in List of Replies from the scientific experts to
questions posed by the Panel, para. 354.
2158 See, para. 7.688. See, Dr Latorre's reply to Pane l question 57, in List of Replies from the scientific
experts to questions posed by the Panel, para. 358; Dr Swinburne's reply to Panel question 75, in List of Replies
from the scientific experts to questions posed by the Panel, para. 438.
2159 Australia's IRA, Part B, pp. 138-139.
2160 Australia's IRA, Part B, p. 138.
2161 Ibid.
2162 Dr Sgrillo's reply to Panel question 85, in List of Replies from the scientific experts to questions

explain how it took into account the inoculum dos e necessary for infection when estimating the
probability of exposure to susceptible host plants. Moreover, the IRA fails to adequately recognize
the importance of the number of spores, and other factors such as the host cultivar, for the likelihood
of initiating an infection. The IRA's discussion rega rding environmental factors fails to take into
account that the necessary climatological conditions for inoculum production, dissemination and
infection, in terms of the appropriate combination of cool temperatures and wetness, are unlikely to be
present in Australia, particularly during summer and early fall, the most critical periods for infection.
7.716 Regarding the exposure value estimated by the IRA, Dr Swinburne notes additionally that:
"The 'exposure value' quoted, assuming it is credible to deduce such a factor, seems to
make assumptions regarding the year-round availa bility of infection sites, and that all
discarded apples discharge spores all year, which are not correct. Moreover by
stating 'a significant exposure factor for N. galligena is the fact that the fungus has a
specific mechanism for spore dispersal ' in the conclusion on p 138, [the IRA]
suggests that the outcome was heavily reliant on the erroneous presumption that
rotted fruit would release ascospores..."
2163
7.717 Accordingly, and in the light of the shortcomings that affect a number of sections of the IRA's
conclusions on exposure, the Panel finds that, overa ll, these conclusions do not rely on adequate
scientific evidence and, accordingly, are not coherent and objective.
Establishment
7.718 The IRA derives its conclusions regarding the probability of establishment from "a
comparative assessment of those factors in the sour ce country and the 'PRA area' that are considered
pertinent to the ability of a p est to survive and propagate". 2164 These factors would include: the
availability of suitable hosts, alternate hosts and vectors in the PRA area; the suitability of the
environment; the cultural practices and control m easures; and other characteristics of the pest
affecting the probability of establishment. 2165 In the case of analysis of the probability of
establishment for European canker, other factors incl ude: the potential for adaptation of the pest; the
reproductive strategy of the pest; the minimum population needed for establishment; and, the method
of pest survival.2166
7.719 Several of the flaws that the Panel has alread y noted with respect to the IRA's reasoning on
exposure are also relevant for the analysis on estab lishment. In its discussion of the availability of
suitable hosts, alternate hosts and vectors in the PRA area, the IRA again contains unsupported
assumptions regarding the year-round availability of infection sites and on whether birds or insects
could be involved as vectors in the transfer of Neonectria galligena. In its reasoning, the IRA fails to
take into account the evidence that conidia are poor epiphytes and will not survive as a surface
contaminant. In its discussion of the suitability of th e environment, the IRA fails to take into account
the evidence that the climatic conditions necessary for the establishment of the disease, in terms of the
appropriate combination of adequate temperatures and wetness, are unlikely to be present in Australia,
particularly during summer and early fall, the most critical periods for infection. The IRA focuses on
total annual rainfall, rather than on the hours of "leaf wetness" and on whether rainfall occurs during
critical periods. In its discussion of the minimum population needed for establishment, the IRA fails
to explain how the inoculum dose necessary for in fection is related to the estimations of the

2163 Dr Swinburne's reply to Panel questions 84 and 85, in List of Replies from the scientific experts to
questions posed by the Panel, para. 499 (original emphasis).
2164 Australia's IRA, Part B, p. 30.
2165 Ibid.
2166 Australia's IRA, Part B, pp. 139-141.

probability of initiating an infection in a susceptible host plant. In its discussion of the method of pest
survival, the IRA again relies on unsupported assertions regarding the possibility of the
mummification of fruits that would then produce perithecia and release ascospores.
Spread
7.720 The IRA derives its conclusions regarding th e probability of spread from "a comparative
assessment of those factors in the source country and 'PRA area' considered pertinent to the expansion
of the geographical distribution of a pest". 2167 These factors would include: the suitability of the
natural and/or managed environment for natural spread of the pest; the presence of natural barriers;
the potential for movement with commodities or co nveyances; the intended use of the commodity;
and the potential vectors of the pest in the PRA area.2168
7.721 Several of the flaws that the Panel has alread y noted with respect to the IRA's reasoning on
exposure and establishment are also relevant for th e analysis on spread. In its discussion of the
suitability of the natural and/or managed environment, the IRA again fails to take into account that the
climatological conditions necessary for spread of th e disease, in terms of the appropriate combination
of cool temperatures and wetness, are unlikely to be present in Australia, particularly during summer
and early fall, the most critical periods for infection. The IRA notes that:
"The fact the disease spread to a few orchards in Spreyton in Tasmania, probably
after a single entry point indicates that the managed environment of Australia can be
favourable for spread, although the extent of dispersal was quite limited despite being
present for many years. This may have been because of the absence of air borne
ascospores better suited to long-distance dispersal than conidia (Ransom, 1997),
combined with unfavourable climatic conditions (Spreyton receives less than 900 mm
annual rainfall) and the use of chemicals to control apple scab may also have limited
disease spread. ... [I]n addition to the l ack of ascospore detection in Spreyton
(Ransom, 1997), the limited spread can also be attributed to the eradication program
which began within two years of confirmation of the disease (Ransom, 1997). The
program involved the use of chemicals to prevent the development of sporodochia,
removal and burning of severely infected trees, prohibition of movement of
propagation material out of the quarantined zone, etc."2169
7.722 In this respect, Dr Swinburne notes that, although "[t]he dispute between the parties regarding
the suitability of the climate in the fruit growing re gions of Australia for the establishment and spread
of European canker in apple is difficult to resolve on the basis of the data available":2170
"[T]he fact that canker has only been seen in Tasmania and that western Tasmania
has a higher number of days of rainfall (> 1m m) than mainland Australia is striking.
Moreover, it may also be significant that even in Tasmania perithecia were not
observed. Thus it is difficult to escape the conclusion that the climate of fruit
growing regions of mainland Australia are not conducive to the development of an
epidemic of this disease (see Q72.)."
2171

2167 Australia's IRA, Part B, p. 31.
2168 Australia's IRA, Part B, pp. 31 and 141-142.
2169 Australia's IRA, Part B, p. 141.
2170 Dr Swinburne's reply to Panel question 58, in List of Replies from the scientific experts to
questions posed by the Panel, para. 367.
2171 Ibid.

7.723 Dr Latorre added that the experience of the Eu ropean canker outbreak in Spreyton, Tasmania,
suggests that the disease would disseminate and subsequently spread in a new area relatively slowly:
"On the basis of the biology of N. galligena and considering the epidemiological
characteristics of European canker, if N. galligena were to enter a new area, I would
expect a relatively slow dissemination of the pathogen and subsequent spread of
European canker in this new area. The in formation provided in relation to Spreyton
supports the hypothesis of a very slow spread occurred that would make it possible to
eradicate N. galligena."
 2172
7.724 Dr Swinburne notes that one important factor that the IRA fails to note regarding the
Tasmanian European canker outbreak is that the disease most likely originated with the importation of
infected trees, and not with contaminated apple fruit:
"[The Tasmanian outbreak] didn't spread to native plants, but [Australia] had an
enormous difficulty in getting rid of it, in spite of constant pruning and cutting, and so
forth. Even though [there was] no inoc ulum ... no spore production. ... [T]hat
infection was imported with the trees that [were] planted on that occasion. Those
trees were almost certainly infected when they put were in the ground. The desperate
difficulty that [Australia] had in getting rid of it from those individual trees was
because it was semi-systemic infection. In fact, the infection was moving through the
tree inside. Although you cut off a canker there, you were astonished to find another
one appearing on a branch over there. Bu t it had not spread from there to there
directly, it had gone the other way, it had gone, as we now recognise, semi-systemic
infection and that clean planting material is crucial to the prevention of canker."
2173
7.725 Dr Latorre suggests that the fact that, despite this semi-systemic infection, European canker
did not spread from Tasmania suggests that the c limatological conditions necessary for spread are not
present in Australia. "The lack of considerable spread suggests that weather conditions are not
favourable for European canker in Tasmania (Spr eyton, Tasmania, AUS FWS Annex 2; Beresford
and Kim, NZ Annex 3). These relatively unfavourable climatic conditions may imply that prevalence,
incidence and severity of European canker re mained low and that the disease never spread
considerably outside Tasmania."2174
7.726 Parties have conflicting views regarding the re levance of the experience of the Tasmanian
European canker outbreak for the estimation of the pr obability of spread. The experts found that the
IRA's discussion of some of the factors associated with the limited spread of the infection to other
regions, such as the combination of strict eradica tion measures and specific fungicide treatments, are
generally reasonable.2175
7.727 In its discussion of the potential for moveme nt with commodities or conveyances, the IRA
notes that:

2172 Dr Latorre's reply to Panel question 59, in List of Replies from the scientific experts to questions
2173 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 563. See also,
Dr Swinburne's reply to Panel question 90, in List of Re plies from the scientific experts to questions posed by
the Panel, para. 518.
2174 Dr Latorre's reply to Panel question 74, in List of Replies from the scientific experts to questions
posed by the Panel, para. 429. See also, Dr Deckers's and Dr Swinburne's replies to Panel questions 74 and 90,
in List of Replies from the scientific experts to questions posed by the Panel, paras. 428, 430 and 518.
2175 Dr Deckers's, Dr Latorre's and Dr Swinburne's replies to Panel question 90, in List of Replies from
the scientific experts to questions posed by the Panel, paras. 513, 514 and 517.

"CABI (2003) lists fruit (including pods), bark and stems (above-ground shoots,
trunks and branches) as host plant parts that can carry spores and hyphae of the
pathogen both internally and externally. Ther efore, in addition to the fruit trade, the
nursery, hardwood timber and mulch industries can also be involved in spread of the
pest. Foliage is not affected (Butler, 1949) and leaf trash is unlikely to present a
pathway unless twigs with active canker are present.
Long-distance movement of European canker is primarily the result of movement of
infected nursery stock. ...
There is no evidence in the literature that indicates that long-distance spread of
disease is due to movement of fruit. Conidi a and perithecia can develop in rotted or
mummified fruit and contribute to local spread."
2176
7.728 In the discussion of the potential for moveme nt with commodities or conveyances, the IRA
again relies on unsupported assertions regarding the possibility of the mummification of fruits that
would then produce perithecia. 2177 Additionally, in its discussion of the potential vectors of the pest,
the IRA contains unsupported assumptions regarding the possible involvement of insects and birds as
vectors in the spread of Neonectria galligena .2178 There is also no support in the IRA for the
statement that "[p]eople (for example, consumer s, orchard and nursery workers) handling infected
apples could potentially spread inoculum to susceptible host plants."2179
Partial probability of establishment and spread
7.729 Having discussed factors such as the suitability of the natural and/or managed environment;
the presence of natural barriers; the potential for movement with commodities or conveyances; the
intended use of the commodity; and the potential v ectors of the pest, the IRA estimates the partial
probabilities of establishment and spread for spec ific exposure groups: commercial fruit crops,
establishment – uniform (0.7, 1), spread – unifo rm (0.7, 1); nursery plants, establishment –
uniform (0.7, 1), spread – uniform (0.7, 1); household and garden plants, establishment –
uniform (0.3, 0.7), spread – uniform (0.3, 0. 7); wild and amenity plants, establishment –
uniform (0.3, 0.7), spread – uniform (5 × 10-2, 0.3).2180
Conclusions regarding exposure, establishment and spread
7.730 The IRA combines in an @RISK model the partial probability estimate for importation, the
estimated volume of apples and the partial probabi lity estimates for establishment and spread, to
obtain an overall value for the annual probability of entry, establishment and spread (PEES). The
median simulated value for this probability of entr y, establishment and spread is estimated under the
first scenario (if 70 to 100 per cent of imported a pples are distributed to orchard packing houses and
the remainder to urban wholesalers) as (7.0 × 10 -2) and under the second scenario (if 0.1 to 5 per cent
of imported apples are distributed to orchard pack ing houses and the remainder to urban wholesalers)
as (6.9 × 10-2), both corresponding to the qualitative description of "low".2181
7.731 The Panel has already noted that the IRA's de rivation of the overall probability of importation
of Neonectria galligena by estimating and adding indivi dual probabilities for each importation

2176 Australia's IRA, Part B, p. 142.
2177 Ibid.
2178 Ibid.
2179 Ibid.
2180 Australia's IRA, Part B, pp. 142-144.
2181 Australia's IRA, Part B, p. 145.

pathway is not supported and has not been validated by evidence. Moreover, the Panel has found that
the estimations of several of the likelihoods for individual importation pathways are not supported by
scientific evidence or not based on a coherent and objective reasoning, and most likely overestimated.
Additionally, any biases or overestimation in the calculation of the individual probabilities would be
aggregated in the overall probability of importation.
7.732 The Panel has also noted that, with respect to several aspects of its discussion on exposure,
establishment and spread, the IRA's reasoning is not coherent and objective or does not find proper
support in scientific evidence. This is notably the case for the IRA's assertions regarding the
possibility that latently infected but symp tomless fruit could deve lop rot and generate Neonectria
galligena spores, which could then be transferred to new hosts; likewise with the propositions
regarding the mummification of fruits and the possi bility that perithecia would play a role in the
contamination of new hosts. There is also no ev idence to support the IRA's seeming assumption that
inoculum for infection and infection sites would be al ways available. With respect to waste disposal,
the IRA's assertion that consumer waste would pr esent "potential inoculum sources for transfer to
susceptible host plants" is not supported by eviden ce. The IRA does not contain scientific evidence
that wind can serve as a dispersal mechanism for c onidia in the absence of rain. The IRA's reasoning
on the transfer mechanism is not objectively justifia ble as it fails to take into account that dispersion
of conidia by rain splash would be very limited and, in order to achieve transfer, would also require
certain climatic conditions, which are unlikely to be present in Australia, particularly during the most
critical periods for infection. There is no support in the IRA for the suggested possibility that birds or
insects could be involved as vectors in the transfer and spread of Neonectria galligena. The IRA's
discussion on the availability of entry points fails to take into account that conidia are poor epiphytes
and will not survive as a surface contaminant on a pple fruit. The IRA also fails to adequately
recognize the importance of the number of spores for th e likelihood of initiating an infection, or the
role of other factors, such as the host cultivar. Regarding host plant receptivity, the IRA exaggerates
the susceptibility of leaf scars to serve as entry sites for conidia. The IRA's reasoning regarding
environmental factors is not objectively justifiable, as it fails to take into account that the necessary
climatic conditions for inoculum production, dissemina tion and infection, in terms of the appropriate
combination of cool temperatures and wetness, are unlikely to be present in Australia, particularly
during summer and early fall, the most critical peri ods for infection. The IRA focuses on total annual
rainfall, rather than on the more important factor s of hours of "leaf wetness" and whether rainfall
occurs during critical periods. There is also no s upport in the IRA for the statement that people (for
example, consumers, orchard and nursery workers) handling infected apples could potentially spread
inoculum to susceptible host plants.
7.733 Dr Latorre notes that the reasoning provided in the IRA regarding the establishment and
spread of European canker:
"[I]s not entirely convincing because: (i) Analysis of the climate conditions in the
potential entrance areas is discussed only brie fly. It should not be assumed that any
area where the rainfalls are close to, or exceed 1000 mm annually, are necessarily
prone to European canker development. Temperatures and rainfalls during the
entrance periods (fruit-importing periods) shoul d be provided, considering that they
will affect the likelihood of establishment and spread of N. galligena after entrance.
Weather information for the entrance periods would allow experts to assess the
probability that mature fruit carrying la tent infections will develop symptoms,
sporulate, liberate the inoculum and spread it to nearby hosts. (ii) Injuries, leaf scars,
pruning wounds, or other damages are necessary for infection, but leaf scars in the
autumn are the most common sites of infection. Fruit importation (and inoculum

availability) could occur when leaf scars are not present, reducing the probability of
establishment and spread to zero."2182
7.734 Dr Latorre adds that climatic conditions are a key point when assessing the risk of
establishment and spread of Neonectria galligena associated with asymptomatic apples from
New Zealand. "Climatic conditions in Australia's apple-producing regions must be suitable to disease
establishment and spread, otherwise the likelihood of establishment and spread would be zero and the
risk analysis should end at this point."2183
7.735 Regarding climatic conditions, Dr Swinburne notes further that:
"[Data on the basic weather conditions for in fection] will be relevant to all apple
growing regions, but as they refer to just one aspect of the cycle of events, can not be
used alone to predict the suitability of any region for the di sease. The essential
weakness of the approach in the IRA is that it assumes that inoculum (spores) for
infection is always available, and all that is required is a suitable period (hours of leaf
wetness within given temperature limits) for infection to occur. The major flaw in
this argument is the assumption that regions can be compared on the basis of annual
rainfall, without regard to rainfall pattern s. Even in regions such as N. Ireland
(Loughgall) with rain in all seasons, more than 5hrs of leaf wetness was required
following a few dry days before ascospore discharge resumed (Swinburne, 1971b).
The situation in regions with a pronounced dry season, such as California and the
Pacific Northwest in the USA, spore form ation does not even begin until some time
(as yet undetermined) into the rainy period (Zeller, 1926, Wilson, 1966/8). For such
an area data relating only to simple 'infec tion periods' would greatly overestimate the
risk of disease establishment."
2184
7.736 Dr Swinburne adds that, because the initial establishment of an epidemic incited by
Neonectria galligena via imported infected fruit has not been demonstrated, "the issue can only be
addressed from a theoretical standpoint":2185
"For such a pathway to exist fruit would not only have to develop visible rot, but also
to form viable spores which can be distributed to new hosts. The formation of
perithecia on fruit has been observed very rarely (Dillon-Western, 1927), and does
not feature in any subsequent epidemiological study (Swinburne, 1975; CAB 2001).
It is therefore most unlikely that ascospor es would be formed or released from rotted
fruit. The formation of conidia on the surface of lesions does occur (Swinburne,
1975) generally in the centre of the rotted ar ea where the cuticle h as split. This is
most obvious in fruit taken from stores in wh ich the humidity has been maintained at
c. 100%. Fruit which develop rots later w ithin the retail chain in conditions with
lower [relative humidity] do not usually produce spores (personal observation) which

2182 Dr Latorre's reply to Panel question 58, in List of Replies from the scientific experts to questions
2183 Dr Latorre's reply to Panel question 66, in List of Replies from the scientific experts to questions
2184 Dr Swinburne's reply to Panel question 66, in List of Replies from the scientific experts to
questions posed by the Panel, para. 399. See also, Dr Deckers's reply to Panel question 66, in List of Replies
from the scientific experts to questions posed by the Panel, para. 397.
2185 Dr Swinburne's reply to Panel question 58, in List of Replies from the scientific experts to
questions posed by the Panel, para. 365.

conforms with the observations (e.g. Wilson, 1966) for wood infections, that a period
of 'leaf-wetness' is required for conidia formation."
2186
7.737 Dr Swinburne adds further that the IRA fails to note that the number of apples latently
infected with Neonectria galligena would be likely diminishing along the pathway chain,
progressively reducing the likelihood of the estimated events occurring. The expert illustrates this
with a hypothesis:
"[I]f one had 100 infected apples that arrive d in Australia healthy, but became rotted
subsequently, what would happen to those 100 infected apples? Perhaps 70 or 80 of
them would never develop spores anyway, so it could be disregarded. Then you have
to consider where the others might end up in relation to the dispersal of inoculum. In
other words, all the processes are attenuating all the time down the chain and that is
what I don't see coming through in the IRA at all. The longer the apples are stored in
New Zealand, the less is the likelih ood that an apple infected with Nectria would be
sent to Australia, because it would be culled out before it went into the retail-ready
pack and went on the train. So, the attenuation process after harvest would be
continuous throughout the transport chain wh ich is not terribly well reflected in the
IRA."2187
7.738 Dr Swinburne concludes that "there is in fact no evidence in the literature that infected apples
which rot with this fungus are responsible subse quently for the dissemination of the disease to other
hosts, to further hosts":2188
"Much of the evidence that has been pr esented concerns observations made in the
1920s by Dillon-Western concerning a variety known as Worcester, which is an
extremely early variety, which does rot on the tree and produces mummified fruits.
In the 40-odd years that I have worked on this, I never have had the privilege of
seeing such a thing and I have attempted in the past to produce perithecia and
ascospores from rotted apples for experiment al purposes and failed. Fruit which rot
with Nectria as I will call it, does produce conidia if it is incubated under moist
humid conditions to a limited extent in the centre of the lesion. It is not a prolific
source of spores for subsequent release a nd I fear that nobody has actually done the
experiment of determining whether a ro tted apple can release spores into a new
orchard situation and bring about disease. It is amenable to experimentation, along
the lines of an experiment which we made in East Malling not too long ago with
discarded canker wood which we pulverized and placed under potted trees of the
most susceptible variety that I know, namely Spartan, and we failed to induce a single
canker as a result of pulverizing several, maybe 50 kilos, of cankers underneath
them."
2189
7.739 Dr Swinburne adds that "there is no informa tion concerning the possibility" that an apple
rotted with Neonectria galligena discarded in an Australian orchard would produce conidia and would
have the ability to initiate a new series of infections in an area which had never had it:2190

2186 Dr Swinburne's reply to Panel question 58, in List of Replies from the scientific experts to
questions posed by the Panel, para. 365.
2187 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 574.
2188 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 411.
2189 Ibid.
2190 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 419.

"[F]ruit has to produce conidia in order to become an infectious unit. It may be
infected, but it is not necessarily infectious and even if it does become infectious,
being presumably on the ground and not deliberately placed somewhere up in a tree,
the dissemination of those conidia which depends on splash dispersal is actually
going to be over a very limited area ... I wouldn't want to overemphasize that
particular possibility but there is no inform ation which tells us that it cannot happen
and as biologists one can never say it would never happen."
2191
As explained by Dr Swinburne, although as a biolog ist he cannot rule out the possibility of infected
fruit acting as a pathway for the long distance spr ead of European canker, "it probably has a
vanishingly small probability."2192
7.740 Dr Latorre noted that, despite the fact th at mature fruit can hold the pathogen and can
certainly be moved from one place to the other, he agreed with Dr Swinburne's view:
"The first step would be to have an infected fruit, and this is possible, without
symptoms. You can take this fruit and carry it from New Zealand, perhaps to
Australia. This is also possible, in my opini on. But another question is that this fruit
is going to be rotten in Australian conditions and, secondly, another situation will be
that that rotten fruit will produce spores, conidia, on the surface and, thirdly, that
those conidia can be spread nearby, primarily by rain splashing, which is the main
dissemination way."
2193
7.741 As noted by Dr Latorre, long-distance movement of European canker is usually associated
with the importation of nursery stock and not with trade in apple fruit. "There is no scientific
evidence demonstrating that long-di stance spread of European canker is due to the movement of
fruits. ... [L]ong-distance spread along with mature apple fruits should be regarded as a hypothesis
rather than a true fact."2194
7.742 Dr Latorre stated further that:
"[T]he only way that I can see how Australia can get European canker, really, is by
the commercialization, international transportation of nursery plant material. Perhaps
this has been the way how this disease has been moved around the world. I have seen
no possibility that in reality fruit can really be the cause or be the introduction,
establishment and spread of the disease in a new area. You can introduce Nectria on
apples, but the other question is whether th is disease is going to be established in a
location from the inoculum arriving on fruits."
2195
7.743 Dr Latorre concludes that the overall value estim ated by the IRA for the annual probability of
entry, establishment and spread for European ca nker leads to "non-credible" conclusions and would
need to be validated before it can be accepted:

2191 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 419.
2192 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 422.
2193 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 424.
2194 Dr Latorre's reply to Panel question 64, in List of Replies from the scientific experts to questions
posed by the Panel, para. 392. See also, Dr Swinburne's reply to Panel question 64, in List of Replies from the
scientific experts to questions posed by the Panel, para. 393.
2195 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 565. See also,
Dr Deckers's reply to Panel question 64, in List of Replies from the scientific experts to questions posed by the
Panel, para. 390.

"[T]he overall probability of entrance, establishment and spread of N. galligena was
7.0 × 10
-2, which was rated as low (Table 37, AUS-2 BA p. 150). Indeed, this a very
high, rather than low, probability fo r any biological event associated with
N. galligena. If this likelihood value is true, and assuming that market penetration in
Australia is equal to 50,000,000 a pples annually (AUS-2 BA, p. 19), N. galligena
should be present in 3,500,000 apples (7%) annually, which is non-credible.
Therefore, the overall probability (7.0 × 10 -2) should be validated before acceptance.
Data validating the probability values given in Table 12 were not presented."2196
7.744 In conclusion, throughout the discussion of the di fferent factors, the IRA tends to exaggerate
the risk, for example, by not taking into account that any epyphitical fungal populations would likely
be small and diminishing and that the number of la tently infected apples would also diminish over
time, by not considering the climatic conditions that are necessary for inoculum production,
dissemination and infection, and by assuming that inoc ulum for infection and infection sites would be
always available. The IRA instead emphasizes a number of factors and assumes some hypotheses that
would tend to increase the likelihood of entry, est ablishment and spread, despite the absence of
adequate scientific evidence to support these factors or even in the face of available evidence to the
contrary.
7.745 Little information is provided in the IRA on how the extensive discussion and review of
different factors associated with the entry, estab lishment and spread, is then translated into
quantitative estimates. The Panel cannot attempt to recalculate these estimates, as this would
constitute a de novo review exercise. It cannot fail to note, however, that these estimations do not find
support in the available scientific evidence or in a coherent and objective reasoning. In this respect,
the Panel finds puzzling that, under two, widely-d ifferent scenarios regarding proximity, the IRA
reaches relatively similar conclusions on the probabili ty of entry, establishment and spread. As noted
above, the IRA considers a first scenario, under which 70 to 100 per cent of imported apples are
distributed to orchard packing houses and the rema inder to urban wholesalers, and a second scenario,
under which only 0.1 to 5 per cent of imported apples are distributed to orchard packing houses. The
IRA, however, reaches broadly similar conclusions , corresponding to the qualitative description of
"low", and estimates almost identical probability values under both scenarios.2197
7.746 The Panel has already recognized that, in co nducting risk assessments, Members frequently
confront limitations in the availability of the data necessary for their models. 2198 The Panel has noted
that, when facing this problem, Members may try to es timate the answers if there is no data available,
through the use of expert judgement. Indeed, Aust ralia argues that this is how probabilities were
estimated for several steps. 2199 In this respect, the Panel has noted that, while expert judgement may
be an important tool for the risk assessor, it cannot replace the necessary scientific data, especially for
the purpose of estimating the likelihood of entry, establishment and spread of a pest. In accordance
with the relevant ISPMs, recourse to expert judgeme nt does not substitute for the use of the available
information. The use of expert judgement must be documented and transparent; it must be based on
the relevant reliable scientific information, even when that information is limited.2200 As noted by one

2196 Dr Latorre's reply to Panel guideline (g), in List of Replies from the scientific experts to questions
2197 Australia's IRA, Part B, p. 145. Dr Sgrillo's re ply to Panel question 46, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 296-297; Dr Sgrillo's reply in Transcript of the Panel's
meeting with experts, para. 40. See also, Dr Cross's reply in Transcript of the Panel's meeting with experts,
para. 42.
2198 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 191.
2199 See, for example, Australia's first written submi ssion, paras. 541, 547, 563, 568, 580, 594, 598,
601, 638, 649, 689 and 719; Australia's second written submission, paras. 467 and 520. See also, Australia's
opening oral statement at the second substantive meeting of the Panel with the Parties, para. 12.
2200 See paras. 7.433-7.440 above.

of the experts, if there is no data available, Members should try to refer to other available information,
for example to other pests, where there may be some data. 2201 Non-compliance with these
requirements, may produce errors in the exercise of e xpert judgement. It is not enough to claim, as
Australia has done, that "[t]he IRA Team applied its expert judgment and elaborated its reasoning at
every step in the Final IRA Report".2202
7.747 In the light of the above, the Panel finds that New Zealand has not made a prima facie case
that the IRA's discussion on utility points and estimated proximity ratings for the combination of each
utility point with exposure groups (proximity values) for European canker, does not rely on adequate
scientific evidence or is not coherent and objective.
7.748 The Panel finds, however, that the IRA's estimation that fruit coming out from an infected or
infested orchard is infected or infested with Neonectria galligena (importation step 2); that clean fruit
from infected or infested orchards is contaminated with Neonectria galligena during picking and
transport to the packing house (importation step 3); th at infected or infested fruit remains infected or
infested after routine processing procedures in the p acking house (importation step 4); that clean fruit
is contaminated by Neonectria galligena during processing in the packing house (importation step 5);
that infected or infested fruit remains infected or infested during palletization, quality inspection,
containerization and transportation to Australia (importation step 6); and that clean fruit is
contaminated by Neonectria galligena during palletization, quality in spection, containerization and
transportation (importation step 7); do not find suff icient support in the scientific evidence relied
upon and, accordingly, are not coherent and objective. In the light of the these findings and in the
absence of any separate justification and eviden ce in the IRA regarding the estimated overall
likelihood of importation, the Panel finds additi onally that the IRA's estimation of the overall
probability of importation is not supported by adeq uate scientific evidence a nd, accordingly, is not
coherent and objective.
7.749 The Panel also notes that a significant pa rt of the IRA's discussions on exposure,
establishment and spread of European canker, r ests on a number of assumptions and qualifications.
This leads to reasonable doubts about the evaluatio n made by the risk assessor. The IRA has not
properly considered a number of factors that coul d have a major impact on the assessment of this
particular risk. Accordingly, the Panel finds that the reasoning articulated in Australia's IRA, with
respect to the likelihood of entry, establishment a nd spread of European canker, including the IRA's
estimation of the value for the respective probabiliti es, does not rely on adequate scientific evidence
and, accordingly, is not coherent and objective.
(k) Potential biological and economic consequences associated with European canker
(i) Summary of the Parties' arguments
7.750 New Zealand argues that Australia's analysis of the consequences of European canker does
not constitute an evaluation of the "associated potential biological and economic consequences" of the
disease within the meaning of the SPS Agreement. In its view, "the IRA's assessment of the overall
consequences as moderate is a significant overestimation."
2203
7.751 New Zealand argues that the IRA's rating of "E" for the direct impact of European canker on
plant life or health is "a significant overestim ate", because the IRA exaggerates the risk of

2201 Dr Schrader's reply in Transcript of the Panel's meeting with experts, para. 195.
2202 Australia's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 16. See also, Australia's first written submission, paras. 74, 218 and 239.
2203 New Zealand's first written submission, para. 4. 332. See also, New Z ealand's second written
submission, paras. 2.662 and 2.685.

establishment or spread of European canker in Australia.
2204 In New Zealand's view, because of the
Australian climate conditions, "the direct impact of European canker on plant life or health in
Australia would be at most minor, even at the local level."2205
7.752 New Zealand also disputes the IRA's analysis of the direct impact of European canker on
other aspects of environmental effects. In New Z ealand's view, the IRA's analysis of the Tasmanian
outbreak in this regard is flawed. New Zealand ar gues that "there are few areas in Australia where
European canker could establish and spread".2206
7.753 New Zealand also argues that the IRA's analysis of the indirect impact of European canker
"exaggerates the predicted overa ll effect that European ca nker would have on Australia". 2207
According to New Zealand, " N. galligena is not known worldwide to cause damaging diseases of
amenity plants." 2208 As regards control or eradication, New Zealand submits that "any outbreak is
likely to be highly localised [and c]onsequently, the costs of eradication are not likely to be high". 2209
Regarding international trade, New Zealand notes that its experience is that "the presence of
N. galligena has not constrained its trade in appl es, with countries other than Australia". 2210 Finally,
New Zealand submits that European canker's "impact on the environment and communities is
negligible".2211 New Zealand argues, in particular, that "t here is no basis for the IRA's suggestion that
European canker disease ... could have indirect flow-on effects for tourism".2212
7.754 In response, Australia argues that the IRA' s analysis of the potential consequences of
European canker is objective and credible. Austra lia submits that, despite its allegations about
"exaggeration" and "significant ove restimation", New Zealand did not seriously address the issues
raised in the discussion on consequences contained in the IRA and failed to establish any flaws with
the assessment of consequences.2213
7.755 Australia rejects New Zealand's allegation on the analysis for the direct impact of European
canker on plant life or health. Australia submits "t hat the rating assigned to this criterion by the IRA
Team was credible."2214 Australia argues that the IRA's analysis contains "a credible evaluation of the
likelihood of the establishment or spread of European canker". 2215 The IRA notes that climatic
conditions in approximately 40 per cent of Aust ralian commercial fruit growing areas are conducive
to infection and that certain Australian regions have annual mean rainfalls greater than 1000 mm or
close to that amount. 2216 In Australia's view, New Zealand's climate analysis "is too narrow to
accurately predict the establishment of European canker ... [T]he potential distribution of European

2204 New Zealand's first written submission, para. 4.326.
2205 New Zealand's first written submission, para. 4. 327. See also, New Z ealand's second written
submission, paras. 2.665-2.666.
2206 New Zealand's first written submission, paras. 4.328-4.329. See also, New Zealand's second
written submission, paras. 2.675-2.676.
2207 New Zealand's first written submission, para. 4.330.
2208 Ibid.
2209 New Zealand's first written submission, para. 4. 331. See also, New Z ealand's second written
submission, para. 2.678.
2210 New Zealand's first written submission, para. 4. 332. See also, New Z ealand's second written
submission, para. 2.682.
2211 New Zealand's first written submission, para. 4. 332. See also, New Z ealand's second written
submission, para. 2.684.
2212 New Zealand's first written submission, para. 4.332.
2213 Australia's first written submission, paras. 673 and 718. See also, Australia's second written
submission, para. 590.
2214 Australia's first written submission, para. 686.
2215 Australia's first written submission, para. 679.
2216 Australia's first written submission, para. 678.

canker in Australia covers a much larger area th an suggested by New Zealand's climate analysis,
showing that the direct impact of European canker on plant life or health in Australia would be more
than 'minor', even at the local level." 2217 Australia argues further that the IRA's examples, regarding
the impact to plant life or health do not relate onl y to Europe and North America, where some popular
varieties are similar to those grown in Australia a nd New Zealand, but also includes material dealing
with both Tasmania and New Zealand "which i ndicates that the disease, where established, has
serious consequences ... In any event, give n that Australia is currently free from N. galligena , in
assessing consequences the IRA Team had no option but to draw on the experiences of other countries
with the disease." 2218 Australia argues that recent reports coming out of New Zealand support the
IRA's rating of the direct impact of Neonectria galligena on plant life or health. 2219 Finally, Australia
submits that New Zealand ignores the fact that the IRA considered that there were a large number of
other host species of Neonectria galligena, in addition to apples and pears.2220
7.756 Australia also rejects New Zealand's allegation on the analysis of the direct impact of
European canker on other aspects of the environmen t. Australia argues that the rating assigned by the
IRA to this criterion was credible. 2221 In this respect, Australia agai n argues that the IRA's analysis
contains "a credible evaluation of the likelihood of the establishment or spread of European canker"
and that, given that Australia is free from Neonectria galligena, the IRA team had to consider studies
from other countries with the disease, exercising its e xpert judgement in order to take into account
differences in the circumstances be tween Australia and other countries, including on climate and
flora.2222 Australia rejects New Zealand's allegation th at the IRA ignored the actual experience from
the Tasmanian European canker outbreak. In Austra lia's view, "[i]t is disingenuous ... to argue that
this rigorous eradication program was somehow irre levant to restricting the spread of the disease." 2223
Australia additionally submits that "[t]he limited spread of N. galligena in Tasmania was also assisted
by the absence of airborne ascospores which are bette r suited to long-distance dispersal than conidia."
Even in the absence of ascospores, limited spread among apple trees w ithin and between orchards in
Tasmania occurred through rain splashed conidia. However, because "[t]he New Zealand strain of N.
galligena produces ascospores ... if it established in Aust ralia the impact would be much more severe
than in Tasmania." Australia also suggests that "the Tasmanian outbreak was likely to have involved
an unique strain of N. galligena that required another mating type for reproduction." 2224 A u s t r a l i a
rejects New Zealand's assertion that N. galligena does not impact on amenity plants. Australia
suggests that the "[e]vidence shows that the diseas e causes considerable damage to trees in private
gardens in New Zealand" and that "it is well accepted that common hosts of the fungus include maple,
birch, beech, ash, oak, willow and elm trees", many of which are amenity plants in Australia.2225
7.757 Regarding the IRA's analysis of the indirect impact on control and eradication, Australia
rejects New Zealand's arguments and submits that the IRA's rating is credible. 2226 Australia again
suggests that New Zealand's climate analysis is "too narrow" and "the potential distribution of
European canker in Australia covers a much larger area than suggested by New Zealand". 2227

2217 Australia's first written submission, para. 681. See also, Australia's second written submission,
paras. 575-577.
2218 Australia's first written submission, paras. 682-683. See also, Australia's second written
submission, paras. 578-580.
2219 Australia's first written submission, para. 684.
2220 Australia's first written submission, para. 685.
2221 Australia's first written submission, para. 694.
2222 Australia's first written submission, para. 689.
2223 Australia's first written submission, para. 690. See also, Australia's second written submission,
paras. 581-582.
2224 Australia's first written submission, para. 691 (footnotes omitted).
2225 Australia's first written submission, para. 693.
2226 Australia's first written submission, para. 702.
2227 Australia's first written submission, para. 698.

Australia rejects "New Zealand's attempt to downplay the costs of eradication". In its view,
"European canker is both difficult and expensive to eradicate once established." Implementing
general control methods for European canker, such as fungicide sprays, paints applied to pruning cuts,
cultural control, improving host plant resistance and the prevention of fruit rot, would be costly.
2228
Although the IRA acknowledges that cultural practices and chemical measures used to control apple
scab in most Australian apple growing regions wo uld assist in controlling European canker, spray
treatments alone cannot eradicate ex isting infections and must be s upplemented by removing cankers
and treating wounds with an effective paint. 2229 In Australia's view, the Tasmanian outbreak
illustrates the appropriateness of the IRA's rating for the indirect impact of control and eradication.2230
7.758 Australia rejects New Zealand's arguments regarding the IRA's analysis on the indirect impact
on international trade. Australia submits that New Zealand presupposes that Australia's export
markets are the same as New Zealand's, which already have European canker. 2231 In any event,
Australia notes that the IRA considered that Euro pean canker would only have "a minor impact on
international trade at local level ... [and] the impact at the national level was assessed as unlikely to be
discernable."2232
7.759 Regarding the IRA's analysis on the indirect impact on the environment and on communities,
Australia rejects New Zealand's arguments and submits that the IRA's rating is credible. 2233 Australia
submits that New Zealand's reference to a "n egligible" impact on the environment and on
communities would be other examples of New Zeala nd attempting to conduct its own risk assessment
according to its own methodology. 2234 Australia argues that the Tasmanian outbreak experience
illustrates the IRA's proposition that establishment of Neonectria galligena in Australia could
necessitate increased chemical usag e that may have undesirable effects on the local environment as
well as a significant impact on the future placement of plant species. 2235 Regarding communities, the
Tasmanian outbreak also illustrates the effects of quarantining of the area, the effects on the
livelihood of local people, and the effects on tourism. 2236 Finally, Australia rejects New Zealand's
arguments dismissing the IRA's analysis regarding the indirect impact of European Canker
establishment on tourism. Australia argues that th e the elm tree population in gardens and parks of
Melbourne are likely to be important to tourism.2237
(ii) The Panel's analysis
7.760 The assessment in the IRA of the potential biological and economic consequences associated
with European canker is based on the consideration of a number of direct and indirect criteria. The
direct criteria include: plant life or health, hum an life or health and any other aspects of the
environment. The indirect criteria include: control or eradication, domestic trade or industry,
international trade, environment and communities. The IRA allocates impact scores for each direct
and indirect criterion. The impact scores are from the least significant "A" to the most significant
"G".

2228 Australia's first written submission, para. 699.
2229 Australia's first written submission, para. 700.
2230 Australia's first written submission, para. 701.
2231 Australia's first written submission, para. 705. See also, Australia's second written submission,
para. 583.
2232 Australia's second written submission, paras. 584-585.
2233 Australia's first written submission, paras. 710 and 717.
2234 Australia's first written submission, paras. 708 and 713.
2235 Australia's first written submission, para. 709.
2236 Australia's first written submission, para. 715.
2237 Australia's first written submission, para. 716. See also, Australia's second written submission,
paras. 586-588.

7.761 Regarding the direct criteria . On plant life or health, the IRA allocates an impact score
of "E". The IRA considers the consequences of Eur opean canker affecting plant life or health to be
minor at a national level, significant at a regional level and highly significant at a district level.2238 On
human life or health, the IRA allocates an impact sco re of "A". The IRA considers the consequences
of European canker on human life or health to be unlikely to be discernable at local level; it notes that
"[t]here are no known direct impacts of N. galligena on human life or health". 2239 On any other
aspects of the environment, the IRA allocates an imp act score of "D". The IRA considers the direct
consequences of European canker on the environmen t to be unlikely to be discernable at a national
level, of minor significance at a regional level, but significant at a district level and highly significant
locally.
2240
7.762 Regarding the indirect criteria. On control and eradication, the IRA allocates an impact score
of "D". The IRA considers that the costs of c ontrol and eradication of an outbreak of European
canker would be unlikely to be discernable at a na tional level and of minor significance at a regional
level, but significant at a district level and highly significant locally. 2241 On domestic trade or
industry, the IRA allocates an impact score of "D". The IRA considers that the indirect impact of
European canker on domestic trade would be unlikel y to be discernable at a national level and of
minor significance at a regional level, but significant at a district level and highly significant
locally.
2242 On international trade, the IRA allocates an impact score of "B". The IRA considers that
the indirect consequences of European canker on in ternational trade would not be discernible at a
national level and would be of minor significance at a regional level.2243 On the environment, the IRA
allocates an impact score of "C". The IRA notes th at any indirect consequences of European canker
on the environment are unlikely to be discernible at the regional level, of minor significance at a
district and significant at a local level. 2244 On communities, the IRA allocates an impact score of "C".
The IRA considers that the indirect conseque nces of European canker on communities would be
unlikely to be discernible at a regional level, of minor significance at a district level and significant at
the local level.
2245
7.763 Considering these impact scores, the IRA concludes that the overall potential biological and
economic consequences should be rated as "moderate".2246
7.764 Furthermore, by combining the value for the annual probability of entry, establishment and
spread and the outcome of overall consequences, th e IRA estimates that the unrestricted annual risk
for imported apples from New Zealand is "low". Th e rating of "low" unrestricted annual risk is the
same under the two different scenarios considered by the IRA. As noted above, the IRA considers a
first scenario, under which 70 to 100 per cent of impo rted apples are distributed to orchard packing
houses and the remainder to urban wholesalers, a nd a second scenario, under which only 0.1 to 5 per
cent of imported apples are distributed to orchard packing houses. This rating of "low" is above
Australia's ALOP of "very low". Accordingly, th e IRA concludes that "risk management would be
required for this pest".
2247
7.765 The experts consulted by the Panel are sceptical about the impact scores assigned by the IRA
to some criteria. Dr Latorre, for example, noted that "[o]n the basis of reports in the literature and the

2238 Australia's IRA, Part B, pp. 146-147.
2239 Australia's IRA, Part B, p. 147.
2240 Australia's IRA, Part B, pp. 147-148.
2241 Australia's IRA, Part B, p. 148.
2242 Australia's IRA, Part B, p. 149.
2243 Ibid.
2244 Ibid.
2245 Australia's IRA, Part B, p. 150.
2246 Ibid.
2247 Ibid.

experience of other apple-producing countries, the conclusion arrived at by the IRA with regard to the
overall consequence rating (E, moderate) is overestimated."
2248 Dr Latorre added that:
"[B]ased on the general overall information in the world, in my opinion European
canker is an important disease, but it is not a limiting factor for apple production, nor
is it a limiting factor for commercialization outside Australia. At least this hasn't
been the situation that I can speak of, in the Chilean production. We do have this
problem in part of the country, that farmers can really address, and so far as I know, it
has never been a real problem or been a reason for not to commercialize the fruit
properly, adequately, in most of the interna tional or local markets. In this regard, I
tend to disagree with the moderate conclu sion on consequence that [the IRA has]
arrived at."
2249
7.766 Dr Swinburne concurred and noted that:
"The overall consequence rating of 'E' (m oderate) can only be justified if the
assumption that climatic conditions in th e fruit producing regions of mainland
Australia are conducive to the rapid spread of canker from a point source (discarded
rotted apples) across a district. As discussed in Q58 & Q66, and in the light of the
limited spread experienced in Tasmania, it seems unlikely that this could occur."2250
7.767 Dr Swinburne concluded further that:
"Based on the observation of where [Australia's] fruit growing regions are, taken
from [Australia's] submission, and noting that [they lie] within the band with less than
a 100 days rainfall on average per year and perhaps nearer to 50. I think the
consequences of an infection event within [Australia's] fruit industry would not have
as large a damaging effect as [the IRA] had claimed."2251
7.768 Regarding some of the evidence submitted by Australia, regarding the consequences of
European canker, Dr Latorre noted that plant pa thologists may tend to overemphasize the importance
of some plant diseases:
"[P]lant pathologists ... tend to consider their work as the most important and most
serious of anything in the world. In doing so, we tend to over emphasise the
importance of some diseases. I think I make myself that mistake too, sometimes. In
reality, diseases are very important, this is true. The question is, is this a limiting
factor by which the farmers or the count ry cannot produce a certain commodity?
Speaking on European canker, this is not the case. It has not been the case in any
place in the world where this disease has arrived, as far as I know. ... So, I am not
surprised about the comments in Annex 3 [of Australia's rebuttal submission]. If you
look in the literature, normally [European canker] is called 'a major disease of
apple".
2252

2248 Dr Latorre's reply to Panel question 60, in List of Replies from the scientific experts to questions
2249 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 562.
2250 Dr Swinburne's reply to Panel question 60, in List of Replies from the scientific experts to
questions posed by the Panel, para. 373. See also, Dr Deckers's reply to Panel question 60, in List of Replies
from the scientific experts to questions posed by the Panel, para. 371.
2251 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 560.
2252 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 565.

7.769 Regarding the IRA's analysis on the direct consequences of European canker on plant life or
health, Dr Latorre added that "European canker ha s been considered as a major disease of apples,
proving economically important in Chile (Latorre et al., 2002), primarily because 2-3 fungicide
applications are necessary each year to pr event infections through leaf scars."
2253 However, he noted
that European canker has never limited Chilean commercial production, although yields can be
reduced and production cost increased.2254
7.770 Dr Latorre noted the IRA's assertion that "[c]limatic conditions in approximately 40% of
Australian commercial fruit growing areas are conducive to infection." 2255 Dr Latorre pointed out that
this conclusion "was only based on an nual rainfalls, without any analysis of the climatic conditions
during the critical period (e.g., leaf fall in autumn) with regard to the host trees for infection."2256
7.771 With respect to the IRA's assertion that "[t]he main economic impact of the disease results
from destruction and removal of individual trees or whole orchards because of girdling of branches,
which can significantly reduce crop production yields" 2257, Dr Latorre notes that "[r]emoval of whole
orchards of bearing trees is extremely rare, if it ever happens. Removal of some young trees may
occur."
2258
7.772 Dr Latorre also noted the IRA's assertion that "[ f]ruit rot generally develops in the field or
before harvest, although storage losses of 10–60% of the stored fruit crop have been reported in
various parts of the world".2259 In this respect, he explained that:
"In rainy areas at harvest, storage losses are commonly below approximately 2%. In
areas free of summer rains at harvest, storage losses are 0%. Storage losses of 10-
60% may occur in highly susceptible apple va rieties that are inadequately managed
(without fungicide treatments under poor cold-storage conditions), a phenomenon
that has been observed only in areas with extremely favourable environments and
under high inoculum pressure."
2260
7.773 Dr Latorre concluded that, "[b]ased on the know ledge of European canker, and according to
the general experience observed in other apple expor ting countries where European canker is present,
considering the consequences impact as 'E' is not credible". 2261 In his view, "the 'E' score is unreal
because it is unlikely that losses can be sev ere at the district or local level." 2262 The economic effects
of European canker, in terms of increased costs of winter pruning, fungicide treatments and the

2253 Dr Latorre's reply to Panel question 60, in List of Replies from the scientific experts to questions
posed by the Panel, para. 372. See also, Dr Latorre's reply to Panel question 86, in List of Replies from the
scientific experts to questions posed by the Panel, para. 502.
2254 Dr Latorre's reply to Panel question 60, in List of Replies from the scientific experts to questions
2255 Australia's IRA, Part B, p. 146.
2256 Dr Latorre's reply to Panel question 60, in List of Replies from the scientific experts to questions
posed by the Panel, para. 372. See also, Dr Deckers's reply to Panel question 86, in List of Replies from the
scientific experts to questions posed by the Panel, para. 500.
2257 Australia's IRA, Part B, p. 146.
2258 Dr Latorre's reply to Panel question 60, in List of Replies from the scientific experts to questions
2259 Australia's IRA, Part B, p. 146.
2260 Dr Latorre's reply to Panel question 60, in List of Replies from the scientific experts to questions
posed by the Panel, para. 372. See also, Dr Latorre's reply to Panel question 86, in List of Replies from the
scientific experts to questions posed by the Panel, para. 502.
2261 Dr Latorre's reply to Panel question 86, in List of Replies from the scientific experts to questions
2262 Dr Latorre's reply to Panel question 86, in List of Replies from the scientific experts to questions

removal of stem lesions and infected branches, and fruit yield reduction, can be absorbed by farmers
with no major consequences to the farmer or to th e local apple industry. Moreover, those economic
effects can be reversible at local level, rather th an permanent. While disease severity can be high at a
tree level, disease prevalence and disease incidence ar e commonly far less than 100 per cent. Finally,
"[e]ven under highly-prone environm ental conditions, disease progress rate would be low rather than
high."
2263
7.774 Regarding the IRA's analysis on the indirect consequences of European canker on control or
eradication, Dr Latorre added that the rating of "D" assigned by the IRA:
"[A]ppears to be too high considering: (i). Control of European canker would be
unlikely to be too high, physically and econom ically (ii). Control strategies for other
apple diseases (e.g., apple scab, powdery mild ew) would help to control European
canker. (iii). The rate of disease progress is commonly low, which implies that
eventual outbreaks of European canker mu st be localized, facilitating control and
eradication. (iv) The presence of European canker has no effect on apple trade
internationally, except with Australia. Thus, eradication of eventual European canker
outbreaks would not affect the international trade."
2264
7.775 Referring to Australia's argument on the Tasman ian outbreak illustrating the appropriateness
of the IRA's rating for the indirect impact of control and eradication, Dr Swinburne noted that:
"[Australia] had an enormous difficulty in getting rid of [the disease], in spite of
constant pruning and cutting, and so fort h. Even though [there was] no inoculum,
there was no spore production. What I should have said ... is that that infection was
imported with the trees that [were] planted on that occasion. Those trees were almost
certainly infected when they put were in the ground. The desp erate difficulty that
[Australia] had in getting rid of it from those individual trees was because it was
semi-systemic infection. In fact, the infection was moving through the tree inside.
Although you cut off a canker there, you were astonished to find another one
appearing on a branch over there. But it had not spread from there to there directly, it
had gone the other way, it had gone, as we now recognise, semi-systemic infection
and that clean planting material is crucial to the prevention of canker. So long as you
keep Australia's quarantine system going for new cultivars or new root stocks and
make sure that the nurseries that produce the commercial trees are screened
absolutely, I don't think Australia will have a particular problem from canker
spreading by the airborne route."
2265
7.776 It is not the Panel's role to reassess the imp act scores assigned by the IRA to specific criteria
and propose different scores. In any event, it must be noted that, according to the experts consulted
by the Panel, the IRA has a tendency to overestim ate the severity of the consequences of European
canker in certain aspects. This overestimation affect s in particular two of the scores that in the IRA
are assigned the more severe scores of "E" and "D" (plant life or health, control or eradication and
domestic trade or industry).

2263 Dr Latorre's reply to Panel question 86, in List of Replies from the scientific experts to questions
2264 Dr Latorre's reply to Panel question 87, in List of Replies from the scientific experts to questions
2265 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 563.

7.777 In the light of the above, the Panel concludes that the IRA's evaluation of the potential
consequences associated with the entry, establishment or spread of European canker into Australia
does not rely on adequate scientific evidence and, accordingly, is not coherent and objective.
(l) Overall conclusions with respect to the requirements regarding European canker
7.778 For the reasons stated above, the Panel finds that, with respect to its analysis of the likelihood
of entry, establishment and spread of European can ker, and of the potential consequences associated
with the entry, establishment or spread of Europ ean canker into Australia, Australia's IRA is not a
proper risk assessment within the meaning of Ar ticle 5.1 and paragraph 4 of Annex A of the
SPS Agreement. The flaws described above also cons titute a failure by the IRA to take sufficiently
into account factors such as the available scientific evidence, th e relevant processes and production
methods in New Zealand and Australia, and the actua l prevalence of European canker, as required by
Article 5.2 of the SPS Agreement.
7.779 Accordingly, Australia's requirements regard ing European canker on New Zealand apples are
inconsistent with Articles 5.1 and 5.2 of the SPS Ag reement. Since the requirements are not based on
a risk assessment as provided in Article 5.1 of the SPS Agreement, these measures can be presumed,
more generally, not to be ba sed on scientific principles within the meaning of Article 2.2. 2266
Accordingly, the Panel finds that Australia 's requirements regarding European canker on
New Zealand apples are, by implication, also inconsistent with Article 2.2 of the SPS Agreement".
(m) Methodological flaws identified by New Zealand
7.780 The Panel has already found that the IRA's c hoice of probability interval and midpoint for
events with a "negligible" likelihood of occurri ng, as well as the combination of this probability
interval with the use of a uniform distribution to model the likelihood of these events, are not properly
justified in the IRA and lead to an overestimation of the probability of entry, establishment and spread
of the pests at issue. The Panel found that, because of these methodologi cal flaws, Australia's
requirements regarding fire blight on New Zealand ap ples are inconsistent with Articles 5.1, 5.2 and
2.2 of the SPS Agreement.
7.781 Because the methodological flaws also affect Australia's requirements regarding European
canker, there is no need for the Panel to make a separate determination in this regard for these
requirements. Accordingly, the Panel finds that, with respect to the methodological flaws described
above, Australia's requirements regarding European canker on New Zealand apples are inconsistent
with Articles 5.1, 5.2 and 2.2 of the SPS Agreement.
6. Requirements regarding ALCM
7.782 As with other pests, the IRA contains a section describing the biology of ALCM, a
description of the risk scenario, a discussion of the likelihood of entry, establishment and spread of
ALCM, an assessment of the consequences, a descri ption of the unrestricted risk and, finally, a
discussion of risk management measures.2267
7.783 New Zealand has challenged Australia's inspection and treatment requirements regarding
apple leafcurling midge on New Zealand apples. As described in New Zealand's panel request, these
requirements include the following options:

2266 Appellate Body Report on Australia – Salmon, paras. 137-138.
2267 Australia's IRA, Part B, pp. 157-192.

"[T]he option of inspection of each lot on the basis of a 3000 unit sample selected at
random across the whole lot for apple leafcu rling midge, symptoms of quarantineable
diseases, quarantineable pests, arthropods, tr ash and weed seeds, with detection of
any live quarantineable arthropod resulting in appropriate treatment or rejection for
export;
[T]he option of inspection of each lot on the basis of a 600 unit sample selected at
random across the whole lot for symptoms of quarantineable diseases, trash and weed
seeds, plus mandatory appropriate treatment of all lots."
2268
7.784 New Zealand argues that Australia has failed to evaluate the likelihood of entry of ALCM.
With respect to the IRA's analysis of the probabilit y of importation, New Zealand argues that "there is
frequently no objective and rational relationship [in th e IRA] between the scientific evidence that is
cited for a step and the probability value that is c hosen. Indeed, frequently a value is chosen in the
absence of sufficient scientific support."2269
7.785 New Zealand also argues that Australia has "failed to evaluate the likelihood of 'establishment
or spread' of the disease."2270
7.786 New Zealand also adds that "[the IRA's] pur ported analysis of the 'associated potential
biological and economic conse quences' of ALCM constitutes nothing more than a listing of
unsubstantiated assumptions. It is not an evaluation of those consequences within the meaning of the
SPS Agreement."2271
7.787 In New Zealand's view, there is "no eviden ce that the consequences foreseen by the IRA
would occur."2272
7.788 The Panel will analyze this requirement regard ing apple leafcurling midge under Articles 5.1
and 5.2 of the SPS Agreement by focusing on the specific alleged flaws in the IRA identified by
New Zealand in its various submissions. The Pane l will consider whether New Zealand has properly
made the case that:
(a) In assessing the likelihood of ALCM entry and establishment, the IRA did not
properly take into account the proportion of cocoons with viable ALCM;
(b) In assessing the viability of ALCM inside occupied cocoons, the IRA did not
properly take into account the possible ef fect of parasitism caused by the wasp
Platygaster demades;
(c) The IRA's evaluation of the establishment and spread of ALCM is based on incorrect
assumptions regarding the flight range of ALCM;
(d) The IRA's evaluation of the establishment and spread of ALCM is based on incorrect
assumptions regarding the period that would be needed for ALCM to emerge after the
apples have been removed from cold storage;

2268 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2. See also, Australia's IRA, Part B, pp. 188-192.
2269 New Zealand's first written submission, paras. 4.334-4.335.
2270 New Zealand's first written submission, para. 4.350.
2271 New Zealand's first written submission, para. 4.377.
2272 New Zealand's first written submission, para. 4.373.

(e) The IRA did not properly take into account the climatic conditions that are necessary
for the establishment and spread of ALCM;
(f) The IRA is based on wrong assumptions regarding the mode of trade of New Zealand
apples imported into Australia; and,
(g) The IRA fails to properly evaluate the potential biological and economic
consequences associated with the pest.
7.789 The Panel will conduct this review by consideri ng the arguments raised by New Zealand in
the context of the IRA's analysis on ALCM. Acco rdingly, the Panel will consider the issues as
follows: the available data on viability of ALCM cocoons; the effect of parasitism on viability of
ALCM inside occupied cocoons; the flight range for ALCM; the period of emergence; the climate
conditions for spread of ALCM in Australia; the mode of trade; and, the potential biological and
economic consequences associated with ALCM.
7.790 For each of those issues, the Panel will identif y the scientific basis underlying the relevant
analysis in the IRA. Having identified that scien tific basis, the Panel will then verify whether it
comes from a respected and qualified source. Fina lly, the Panel will assess whether the reasoning
articulated in the IRA on the basis of the scientific evidence is coherent and objective. In other words,
as noted by the Appellate Body in Canada/US – Continued Suspension , "whether the particular
conclusions drawn by [Australia 's IRA] find sufficient support in the scientific evidence relied
upon".2273
(a) Available data on viability of ALCM cocoons
(i) Summary of the Parties' arguments
7.791 New Zealand argues that Australia's IRA did not take into account the proportion of cocoons
with viable ALCM in its assessment of th e likelihood of ALCM entry and establishment. 2274
In New Zealand's view, this fact "is obvious from the text of the IRA".2275
"Australia ignored the scientific evidence available on the viability of cocoons found
on New Zealand apples and focussed only on presence of cocoons, regardless of
whether they contain live ALCM. However, cocoons themselves are not a risk factor
for ALCM. It is only cocoons that contain viable ALCM that pose a potential risk.
Thus, Australia's conclusions about the level of infestation of New Zealand apples are
not supported by scientific evidence."
2276
7.792 New Zealand adds that Australia's measures are "based on the assumption that the overall
percentage of viable cocoons was 100%". 2277 However, "the scientific evidence indicates that the
great majority of cocoons on New Zealand apples are not viable, either because the midge inside has
already developed into an adult and left the coc oon (and the cocoon is thus empty), or because it has
died inside the cocoon (and thus the cocoon is non-viable)." 2278 New Zealand refers to a paper by

2273 Appellate Body Report on Canada – Continued Suspension, para. 590.
2274 New Zealand's second written submission, para. 2. 692. See also, New Zealand's opening oral
statement at the second substantive meeting of the Panel with the Parties, para. 101.
2275 New Zealand's second written submission, para. 2.692.
2276 New Zealand's first written submission, para. 4.111.
2277 New Zealand's second written submission, para. 2.223.
2278 Ibid.

Rogers et al. (2006), and submits that this paper shows that according to which only 15 per cent of
ALCM cocoons may contain live pupae.
2279
7.793 Australia responds that, although the level of viable ALCM on New Zealand apples "is an
important issue" 2280, in preparing its IRA, it confronted a "significant lack of data available" on
several key issues in dispute, including the viability of ALCM. 2281 Australia argues that it had to
exercise "expert judgement" in this situation. "In this circumstance of scien tific uncertainty, the IRA
Team had to exercise its expert judgment and est imate values for the probability of importation that
would be appropriate for the whole of New Zealand taking into account variations between different
areas of New Zealand and potential variations in prevalence levels between seasons."2282
7.794 Australia adds that, while exercising expert judgement, the IRA Team did take into account
the issue of viability in ALCM cocoons, so that it did not consider cocoons themselves to be a risk
factor and "used a triangular distribution for Importa tion step 2, which factored in the relatively low
viability rate of cocoons by skewing the distribut ion towards the lower likelihood end and thereby
giving less weight to the maximum value".2283 The IRA Team used the August 2005 data provided by
New Zealand to estimate the probability of importa tion of ALCM. The IRA Team assumed that this
data reflected viability in cocoons. Australia noted New Zealand's acknowledgement during the
experts consultation stage that the August 2005 da ta referred to occupied cocoons; Australia
submitted, however, that New Zealand had faile d to provide any evidence in support of its
assertion.2284
7.795 Australia considers that, in any event, New Ze aland has misinterpreted the results of the
Rogers et al. (2006) paper as to the proportion of cocoons on New Zealand apples containing viable
ALCM.2285 In Australia's view, according to the Rogers et al. (2006) paper, "around 25% of the total
number of cocoons found in the sample of apples contained viable ALCM – not 15% as New Zealand
claims".2286 Furthermore, the 25 per cent estim ate of viable cocoons in Rogers et al . (2006) "was
probably an underestimation". 2287 Therefore, the results of the Rogers et al . (2006) paper "are
unreliable, and they do not reflect the potential for seasonal and geographic variability".2288
7.796 Australia concludes that "New Zealand's faulty estimations of the level of viable ALCM
infestation of New Zealand apples has irredeemably tainted its estimations of likelihood of entry,

2279 Rogers et al., "Apple Leafcurling Midge Cocoons on Apple: Pupal Occupancy and Mortality"
(2006), in Exhibit NZ-17. See New Zealand's first written submission, para. 4.337; New Zealand's second
written submission, para. 2.708-2.712.
2280 Australia's reply to Panel question 97 after the second substantive meeting, para. 435.
2281 Australia's opening oral statemen t at the second substantive meeting of the Panel with the Parties,
para. 107. See also, Australia's sec ond written submission, para. 633; Austra lia's closing oral statement at the
second substantive meeting of the Panel with the Parties, para. 25; Australia's reply to Panel questions 31 and
97 after the second substantive meeting, paras. 185, 435 and 436; Australia's comments on New Zealand's
replies to Panel questions after the second substantive meeting, para. 176.
2282 Australia's second written submission, para. 633. See also, Australia's reply to Panel question 88
after the first substantive meeting.
2283 Australia's first written submission, para. 729. See also, Australia's reply to Panel question 80 after
the first substantive meeting; Australia's second written submission, para. 626; Australia's reply to Panel
question 97 after the second substantive meeting, para. 439.
2284 Australia's second written submission, paras. 629-632.
2285 Australia's first written submission, para. 731; Australia's second written submission, para. 623.
2286 Australia's first written submission, para. 731.
2287 Australia's first written submission, para. 733.
2288 Australia's second written submission, para. 623.

establishment and spread, and consequently its asserti on as to the level of risk and the efficacy of
particular measures to reduce the risk to achieve Australia's ALOP".2289
(ii) The Panel's analysis
7.797 Importation step 2 for the probability of entry, establishment and spread of ALCM refers to
the likelihood that picked apple fruit is infested with ALCM. The IRA estimates this likelihood as a
triangular distribution with a minimum of 1.5 × 10 -2, a maximum of 0.115 and a most likely value
of 5 × 10-2.2290 The IRA's estimation in this regard is "based on the evidence that contamination rates
for pupae or larvae of apple leafcurling midge range from 1-2% to 11.5% of apples in the Bay of
Plenty and the Waikato region respectively ..."
2291 This evidence is contained in a paper by
Tomkins et al. (1994), which contains a survey conducted in April and May of 1994 of 30 blocks of
Braeburn apples in the Waikato region and one bl ock in the Bay of Plenty (both regions in
New Zealand). The study found that 0-11.5 per cent of harvested apples were infested with ALCM
cocoons, and that 63 per cent of coco ons were empty (contained no pupae). 2292 It contains no data on
the viability of ALCM pupae inside occupied cocoons.
7.798 New Zealand takes issue with the relevance and quality of the data in Tomkins et al.2293 More
importantly, New Zealand argues that this data is insufficient insofar as the likelihood that picked
apple fruit is infested with ALCM cannot be pr operly estimated without taking into account the
viability of ALCM pupae inside occupied cocoons. New Zealand has provided the Panel with a copy
of the paper by Rogers et al. (2006) mentioned above. 2294 This study found rates of 36.5 per cent to
42.2 per cent of empty cocoons in apples from three varieties (Braeburn, Fuji and Royal Gala)
surveyed in the Nelson region (in New Zealand) during 2005. The study also found that "nearly 60%
of all cocoons contained dead ALCM".
2295 Death was determined by prodding larvae and pupae
found inside the cocoons; "death character ized as failure to move when prodded". 2296 Shrivelled
larvae or pupae were considered to be non-viable. In a subsequent letter, prepared during the course
of this dispute and submitted by New Z ealand, the main author of the Rogers et al . (2006) paper
explained that the 60 per cent figure for dead pupae "included both occupied and unoccupied
cocoons".2297 Expressed as a percentage of occupied cocoons only, the mean mortality was estimated
as 75 per cent.2298
7.799 As a matter of fact, the IRA notes the observations contained in the Rogers et al. (2006) paper
regarding the viability of ALCM cocoons found on New Zealand apples. 2299 Notwithstanding this
fact, Australia has explained that it questioned th e use of the prodding test to establish whether non-

2289 Australia's first written submission, para. 736.
2290 Australia's IRA, Part B, p. 160.
2291 Ibid. See also, Tomkins et al ., "A survey of Apple Leafcurling Midge ( Dasyneura mali )
management in Waikato orchards" (1994), pp. 346-349, in Exhibit NZ-43.
2292 Tomkins et al., "A survey of Apple Leafcurling Midge ( Dasyneura mali) management in Waikato
orchards" (1994), pp. 346-349, in Exhibit NZ-43.
2293 New Zealand's first written submission, para. 4. 336; New Zealand's se cond written submission,
para. 2.692; New Zealand's comments on Australia's replies to Panel question 31 after the second substantive
meeting, para. 101.
2294 Rogers et al ., "Apple Leafcurling Midge Cocoons on Apple: Pupal Occupancy and Mortality"
(2006), in Exhibit NZ-17.
2295 Ibid..
2296 Rogers et al ., "Apple Leafcurling Midge Cocoons on Apple: Pupal Occupancy and Mortality"
(2006), in Exhibit NZ-17.
2297 Letter by Dr David J Rogers to Biosecurity New Zealand (18 August 2008), in Exhibit NZ-102.
2298 Ibid.
2299 Australia's IRA, Part B, pp. 160 and 191-192.

shrivelled ALCM larvae or pupae were alive or dead.
2300 According to Australia, the prodding test is
not very accurate, because individuals that do not move in response to prodding could be viable.
Australia argues that the use of the prodding test ma y have resulted in underestimating the number of
viable cocoons.2301 In order to establish mortality, it woul d be better to observe whether occupants
emerge as adults.2302 Indeed, Dr Cross notes some of the limitations of the Rogers et al. (2006) paper.
He submits, for example, that "Australia is ... right to question the use of the prodding test ... as this
would not be a very accurate test." At the same time, Dr Cross acknowledges that a more accurate
test for establishing mortality, such as rearing to adult, "could well [find] that mortality is
considerably higher than established by examinati on and prodding." Dr Cross notes that, given the
crucial importance of viability in calculating risk s and determining appropriate sample sizes,
Australia's IRA should take viability into account an d, accordingly, a more rigorous study should be
conducted. Until good data is produced, and given the l ack of data and likely variable nature of this
parameter, Dr Cross suggests that Australia would be entitled to a conservative estimate of 50 per cent
viability.2303
7.800 The IRA contains some scientific data regarding the likely level of infestation with ALCM of
apples from New Zealand and on cocoon occupancy, i. e., the proportion of cocoons containing pupae.
However, the IRA devotes little consideration to th e issue of viability of ALCM pupae in occupied
cocoons: what proportion of those cocoons contain viable ALCM larvae or pupae. 2304
Notwithstanding Australia's argument that the IR A Team used the August 2005 data provided by
New Zealand unaware that this data did not reflect viability in cocoons, there is no mention of this
factor in the IRA. On this point, the evid ence cited by the IRA is limited to the Rogers et al. (2006)
paper.2305 The IRA refers to this paper, but then does not seem to take into account the findings on
cocoon occupancy and viability in the estimation for importation step 2.2306 As noted above, Australia
says that the IRA does take viability into account by using the triangular distribution that skewed the
results towards the lower end of the likelihood range.
7.801 Additional evidence, which beca me available during these proceedings and was submitted by
New Zealand at the time of its second written submi ssion, indicates that a substantial proportion of
ALCM cocoons emerging from cold storage did not contain viable insects. 2307 Australia has
challenged the appropriateness of considering this evidence, arguing that the IRA Team could not
have taken into account data that was not available to it at the time. 2308 Article 5.2 of the
SPS Agreement provides that in their risk assessme nts Members shall take into account available
evidence. In any event, it is not necessary for the Panel to express a view on whether scientific
evidence that was not available at the time of the risk assessment should be considered when
determining the conformity of a risk assessment with Article 5.1. 2309 Disregarding the Sandanayaka

2300 Australia's first written submission, para. 733.
2301 Ibid.
2302 Ibid. See also, reply of Dr Cross to Panel question 97, in List of Replies from the scientific experts
to questions posed by the Panel, para. 566.
2303 Dr Cross's reply to Panel question 97, in List of Replies from the scientific experts to questions
2304 Dr Cross's replies in Transcript of the Panel's meeting with experts, paras. 584, 590, 594, 626, 674
and 678. See also, Dr Cross's reply to Panel question 104, in List of Replies from the scientific experts to
questions posed by the Panel, para. 614.
2305 Australia's IRA, Part B, p. 160. See also, Australia's IRA, Part B, pp. 191-192.
2306 Dr Cross's reply to Panel question 109, in List of Replies from the scientific experts to questions
2307 Sandanayaka and Rogers, "Effect of cold storage on emergence and mortality of apple leafcurling
midge" (2009), pp. 1-8, in Exhibit NZ-119. See, reply of Dr Cross in Transcript of the Panel's meeting with
experts, para. 582.
2308 Australia's reply to question 2 from New Zealand after the second substantive meeting, para. 554.
2309 Appellate Body Report on Japan – Apples, para. 215.

and Rogers (2009) study, the fact remains that th e IRA did not take into account data on viability of
ALCM pupae inside occupied cocoons. Presumably, if only 25 per cent of cocoons contain viable
ALCM, as Australia interprets the Rogers et al. (2006) paper, or for argument's sake if the percentage
of viable ALCM is even higher, the values for impor tation step 2 should in any event be considerably
smaller than estimated in the IRA.
2310 In this respect, Dr Cross expressed his view that, "[i]f only
25% of cocoons contain viable ALCM then the values should be 4 times smaller." 2311 Indeed,
importation step 2 assesses the likelihood that picked apple fruit is infested with ALCM, based on the
estimated number of apples infested with cocoons.
7.802 The use of the prodding test, criticized by Au stralia, does not necessarily mean that the
Rogers et al. (2006) paper underestimated the number of viable cocoons. Although, in some cases,
insects may not have moved when prodded, leading to an overestimation of mortality, in other cases
prodding could also have resulted in underestimating the level of mortality of ALCM. Observation
continuing to adulthood might result in finding that mortality of ALCM is considerably higher than
measured by prodding, because some pupae that mo ved when prodded and where accordingly scored
as live may die subsequently and fail to emerge as adults. 2312 Dr Cross expressed his view that the
data in the IRA regarding the viability of ALCM , is "inadequate for an objective and credible
assessment".2313
7.803 The Panel notes Australia's argument that, in the absence of sufficient scientific data, the IRA
Team exercised its expert judgement.2314 Australia states that "it is tr ue that [in the IRA] certain steps
in the pathways assessed were better supported by eviden ce than others. In those latter cases, expert
judgment was employed." 2315 In Australia's view, however, "this does not affect the overall
sufficiency of scientific evidence in the Final IRA Report, and the Final IRA Report did not rely on
100% expert judgment." 2316 Australia adds that "in exercising its expert judgment ... the IRA Team
took into account the available scientific evidence on a range of factors..."2317
7.804 The Panel has already considered Australia's arguments regarding the use of expert judgement
in the IRA. 2318 As noted above, while expert judgement may be an important tool for the risk
assessor, it is not a substitute for the necessary scien tific data, especially for the purpose of estimating
the likelihood of entry, establishment and spread of a pest. In accordance with the relevant ISPMs,

2310 In its section on Risk Management for ALCM, the IRA notes that "New Zealand provided
additional data (Rogers et al., 2006) showing that 36–42% of apple leafcurling midge cocoons on apples were
empty, and nearly 60% of all cocoons contained dead apple leafcurling midge. However, the IRA team still
considers that this low level of infestation is still a risk, albeit a lower risk and maintains that a 3000 fruit
inspection is required." Australia's IRA, Part B, p. 192. There is no ex planation of how the IRA team reached
this conclusion.
2311 Dr Cross's reply to Panel question 109, in List of Replies from the scientific experts to questions
2312 Dr Cross's reply to Panel questions 97 and 110, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 566 and 652.
2313 Dr Cross's reply to Panel question 97, in List of Replies from the scientific experts to questions
posed by the Panel, para. 564; Dr Cross's replies in Transcript of the Panel's meeting with experts, paras. 584,
586, 588 and 590.
2314 See, for example, Australia's first written submission, para. 21; Australia's reply to Panel questions
88 and 93 after the first substantive meeting; Austra lia's second written submission, paras. 9, 121, 124, 241,
401, 467, and 633; Australia's opening oral statement at the second substantive meeting of the Panel with the
Parties, paras. 3 and 7. See also, Australia's IRA, Part B, pp. 167 and 178.
2315 Australia's opening oral statemen t at the second substantive meeting of the Panel with the Parties,
para. 12.
2316 Ibid.
2317 See, for example, Australia's second written submission, para. 520. See also, Australia's second
written submission, para. 576.
2318 See paras. 7.433-7.440 above.

recourse to expert judgement does not substitute for th e use of the available information. The use of
expert judgement must be documented and transpar ent; it must be based on the relevant reliable
scientific information, even when that info rmation is limited. Non-compliance with these
requirements may produce errors in the exercise of expert judgement. It is not enough to claim, as
Australia has done, that in "circumstance of scientif ic uncertainty, the IRA Team had to exercise its
expert judgment and estimate values for the probabili ty of importation that would be appropriate for
the whole of New Zealand taking into account varia tions between different areas of New Zealand and
potential variations in preval ence levels between seasons".
2319 Because it is subject to certain rules,
the exercise of expert judgement is not immune from examination by a Panel.
7.805 As noted by Dr Cross, the data on viability rates is crucial, in order to estimate the likelihood
that picked apple fruit is infested with ALCM. 2320 New Zealand has made a prima facie case, not
rebutted by Australia, that the data on occupancy and viability of ALCM in cocoons on New Zealand
apples was not adequately taken into account. Ther e is no indication in Australia's IRA of how the
exercise of expert judgement could have cured this. Moreover, because the recourse to expert
judgement in the IRA was not documented and transp arent, the Panel is prevented from considering
how the available scientific evidence was taken into account and conclusions were drawn through this
exercise.
7.806 As a result, the Panel finds that the IRA's re asoning regarding the viability of ALCM, is not
objectively justifiable.
(b) Effect of parasitism on viability of ALCM inside occupied cocoons
(i) Summary of the Parties' arguments
7.807 Another factor that may affect the viability of ALCM inside occupied cocoons is the possible
incidence of parasitism, caused by the wasp Platygaster demades . New Zealand argues that
Australia's IRA did not take into account the possible effect of this type of parasitism on the viability
of ALCM cocoons. In New Zealand's view:
"[One of the reasons] for the high number of non-viable cocoons is that a high
number of occupied cocoons actually contain dead pupae. This is caused primarily
by the wasp, Platygaster demades , introduced to New Zealand in 1925 to control
apple/pear leafcurling midge. This par asite lays eggs inside the ALCM eggs,
develops in the mature ALCM larva and emerges from the ALCM cocoon killing the
pupa inside (Shaw et al. 2005: 306). Indeed, high levels (50 – 60%) of parasitism by
the wasp Platygaster demades have been reported recently in third and fourth
generation ALCM cocoons (Shaw et al. 2005: 310). Heavy parasitism of later
generations has also been recorded by Todd 1959: 868."2321
7.808 Again, Australia refers to the limited information available on the question of ALCM
prevalence on New Zealand apples, in cluding on the level of parasitism by Platygaster demades.2322
In this circumstance of scientific uncertainty, the IRA Team also exercised its expert judgement.2323

2319 Australia's second written submission, para. 633. See also, Australia's reply to question 31 from
the Panel after the second substantive meeting, para. 185.
2320 Dr Cross's reply to Panel question 97, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 564 and 568.
2321 New Zealand's first written submission, para. 4.110.
2322 Australia's second written submission, para. 633.
2323 Ibid. See also, Australia's reply to Panel question 31 after the second substantive meeting,
para. 185.

(ii) The Panel's analysis
7.809 The IRA notes that:
"[ALCM] is partially controlled in New Zealand by a parasitic wasp, Platygaster
demades (Walker), an introduced biological control agent (Todd, 1959; Tomkins
et al., 2000). In responding to the revised draft IRA New Zealand has provided
further information indicating that P. demades plays a significant role in reducing
apple leafcurling midge populations (Shaw et al., 2005) with high levels of parasitism
being recorded. However, this parasitoid is not present in Australia (Evenhuis, 1989).
Thus there is no information available to determine if this parasitoid would be
effective in controlling apple leafcurling midge in Australia."2324
7.810 Notwithstanding these references to the existence of Platygaster demades in New Zealand,
the IRA does not consider the impact of paras itism by that arthropod on cocoon occupancy and
viability in the estimation for importation step 2. Presumably, if parasitism by Platygaster demades
reduces the proportion of viable cocoons 2325, the values for importation step 2 should be considerably
smaller.2326 Consulted by the Panel, Dr Cross expressed his view that the data in the IRA regarding
the viability of ALCM, is "inadequate for an objective and credible assessment".2327
7.811 As noted above, the data on viability rates is cr ucial, in order to estimate the likelihood that
picked apple fruit is infested with ALCM.2328 The sources of data on the possible effects of parasitism
by Platygaster demades in Australia's IRA are very sparse and do not seem to have been adequately
taken into account. With respect to this point, there is no indication in Australia's IRA that the
exercise of expert judgement could have cured the f act that the limited data was not adequately taken
into account. Moreover, because the recourse to e xpert judgement in the IRA was not documented
and transparent, the Panel is prevented from cons idering how the available scientific evidence was
taken into account and conclusions were drawn through this exercise.
7.812 As a result, the Panel finds that the IRA's r easoning regarding the viability of ALCM in the
light of the possible incidence of parasitism by the wasp Platygaster demades is not objectively
justifiable.
(c) Flight range for ALCM
(i) Summary of the Parties' arguments
7.813 New Zealand argues that the evaluation of estab lishment and spread of ALCM in Australia's
IRA is also based on incorrect assumptions regarding the flight range of ALCM.
2329 New Zealand
notes that the IRA's estimation "requires that utility points at which apples will be discarded will be in
sufficient proximity to apple trees with growing s hoots (given that ALCM only lay eggs on freshly

2324 Australia's IRA, Part B, p. 176. See also, Australia's IRA, Part B, pp. 178 and 180.
2325 Dr Cross's reply to Panel question 100, in List of Replies from the scientific experts to questions
2326 Dr Cross's reply to Panel questions 104 and 109, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 615 and 650; Dr Cr oss's replies in Transcript of the Panel's meeting with
experts, paras. 590, 594 and 678.
2327 Dr Cross's reply to Panel question 97, in List of Replies from the scientific experts to questions
posed by the Panel, para. 564; Dr Cross's replies in Transcript of the Panel's meeting with experts, paras. 584
and 590.
2328 Dr Cross's reply to Panel question 97, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 564 and 568.
2329 New Zealand's first written submission, para. 4.352.

unfurling apple tree leaves) for mating and egg laying to occur".
2330 "If apple waste was disposed of
more than 100 metres from apple trees, even if ALCM emergence and mating could occur,
establishment would not take place because there w ould be nowhere within flight range for mated
female ALCMs to lay their eggs."
2331 The IRA "appears to base its calculations on a flight range for
ALCM of up to 200 metres, a figure which Australia appears to draw from Suckling et al. 2007".2332
7.814 In New Zealand's view, there is no scientific evidence to support the assumption that female
ALCM can fly up to 200 metres. 2333 "ALCM are not strong fliers, and are not capable of directional
flight over long distances. Mated female midges have been found to have a flight range of less than
30m (Suckling et al. 2007: 750). Male flight range is thought to be similar (Suckling et al. 2007:
750). As a result, spread of ALCM by flight alone is highly localised."2334
7.815 Again, Australia refers to the limited info rmation available on the question of ALCM on
New Zealand apples, including on the flight distance of ALCM. 2335 In this respect, Australia states
that the IRA relied upon scientific evidence from Cross (2005), Suckling et al . (2007) and
HortResearch (1999b).2336
7.816 The IRA notes that "[ALCM] were detected in a block of newly established apple trees at 200
metres from the source (the furthest distance tested)". 2337 Australia argues, however, that the IRA
placed "relatively little weight on the possibility that ALCM could fly up to 200 metres".2338 The IRA
"did not even refer to the 200 metre figure in its main discussion of ALCM flight distance in the
context of a transfer to suitable hosts".2339
7.817 Australia refers to informati on from Cross (2005) claiming that male ALCM were caught at
distances up to 50 metres when testing sex pheromone traps; the distances beyond 50 metres were not
investigated, suggesting that 50 metres was not a maximum distance". 2340 Australia adds that, "[i]n
any event, it is ultimately female flight that matters for establishment once mating has occurred". 2341
"The research in Suckling et al. (2007) does not speak to the situation where a mated female must fly
further than 30 metres in order to find a suitable host on which to lay her eggs."2342

2330 New Zealand's first written submission, para. 4.353.
2331 New Zealand's second written submission, para. 2.261.
2332 New Zealand's first written submission, para. 4.353. Suckling et al ., "Trapping Dasineura mali
(Diptera: Cecidomyiidae) in Apples" (2007), in Exhibit NZ-15. See also, New Zealand's reply to Panel
question 81 after the first substantive meeting, paras. 186-188; New Zealand's second written submission,
paras. 2.237 and 2.736-2.737.
2333 New Zealand's second written submission, para. 2.237. See also, New Zealand's second written
submission, paras. 2.239-2.243.
2334 New Zealand's first written submission, para. 3.77. See also, New Zealand's first written
submission, paras. 4.116, 4.125; New Zealand's second written submission, paras. 2.244-2.245.
2335 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 176.
2336 Australia's first written submission, para. 803. See, Australia's IRA, Part B, p. 171.
2337 See Australia's IRA, Part B, p. 168. See, Australia's first written submission, para. 803.
2338 Australia's second written submission, para. 669. See also, Australia's first written submission,
para. 803.
2339 Australia's second written submission, footnote 1178 to para. 669. See, Au stralia's IRA, Part B,
p. 171. See also, Australia's first written submission, para. 803.
2340 Australia's first written submission, para. 804. See Cross (2005), Personal communication from
Jerry Cross of East Malling Research, Kent, UK on apple leaf curling midge (30 March 2005), in Exhibit AUS-
96. Published in Table 5 of Cross & Hall, Crop Protection 28 (2009), pp. 139-144; see, Dr Cross's reply to
Panel question 94(iii), in List of Replies from the scientific experts to questions posed by the Panel, para. 534.
2341 Australia's first written submission, para. 805.
2342 Australia's second written submission, para. 670.

7.818 Australia adds that:
"New Zealand's claim is predicated on the b asis that ALCM has to physically fly the
distance to locate hosts but the IRA Team cons idered that it is equally probable that a
gust of wind or other mechanical means can give the ALCM a further boost to its
flight range. HortResearch (1999) notes that 'some researchers consider them strong
fliers able to disperse well in wind, and [ALCM] has a history of rapid spread when
introduced to new areas.'"
2343
7.819 Australia finally notes that "a flight range of 30-50 metres for a mated female ALCM would
be ample in many cases between an orchard packing house co-located within an apple orchard".2344
(ii) Analysis of the Panel
7.820 In relevant part, the IRA notes that:
"Both the adult male and female [ALCM] have wings and are able to fly. Maximum
flight activity has been observed under warm, calm conditions , although small
numbers have been seen on the wing even wh en the weather is cool, overcast, and
windy. Recent research on the response of apple leafcurling midge to apple midge
sex pheromone has shown that 'significant numbers of (male) midges were caught at
all distances up to 50m and greater distances were not investigated'; however,
'numbers caught at 50m were still significan t (several per day)' and 'no experiments
on the distances females can fly' have been attempted (Cross, 2005) … Suckling et
al. (2006) report that female apple leafcurling midges did not fly much further than
about 30m to colonise adjacent newly established apple orchards from large
populations in mature trees. Female wing loadings were found to be 1.8 times greater
than they are for male midges which supports the likely shorter distance of female
flight and is consistent with estimates of male distance movements to traps baited
with female sexpheromone. Neverthel ess, some researchers consider apple
leafcurling midge are able to disperse well with the wind (HortResearch, 1999b)."
2345
7.821 Commenting on information provided by New Zealand on the distance that ALCM are
thought to fly, the IRA states that the "IRA team noted that midge were detected in a block of newly
established apple trees at 200 metres from the source (the furthest distance tested)."
2346 The 200
metres distance seems to be based on the background rate of infestation shown in Figure 4 of Suckling
et al. (2007).2347 However, as noted by Dr Cross, this data does not show that these infestations were
caused by longer range movement of females from the adjacent block. Suckling et al. (2007) only
suggest that low levels of ALCM infestati on were present on the new trees when they were
planted.2348 In any event, the IRA team "concluded that this information from a single experiment in
one season did not justify altering the proximity values."2349

2343 Australia's first written submission, para. 806.
2344 Australia's first written submission, para. 808. See also, Reply of Dr Cross to Panel question
94(iii), in List of Replies from the scientific experts to questions posed by the Panel, para. 534.
2345 Australia's IRA, Part B, p. 171.
2346 Australia's IRA, Part B, p. 168.
2347 Suckling et al ., "Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples" (2007), in
Exhibit NZ-15.
2348 Dr Cross's reply to Panel question 94(iii), in List of Replies from the scientific experts to questions
2349 Australia's IRA, Part B, p. 168.

7.822 Dr Cross expressed his view that, generally speak ing, there is little scientific data regarding
the flight range of ALCM.
2350 The data cited in the IRA 2351 confirms that ALCM is a weak flier; it
tends to spend most of the time close to the gr ound and only flies to lay its eggs on growing apple
shoots when wind conditions are slight. 2352 The small amount of available evidence shows that the
ALCM is unlikely to fly long distances. 2353 As noted by the IRA, Cross (2005) found that male
ALCM could be attracted over a distance of 50 metr es (the greatest distance investigated) away from
the host plant by a sex pheromone lure. Dr Cross no ted that the flight range of females relative to
males has not been investigated. In his opinion, it is possible that the flight range of females is shorter
than males, because femal es are carrying the additional weight of eggs. He cautioned, however, that
females tend to have slightly larger, and perhaps stronger, bodies and wings which might
compensate.2354 There is also no evidence to support the IRA's argument that gusts of wind may
increase the flight range of female ALCM. Altho ugh this is something that would seem logical,
ALCM avoids flying in windy conditions. 2355 Accordingly, there is no indication that the evidence
considered by the IRA Team on the flight ra nge for ALCM does not come from respected and
qualified sources.
7.823 In conclusion, in the Panel's view, there is insufficient scientific evidence that would have
allowed Australia to reach a definitive conclu sion on the precise flight range for ALCM. 2356 In any
event, in the light of the limited information there is, the lack of a precise flight range for ALCM does
not necessarily call into question the IRA's reas oning regarding whether orchards surrounding
wholesale pack houses may be located at a distance that is within the flying range of ALCM.
Australia's assertion that "a flight range of 30-50 metres for a mated female ALCM would be ample in
many cases between an orchard packing hou se co-located within an apple orchard" 2357, seems
reasonable.2358 Although it is unlikely that a mated female midge would be able to fly hundreds of
metres, the 200 metre distance noted by the IRA would not be unreasonable.2359
7.824 As a result, accepting for the moment the IRA' s assumptions regarding the way in which
New Zealand apples would be distributed in Australia 2360, the Panel finds that New Zealand has not
made a prima facie case that orchards surrounding wholesale packing houses would not be located at
a distance that is within the flying range of ALCM.2361

2350 Dr Cross's replies in Transcript of the Panel's meeting with experts, paras. 584, 586, 614 and 674.
2351 Personal communication from Jerry Cross of East Malling Research, Kent, UK on apple leaf
curling midge (30 March 2005), in Exhibit AUS-96; Suckling et al., "Crop colonisation by apple leaf curling
midge" (2006); HortResearch, "Insects and mites of pipfruit and stonefruit" (1999).
2352 Australia's IRA, Part B, p. 157. Dr Cross's replies in Transcript of the Panel's meeting with experts,
para. 586 and 614.
2353 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 584.
2354 Dr Cross's reply to Panel question 94(iii), in List of Replies from the scientific experts to questions
2355 Ibid. See also, Dr Cross's replies in Transcript of the Panel's meeting with experts, paras. 584, 610,
612 and 674.
2356 Dr Cross's reply to Panel questions 94(iii) and 103, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 535 and 597; Dr Cross's reply in Transcript of the Panel's meeting with
experts, para. 584.
2357 Australia's first written submission, para. 808.
2358 Dr Cross's reply to Panel question 94(iii), in List of Replies from the scientific experts to questions
posed by the Panel, para. 534; Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 584.
2359 Dr Cross's replies in Transcript of the Panel's meeting with experts, paras. 586 and 614.
2360 Australia's IRA, Part B, pp. 171-172. Th e Panel will return to this issue below, see
paras. 7.856-7.865 below.
2361 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 584.

(d) Period of emergence
(i) Summary of the Parties' arguments
7.825 New Zealand argues that the evaluation of estab lishment and spread of ALCM in Australia's
IRA is also based on incorrect assumptions regarding the period that would be needed for ALCM to
emerge after being removed from cold storage.2362
7.826 According to New Zealand, "ALCM will not emerge from fruit as soon as it is removed from
cold storage. It first has to break diapause and complete pupation, which takes at least 13-18 days
(Barnes 1948: 36). Thus, an ALCM could not emer ge from a viable cocoon attached to a discarded
apple during the few hours it might remain uncovered as waste."2363
7.827 In its second written submission, referring to recent research 2364, New Zealand reiterates its
position that viable ALCM would need at least 13 days to emerge after being removed from cold
storage.2365 New Zealand emphasizes, however, that what ever the minimum length of time for adult
ALCM emergence, the key fact would be "that emer gence of viable individuals would be staggered
over a prolonged period of time and not, as Aust ralia assumed, simultaneously after removal from
cold storage".2366
7.828 In New Zealand's view:
"Australia's measures are based on the incorrect assumption that all ALCM present on
New Zealand apples would simultaneously emerge as soon as the apples were
removed from cold storage. 2367 In order for this to be true all ALCM present on
New Zealand apples would have to be fully developed pupae which, upon being
taken out of cold storage, would not requi re any development time. As confirmed by
the experts, this assumption is not supported by the scientific evidence."2368
7.829 New Zealand adds that, "the prolonged peri od of emergence substantially decreases the
chance of male and female emerging during the necessary time frame for mating."2369
7.830 Australia responds that New Zealand should not be permitted to raise the issue of the
extended period of time over which adult emergence may take place, because it had not raised that
issue in its first written submission. In Australia's view, this is an issue that New Zealand raised only
after having heard the replies by one of the experts to questions posed by the Panel.2370

2362 New Zealand's first written submission, para. 4.116-4.124.
2363 New Zealand's first written submission, para. 4.131.
2364 Sandanayaka and Rogers "Effect of cold storag e on emergence and mortality of apple leafcurling
midge" (2009), pp. 1-8, in Exhibit NZ-119.
2365 New Zealand's second written submission, para. 2.247.
2366 Ibid.
2367 (footnote original) IRA, p. 171, which states: "…adults coul d emerge from the pupal stage after the
apples have been taken out of cold storage, or wherev er the cold chain is broken , such as at unpacking and
repacking facilities or retailers and during the transportation of purchased apples from retailers to households or
with fruit that is dumped": This is confirmed by Professor Cross: Cross RPQ, Q 94 (i), p. 2.
2368 New Zealand's second written submission, para . 2.246. See also, New Zealand's comments on
Australia's replies to Panel question 24 after the second substantive meeting, para. 77.
2369 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 104.
2370 Australia's reply to Panel question 24 after the second substantive meeting, para. 140.

7.831 Australia adds that New Zealand has failed to demonstrate any serious flaw with the IRA.
Australia argues that the issue of whether su fficient quantities of New Zealand apples will be
co-located and remain out of cold storage for a sufficient period of time for a mating pair of ALCM to
emerge within close enough proximity to a suitable host at an appropriate time of year has been
appropriately taken into account in the IRA.
2371
7.832 In Australia's view, New Zealand seems to assume that the insects in the cocoons on imported
New Zealand apples will all be at exactly the same stage of development; that is, the prepupal stage
prior to metamorphosis of the pupa l stage. However, the IRA cons idered it more likely that, when
harvest occurs, various ALCM present in cocoons will be at different stages of development. It is
probable that some larvae will have progressed beyo nd the prepupal stage to the pupal stage and will
be ready to emerge as adults as soon as the appropria te environmental triggers are encountered by the
pupa, rather than wait the 13-18 days as recorded by Barnes (1948).2372
7.833 Australia submits further that New Zealand's argu ments, predicated on its view that the 13-18
day development period referred to in Barnes (1948) commences only once insects are removed from
cold storage, are unsupported by evidence. By contrast, as noted by Dr Cross, "Australia is probably
correct to assert that (some) adults could emerge as soon as the appropriate triggers are encountered
by the pupa." Australia adds that Dr Cross empha sised that the conditions in respect of diapause,
temperature and time requirements for developm ent have not been determined for ALCM, and
concluded that "Australia's IRA re lating to this issue was objective and credible and relied on [the]
limited scientific evidence available."2373
(ii) Analysis of the Panel
7.834 The IRA notes that:
"A stakeholder claims that key factors for the termination of pupal diapause in
New Zealand include critical day length and subsequent temperatures. First adult
emergence in New Zealand is synchronised with unfurling young apple shoots and
Tomkins et al. (2006) report emergence of overwintered adult midge from mid-
September to mid-November. Pupal development time to adult emergence is claimed
to be 30 days at a constant 23ºC (M AFNZ, 2006a) based on field collected pre-pupae
reared in the laboratory so it is certainly unrealistic to take 30 days as a minimum.
Fluctuating temperatures in the field mean that pupal development time could be
shorter or longer than 30 days and until further data sets are available it is unwise to
rely upon pupal development times at such unrealistic temperatures."
2374
7.835 The Panel has already rejected Australia's argu ment that New Zealand should be prevented
from raising issues that it did not raise in its first written submission, including issues that were raised
after having heard the replies of the experts consulted by the Panel. 2375 In any event, the Panel notes
that the specific issue of whether the IRA contains incorrect assumptions regarding the period that
would be needed for ALCM emergence is part of New Zealand's claim that Australia's IRA is not a
proper risk assessment within the meaning of Ar ticle 5.1 of the SPS Agreement and is therefore
within the Panel's terms of reference. This issu e was initially raised by New Zealand in its first
written submission.2376 As noted before 2377, the Panel sees no impediment in Parties setting out and

2371 Australia's second written submission, para. 639.
2372 Australia's first written submission, para. 797.
2373 Australia's second written submission, para. 658.
2374 Australia's IRA, Part B, p. 171.
2375 See paras. 7.80-7.82 above.
2376 New Zealand's first written submission, para. 4.116-4.124.

progressively clarifying their arguments in their successive submissions and statements before the
Panel, in the light of each other' s arguments, of the arguments advanced by Third Parties, of the
questions posed by the Panel, and of the explanations provided by the experts consulted by the Panel.
7.836 The IRA notes that "[i]f mature larvae or pupae survive cold storage or controlled atmosphere
storage, adults could emerge from the pupal stage afte r the apples have been taken out of storage, or
wherever the cold chain is broken". 2378 Dr Cross expressed his opinion that the IRA's reasoning in
this regard seems objective and credible.2379
7.837 As noted by Australia, it seems likely that AL CM in cocoons on apple fruits emerging from
cold storage will be at a wide range of stages of development, including: larvae that have just
cocooned and need to complete diapause and post-d iapause development; mature larvae that have
just cocooned and do not require diapause, but have to complete pupal development; pupae at various
stages of development, including some at late stages of development that were nearly ready to emerge
as adults at the moment of entering into cold storage.
2380 New Zealand has not provided scientific
evidence to prove its apparent assumption that cold storage of apples would kill individuals that were
pupating or force them into diapause.2381
7.838 Dr Cross has noted that the overall effect of th is broad range of ALCM development stages is
a prolonged period of emergence of viable individu als. The emergence period of the midges would
depend on the conditions in which the fruit has been stored, and the environmental conditions when it
is released in Australia (the time of year, temperatures, etc.). The resulting emergence could be a
protracted one, of many weeks.
2382 This protracted emergence of AL CM adults relative to their short
life span would substantially decrease the chances of a male and female ALCM emerging within the
time frame of a few days, which is required for successful mating. The likelihood of establishment
would thus be substantially reduced. 2383 As noted by Dr Cross, "[i]f the midge is only able to survive
for a couple of days in the natural world and the midges are emerging over a period of 3, 4, 5, 6 weeks
or maybe up to a year, then the chances of the estab lishment of the infestation are very significantly
reduced."2384
7.839 There is no evidence in the IRA regarding th e time necessary for ALCM to emerge after
apples have been removed from cold storage. Cons ulted by the Panel, Dr Cross expressed his view
that Australia's assertion that some adults coul d emerge as soon as the appropriate triggers are
encountered by the pupae may be correct, but is not supported by sufficient evidence. 2385 Similarly,

2377 See paras. 7.80-7.82 above.
2378 Australia's IRA, Part B, p. 171.
2379 Ibid. See also, Dr Cross's reply to Panel questions 94(i) and (viii), in List of Replies from the
scientific experts to questions posed by the Panel, paras. 532 and 547.
2380 Dr Cross's reply to Panel questions 94(i) and (viii), in List of Replies from the scientific experts to
questions posed by the Panel, paras. 532 and 546; Dr Cross's reply in Transcript of the Panel's meeting with
experts, para. 582.
2381 Dr Cross's reply to Panel question 94(i), in List of Replies from the scientific experts to questions
2382 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 582. See, Sandanayaka and
Rogers "Effect of cold storage on emergence and morta lity of apple leafcurling midge" (2009), pp. 1-8, in
Exhibit NZ-119.
2383 Dr Cross's replies to Panel questions 102, 109 and 115, in List of Replies from the scientific experts
to questions posed by the Panel, paras. 594, 650 and 672; Dr Cross's replies in Transcript of the Panel's meeting
with experts, paras. 590 and 630.
2384 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 590. See also, Dr Cross's
reply in Transcript of the Panel's meeting with experts, para. 630.
2385 Dr Cross's reply to Panel question 94(i), in List of Replies from the scientific experts to questions

New Zealand's contention that at least 13 to 18 days would be needed is not sufficiently supported by
evidence.
2386 In response to Dr Cross's responses, Austra lia has pointed to the IRA and submitted that
"[i]t is clear ... that the IRA Team fully appreci ated the many uncertainties and small likelihoods
associated with the potential of ALCM to establish in Australia." 2387 This does not respond to the
question, however, of whether the IRA took into acc ount the impact of the protracted emergence of
ALCM adults on the likelihood of transfer, nor does it identify any evidence in the IRA regarding the
necessary time for ALCM emergence.
7.840 As noted by Dr Cross, the issue of the protract ed emergence of ALCM, in relation to its short
life-span, is an important factor in considering the likelihood of transfer. 2388 There is no evidence in
the IRA regarding the necessary time needed for ALCM to emerge after being removed from cold
storage. Nor does the IRA's reasoning take into account the fact that a longer period of adult
emergence would substantially reduce the likel ihood of small numbers of individuals in a
consignment emerging within a few days of each other and being able to mate and lay eggs to start a
population.2389
7.841 As a result, the Panel finds that the IRA's re asoning regarding the likelihood of transfer of
ALCM in the light of the protracted emergence of ALCM is not objectively justifiable.
(e) Climatic conditions for spread of ALCM in Australia
(i) Summary of the Parties' arguments
7.842 New Zealand argues that the IRA did not properl y take into account the climatic conditions
that are necessary for the establishment and spread of ALCM. 2390 According to New Zealand, "there
is also no scientific basis for the IRA's conclusi ons in respect of the likelihood of ALCM spread,
because the IRA failed to factor in climatic issues ... The IRA did not deal with the important issue of
climate, and the conditions necessary for ALCM survival, at all."2391
7.843 New Zealand contends that:
"Even if ALCM were to establish in Austra lia, the likelihood of spread is remote.
ALCM distribution and pest status appears to be limited to cooler wetter climatic
conditions, such as those found in temperate coastal regions (Rogers 2006: 1). ...
Based on [the experience of other regions of the world], if ALCM were ever to
become established in Australia, it is highly unlikely that it would become
successfully established in all of the areas where apples are grown commercially and

2386 Dr Cross's reply to Panel question 94(i), in List of Replies from the scientific experts to questions
posed by the Panel, para. 530; Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 582.
2387 Australia's comments on the experts replies to questions, para. 257.
2388 Dr Cross's replies to Panel questions 102, 109 and 115, in List of Replies from the scientific experts
to questions posed by the Panel, paras. 594, 650 and 672; Dr Cross's replies in Transcript of the Panel's meeting
with experts, paras. 590 and 630.
2389 Dr Cross's replies to Panel questions 94(i), 102 and 104, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 532, 594 and 615. See also, Dr Cross's reply in Transcript of the
Panel's meeting with experts, para. 678.
2390 New Zealand's second written submission, para. 2.761-2.762. See also, New Zealand's reply to
Panel question 81 after the first substantive meeting, paras. 191-192; New Zealand's second written submission,
para. 2.764; and New Zealand's opening oral statement at the second substantive meeting of the Panel with the
Parties, para. 107.
2391 New Zealand's second written submission, paras. 2.761-2.762 (footnote omitted). See also,
New Zealand's second written submission, paras. 2.268 and 2.766.

where apple trees are grown in domestic gardens. It is highly unlikely that ALCM
would either establish or have any pest st atus in the areas of Australia which do not
have suitable climatic conditions (e.g. areas north of Canberra, including Sydney,
which are too hot and dry)."2392
7.844 According to New Zealand, "[t]he IRA's failure to take into account cl imate issues allowed it
to overestimate the likelihood of ALCM spread in Australia. ... Indeed, if the only area conducive to
ALCM establishment is Tasmania then this grea tly reduces the likelihood of ALCM establishment
and spread."2393
7.845 Australia responds that the IRA "took into account climate-related issues for [ALCM]
spread".2394 It notes that the IRA states that, "[a]ppl e leafcurling midge has spread all over
New Zealand since its accidental introduction in a bout 1950. There are similar environments in
Australia that would be suitable for its spread."2395
7.846 In its first written submission, Australia argues that "Australian states such as Victoria,
Tasmania and New South Wales have the types of cool climate su ited to the establishment and spread
of ALCM, and a considerable proportion of Aust ralia's commercial apple producing regions are
situated in such regions."2396
7.847 Subsequently, in response to a question from the Panel, Australia goes further and states that:
"To the extent that the pests at issue [inc luding ALCM] are pests of apples, pears and
other host plants, the climatic conditions in Australia would be suitable for
establishment of the three pests in all areas that apples, pears and other host plants
grow. These areas include the major citi es of Perth, Adelaide, Melbourne, Hobart
and Sydney. It also includes most of south-eastern Australia and south Western
Australia."2397
7.848 Australia also argues that, contrary to New Ze aland's contention, "[the IRA's] assessment of
the probability of spread did not assume that ALCM would necessarily spread to all apple growing
areas and gardens of Australia, nor should it have do ne. 'Spread' will have been achieved if the pest
spreads beyond its place of establishment to any other part of Australia."2398
(ii) The Panel's analysis
7.849 As noted above, there is very little mention in the IRA regarding the existence of climatic
conditions necessary for spread of ALCM in Austra lia. The IRA only notes that "Apple leafcurling
midge has spread all over New Zealand since its ac cidental introduction in about 1950. There are
similar environments in Australia that would be suitable for its spread."2399
7.850 Consulted by the Panel, Dr Cross expressed his vi ew that "clearly there are certain climatic
requirements for the midge's survival and we do kno w that it doesn't occur ev erywhere in the world

2392 New Zealand's first written submission, paras. 4. 364-4.365. See also, New Zealand's first written
submission, paras. 4.369 and 4.375; New Zealand's second written submission, para. 2.780.
2393 New Zealand's second written submission, para. 2.766 (footnote omitted). See also, New Zealand's
second written submission, para. 2.767.
2394 Australia's first written submission, para. 812.
2395 Ibid. See also, Australia's IRA, Part B, p. 177.
2396 Australia's first written submission, para. 813.
2397 Australia's reply to Panel question 54 after the second substantive meeting, para. 301.
2398 Australia's first written submission, para. 813 (original emphasis).
2399 Australia's first written submission, para. 812. Australia's IRA, Part B, p. 177.

and there are parts of the world where apples are grown and the apple-leaf curling midge doesn't
exist."
2400
7.851 Australia agrees that "ALCM is a pest of cool climates". 2401 In this regard, Dr Cross notes
that:
"In Europe, where [ALCM] seems to have reached its equilibrium position, it doesn't
occur in the Southern European areas of S outhern Spain, in Italy South of Naples.
Similarly, over in the United States it doesn't occur in the more southerly areas. I
think the thing is that [ALCM] needs cool temperatures, a sufficient accumulation of
cool temperatures in winter to break diapause. Unless diapause is broken, the
emergence in spring is not synchronized properly. In areas that don't have a sufficient
period of cool in winter the midge cannot exist. I am questioning whether those
limits have been established in Australia. If you look at a world map of where the
midge exists, it doesn't seem to occur in latit udes much less than about 38°. I haven't
investigated this thoroughly, but clearly in these warmer areas there are not sufficient
cool temperatures in winter and that limit has not been established in Australia by a
climatological analysis. ... So, I am suggesting that a study needs to be done of these
factors and it needs to be established where in Australia the climatological conditions
exist for the midge based on its known distribution throughout the world."
2402
7.852 The same expert notes additionally that ALCM long-term survival also requires wet summer
weather:
"[T]he midge also needs reasonably regular summer rainfall. Although it can clearly
survive droughty periods for a year or two, drought conditions in summer do not
favour it ... and it needs reasonably regular summer rainfall in order for it to be a
successful species and it doesn't occur in ar eas of the world that are dry. A great
example of this is Washington State wher e West of the Cascade Mountains, where
there is quite a lot of rainfall, the apple-leaf curling midge exists. But to the East of
that mountain range, there is an arid area where there is little summer rainfall in the
central summer months, and the midge doesn 't exist. Presumably, because there is
insufficient moisture for it to complete its development."2403
7.853 In the opinion of Dr Cross, "[ALCM] will only spread and cause a problem in areas of
Australia where the climate is suitable for its existence". 2404 The expert adds that "overall, the vast
bulk of the territory of Australia has an unsuitable climate for apple leaf curling midge. And it's only
in these very southerly areas where there's adequate rainfall, that [ALCM] poses a risk."2405
7.854 Australia's IRA does not adequately consider the issue of the existence of climatic conditions
necessary for establishment and spread of ALCM in Australia and the geographic range of these
conditions. The IRA does not contain an analysis in this regard, with reference to a representative

2400 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 588.
2401 Australia's first written submission, para. 821.
2402 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 588. See also, reply of
Dr Cross in Transcript of the Panel's meeting with experts, para. 650.
2403 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 588. See also, Dr Cross's
replies in Transcript of the Panel's meeting with experts, paras. 632 and 670.
2404 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 650.
2405 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 634. Dr Cross's reply to
Panel questions 94(v) and 117, paras. 536 and 673.

period of time.2406 This Panel does not have the authority to conduct such an analysis, as this would
amount to a de novo exercise. However, if a climatic analysis were to conclude that a suitable climate
for establishment and spread of ALCM is limite d to particular areas of Australia, this could
presumably have a significant effect on the risk assessment.2407
7.855 As a result, the Panel finds that the IRA's re asoning regarding the likelihood of establishment
and spread of ALCM in Australia, in the light of the existence of necessary climatic conditions and
geographic range of these conditions, is not objectively justifiable.
(f) Mode of trade
(i) Summary of the Parties' arguments
7.856 New Zealand argues that there is no basis for the assumptions in Australia's IRA "about the
normal retail supply chain practices".2408 In New Zealand's view:
"Australia failed to take into account that the great majority of New Zealand apples
would be exported in retail ready cond ition and so would not go to orchard
wholesalers for re-packing. In addition, Au stralia failed to take into account that,
even if New Zealand apples did go to orchard wholesalers, Australian agricultural
waste practices would preclude any opportunity for ALCM establishment."2409
7.857 New Zealand adds that the experience of its expor ters with respect to apples shipped to other
markets, as well as to exports of other horticultural g oods to Australia, "clearly indicate that the likely
mode of trade for apple exports to Australia would be retail ready packaged fruit".2410
7.858 According to New Zealand, because the vast majority of apples would be exported to
Australia retail-ready, the primary pathway for AL CM establishment, apples at orchard wholesalers,
would be "virtually eliminated". 2411 "Because New Zealand apples would not require repacking, they
would be sent directly to urban centres, which would effectively remove any likelihood of large
numbers of apples being near enough to apples trees to be within ALCM female flight range – a key
prerequisite to ALCM establishment."2412
7.859 Australia responds that, in the absence of any trade having commenced, "[n]either Australia
nor New Zealand is in a position to specify with any degree of precision what proportion of apples
will be handled by different wholesalers or imported 'retail ready'." 2413 In this regard, "the frequency
that the mode of trade would be via bulk fruit as opposed to 'retail ready' fruit will depend on
commercial considerations which will vary accordi ng to the market circumstances at any given
time."2414 In its view, it would not be to New Zealand' s commercial advantage to limit its exports of

2406 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 650. Dr Cross's reply to
Panel questions 94(v) and 117, in List of Replies from the scientific experts to questions posed by the Panel,
paras. 540, 543 and 677.
2407 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 634.
2408 New Zealand's second written submission, para. 2.251.
2409 New Zealand's second written submission, para. 2.252. See also, New Zealand's first written
submission, para. 4.361-4.363.
2410 New Zealand's reply to Panel question 9 after the second substantive meeting, para. 17. See also,
New Zealand's second written submission, para. 2.36-2.40.
2411 New Zealand's second written submission, para. 2. 253; New Zealand's opening oral statement at
the second substantive meeting of the Panel with the Parties, paras. 63-64.
2412 New Zealand's second written submission, para. 2.254.
2413 Australia's reply to Panel question 53 after the second substantive meeting, para. 290.
2414 Ibid.

apples to a specific form, such as "retail-ready", without regard for the particular and variable
demands of the Australian market.
2415 According to Australia, the required use by Australia's major
supermarket chains of their own individual packagin g in the form of returnable plastic crates would
pose a significant challenge for New Zealand apple e xporters to limit their exports to Australia to
"retail-ready".2416
7.860 Australia also argues that even limiting exports to "retail-ready" apples would not ensure that
those apples are not handled by orchard packing houses and that repacking and reconditioning of
apples are common practices.2417
(ii) The Panel's analysis
7.861 With respect to this issue, the IRA notes the following:
"Stakeholders provided varying views on how imported apples might be distributed.
Some stakeholders suggested that a large proportion of apples would come in as bulk
produce and be sent to orchard packing ho uses for regrading and repacking, while
other stakeholders suggested that apples w ould be packed in market ready boxes and
sent directly to urban wholesalers for distribution. Two possible scenarios were
considered in detail as follows.
One scenario was based on 0.1%–5% of imported apples being distributed to orchard
packing houses and the remainder (95% –99.9%) being distributed to urban
wholesalers. The other scenario was based on 70%–100% of imported apples being
distributed to orchard packing houses and the remainder (0–30%) being distributed to
urban wholesalers. Estimates of the number of infested fruit were calculated by
running a series of simulations."
2418
7.862 Dr Cross noted that the way in which fruit is handled in Australia would have a significant
effect on risk. If large volumes of apples were to be packed and graded in the vicinity of apple
orchards, and waste fruit from that process were to be disposed of or held therein, if those apples in
turn had infested cocoons on them and a number of midges emerged, they would have a higher chance
of making it into the nearby apple orchards. 2419 On the other hand, if fruit was held in refrigerated
conditions, or if it was received re tail-ready and sold in small quantities to individual consumers, the
risk would be greatly reduced. Moreover, apple fr uit that is packed and graded ready-for-sale is
unlikely to have green leaf material (particularly leaves of the top of the shoots, which are the ones
that can be infested with ALCM) attached. It is also unlikely that the packaging itself would be
infested with ALCM.2420 This would further reduce the risk.
7.863 The IRA develops two different scenarios, one considering that most imported apples would
enter in bulk and be sent to orch ard packing houses and the other considering that most apples would
be imported in market-ready form and be sent directly to urban wholesalers. 2421 Because of the

2415 Australia's second written submission, paras. 652 and 654.
2416 Australia's second written submission, paras. 651-652. See also, Australia's first written
submission, paras. 781-783.
2417 Australia's second written submission, para. 653.
2418 Australia's IRA, Part B, pp. 171-172.
2419 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 596.
2420 Dr Cross's reply to Panel question 98, in List of Replies from the scientific experts to questions
posed by the Panel, para. 575. See also, Dr Deckers's reply to Panel question 101, in List of Replies from the
scientific experts to questions posed by the Panel, para. 592. See also, New Zealand's comments to experts
responses, para. 155; Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 592.
2421 Australia's IRA, Part B, pp. 34 and 171-174.

impact that the way in which fruit is handled would have on risk, presumably the two distinct
scenarios should have resulted in different estimati ons of unrestricted risk. However, the overall
conclusions of Australia's IRA do not transparently re flect the different level of risk that would occur
under each scenario.2422
7.864 As noted by Dr Cross, "[w]ith respect to AL CM, the proportion of apples shipped retail ready
from [New Zealand] to Australia is crucial. If all fruit were shipped as retail ready and held in a cool
chain conditions until sold to consumers, the risk of importation, establishment and spread would be
greatly reduced, perhaps to negligible levels."2423
7.865 Little information is provided in the IRA on how the discussion and review of different
factors associated with the entry, establishment and spread of ALCM is translated into quantitative
estimates. The Panel cannot attempt to recalcula te these estimates, as this would constitute a de novo
review exercise. As noted above, the IRA consid ers a first scenario, under which only 0.1 to 5 per
cent of imported apples are distributed to orchard packing houses, and a second scenario, under which
70 to 100 per cent of imported apples are distributed to orchard packing houses and the remainder to
urban wholesalers. As noted by Dr Cross, the fact that imported infested apples are brought in bulk to
rural packing houses in proximity to orchards would be quite critical, as compared to retail-ready
apples being handled at urban wholesalers.
7.866 In conclusion, Australia's IRA does not ade quately reflect how the mode of trade of
New Zealand apples imported into Australia was ta ken into account. If many or most apples were
imported from New Zealand "retail-ready", ready-pack ed in small packages, that were handled at
urban wholesalers, as they presumably would be, this mode of trade should have a significant effect
on the risk assessment. 2424 As noted above, the IRA considers two different scenarios, with widely
varying proportions of imported apples being dist ributed to orchard packing houses as opposed to
urban wholesalers. However, consideration of the different possible modes of trade has not had any
evident impact on the IRA's conclusions. Again, this issue does not seem to have been adequately
considered or transparently reflected in Australia's IRA.
7.867 As a result, the Panel finds that the IRA's r easoning regarding the unrestricted risk for ALCM
through the importation of New Zealand apples in Austra lia, in the light of the mode of trade of those
apples, is not objectively justifiable.
(g) Conclusions regarding the IRA's estimation fo r the likelihood of entry, establishment and
spread of ALCM
7.868 In the light of the above, the Panel concludes th at the reasoning articulated in Australia's IRA,
with respect to the likelihood of entry, establishmen t and spread of ALCM, contains flaws which are
enough to create reasonable doubts about the evalua tion made by the risk assessor. The IRA has not
properly considered a number of factors that coul d have a major impact on the assessment of this
particular risk.
7.869 The Panel has not found that New Zealand h as made a prima facie case regarding the
existence of flaws in the IRA's reasoning with resp ect to the issue of whether orchards surrounding
wholesale packing houses may be located at a distance that is within the flying range of ALCM.

2422 Australia's IRA, Part B, pp. 187-188.
2423 Dr Cross's reply to Panel question 98, in List of Replies from the scientific experts to questions
posed by the Panel, para. 570. See also, Dr Cross's reply to Panel questions 98, 101 and 121, in List of Replies
from the scientific experts to questions posed by the Panel, paras. 574, 591 and 690; Dr Cross's replies in
Transcript of the Panel's meeting with experts, para. 662.
2424 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 662.

7.870 The IRA, however, devotes little consideration to the issue of viability of ALCM in occupied
cocoons and does not make a rigorous attempt to dete rmine what percentage of those cocoons contain
viable ALCM larvae or pupae. Similarly, the IR A does not consider the impact of parasitism by
Platygaster demades on cocoon occupancy and viability in its est imations. The IRA also fails to take
into account the diminished chances of mating of ALCM due to the protracted period of emergence of
ALCM adults relative to their short life span. Finally, the IRA does not contain a proper analysis
regarding the existence of the geographic range of the necessary climatic conditions for establishment
and spread of ALCM in Australia, nor of the likely mode of trade.
7.871 The failure of Australia's IRA to take a ll of these factors into account is enough to
cumulatively create reasonable doubts about the risk asse ssment with respect to its evaluation of the
likelihood of entry, establishment and spread of ALCM. When consulted by the Panel on the IRA's
consideration of the issue of cocoon viability in the context of importation step 2, Dr Cross noted that,
if more appropriate data was c onsidered, this would impact the whole estimation, and not only the
upper or lower values.
2425 Similarly, if the IRA had taken the factors described in the preceding
paragraph into account, and found that any of th em had a significant impact on the analysis,
presumably the whole range of estimations, and not just the upper or lower values, could have shifted.
Due to these flaws, the IRA's r easoning in this regard cannot be found to be supported by coherent
reasoning and sufficient scientific evidence and, in this sense, is not objectively justifiable.
(h) Potential biological and economic consequences associated with ALCM
(i) Summary of the Parties' arguments
7.872 New Zealand argues that "the IRA's analysis ov erstates the likely consequences of ALCM in
a number of areas." 2426 In New Zealand's view, "Australia's purported analysis of the 'associated
potential biological and economic consequences' of ALCM constitutes nothing more than a listing of
unsubstantiated assumptions. It is not an evaluation of those consequences within the meaning of the
SPS Agreement."2427
7.873 New Zealand submits in this respect that the da ta considered by the IRA to assess the impact
of ALCM on plant life and health is outdated; th at growers would be very unlikely to assign the same
impact rankings to ALCM now 2428; that only in the case of young apple trees is ALCM an important
pest for which active control methods are recommended 2429; that potential ALCM establishment in
Australia is limited by geog raphical and climatic barriers 2430; that potential establishment of ALCM
would not result in an increase in the use of insectic ides or a disruption of existing pest management
programmes2431; and that actual experience suggests that the IRA is incorrect in anticipating

2425 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 606.
2426 New Zealand's second written submission, para. 2.768. See also, New Zealand's second written
submission, para. 2.784.
2427 New Zealand's first written submission, para. 4.377.
2428 New Zealand's first written submission, para. 4.3 67; New Zealand's reply to Panel question 86
after the first substantive meeting, para. 208. See also, New Zealand's second written submission, paras. 2.769-
2.770.
2429 New Zealand's first written submission, para. 4.3 68; New Zealand's reply to Panel question 86
after the first substantive meeting, para. 211. See also, New Zealand's second written submission, para. 2.774.
2430 New Zealand's first written submission, paras. 4. 369 and 4.375. See also, New Zealand's second
written submission, para. 2.782-2.783; New Zealand's opening oral statement at the second substantive meeting
of the Panel with the Parties, para. 107.
2431 New Zealand's first written submission, paras. 4.371-4.372; New Zealand's reply to Panel question
86 after the first substantive meeting, para. 211. See also, New Zealand's second written submission,
para. 2.775-2.777.

consequences from potential establishment of AL CM on domestic and international trade in
apples.2432
7.874 Australia responds that the IRA's analysis of the potential biological and economic
consequences of an ALCM incursion is objective and credible.2433 In Australia's view:
"New Zealand's challenge to the IRA Team's evaluation of the biological and
economic consequences of an ALCM incu rsion in Australia is imprecise and
unsubstantiated. Once again, New Zeala nd has failed to appreciate the methodology
used by the IRA Team to make its assessment. New Zealand has failed to identify
any evidence that the IRA Team did not ta ke into account or that there were any
flaws in its evaluation."
2434
7.875 Australia argues that New Zealand incorrectly relies on a paper by Rogers et al. (2006) in
support of a large number of its assertions in respect of ALCM consequences. 2435 Australia adds that
New Zealand does not challenge any of the "imp act scores" allocated by the IRA to potential
consequences.2436
7.876 More specifically, Australia contends that th e IRA took into account several sources to assess
the impact of ALCM on plant life and health and that New Zealand has failed to provide any evidence
that growers would currently assign different impact rankings in respect to ALCM compared to those
ascertained earlier 2437; that the IRA Team primarily focu ssed on potential consequences for young
trees2438; that New Zealand has failed to provide an y evidence or argument to suggest that ALCM
would not become a major problem in Austra lian orchards should it become established 2439; that the
consequences analysis for ALCM in the IRA cons idered that potential consequences would only have
regional and local, and not national, significance 2440; that it is inappropriate to draw a direct analogy
between New Zealand's current and well-established practices for managing ALCM, and the
management practices that may have to be newly implemented in Australia if ALCM was to establish,
as invasive species do not necessarily behave in the same way when they are introduced to different
parts of the world
2441; that it was not possible for the IRA to assess the degree to which potential
predators of ALCM present in Australia would ef fectively contribute to the biological control of
ALCM under Australian conditions 2442; that, in considering the consequences from potential
establishment of ALCM on international trade in appl es, New Zealand has not specified the nature of
the "sensitivity" of other markets to ALCM, or how New Zealand addresses those sensitivities.2443

2432 New Zealand's first written submission, paras. 4.374-4.376. See also, New Zealand's second
written submission, para. 2.778-2.781.
2433 Australia's first written submission, paras. 825-850.
2434 Australia's first written submission, para. 850.
2435 Australia's first written submission, para. 827.
2436 Australia's first written submission, para. 828.
2437 Australia's first written submission, paras. 829-832.
2438 Australia's first written submission, para. 833.
2439 Australia's first written submission, para. 834.
2440 Australia's first written submission, paras. 835-837.
2441 Australia's first written submission, paras. 840-842.
2442 Australia's first written submission, paras. 843-846.
2443 Australia's first written submission, paras. 847-849.

(ii) The Panel's analysis
7.877 Australia's IRA contains a qualitative evalua tion of the potential biological and economic
consequences associated with the entry, est ablishment or spread of the relevant pests.
2444 A s
described in the IRA:
"The impact of a pest or disease on each direct and indirect consequence criterion is
estimated at four levels – local, district, regional and national – and the values derived
are translated into a single qualitative score, A–G (Table 10) ...
At each level, the quantum of impact is d escribed as 'unlikely to be discernible', of
'minor significance', 'significant' or 'highly significant'."2445
7.878 Based on the impact scores assigned to different criteria (namely, plant life or health, human
life or health, other aspects of the environment, control or eradication, domestic trade or industry,
international trade, environment, and communities) , the IRA estimates the overall consequences of
ALCM as being "low". By combining the value fo r the annual probability of entry, establishment and
spread and the outcome of overall consequences, th e IRA estimates that the unrestricted annual risk
for imported apples from New Zealand is "low". This rating of "low" is above Australia's ALOP of
"very low". Accordingly, the IRA concludes that "risk management woul d be required for this
pest".2446
7.879 Consulted by the Panel, Dr Cross noted that:
"[S]ome of the terms used [in Australia's methodology for assessing impacts] are
relativistic and are not clearly defined. In Table 10 [of the IRA on 'Assessment of
local, district, regional and national conse quences], much rides on the differences
between 'minor', 'significant' and 'highly significant' but the differences between these
impacts is not defined in terms of economi c loss, the need to apply insecticides or
social consequences."2447
7.880 Dr Deckers noted that "[in Europe, the] problem of an ALCM infection in an apple orchard is
not considered ... as a major problem, but more as a secondary parasite that makes some damage on
the leaves without interfering too much with the productivity of the fruit trees."2448
7.881 Dr Cross expressed the view that the IRA may have overestimated the assignment of certain
impact scores. On the direct impact on plant life or health, the IRA assigned an impact score of "D".
While this impact score is "credible", the expert not ed that a less-serious impact score of "C" (district
level – minor; local level – signifi cant) "would be more appropriate". 2449 Likewise, the impact score
of "D" for the indirect impact on control or erad ication is considered "somewhat severe" and a "C"
score "would be more objective and credible". 2450 Dr Cross found that the IRA score for domestic
trade or industry, international trade, the environment and communities are "credible and

2444 See para. 2.63 above.
2445 Australia's IRA, Part B, p. 38.
2446 Australia's IRA, Part B, p. 187.
2447 Dr Cross's reply to Panel question 96, in List of Replies from the scientific experts to questions
2448 Dr Deckers's reply to Panel question 96, in List of Replies from the scientific experts to questions
2449 Dr Cross's reply to Panel question 96, in List of Replies from the scientific experts to questions
2450 Dr Cross's reply to Panel question 96, in List of Replies from the scientific experts to questions

objective".2451 The expert questioned, however, the IRA's discussion on the possible effects of ALCM
infestation on skin finish and fruit quality. The expert noted that such effects "are rare". "The type of
damage reported from New Zealand has not been reported elsewhere and is extraordinary."2452
7.882 It is not the Panel's role to reassess the imp act scores assigned by the IRA to specific criteria
and propose different scores. In any event, most of New Zealand's arguments with respect to the
IRA's estimation of consequences assume that ALCM would behave in the same way if introduced in
Australia as has been observed in other regions. As noted by Australia, "invasive species do not
necessarily behave in the same way when they are introduced to different parts of the world".
2453
7.883 It must be noted, however, that the IRA has a tendency to overestimate the severity of ALCM
consequences in certain aspects. This overestimatio n affects in particular the four scores that in the
IRA are assigned the harshest score of "D" (plant lif e or health, control or eradication, domestic trade
or industry and international trade).
7.884 Moreover, the Panel has already noted that Aust ralia's IRA does not adequately consider the
issue of the geographic range and the existence of climatic conditions necessary for establishment and
spread of ALCM in Australia. As stated by New Zealand, potential ALCM establishment in Australia
can be limited by geographical and climatic barriers. This calls into question the IRA's conclusions
regarding the potential biological and economi c consequences associated with the entry,
establishment or spread of ALCM into Australia.
7.885 In the light of the above, the Panel concludes that the IRA's evaluation of the potential
consequences associated with the entry, establishment or spread of ALCM into Australia does not rely
on adequate scientific evidence and, accordingly, is not coherent and objective.
(i) Overall conclusions with respect to requirements regarding ALCM
7.886 For the reasons stated above, the Panel finds that, with respect to its analysis of the likelihood
of entry, establishment and spread of ALCM, and of the potential consequences associated with the
entry, establishment or spread of ALCM into Australia, Australia's IRA is not a proper risk
assessment within the meaning of Article 5.1 and paragraph 4 of Annex A of the SPS Agreement.
The flaws described above also constitute a failure by the IRA to adequately take into account factors
such as the available scientific evidence, th e relevant processes and production methods in
New Zealand and Australia, the actual prevalence of viable ALCM, and re levant environmental
conditions, as required by Article 5.2 of the SPS Agreement.
7.887 Accordingly, Australia's inspection and treatment requirements regarding ALCM on
New Zealand apples are inconsistent with Article s 5.1 and 5.2 of the SPS Agreement. Since the
requirements are not based on a risk assessment as provided in Article 5.1 of the SPS Agreement,
these measures can be presumed, more generally, not to be based on scientific principles or not to be
maintained with sufficient scientific evidence within the meaning of Article 2.2.
2454 Accordingly, the
Panel finds that Australia's inspection and treat ment requirements regarding ALCM on New Zealand
apples are, by implication, also inconsistent with Article 2.2 of the SPS Agreement.

2451 Dr Cross's reply to Panel question 96, in List of Replies from the scientific experts to questions
2452 Ibid.
2453 Australia's first written submission, para. 840. See also, Reply of Dr Cross to Panel question 119,
para. 676.
2454 Appellate Body Report on Australia – Salmon, paras. 137-138.

7. General measures
(i) Summary of the Parties' arguments
7.888 In addition to specific requirements regardi ng fire blight, European canker and apple
leafcurling midge, New Zealand challenges three requirements, which it has defined as "general"
measures:
• "The requirement that Australian Quar antine and Inspection Service officers
be involved in orchard inspections for European canker and fire blight, in
direct verification of packing house procedures, and in fruit inspection and
treatment.
• The requirement that New Zealand ensure that all orchards registered for
export to Australia operate under standard commercial practices.
• The requirement that packing houses provide details of the layout of
premises."
2455
7.889 New Zealand argues that, with respect to these me asures, too, Australia has failed to comply
with its obligations under Artic le 2.2 of the SPS Agreement. 2456 These measures would also be
inconsistent with the requirement in Article 2.2 th at they be based on scientific principles and applied
only to the extent necessary to protect human, animal or plant life or health. 2457 In New Zealand's
view:
"Since mature, symptomless apple fruit are not a pathway for fire blight or European
canker to be transmitted to Australia, and since there is no scientific evidence that
entry, establishment and spread of ALCM could occur at the levels of infestation
reported on New Zealand apples, there is also insufficient scientific evidence for
Australia to maintain its additional measures applicable to all three pests".
2458
7.890 New Zealand submits that there is no justifica tion in the IRA for the requirement that AQIS
officers be involved in orchard inspections for Europ ean canker and fire blight, in direct verification
of packing house procedures, and in fruit inspection and treatment. According to New Zealand,
because there is no justification for requiring any of these inspections or packing house procedures,
and these requirements are in breach of Article 2.2 of the SPS Agreement, there is also no justification
for requiring AQIS staff to be involved in orchard inspections, packing house inspections, or in fruit
inspection or treatment.2459
7.891 New Zealand adds that, although New Zealand apples are processed according to standard
commercial practices, there is no justification to require, through a costly program, verification of

2455 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3. See also, Australia's IRA, Part B, pp. 150-155.
2456 New Zealand's first written submission, paras. 4.141-4.150.
2457 New Zealand's first written submission, para. 4. 150. See also, New Z ealand's second written
submission, para. 2.272.
2458 New Zealand's first written submission, para. 4.141.
2459 New Zealand's first written submission, paras. 4.142-4.144. See also, New Zealand's second
written submission, paras. 2.275-2.278.

such compliance by New Zealand. According to New Zealand, Australia does not even attempt to
demonstrate any scientific support for this measure.2460
7.892 New Zealand also argues that Australia does not attempt to demonstrate any scientific support
for the requirement that packing houses provide deta ils of the layout of premises. In New Zealand's
view, it is not clear how this measure can be justified, nor what risk is it intended to address.2461
7.893 New Zealand adds that these three measures also breach Article 5.1 of the SPS Agreement,
because the IRA fails to comply with the requir ement to evaluate the likelihood of entry,
establishment and spread of the relevant pests, according to the SPS measures which might be
applied.2462
7.894 In response, Australia argues that the three "g eneral" measures identified by New Zealand are
"ancillary measures", which "do not fall within the definition of SPS measure in Annex A(1) of the
SPS Agreement".2463 They would constitute "general operational procedures to support the principal
risk management measures for the quarantine risks identified in [the IRA]".2464 Australia submits that
"none of these requirements operate in a concrete way in its own right, and therefore cannot be
challenged on an individual basis. Accordingl y, the Panel should only assess these requirements
when 'taken together' (or, 'as a whole') with the principal risk management measures recommended in
the Final IRA Report."2465
7.895 Australia adds that a panel need onl y examine the measures "which actively reduce the risks
of concern – i.e. the principal risk reduction measures" and not "those measures which do not actually
reduce the risks themselves, but are required simply to support, verify and operationalise the principal
risk reduction measures." 2466 Australia submits that it "has demonstrated that its principal risk
reduction requirements are supported by sufficient scientific evidence". Australia adds that
"New Zealand has adduced no evidence to suggest that the ancillary requirements are not valid
requirements for ensuring verification and support of the principal measures." Therefore, there would
be "no basis for finding the ancillary requirem ents are not supported by sufficient scientific
evidence."2467 Australia concludes that the "general" measures are consistent with articles 5.1, 5.2 and
2.2 of the SPS Agreement.2468
7.896 The Parties differ as to the exact scope of the three "general" measures identified by
New Zealand.2469 Most especially, they differ as to the exact scope of the requirement of AQIS

2460 New Zealand's first written submission, paras. 4.145-4.148. See also, New Zealand's second
written submission, paras. 2.286-2.290.
2461 New Zealand's first written submission, para. 4. 149. See also, New Z ealand's second written
submission, paras. 2.279-2.285.
2462 New Zealand's first written submission, paras. 4.400-4.401.
2463 Australia's second written submission, para. 714. See also, Australia's first written submission,
para. 145. See also, Australia's reply to Panel questions 14 and 15 after the first substantive meeting.
2464 Australia's first written submission, para. 145.
2465 Australia's first written submission, para. 146. See also, Australia's reply to Panel questions 12
and 17 after the first substantive meeting.
2466 Australia's first written submission, para. 859 (original emphasis). See also, Australia's first written
submission, paras. 868-869.
2467 Australia's first written submission, para. 959. See also, Australia's first written submission,
paras. 962-969; Australia's second written submission, paras. 715-729.
2468 Australia's second written submission, paras. 730-735.
2469 See paras. 2.170 to 2.198 above.

involvement. As noted by Australia, "[t]he extent and precise nature of 'AQIS involvement' was not
defined in the Final IRA Report."
2470 Australia adds, however, that this requirement:
"[D]oes not require the involvement of AQIS officials in all orchard inspections and
packing house operations. Rather, AQIS activities are to be by way of systems
audits.
2471 For orchard inspections, the audit would include 100% of survey teams in
the field, and the intensity of audits would be adjusted over time based on
performance. For packing houses, all releva nt packing houses would be audited in
their first year of trade."2472
7.897 New Zealand responds that the AQIS involveme nt for New Zealand apples, which involves
the audit of 100 per cent of survey teams and packi ng houses, "differs in scope and intensity from any
form of systems audit familiar to New Zealand, or indeed Australia." 2473 According to New Zealand,
this requirement is different to the one impos ed for stone fruit from New Zealand to Western
Australia, imposed only for the first season of trade and involving only a sample of growers and
packing houses.
2474 New Zealand also rejects Australia's link of the AQIS involvement requirement
with standard pre-clearance arrangements. Under the IRA's requirement, AQIS officers would
undertake audits of survey teams and packing hous es while they are in New Zealand. New Zealand
submits that audits of survey teams would not ta ke place at the same time as pre-clearance. For
example, in the case of fire blight and European canker, orchard inspections would take place long
after or well before the export of apples to Australia would have occurred. This would differ to what
pre-clearance generally entails, that the usua l on-arrival verification requirements would be
undertaken outside Australia.2475
(ii) The Panel's analysis
7.898 The Panel has already concluded that each of the 16 measures at issue constitutes an SPS
measure, within the meaning of Annex A(1) of the SPS Agreement. 2476 The Panel has also concluded
that it is not prevented from analyzing the challe nged measures either individually or as a whole. 2477
In the circumstances of the present case, a distinc tion between principal and ancillary measures would
not limit the Panel to considering any of the measure s, and in particular the "general" measures, only
in conjunction with a "principal" risk management measure.
7.899 Notwithstanding the disagreement between the Par ties as to the exact scope of the "general"
measures, and most especially of the requirement of AQIS involvement, is is undisputed that these
measures are, by their purpose, form and nature, li nked to the specific measures regarding the pests at
issue in the current dispute.
2478 There is no discussion in the IR A of scientific evidence that would
support these "general" measures; indeed, there is no attempt to provide any separate justification for
these measures.

2470 Australia's first written submission, para. 151.
2471 (footnote original) This is explained in the Final IRA Report as follows: "AQIS field audits will
measure compliance with orchard registration, block identification, pest/disease management/monitoring,
records management, and the administration of the area freedom and accreditation requirements." (Final IRA
Report, Part B, p. 314.)
2472 Australia's first written submission, para. 151.
2473 New Zealand's second written submission, para. 2.276.
2474 Ibid.
2475 New Zealand's second written submission, paras. 2.277. See also, Australia's reply to Panel
question 47 after the first substantive meeting.
2476 See para. 7.172 above.
2477 Ibid.
2478 See paras. 2.92-2.95 above.

7.900 The IRA introduces the section where these three measures are described explaining that the
section provides details "on the recommended quaran tine conditions ... and operational procedures
required to manage the quarantine risks".2479
7.901 In the case of the requirement of AQIS involvement, Australia notes that:
"[T]he AQIS audits of orchard inspections and packing house procedures serve to
verify that the principal orchard inspecti on and disinfection measures for fire blight
and European canker are appropriately fu lfilled. Verification of fruit inspection
processes is aimed at ensuring the appropriate level of efficacy is achieved for the
principal fruit inspection requirements for ALCM, as well as the more general fruit
inspection requirements."
2480
7.902 The requirement that packing houses provide details of the layout of premises is linked to the
requirement of AQIS involvement in orchard insp ections and packing house procedures. Indeed,
Australia notes that "[t]his measure is ancillary to the aforementioned requirement, in that it is
designed to facilitate AQIS verification of packing house procedures."2481
7.903 Finally, the requirement that New Zealand ensure that all orchards registered for export to
Australia operate under standard co mmercial practices is again linke d to the measures regarding the
pests at issue in the current dispute. In Australia 's words, "[t]his measure is an ancillary measure, on
the basis that the assumption that orchards wi ll operate under standard commercial practices
underpins all the risk management measures recommended in the Final IRA Report, including all the
principal measures at issue in this dispute, and hence it is ancillary to them."2482
7.904 The Panel has already found that Australia's requirements regarding fire blight, European
canker and ALCM are inconsistent with Articles 5.1, 5.2 and 2.2 of the SPS Agreement. Considering
the link in the IRA between the "general" meas ures identified by New Zealand and the specific
requirements regarding fire blight, European canke r and ALCM, as well as the lack of any separate
justification for these "general" measures in the IRA, the Panel must conclude that with respect to
these "general" measures, too, Australia's IRA is not a proper risk assessment within the meaning of
Article 5.1 and paragraph 4 of Annex A of the SPS Agreement. In imposing these "general" measures
the IRA has failed to take into account factors such as the available scientific evidence, the relevant
processes and production methods in New Zealand a nd Australia, and the actual prevalence of fire
blight, European canker, and relevant environmenta l conditions for ALCM, as required by Article 5.2
of the SPS Agreement.
7.905 Accordingly, Australia's "general" measures on New Zealand apples are inconsistent with
Articles 5.1 and 5.2 of the SPS Agreement. Because the requirements are not based on a risk
assessment as provided in Article 5.1 of the SPS Agreement, these measures can be presumed, more
generally, not to be based on scientific prin ciples within the meaning of Article 2.2. 2483 The Panel
finds that Australia's "general" measures on New Zeala nd apples are, by implication, also inconsistent
with Article 2.2 of the SPS Agreement.

2479 Australia's IRA, Part B, p. 313.
2480 Australia's reply to Panel question 15 after the first substantive meeting.
2481 Ibid.
2482 Ibid.
2483 Appellate Body Report on Australia – Salmon, paras. 137-138.

8. General conclusion on New Zealand's claims under Articles 5.1, 5.2 and 2.2 of the
SPS Agreement
7.906 For the reasons stated above, the Panel has found that Australia's requirements regarding fire
blight, European canker and ALCM, as well as th e requirements identified by New Zealand as
"general" measures that are linked to all three pests at issue in the present dispute, are inconsistent
with Articles 5.1, 5.2 and 2.2 of the SPS Agreement.
D. N
EW ZEALAND'S CLAIM UNDER ARTICLE 5.5 OF THE SPS AGREEMENT
1. Introduction
7.907 In its panel request, New Zealand claims a viola tion of the "first sentence" of Article 5.5 of
the SPS Agreement2484, which reads:
"With the objective of achieving consistency in the application of the concept of
appropriate level of sanitary or phytosanitary protection against risks to human life or
health, or to animal and plant life or h ealth, each Member shall avoid arbitrary or
unjustifiable distinctions in the levels it considers to be appr opriate in different
situations, if such distinctions result in discrimination or a disguised restriction on
international trade."
7.908 New Zealand notes that, in the light of the Appellate Body report in EC – Hormones,
three elements need to be demonstrated to show a breach of this provision:
"First, that the Member imposing the meas ure complained of has adopted its own
appropriate levels of sanitary protection ag ainst risks to human life or health in
several different situations.
Second, that those levels of protection exhi bit arbitrary or unjustifiable differences
('distinctions' in the language of Article 5.5) in their treatment of different situations.
Third, that the arbitrary or unjustifiable differences result in discrimination or a
disguised restriction on international trade.2485"2486
7.909 New Zealand argues that all three elements are fulfilled. 2487 Australia has imposed measures
to New Zealand apples that it does not impose in ci rcumstances of comparable risk, as illustrated by
the way Australia has treated the im portation of nashi pears from Japan. 2488 In particular,
New Zealand compares Australia's appropriate leve l of protection (ALOP) for New Zealand apples in
respect to fire blight ( Erwinia amylovora) and European canker ( Neonectria galligena ) with
Australia's ALOP for Japanese nashi pears in regard to Japanese Erwinia and brown rot ( Monilinia
fructigena), respectively. According to New Zealand, these situations are comparable, the levels of

2484 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
2485 (footnote original) Appellate Body Report, EC – Hormones , paras. 214-215. See also Appellate
Body Report, Australia – Salmon , para.140; and the SPS Committee's Guidelines to further the practical
implementation of Article 5.5 (G/SPS/15) adopted at its meeting of 21-22 June 2000, para. 4.2.
2486 New Zealand's first written submission, para. 4.432.
2487 New Zealand's first written submission, para. 4. 433. See also New Zealand's opening oral
statement at the first substantive meeting of the Panel w ith the Parties, para. 116; and New Zealand's second
written submission, para. 2.817.
2488 New Zealand's closing oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 13.

protection applied show arbitrary or unjustified distinctions, and these distinctions result in
discrimination or a disguised restriction on trade.2489
7.910 Australia rejects New Zeal and's claim and arguments under Article 5.5 as "flawed" 2490 and
"lack[ing] merit."2491 Quoting the Appellate Body Report on EC – Hormones , Australia argues that
the first clause of Article 5.5 of the SPS Agreemen t sets out the objective of achieving consistency in
the application of the concept of ALOP. This objective itself would not impose any legal obligation
on Members. The Appellate Body recognized in EC – Hormones that this objective does not set a
goal of achieving absolute or perfect consiste ncy in ALOP, since governments establish their
appropriate levels of protection fre quently on an ad hoc basis and over time, as different risks present
themselves at different times. It is only arbitrar y or unjustifiable inconsistencies that are to be
avoided.2492
7.911 Like New Zealand, Australia identifies three el ements that need to be demonstrated for a
finding of inconsistency with Article 5.5 of the SPS Ag reement. At the same time, Australia refers to
a part of the Appellate Body report in Australia – Salmon , which shows certain differences with the
Appellate Body report in EC – Hormones as regards the first and second elements:
"– the Member concerned adopts differe nt appropriate levels of sanitary
protection in several 'different situations';
– those levels of protection exhibit differences which are 'arbitrary or
unjustifiable'; and
– the measure embodying those differences results in 'discrimination or a
disguised restriction on international trade'.2493"2494
Australia emphasizes that these three elements are cu mulative, so New Zealand is required to show
that all three elements are present.2495
7.912 In addressing New Zealand's Article 5.5 claim, the Panel will follow the approach of the
Appellate Body and panels in previous disputes involving Article 5.5 claims. 2496 As also argued by
the Parties, this approach is based on a three-pr onged test applied to the second part of the first
sentence of Article 5.5. In applying the test, th e Panel will also address the apparent differences
between the Appellate Body reports in identifying the first and second elements in the test. But
before turning to the three limbs of the substan tive test under Article 5.5, the Panel will address a
threshold issue raised by Australia in regard to New Zealand's claim under this provision.

2489 New Zealand's second written s ubmission, para. 2.817. See al so New Zealand's opening oral
statement at the first substantive meeting of the Panel with the Parties, para. 116.
2490 Australia's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 56.
2491 Australia's closing oral statement at the first su bstantive meeting of the Panel with the Parties,
paras. 35-36.
2492 Australia's first written submission, para. 974.
2493 (footnote original) Appellate Body Report, Australia – Salmon, para. 140.
2494 Australia's first written submission, para. 975.
2495 Australia's first written submission, para. 976.
2496 See the panel and Appellate Body reports on EC – Hormones and Australia – Salmon , and the
panel report on Australia – Salmon (Article 21.5 – Canada).

2. Threshold issue raised by Australia
7.913 New Zealand's Article 5.5 claim is based on a comparison of the ALOP and measures applied
by Australia to fire blight ( Erwinia amylovora ) and European canker ( Neonectria galligena ) in
New Zealand apples, and to Japanese Erwinia and brown rot (Monilinia fructigena) in Japanese nashi
pears. Australia raises a threshold issue in regard to this claim. Australia argues that, because
New Zealand did not identify Japanese nashi pears as the comparator product until its first written
submission, due process was prejudiced and the prep aration of Australia's defence was negatively
affected.
2497 Since New Zealand merely listed Article 5.5 in its panel request, Australia had only four
weeks to address New Zealand's arguments in its fi rst written submission. Australia is not arguing
that New Zealand should have elaborated its argume nts on Article 5.5 in its panel request. Rather,
New Zealand should have properly outlined its clai ms under this provision so that Australia could
have commenced preparation of its defence before receiving New Zealand's first written
submission.2498
7.914 New Zealand rejects the threshold issue rais ed by Australia. In New Zealand's view,
the question of the sufficiency of New Zealand' s panel request was dealt with by the Panel's
preliminary ruling of June 2008. The comparator situation of nashi pears imported from Japan was
identified by Australia in the 1998 Final IRA Report fo r New Zealand apples. It should have come as
no surprise to Australia that New Zealand would di scuss a comparison that had already been made by
the IRA Team. Further, in proving a breach of Article 5.5, the complainant faces particular
challenges. It must piece together information on comparator situations drawing on publicly available
sources, without having ready access – like the re spondent – to all info rmation concerning SPS
measures imposed by the respondent on goods from th ird countries. New Zealand adds that, at the
October 2007 consultations in this dispute, Au stralia did not ask New Zealand to indicate the
comparator situations it had in mind in identify ing a breach of Article 5.5 in its request for
consultations.2499
7.915 In response, Australia recogni zes that Japanese nashi pears we re briefly mentioned in the
1998 Final IRA Report for New Zealand apples. Howe ver, as also noted in that Report, there are
significant differences between Japanese nashi pear s and New Zealand apples. In contrast to
New Zealand apples, Japanese nashi pears involve a very low volume of fruit, risk management is
based on a robust area freedom arrangement, and a stringent eradication programme is in place in
Japan. Accordingly, it is unreasonable to expect Australia to know that nashi pears from Japan would
be the comparator situation ten years later in this dispute. 2500 In any event, it was Australia and not
New Zealand that identified the issue of nashi pears in the 1998 IRA; New Zealand has not submitted
evidence showing that it raised this issue in 1998 in any claim of discrimination.2501
7.916 Australia confirms that the consultations of October 2007 did not address the comparison of
New Zealand apples with Japanese nashi pears in the context of New Zealand's Article 5.5 claim. 2502
It is unclear why New Zealand did not raise this at the consultations. 2503 A s c o m p l a i n a n t ,
New Zealand has the onus to ensure through its pa nel request that Australia, the respondent, fully
comprehend the nature of the case it has to answer. It is not the respondent's role to seek further

2497 Australia's first written submission, para. 973. See also Australia's second written submission,
paras. 163-165.
2498 Australia's reply to Panel question 128 after the first substantive meeting. See also Australia's
second written submission, para. 170.
2499 New Zealand's reply to Panel question 129 after the first substantive meeting.
2500 Australia's reply to Panel question 128 after the first substantive meeting.
2501 Australia's second written submission, para. 170.
2502 Australia's reply to Panel question 128 after the first substantive meeting. See also Australia's
second written submission, para. 166.
2503 Australia's second written submission, para. 167.

information from a complainant as to the nature of its claims, and there is no mechanism in the DSU
to do so.2504
7.917 The Panel recalls that Australia advanced simila r arguments in the context of its first request
for a preliminary ruling by the Panel under Article 6.2 of the DSU. At that time, Australia was
complaining that it would be forced to wait until New Zealand's first written submission to learn about
the product of comparison:
"There is a further aspect to Australia's claim that the mere listing of the provisions
alleged to have been violat ed is completely inadequate in this case, inhibiting the
preparation of Australia's defence. This aspect relates to New Zealand's claims under
Article 2.3 and Article 5.5 of the SPS Agreement . Both of these provisions require
comparisons to be made between measures adopted by a Member in different
situations in order to subs tantiate claims of discrimination or the imposition of
disguised restrictions on international trade. As such, Australia submits that in order
to prepare its defence to claims under Article 2.3 and Article 5.5, it requires notice of
which measures specified in the Final IRA Report are the subject of these claims and,
equally importantly, which of Australia's other SPS measures are being used by
New Zealand as points of comparison with the measures in the Final IRA Report.
Australia applies a range of SPS measures in relation to different products from many
WTO Members. New Zealand's failure to identify in its panel request which of those
measures it seeks to compare with the measu res in the Final IRA Report, in order to
substantiate its claims under Article 2.3 and Article 5.5, means that Australia is
forced to wait to receive New Zealand's first written submission to identify the basis
of its claims under those provisions. Without such information, Australia is not able
to commence preparation of its defence in relation to these provisions on the basis of
the panel request. Australia submits that such an outcome cannot be consonant with
due process. Australia is not arguing t hat New Zealand should have elaborated its
arguments on Article 2.3 and Article 5.5 in its panel request. Australia is arguing
that New Zealand should have properly outlined its claims under those provisions so
that Australia could commence prepara tion of its defence before receiving
New Zealand's first written submission."
2505
7.918 Likewise, in its rebuttal submission on the same preliminary issue, Australia argued that:
"For the statement of a particular legal clai m to be sufficient to meet the requirements
of Article 6.2 of the DSU, that statem ent must, at a minimum, provide enough
information so that a respondent can 'begin preparing its defence at the beginning of
the panel process.' 2506 Applying this principle to Article 2.3 and Article 5.5,
New Zealand should at least have identified the basis of comparison that it relies
upon in asserting a violation in its panel request. The element of comparison is
central to both provisions.
Under the first sentence of Article 2.3, for example, a hypothetical 'claim' might be
that certain SPS measures discriminate between Member A and Member B.
An 'argument' in support of this claim might be that Australia has given preferential
treatment to Member A's market access request over a similar request made by
Member B. Where the obligations in a provision turn on a comparison of certain

2504 Australia's second written submission, para. 168.
2505 Australia's first request for a preliminary ruling, 13 March 2008, paras. 55-56 (emphasis added).
2506 (footnote original) Panel Report, Japan – DRAMs (Korea), para. 7.9.

treatment in different situations, for ex ample between Member A and Member B,
then a claim under that provision is only partially stated if Member A and not
Member B is identified. It is not possibl e for Australia to commence preparation of
its defence under either Article 2.3 or Article 5.5 without knowing the bases for
comparison that New Zealand considers relevant."
2507
7.919 In its preliminary ruling relating to Article 6.2 of the DSU the Panel has already addressed
these arguments, including whether due process would be prejudiced by New Zealand identifying the
comparator product for its Article 5.5 claim only in its first written submission:
"... [T]he Panel notes that it is not convinced by Australia's arguments that the lack of
a more detailed explanation as to how or why the 17 specifically listed measures at
issue are considered by New Zealand to be violating the provisions invoked has
prejudiced or will prejudice Australia's ability to defend itself in the course of the
Panel's proceedings.
Accordingly, the Panel finds that New Zealand's panel request does not fail to provide
a brief summary of the legal basis of its co mplaint, which is sufficient to present the
problem clearly, as required by Article 6.2 of the DSU."
2508
7.920 The Panel concluded in its preliminary ruling that "New Zealand's panel request contains
sufficient information regarding the legal basis of the complaint to present the problem clearly with
respect to the 17 identified items." 2509 Further, "the Panel ... allow[ed] this proceeding to continue
with respect to the 17 measures specifically identif ied in New Zealand's panel request and to the
alleged inconsistency of such measures with th e provisions of the SPS Agreement cited therein",
including Article 5.5.2510
7.921 As New Zealand argues, the Panel's prelimin ary ruling has already addressed the threshold
issue raised by Australia in the context of New Z ealand's Article 5.5 claim. There is no need to
modify this preliminary ruling. Nevertheless, in line with the explicit reservation in the preliminary
ruling2511, the Panel intends to further develop the reas ons for its ruling in the light of Australia's
subsequent arguments.
7.922 The Panel addressed the threshold issue raised by Australia in the context of New Zealand's
Article 5.5 claim, in the part of its preliminar y ruling, dealing with whether New Zealand's panel
request provides a brief summary of the legal basis of its complaint, as required by Article 6.2 of the
DSU. First, the Panel held that New Zealand's panel request laid out a connection between each of
the challenged measures and the specific provi sions invoked, including Article 5.5 of the
SPS Agreement:
"In its panel request, New Zealand has liste d a number of provisions of the covered
agreements, which it alleges are breached by the measures adopted by Australia.
New Zealand has not drawn an explicit a nd detailed connection between the specific

2507 Written submission of Australia in response to New Zealand's submission on Australia's first
request for a preliminary ruling, 14 April 2008, paras. 34-35 (original emphasis).
2508 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, paras. 11-12.
2509 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 13(a).
2510 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 14.
2511 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, p. 1.

measures challenged and the provisions invoked. New Zealand has only stated in
general terms that 'the above measures ar e inconsistent with the obligations of
Australia under [nine provisions of the Agre ement on the Application of Sanitary and
Phytosanitary Measures, (SPS Agreement)]'. 2512 Having carefully considered the
language used in the panel request and the specific content of the provisions of the
SPS Agreement cited therein, the Panel unde rstands that New Zealand has claimed
that 'every measure ... [identified] in its pa nel request is inconsistent with each of the
[nine] provisions referred to [in the panel request].' 2513 In the Panel's view, this
satisfies the requirement that the panel request lays out a connection between the
various measures challenged and the specific provisions invoked.
2514"2515
7.923 The Panel's preliminary ruling then turned to whether New Zealand's panel request provides a
brief summary of the legal basis of the complaint th at is sufficient to present the problem clearly.
At the outset of this analysis, the Panel noted that it "would ideally have preferred a more explicit
explanation of how or why the measures at issue are considered by New Zealand to be violating the
identified provisions of the SPS Agreement."2516
7.924 Disputes under the SPS Agreement, in particular disputes involving more than one pest,
disease or product, tend to be particularly comple x and require considerable preparation by both
parties and panels. It would certainly be he lpful if complainants making claims under the
SPS Agreement specified as much deta il as possible in their panel request to allow more time for the
defendant to prepare its defence. The Panel does not agree with New Zealand that the complainant
faces particular challenges under Article 5.5 of th e SPS Agreement. At the same time, the Panel
believes that where the complainant makes claims under provisions of the SPS Agreement that require
a comparison of the situation at issue in the disput e with other situations, such as Article 5.5, it would
be particularly helpful if complainants specified the situation that was to serve as the basis of
comparison.
7.925 However, it is important to bear in mind that the latter situation only serves as a basis of
comparison. Strictly speaking, it is not at issue in the dispute. In the current dispute, and in the
context of its Article 5.5 claim, New Zealand contests the 17 Australian measures at issue and the de
facto ALOP reflected in these measures, in regard to New Zealand apples. New Zealand does not
claim any inconsistency of Australia's ALOP for Japanese nashi pears, nor of any measures applied by
Australia to this product.
7.926 The Panel does not view the comparison situation in this dispute, namely the one relating to
Japanese nashi pears, as part of New Zealand's claim. Rather, it belongs to New Zealand's arguments.
In EC – Bananas III , the Appellate Body established a cl ear distinction between claims and
arguments. "[T]here is a si gnificant difference between the claims identified in the request for the
establishment of a panel, which establish the panel's terms of reference under DSU Article 7, and the

2512 (footnote original) Australia – Apples , Request for the Establishment of a Panel by New Zealand
(WT/DS367/5), 7 December 2007, p. 3.
2513 (footnote original) Australia – Apples, Written Submission by New Zealand on Australia's Request
for a Preliminary Procedural Ruling in Relation to th e Consistency of New Zealand's Panel Request with
Article 6.2 of the DSU, 7 April 2008, para. 2.51.
2514 ( footnote original ) See Appellate Body Report on US – Oil Country Tubular Goods Sunset
Reviews, para. 162.
2515 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 10.
2516 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 11 (original emphasis).

arguments supporting those claims, which are set out a nd progressively clarified in the first written
submissions, the rebuttal submissions and the first and second panel meetings with the parties."
2517
7.927 As recognized by the Panel's preliminary ruling 2518, the Appellate Body also stated that, while
an absence of claims in a panel request cannot be corrected at a later stage 2519, there is no requirement
for the complainant to specify its arguments in th e panel request. "Article 6.2 of the DSU requires
that the claims, but not the arguments, must all be specified suffici ently in the request for the
establishment of a panel in order to allow the defe nding party and any third parties to know the legal
basis of the complaint."2520
7.928 The due process consideration with regard to pa nel requests serves to allow the defendant to
"begin" preparing its defence. In this regard, the Panel's preliminary ruling referred to the decision of
the Appellate Body in Thailand – H-Beams, which provides that:
"Article 6.2 of the DSU calls for sufficient clarity with respect to the legal basis of the
complaint, that is, with respect to th e 'claims' that are being asserted by the
complaining party. A defending party is entitled to know what case it has to answer,
and what violations have been alleged so that it can begin preparing its defence.
Likewise, those Members of the WTO who intend to participate as third parties in
panel proceedings must be informed of the legal basis of the complaint.
This requirement of due process is fundamental to ensuring a fair and orderly conduct
of dispute settlement proceedings."2521
7.929 The requirement that the complainant submit a panel request allowing the defendant to
"begin" preparing its defence does not amount to a requirement for allowing the defendant to fully
develop its defence on the sole basis of the complain ant's panel request. Such an interpretation would
wipe out any distinction between claims and arguments. It would also reduce to futility the subsequent
phases of WTO dispute settlement. It is during the exchange of written submissions and the
presentation of oral arguments that the parties confront each other's arguments and counterarguments.
7.930 As the Panel's preliminary ruling stated, the pa nel request in this dispute identified that
New Zealand claims an inconsistency of the 17 measures at issue with, among other specific
provisions, Article 5.5 of the SPS Agreement. This a llowed Australia to begin preparing its defence.
In fact, even without knowing the product of comparison, Australia could start preparing some of its
legal arguments concerning New Zealand's Article 5.5 claim, for instance, concerning the legal
standard to be applied by the Panel in its analysis of this claim. Following the Panel's preliminary
ruling, Australia was fully aware that New Zealand' s Article 5.5 claim relates to 17 specific measures
in regard to New Zealand apples. Thus, Aust ralia could begin preparing its arguments under
Article 5.5 of the SPS Agreement in regard to the sp ecific situation applicable to New Zealand apples,
even if it ignored the specific situations to be argued by New Zealand as the other half of the
comparisons under Article 5.5.
7.931 Australia could have even begun preparing its de fence in regard to this second half of the
comparison. As Australia has argued since its firs t written submission, it has the same stated ALOP
for all biosecurity risks from all parts of the world. Further, once New Zealand specified in its panel
request that its Article 5.5 claim relates to 17 sp ecific measures in regard to New Zealand apples,

2517 Appellate Body Report on EC – Bananas III, para. 141.
2518 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 11.
2519 Appellate Body Report on EC – Bananas III, para. 143.
2520 Ibid. (original emphasis).
2521 Appellate Body Report on Thailand – H-Beams, para. 88 (footnotes omitted; emphasis added).

the number of comparable situations that Australi a could begin looking at was significantly reduced.
In fact, Australia was supposed to take the compar able situations into account when it developed its
IRA for New Zealand apples, including the 17 specific measures called into question in this dispute.
This is the essence of Article 5.5 with regard to both pre-existing (but currently applicable) and
currently developed ALOPs, and the risk manageme nt measures to achieve such ALOPs. This is
confirmed by the explanations provided in the Gu idelines to Further the Practical Implementation of
Article 5.5 adopted in June 2000 by the Committ ee on Sanitary and Phytosanitary Measures.
In regard to ALOPs, the Guidelines provide that:
"To avoid arbitrary or unjustifiable differenc es in the level of protection a Member
considers to be appropriate in different situations, a Member should compare any
proposed decision on the level of protection in a particular situation with the level it
has previously considered or is consideri ng to be appropriate in situations which
contain sufficient common elements so as to render them comparable with regard to
human life or health, to animal life or health, or to plant life or health.
It can be useful to compare a proposed appropriate level of protection with
previous decisions, including those that might have been taken in an ad hoc
fashion, to ensure that any differences in levels of protection applied in a
similar situation are justifiable and would not result in discrimination or a
disguised restriction on international trade. If differences are observed in
comparable situations, either the proposed level may need to be modified, or
the level of protection previously determ ined may need to be revised in light
of the Member's current views on its appropriate level of protection, or a
combination of the two."
2522
7.932 Further, the Guidelines explain that:
"In determining a new or modified appropria te level of protection, a Member should
review its previous decisions regarding appropr iate levels of protection in the light of
the objectives and obligations of Article 5.5, taking into account current decisions and
developments.
In undertaking this review, a Member may wish to give priority to the review
and revision, as necessary, of those decisions which most substantially
deviate from the objectives and obligations of Article 5.5 and which may have
the most negative impact on international trade.
Unless changes are made at the same time to all its comparable decisions on
appropriate levels of protection, a Member may find it difficult to avoid (at
least temporary) unjustifiable differences in levels of protection.

2522 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, para. A.4. The Panel notes that these Gu idelines are "intended to provide assistance to Members
in the practical implementation of the provisions of Ar ticle 5.5 of the SPS Agreement [and] do not add to nor
detract from the existing rights and obligations of Members under the SPS Ag reement nor any other WTO
Agreement." Further the Guidelines "do not provide any legal interpretation or modification to the Agreement
itself [and] are without prejudice to the right of a Memb er to determine its appropriate level of sanitary and
phytosanitary protection against risks to human life or h ealth, or to animal and plant life or health." SPS
Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15), 18 July 2000,
Introduction.

A Member should review its previous d ecisions on appropriate levels of
protection at suitable intervals."
2523
7.933 The Guidelines include similar explanations w ith regard to pre-existing (but currently
applicable) and currently developed SPS measures to achieve a Member's ALOP.2524
7.934 Furthermore, as New Zealand argues, Austra lia's 1998 Final IRA Report for New Zealand
apples already considered Japanese nashi pears as pr oviding a comparable situation in the context of
fire blight:
"Australia has allowed imports of nashi type pears from Japan for some years.
Recently the reoccurrence of a bacterial di sease bacterial shoot blight was reported in
Japan on the island of Hokkaido (Kim et al , 1996). This disease is similar to fire
blight disease and therefore AQIS immediately suspended imports until the situation
could be assessed and adequate arrangements implemented to manage any risks.

Trade in [nashi] pears from Japan is broadly comparable to the New Zealand proposal
in that it involves trade in a susceptible host product from a country with a disease
similar to fire blight. It differs from the New Zealand proposal in that it involves only
a very low volume of fruit, risk management is based on a robust area freedom
arrangement and there is a stringent eradication program for the disease in place.
The New Zealand proposal does not offer an equivalent level of protection to the
protocol in place for trade with Japan."
2525
7.935 In sum, the Panel accepts that Australia could not fully develop its defence merely based on
New Zealand's panel request. Nevertheless, as explained above, Australia could have begun
preparing its defence based on the panel request, an d there is no evidence that Australia's ability to
defend itself was prejudiced in this dispute. In this regard, the Panel's preliminary ruling provides
that, despite the Panel's preference for more expl anations by New Zealand as to how or why it
considered the measures at issue to violate the id entified provisions of the SPS Agreement, there was
enough information in New Zealand's panel request for the Panel to allow the case to proceed.
"[C]onsidering the language used in the panel request and the specific content of the provisions of the
SPS Agreement cited therein, the Panel concludes th at New Zealand's panel request contains enough
information to adequately inform the responding party and other WTO Members on the nature of the
complaint2526 and to allow the responding party to begin preparing its defence.2527"2528
7.936 The Panel confirms its rejection of the thres hold issue raised by Australia in regard to
New Zealand's Article 5.5 claim, and turns to the su bstantive analysis of that claim according to the
three elements of Article 5.5 developed by the Appellate Body and previous panels.

2523 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, para. A.5.
2524 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, paras. B.3 and B.4.
2525 See Final Import Risk Analysis of the New Zealand Request for the Access of Apples (Malus pumila
Miller var. domestica Schneider) into Australia (December 1998), in Exhibit AUS-112.
2526 (footnote original) Appellate Body Report on EC – Bananas III, para. 142.
2527 (footnote original) Appellate Body Report on Thailand – H-Beams, para. 88.
2528 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 11.

3. The three elements of Article 5.5
(a) The first element of Article 5.5
7.937 The panel in Australia – Salmon referenced the first element of the Article 5.5 test as
"[d]istinctions in levels of prot ection for 'different situations'" 2529, and analysed two aspects of this
first element: (i) "different situations" 2530; and (ii) "difference in levels of protection". 2531 T h e
compliance panel in Australia – Salmon (Article 21.5 – Canada) looked at the same two aspects of the
first element of the Article 5.5 test. 2532 Likewise, this Panel will assess whether the situations
identified by New Zealand are different (but compar able), and whether they involve a difference in
ALOP.
(i) Different but comparable situations
7.938 The first aspect of the first element of th e three-pronged test under Article 5.5 involves
whether the situations identified by New Zealand ar e different but comparable. Article 5.5 mentions
"different situations", but this term has been interpreted as meaning different but comparable
situations. For instance, the panel in EC – Hormones noted that it would "refer to ... 'different
situations' as 'comparable situations' since these [di fferent] situations need to be compared for the
purposes of Article 5.5 and are, therefore, 'comparable'." 2533 In the same dispute, the Appellate Body
confirmed that:
"The situations exhibiting differing le vels of protection cannot, of course,
be compared unless they are comparable, that is, unless they present some common
element or elements sufficient to render them comparable. If the situations proposed
to be examined are totally different from one another, they would not be rationally
comparable and the differences in levels of protection cannot be examined for
arbitrariness."2534
7.939 This basic requirement that the "different situ ations" mentioned in Article 5.5 need to be
comparable has been inherent in subsequent reports that analysed the first element of the Article 5.5
test.2535
7.940 New Zealand identifies two pairs of comparator situations in its arguments under Article 5.5:
(a) Australia's requirements on New Zealand apples regarding fire blight ( Erwinia
amylovora), compared with Australia's requirements on Japanese nashi pears
regarding Japanese Erwinia; and
(b) Australia's requirements on New Zeal and apples regarding European canker
(Neonectria galligena ), compared with Australia's requirements on Japanese nashi
pears regarding brown rot (Monilinia fructigena).

2529 Panel Report on Australia – Salmon, p. 174, DSR 1998:VIII, 3410, at 3640.
2530 Panel Report on Australia – Salmon, p. 175, DSR 1998:VIII, 3410, at 3642.
2531 Panel Report on Australia – Salmon, p. 178, DSR 1998:VIII, 3410, at 3646.
2532 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.89.
2533 Panel Report on EC – Hormones (US) , para. 8.176; and Panel Report on EC – Hormones
(Canada), para. 8.179.
2534 Appellate Body Report on EC – Hormones, para. 216 (original emphasis).
2535 See Panel Report on Australia – Salmon, paras. 8.115-8.122; Appellate Body Report on Australia
– Salmon, paras. 143-153; and Panel Report on Australia – Salmon (Article 21.5 – Canada) , para. 7.89. See
also SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15), 18 July
2000, paras. A.2 and A.4.

7.941 Both comparisons involve circumstances that are clearly different: they deal with distinct
pests and distinct fruits from distinct origins. Whether these comparator situations are comparable
depends on whether they fulfil the conditions laid down by the Appellate Body in Australia – Salmon:
"Situations which involve a risk of entry, establishment or spread of the same or a
similar disease have some common elements sufficient to render them comparable
under Article 5.5. Likewise, situations with a risk of the same or similar associated
potential biological and economic conseque nces also have some common elements
sufficient to render them comparable under Artic le 5.5. We, therefore, consider that
for 'different' situations to be comparable under Article 5.5, there is no need for both
the disease and the biological and economic consequen ces to be the same or similar.
We recognize that ... the risk which needs to be examined in a risk assessment,
pursuant to Article 5.1 and the first defin ition of risk assessment of paragraph 4 of
Annex A, is the risk of both the entry, establishment or spread of a disease and the
associated potential biological and economic consequences. However, we fail to see
how this can be of relevance to the questi on of comparability of different situations
under Article 5.5 ... . We, therefore, conc lude that ... situations can be compared
under Article 5.5 if these situations involve either a risk of entry, establishment or
spread of the same or a similar disease, or a risk of the same or similar 'associated
potential biological and economic consequences'."
2536
7.942 Importantly, in developing these alternative conditions of comparability the Appellate Body
refrained from qualifying the word "risk" with the te rm "same or similar". Rather, it used the term
"same or similar" to qualify the words "disease" and "associated potential biological and economic
consequences". Accordingly, the comparison of si tuations needs to focus on the diseases or the
associated potential biological and economic consequences involved in the comparator situations.
7.943 In other words, the comparability test under the first element of the Article 5.5 analysis does
not involve a comparison of risk levels. Indeed, in analysing whether different situations existed in
the Australia – Salmon dispute, the panel stated that:
"[A]t this stage of our examination we only address the question whether two
situations can be compared under Article 5.5. We do not examine nor decide at this
point whether the risk (both in the sense of risk of entry, establishment or spread of
the disease and the associated consequences) linked to these two situations is the
same or has been addressed inconsistently . This issue needs to be examined under
the second element of Article 5.5."2537
7.944 The first condition of comparability identified by the Appellate Body refers to "a risk of entry,
establishment or spread of the same or a similar disea se". In the light of the above, the Panel needs to
assess whether the diseases involved in the allegedly comparable situations are effectively the same or
similar. The second condition of comparability identifie d by the Appellate Body refers to "a risk of
the same or similar associated potential biological and economic consequences". This requires an
assessment of whether the potential biological and economic consequences associated with the
diseases are the same or similar. These two c onditions of comparability being non-cumulative, the
Panel will turn to the second, alternative condition only if it finds that the first one is not fulfilled.

2536 Appellate Body Report on Australia – Salmon , para. 146 (original emphasis). See also SPS
Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15), 18 July 2000,
para. A.2.
2537 Panel Report on Australia – Salmon, para. 8.118.

Comparability of fire blight (Erwinia amylovora) and Japanese Erwinia
7.945 Fire blight ( Erwinia amylovora ) in apples and Japanese Erwinia in nashi pears are not the
same diseases. They are very si milar diseases, though. One of the experts consulted by the Panel,
Dr Deckers, confirms that, while in some respec ts the risks involved in the two pests might be
different, "[t]here is a great similarity between the Japanese Erwinia associated with nashi pears and
Erwinia amylovora on apples from New Zealand. In both cases it concerns a bacterial disease on
fruits, the one Japanese Erwinia on pear and the other fire blight one on apple and pear."2538
7.946 Conceding that "little is known in the literature about [ Japanese Erwinia as a] Nashi disease",
another expert, Dr Paulin, agrees that, apart from cer tain potential differences in the risks associated
with the two pests, "it seems that the bacteria ( Erwinia-Japan and E. amylovora) are very similar but
not identical, and the symptoms seem similar as well."2539
7.947 Biological similarity is a key element of the co mparison of the two diseases. In this respect,
the Panel finds the following arguments and ev idence submitted by New Zealand particularly
convincing: "Japanese Erwinia is very hard to differentiate from E. amylovora. Each produces very
similar symptoms and analysis at the molecular le vel is used to distinguish between the two (Kim et
al. 2001: 2951 and Shrestha et al. 2007: 1023).2540"2541
7.948 In fact, the Kim et al. 2001 article referenced by New Ze aland had to conduct a molecular
analysis of various Erwinia cultures originating from Nashi pear trees in Japanese orchards, to draw
the limited conclusion that, despite symptoms similar to fire blight, these Erwinia cultures in Japanese
nashi pears were "possibly" different from fire blight:
"Several strains of the genus Erwinia, which were isolated in Japan from pear trees
with necrotic symptoms that resembled fi re blight, and tentatively identified as
Erwinia amylovora , were reinvestigated for their relationship to the fire blight
pathogen. ... It is concluded that path ogenic bacteria isolated in Japan from pear
trees with symptoms resembling fire blight are possibly different from Erwinia
amylovora."2542
7.949 Accordingly, the Panel finds that fire blight in New Zealand apples and Japanese Erwinia in
Japanese nashi pears can be qualified as similar dis eases for the purposes of the first element of the
Article 5.5 test.
7.950 The Panel recalls that the Appellate Body d escribed the first condition of the comparability
test under Article 5.5 by reference to "a risk of entr y, establishment or spread of the same or a similar

2538 Dr Deckers's reply to Panel question 12, in List of Replies from the scientific experts to questions
2539 Dr Paulin's reply to Panel question 12, in List of Replies from the scientific experts to questions
posed by the Panel, para. 109 (original emphasis).
2540 ( footnote original ) see Exhibit NZ-68: Kim WS, Hildebrand M, Jock S and Geider K (2001)
"Molecular comparison of pathogenic bacteria from pear trees in Japan and fireblight pathogen Erwinia
amylovora", Microbiology 147, 2951-2959, and Shrestha R, Lee SH, Kim JE, Wilson C, Choi SG, Park DH,
Want MH, Hur JH and Lim CK (2007) "Diversity and detection of Korean Erwinia pyrifoliae strains as
determined by plasmid profiling, phylogenetic analysis and PCR", Plant Pathology 56, 1023-1031.
2541 New Zealand's first written submission, para. 4.437.
2542 Kim et al ., "Molecular comparison of pathogenic bacteria from pear trees in Japan and the fire
blight pathogen Erwinia amylovora" (2001), in Exhibit NZ-68, p. 1.

disease."
2543 As explained above, the assessment of this condition does not require a comparison of
levels of risk. However, the Appellate Body defi ned the first condition of the comparability test by
including the term "risk". Thus, for there to be comparable situations, some degree of risk needs to be
associated with both comparator diseases, or both sets of associated potential biological and economic
consequences. To establish this, the complainant ne eds to make a prima facie case – not successfully
rebutted by the respondent – that some degree of risk is associated with the situations that are being
compared to the situations at issue in the dispute. New Zealand needs to show that the comparator
situations it advances for Japanese nashi pears are not completely without risk for Australia. For the
purpose of the comparability test and in the circum stances of this dispute, New Zealand does not need
to quantify risk, just prove its basic existence. In fact, the situations would not be "rationally
comparable and the differences in levels of prot ection [could] not be examined for arbitrariness"
2544 if
the comparator situations advanced by New Zealand in regard to Japanese nashi pears did not involve
any risk at all for Australia.
7.951 For the purpose of the comparability test and in the circumstances of this dispute, the question
for the Panel is whether Japanese Erwinia in Japanese nashi pears entails any risk for Australia at all.
New Zealand argues that it does, and advances a number of arguments in regard to the risk profile of
Japanese Erwinia. Conversely, Australia argues that its May 1989 Quarantine Circular Memorandum
for Japanese nashi pears did not consider Japanese Erwinia because, as Dr Schrader confirmed, there
is no need to assess the risk of a pest or disease which does not occur in the geographical area for
which a risk assessment is conducted. In Austra lia's view, ISPM No. 11 supports this: "If no
potential quarantine pests are identified as likely to follow the pathway, the PRA may stop at this
point." Accordingly, Australia argues that, as a consequence of Japanese Erwinia never having
occurred in Tottori prefecture, the consideration of Japanese Erwinia was not, and is not, a pest
relevant to the importation of nashi pears from To ttori prefecture in Japan. Its consideration as a
comparable disease to fire blight under New Z ealand's Article 5.5 claim therefore has little
relevance.2545
7.952 One of the experts, Dr Paulin, notes in regard to Japanese Erwinia that "it is not certain that
this particular Erwinia from Japan be considered as a quarantin e pathogen" as "too little knowledge is
available on this Nashi disease to be sure."2546
7.953 The Panel reiterates that assessing the existence of a risk under the first condition of the
comparability test of Article 5.5 does not require a de tailed assessment of risk levels. In particular,
the Panel does not consider at this point whet her, as Australia argues, Japanese nashi pears are
imported only from Tottori prefecture. The question is whether Japanese nashi pears involve a risk of
Japanese Erwinia for Australia at all. Australia implicitly admits that to be the case by arguing that it
has in place a requirement for Japanese Erwinia, applicable also to Jap anese nashi pears imported
from Tottori prefecture:
"As a direct consequence of Japanese Erwinia never having occurred in Tottori
prefecture, the only requirement in place for Japanese Erwinia is that Japan notify
Australia of any future outbreaks of the disease anywhere in Japan. This requirement
was included in the 2003 review as a result of the 1995 outbreak in Hokkaido.
However, given the confinement of the out break to the geographically remote island

2543 Appellate Body Report on Australia – Salmon , para. 146 (original emphasis). See also,
SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15), 18 July 2000,
para. A.2.
2544 Appellate Body Report on EC – Hormones, para. 216 (original emphasis).
2545 Australia's reply to Panel question 119 after the second substantive meeting.
2546 Dr Paulin's reply to Panel question 12, in List of Replies from the scientific experts to questions

of Hokkaido; the eradication program implemented by Japan; and the absence of
Japanese Erwinia occurrences elsewhere in Japan, no further requirements were
deemed necessary."2547
7.954 Accordingly, Erwinia amylovora in New Zealand apples and Japanese Erwinia in Japanese
nashi pears involve a risk of similar diseases, and therefore fulfil the first condition of the
comparability test established by the Appellate Body in Australia – Salmon.
7.955 As noted above, in the same dispute the A ppellate Body also explained that the two
conditions of this comparability test are not cumu lative. Accordingly, the Panel finds that the
situations with respect to fire blight in New Zealand apples and to Japanese Erwinia in Japanese nashi
pears are comparable. Having made its finding on th e basis of the first condition of the comparability
test laid down by the Appellate Body, the Panel does not need to analy ze the second, alternative
condition of comparability: whether the situations concern a risk of the same or similar associated
potential biological and economic consequences.
Comparability of European canker (Neonect ria galligena) and brown rot (Monilinia
fructigena)
7.956 Turning to the comparison of European canker ( Neonectria galligena) in New Zealand apples
and brown rot ( Monilinia fructigena) in Japanese nashi pears, the Pa nel analyses first whether these
situations entail a risk of the same or similar diseases. New Zealand argues that these diseases are
similar in that they are both fungal diseases, and "[l] ike European canker, brown rot is transmitted by
spores and can infect both pears and apples, usually through natural openings or wounds. Apparently
healthy fruit can be infected without showing any symptoms ... ."2548
7.957 Australia accepts that European canker and brow n rot are similar only to the extent that both
are fungal diseases which can produce spores on fruit.2549
7.958 The Panel recalls that in EC – Hormones the Appellate Body linked the essence of the
comparability test to the existence of some commo n element or elements sufficient to render the
situations comparable:
"The situations exhibiting differing le vels of protection cannot, of course,
be compared unless they are comparable, that is, unless they present some common
element or elements sufficient to render them comparable. If the situations proposed
to be examined are totally different from one another, they would not be rationally
comparable and the differences in levels of protection cannot be examined for
arbitrariness."
2550
7.959 Based on New Zealand's arguments, the Panel sees four main points in common between
European canker and brown rot. Both are fungal diseases, both are transmitted via spores, both can
infect apples (usually through natural openings or wounds), and can involve latent infection of
symptomless fruit.
2551 Australia has not rebutted these similarities. Therefore, even though European
canker ( Neonectria galligena ) in New Zealand apples and brown rot ( Monilinia fructigena ) in
Japanese nashi pears are distinct diseases, they sh are some common elements sufficient to render
them similar.

2547 Australia's reply to Panel question 199 after the second substantive meeting (original emphasis).
2548 New Zealand's first written submission, para. 4.441.
2549 Australia's first written submission, para. 1001.
2550 Appellate Body Report on EC – Hormones, para. 216 (original emphasis).
2551 New Zealand's first written submission, paras. 4.440-4.441

7.960 The Panel notes that ever since its May 1989 Qu arantine Circular Memorandum for Japanese
nashi pears, Australia has been applying or at least proposing measures against the risk of brown rot.
Accordingly, like European canker in New Zeala nd apples, brown rot in Japanese nashi pears also
poses a risk. This, in addition to the basic similarity of the two diseases, allows the Panel to conclude
that the situations involving European canker ( Neonectria galligena ) in New Zealand apples and
brown rot (Monilinia fructigena) in Japanese nashi pears are comparable.
7.961 As noted above, the two conditions of comparab ility under the first element of the Article 5.5
test are not cumulative. Consequently, there is no need to engage in an analysis of the second,
alternative condition of comparability: whether the s ituations entail a risk of the same or similar
associated potential biological and economic consequences.
(ii) The ALOPs in the different situations
7.962 Having found that the two pairs of comparator situations identified by New Zealand are
comparable given the similarities of the diseases i nvolved, the Panel turns to the second aspect of the
first element of the Article 5.5 test: the ALOPs in these different but comparable situations.
7.963 The Parties agree that currently Australia has th e same stated and generic ALOP for all of the
different situations identified by New Zealand, i.e. fire blight in New Zealand apples and
Japanese Erwinia in Japanese nashi pears, as well as Europ ean canker in New Zealand apples and
brown rot in Japanese nashi pears. This ALOP is: "providing a high level of sanitary and
phytosanitary protection aimed at reducing risk to a very low level, but not to zero."
2552 In other
words, Australia has formulated one ALOP for all of these comparable situations.
7.964 If Australia's ALOP is the same for Japan ese Nashi pears and New Zealand apples with
respect to the four pests identified, the Panel must consider whether it can proceed with its analysis
under Article 5.5. In EC – Hormones the Appellate Body referred to "situations exhibiting differing
levels of protection", and stated categor ically that "[c]learly comparison of several levels of sanitary
protection deemed appropriate by a Member is nec essary if a panel's inquiry under Article 5.5 is to
proceed at all."2553
7.965 It is noteworthy that the Parties reference two definitions by the Appellate Body for the first
element of the three-pronged Article 5.5 test. Australia quotes the report in Australia – Salmon ,
where the Appellate Body included in the first elem ent of Article 5.5 the distinctions in the ALOPs
applicable to the different comparator situations:
"Following our Report in European Communities – Hormones, the Panel
[in Australia – Salmon] considered:
... that three elements are required in order for a Member to act inconsistently with
Article 5.5:

2552 See Import Risk Analysis Handbook (2003), in Exhibit AUS-10, p. 5, and Import Risk Analysis
Handbook (2007), p. 9 and Annex 3. Formerly, Australia maintained a similar qualitative ALOP. According to
the 1998 AQIS Import Risk Analysis Process Handbook, "A ustralia does not ... maintain a zero risk quarantine
policy, which would be impracticable since it would imply the exclusion of all import trade and entry of
international passengers. Rather, Australia's quarantin e policy is based on the concept of the management of
risk to an acceptably low level." 1998 AQIS Import Risk Analysis Process Handbook, p. 11.
2553 Appellate Body Report on EC – Hormones, para. 214 (emphasis added).

– the Member concerned adopts different a ppropriate levels of sanitary protection
in several 'different situations'; ..."2554
7.966 The Panel notes that in Australia – Salmon the Appellate Body referenced the first element of
the Article 5.5 test as "the existence of distinctions in appropriate levels of protection in different
situations."2555
7.967 Conversely, New Zealand references the earlie r definition of the three-pronged test in EC –
Hormones. In that dispute, the Appellate Body mentioned "distinctions" in ALOP as part of the
second element:
"Close inspection of Article 5.5 indicates that a complaint of violation of this
Article must show the presence of three distin ct elements. The first element is that
the Member imposing the measure complain ed of has adopted its own appropriate
levels of sanitary protection against risks to human life or health in several different
situations. The second element to be shown is that those levels of protection exhibit
arbitrary or unjustifiable differences ('distin ctions' in the language of Article 5.5)
in their treatment of different situations."2556
7.968 The Panel does not read this passage in EC – Hormones as necessarily reducing the first
element of the Article 5.5 test to a mere requirement that an ALOP exist in the different situations that
are being compared. In fact, in the same dis pute the Appellate Body also enunciated the above-
quoted categorical requirement that several ALOPs n eed to exist before any analysis of Article 5.5
can proceed in earnest. Further, in its de tailed analysis under the Article 5.5 test, in EC – Hormones
the Appellate Body referenced "the first element se t out in Article 5.5, namely that a Member has
established different levels of pr otection which it regards as appropriate for itself in differing
situations."2557 The Panel also notes that in the Guidelin es to Further the Practical Implementation of
Article 5.5, the definition of the three elements "a Member should, when de termining an appropriate
level of protection, either as an overall policy ob jective or for a specific situation, consider" 2558
include a "difference" in ALOP as part of the first element:
"– whether there is a difference between the level of protection under
consideration and levels already dete rmined by the Member in different
situations and, if so,
– whether these differences are arbitr ary or unjustifiable, and, if so,
– whether they may result in discrimination or in a disguised restriction on
international trade."2559
7.969 Given that Australia has the same stated ALOP for the situations New Zealand intends to
compare, the Panel is satisfied that Australia h as adopted its own ALOP in these situations in the
literal sense of the Appellate Body 's above-quoted definition of the first element of Article 5.5 in
EC - Hormones. However, this is clearly not sufficient fo r the Panel to proceed with its analysis of
New Zealand's Article 5.5 claim. In the light of the categorical statement by the Appellate Body in
EC – Hormones , the second quoted definition of the first el ement of the Article 5.5 test in the same

2554 Appellate Body Report on Australia – Salmon, para. 140 (footnotes omitted).
2555 Appellate Body Report on Australia – Salmon, para. 143.
2556 Appellate Body Report on EC – Hormones, para. 214.
2557 Appellate Body Report on EC – Hormones, para. 216.
2558 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, para. A.2.
2559 Ibid.

dispute, and the similar definition in Australia – Salmon , the Panel also needs to assess whether
New Zealand has demonstrated that the measures Aust ralia applies in the comparable situations result
in a different de facto ALOP.
7.970 The Panel agrees with New Zealand that Member s should not be allowed to hide behind a
generically stated ALOP. Otherwise, Members' ob ligations under Article 5.5 would be diminished.
This would be particularly serious in the case of Australia – or, for that matter, any other Members –
whose generically stated ALOP covers a wide range of products and diseases, and thus a wide range
of potentially comparable situations.
7.971 The Panel notes that in Australia – Salmon the Appellate Body warned in general terms
against reading out entire provisions from the SPS Agreement. "It would obviously be wrong to
interpret the SPS Agreement in a way that would render nugatory entire articles or paragraphs of
articles of this Agreement and allow Member s to escape from their obligations under this
Agreement."
2560
7.972 Further in Australia – Salmon (Article 21.5 – Canada) the compliance panel noted, in the
context of its analysis under Article 5.6 of the SPS Agreement, that while a vaguely determined
ALOP is not ideal, it should not prevent scr utiny under the SPS Agreement, including under
Article 5.5:
"Although, according to the Appellate Body , Australia determined its ALOP with
sufficient precision to apply Article 5.6, we find it rather difficult to evaluate whether
any of the options before us would also meet Australia's somewhat vaguely
determined level of 'a high or very conser vative level of protection aimed at reducing
risk to very low levels, while not based on a zero-risk approach'. We are of the view,
however, that this should not prevent us from carrying out the task. As noted by the
Appellate Body, '[o]therwise, a Member's failure to comply with the implicit
obligation to determine its appropriate level of protection – with sufficient precision –
would allow it to escape its obligations under this Agreement and, in particular, its
obligations under Articles 5.5 and 5.6'. We note, parenthetically, that a more explicit
and in particular a quantitative expression of a Member's ALOP would greatly
facilitate the consideration of compliance with not only Article 5.6 but with other
provisions of the SPS Agreement as well."
2561
7.973 Indeed, the Panel can imagine the possibility, ar gued by New Zealand in this dispute, that
despite a generic ALOP, the measures applied in different situations may lead to a de facto difference
in ALOPs. Whether this is the case will depend on both the measures applied to implement the same
stated ALOP in different situations, as well as the risks against which such measures are applied.
7.974 Measures are indicative – although not necessarily conclusive – of a Member's ALOP.
Annex A(5) of the SPS Agreement defines "appropriate level of sanitary or phytosanitary protection"
by specific reference to the SPS measures applied to implement that ALOP:
"Appropriate level of sanitary or phytosanitary protection – The level of protection
deemed appropriate by the Member establishing a sanitary or phytosanitary measure
to protect human, animal or plant life or health within its territory."
7.975 Previous panels have also recognised the cl ose link between a Member's SPS measures and
the ALOP such measures serve to implement. The panel in EC – Hormones stated that, in contrast to

2560 Appellate Body Report on Australia – Salmon, para. 206.
2561 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.129 (footnotes omitted).

Article 2.3 of the SPS Agreement, "Artic le 5.5 ... deals more specifically with distinctions in levels of
protection (which will normally be reflected in one or more sanitary measures) ... ."2562 Likewise, the
panel in Australia – Salmon found that "any sanitary measure applied to a given situation inherently
reflects and achieves a certain level of protection" 2563, and reiterated that "the appropriate level of
sanitary protection will normally be reflected in the sanitary measures imposed for a specific
situation."2564 Further, the panel in EC – Biotech held that "although Article 5.5 does not explicitly
refer to 'SPS measures'" 2565, this provision "implies a reference to 'SPS measures'." 2566 T h e s a m e
panel quoted paragraph B.1 of the Guidelines to Furt her the Practical Implementation of Article 5.5,
which provides that "the concept of appropriate le vel of protection is applied in practice through
sanitary or phytosanitary measures." 2567 The panel confirmed that this guidance "is consistent with
relevant Appellate Body jurisprudence" 2568, and quoted the Appellate Body's reference in EC –
Hormones to a "measure embodying or implementing a particular level of protection."2569
7.976 Yet, as New Zealand concedes 2570, a Member's ALOP in a sp ecific situation cannot be
deduced solely from the SPS measures the Member applies. In Australia – Salmon the Appellate
Body clearly distinguished ALOP and measures, by st ating that "[t]he 'appropriate level of protection'
established by a Member and the 'SPS measure' have to be clearly distinguished. They are not one
and the same thing. The first is an objective, the second is an instrument chosen to attain or
implement that objective."2571
7.977 Risk is also an inherent element of a Me mber's ALOP. The note to the definition of
"appropriate level of sanitary or phytosanitary protection" in Annex A(5) of the SPS Agreement
indicates that "[m]any Members otherwise refer to th is concept as the 'acceptable level of risk'."
Further, the panel in Australia – Salmon pointed out that "the level of protection achieved by a
specific sanitary measure will also depend on the degree of risk against which that measure is
intended to protect."2572 As the same panel explained, this is because:
"[I]mposing the same sanitary measure for different situations does not necessarily
result in the same level of protection. I ndeed, in many situations (e.g., situations
representing different risks) the same sanitary measure might result in different levels
of protection. On the other hand, different sanitary measures for different situations
might ensure the same level of protection. Indeed, one given situation might only
represent a small risk for which a lenient sanitary measure will achieve a high level of
protection, whereas another situation might pose very high risks requiring a very
strict and different sanitary measure in order to meet that same high level of
protection."2573
7.978 In the same vein, the Guidelin es to Further the Practical Implementation of Article 5.5 state
that, in the context of the practical implementa tion of the concept of an appropriate level of

2562 Panel Report on EC – Hormones (US), para. 8.168 and Panel Report on EC – Hormones (Canada),
para. 8.171 (emphasis added).
2563 Panel Report on Australia – Salmon, para. 8.107.
2564 Panel Report on Australia – Salmon, para. 8.123.
2565 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1416.
2566 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1417.
2567 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1415.
2568 Ibid.
2569 Appellate Body Report on EC – Hormones, para. 214 (original emphasis).
2570 New Zealand's reply to Panel question 131 after the first substantive meeting.
2571 Appellate Body Report on Australia – Salmon, para. 200 (footnote omitted; original emphasis).
2572 Panel Report on Australia – Salmon, para. 8.123
2573 Ibid.

protection, "[w]hat a Member is comparing are the measures against the risks posed by potential
hazards to human, animal or plant life or health."
2574
7.979 Accordingly, the Panel will assess whether Aust ralia's measures reflect different ALOPs,
by looking at both the measures applied by Austra lia in the various situations identified by
New Zealand, and the risks against which such m easures are applied. This analysis involves an
assessment of the Parties' arguments as regards the measures applicable in the comparable situations
and the related risks against which the measures in question are applied.
7.980 The Panel will carry out this assessment under the second element of the Article 5.5 test.
In this, the Panel follows the panel in Australia – Salmon and the compliance panel in Australia –
Salmon (Article 21.5 – Canada).
7.981 The panel in Australia – Salmon referenced the first element of the Article 5.5 test as
"[d]istinctions in levels of prot ection for 'different situations'".2575 It analysed two aspects of this first
element, "different situations"2576 and "difference in levels of protect ion", by declining to engage in a
detailed analysis of the risk under both aspects. 2577 As noted above, in regard to the first aspect
("different situations"), the panel held that:
"[A]t this stage of our examination we only address the question whether two
situations can be compared under Article 5.5. We do not examine nor decide at this
point whether the risk (both in the sense of risk of entry, establishment or spread of
the disease and the associated consequences) linked to these two situations is the
same or has been addressed inconsistently . This issue needs to be examined under
the second element of Article 5.5."2578
7.982 The panel adopted a similar approach to the sec ond aspect of the first element ("difference in
levels of protection"):
"To determine whether Australia makes a dis tinction in the levels of protection it
considers to be appropriate for the situati ons compared, we thus need to examine the
sanitary measures Australia currently imposes for these different situations. Since we
have found that these situations are comp arable as 'different situations' under
Article 5.5 (because they have at least one disease agent in common and, presumably,
also represent the same or similar biol ogical and economic consequences) and since
we will consider the potential difference in th e degree of risk posed by these different
situations under the second element of Ar ticle 5.5, we will for present purposes
assume that if there is a difference in the sanitary measures imposed for the different
situations we compare under Article 5.5, th is difference does reflect a distinction in
levels of protection achieved in – and considered to be appropriate by – Australia."
2579
7.983 Likewise, the compliance panel in Australia – Salmon (Article 21.5 – Canada) held that the
situations in question were comparable under Article 5.5, and then explicitly declined to assess under
the first element of the Article 5.5 test whether Au stralia adopted different ALOPs in regard to these

2574 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, para. B.2. See also, SPS Committee's Guidelines to further the practical implementation of
Article 5.5 (G/SPS/15), 18 July 2000, para. A.4.
2575 Panel Report on Australia – Salmon, p. 174, DSR 1998:VIII, 3410, at 3640.
2576 Panel Report on Australia – Salmon, p. 175, DSR 1998:VIII, 3410, at 3642.
2577 Panel Report on Australia – Salmon, p. 178, DSR 1998:VIII, 3410, at 3646.
2578 Panel Report on Australia – Salmon, para. 8.118.
2579 Panel Report on Australia – Salmon, para. 8.124.

different situations. "Whether or not Australia adopts different ALOP's in respect of these 'different
situations' is an issue we address under the second element of Article 5.5."2580
7.984 The Panel will adopt a similar approach in th e current dispute. It will assess under the second
element of the three-pronged Article 5.5 test wh ether the measures applied by Australia in the
different situations result in a different de facto ALOP.
7.985 The Panel is cognizant that in EC – Hormones the Appellate Body referenced "three distinct
elements" that need to be addressed under Article 5.5. 2581 However, this dispute has specific
circumstances in that New Zealand contests alleged differences in the level of protection achieved in
practice by the measures applied in comparable situ ations, despite Australia's generically stated
ALOP. Given these special circumstances, the Panel finds it appropriate to refrain from a detailed
analysis of risks under the first element of the Ar ticle 5.5 test, and to assess under the second element
of this test whether there is a difference in the levels of protection achieved by the measures applied in
the different situations at issue.
7.986 Indeed, the second element of the Article 5.5 test is concerned with whether any distinctions
in the ALOP in different situations are arbitrary or unjustifiable. In the light of New Zealand's
arguments in this dispute, in effect this involv es a comparison between the measures Australia applies
to achieve its ALOP in the different situations and the risks against which such measures are applied.
As explained above, the analysis of any distinctio ns in ALOP in this di spute involves the same
exercise in the light of New Zealand's arguments.
7.987 The Panel will assess under the second element of the Article 5.5 test whether Australia
applies measures to achieve its generically stated ALOP in a way that leads to arbitrary or
unjustifiable distinctions in the de facto ALOP applied in the situations that have been found to be
comparable. If the Panel finds that this is the case, it will complete its current analysis under the first
element of the Article 5.5 test by finding that there are indeed distinctions in the levels of de facto
ALOP adopted by Australia, despite Australia's ge nerically stated ALOP. Logically, if there are
arbitrary or unjustifiable distinctions in the de facto ALOP, there will be distinctions in the ALOPs
achieved by the measures applied by Australia in th e comparable situations. Alternatively, if the
Panel finds under the second element of the Article 5.5 test that there are no arbitrary or unjustifiable
distinctions in the de facto ALOP adopted by Australia, there will be no need to complete its current
analysis of the first element. As the Appellate Body explained in EC – Hormones, "the three elements
[of the Article 5.5. test] are cumulative in nature; all of them must be demonstrated to be present if
violation of Article 5.5 is to be found."
2582
(b) The second element of Article 5.5
7.988 In the light of the language of Article 5.5 and the guidance of the Appellate Body 2583, the
second element of the three-pronged Article 5.5 test is whether there are arbitrary or unjustifiable
distinctions in the ALOP achieved by the measures applied by Australia in the different situations.
As explained above, the Panel will assess this by comparing the risks involved in the comparable
situations and the measures applied by Australia against such risks.
7.989 The Panel is aware that this requires a very delicate balancing act between carrying out a
meaningful and objective analysis of the Partie s' arguments and evidence, and refraining from a

2580 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.89.
2581 Appellate Body Report on EC – Hormones, para. 214.
2582 Appellate Body Report on EC – Hormones, para. 215.
2583 Appellate Body Report on EC – Hormones, para. 214; and Appellate Body Report on Australia –
Salmon, para. 154.

de novo review of the risks involved in the different situ ations, in particular in the context of nashi
pears, which is only a comparator product in this dispute. The Panel finds the detailed guidance from
the panel in Australia – Salmon particularly relevant, and quotes it in full here:
"[A]ccording to Article 5.5 and our manda te set out in Article 11 of the DSU
(to make an 'objective assessment of the ma tter before [us], including an objective
assessment of the facts of the case'), we are called upon in this case to make th[e]
comparison [of the levels of protection related to the comparable situations] and to do
so on the basis of the evidence before us. We cannot conduct our own risk
assessment. Nor do we attempt to do so in this report. The fact that one of the
experts advising the Panel stated that 'if you are trying to say which [of two products]
is the most risky, then you need to know something about and possibly do a full
assessment for [the other] product'
 and that 'it would be sensible to assess that which
you have prioritized initially to have the high est risk first, but until you have done the
risk assessment, you actually cannot be sure you have got that right', does not change
our position. Nor do we disagree with these st atements. Indeed, for a scientist to say
with scientific certainty that one product re presents a higher risk than the other, there
may be a need to have two, more or less, complete sets of data, including two risk
assessments. And even on that basis a scientis t would probably not be able to state
with absolute certainty that one product is riskier than the other. Our mandate is
different. We are not asked to make a sci entific risk comparison nor to state with
scientific certainty that one product is risk ier than the other. We can only weigh the
evidence put before us and, on the basis of the rules of burden of proof we adopted,
including the use of factual presumptions , decide whether sufficient evidence is
before us – evidence which has not been re butted – in order to state that it can be
presumed that one product is riskier than the other."
2584
7.990 Likewise, in the present case, the Panel will we igh the evidence put forward by New Zealand
and Australia and decide whether New Zealand has made a prima facie case, not rebutted by
Australia, that it can be presumed that one product is riskier than the other. The Panel will compare
the risks involved in each of the two pairs of comparable situations in this dispute.
7.991 The Panel notes that Annex A(4) of the SPS Agreement defines "Risk assessment" as:
"The evaluation of the likelihood of entry, establishment or spread of a pest or disease
within the territory of an importing Member according to the sanitary or
phytosanitary measures which might be applied, and of the associated potential
biological and economic consequences; or the evaluation of the potential for adverse
effects on human or animal health arising from the presence of additives,
contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs."
7.992 Based on this provision, the Guidelines to Furthe r the Practical Implementation of Article 5.5
define risk as follows:
"'Risk' in the context of the SPS Agreement refers to the likelihood that an adverse
event (pest or disease) will occur and
 the magnitude of the associated potential

2584 Panel Report on Australia – Salmon, para. 8.126.

consequences on plant or animal life or health of the adverse event, or to the potential
for adverse effects on human or animal life or health from food-borne risks."2585
The Guidelines add that "[a]ccordi ngly, categorizing risks as 'similar' must include a comparison of
both the relevant likelihood and the corresponding consequences."2586
(i) Comparison of the risks of European canker in New Zealand apples and of brown rot in
Japanese nashi pears
7.993 As regards the comparison of the risks associ ated with European canker in New Zealand
apples and with Monilinia fructigena in Japanese nashi pears, New Z ealand argues that the risk of
Japanese Nashi pears transmitting brown rot is not ju st comparable, but significantly higher than any
risk of apples from New Zealand transmitting European canker. 2587 In response, Australia argues that
the risk associated with Japanese nashi pears is much lower than the risk associated with New Zealand
apples because both the likelihood and the consequences of the entry, establishment and spread of
brown rot into Australia are lower than the like lihood and consequences associated with European
canker in New Zealand apples.2588
7.994 The Panel looks at seven different risk factors argued by the Parties in this context:
(a) The facility of transmission of the two pest s – because, other things being equal, a
more easily transmittable pest presents a higher risk;
(b) The potential biological and economic conse quences of the pests – because, other
things being equal, more serious consequences entail a higher risk;
(c) The range of host plants – because, other th ings being equal, a wider range of host
plants for a pest results in a higher risk;
(d) The presence of the pests in the exporting areas – because, other things being equal,
a pest present in exporting areas poses a higher risk than one that is not present;
(e) The presence of the pests in Australia – because, other things being equal, as the
compliance panel in Australia – Salmon (Article 21.5 – Canada) explained, a pest not
present in, or in other words "exotic" to, the importing country "may be ... of more
concern [than non-exotic pests] both in terms of risk of introduction of the disease
and its potential impact"2589;
(f) The volume of trade – because, as Dr Latorre and Dr Sgrillo explain, in general, as
the volume of trade increases, so does the probability that a given biological event
may occur; and,

2585 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, footnote 2 (original emphasis). See also, SPS Committee's Guidelines to further the practical
implementation of Article 5.5 (G/SPS/15), 18 July 2000, para. A(4).
2586 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, para. A(4).
2587 New Zealand's first written subm ission, para. 4.442. See also New Zealand's second written
submission, paras. 2.832 and 2.864.
2588 Australia's first written submission, para. 1006.
2589 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.93.

(g) The efficacy of existing controls in Austra lia for the two pests in question – because,
other things being equal, if Australian controls already in place are also effective
against one of the pests in question, the risks from that pest are lower.
Facility of transmission

7.995 New Zealand argues that brown rot presents a higher risk than European canker because
brown rot is more easily transmitted than European canker. "[T]he scientific evidence is clear that
pears that are latently infected with brown rot do produce spores after removal from cold storage ... .
... [T]his is not the case for European canker. Pear s are therefore a potential vector of brown rot,
unlike apples in respect of European canker."2590
7.996 Dr Swinburne seems to agree with this point:
"The risk posed by brown rot incited by M. fructigena differs from that associated
with N. galligena in a number of important respects. For example, it can spread from
fruit to fruit in bulk bins leading to 'nesti ng', and thus inoculum enhancement, which
is not found with N. galligena. Rotted fruit almost invariably produce prolific
numbers of conidia on sporodochia which form in concentric circles across the
surface of the rotted area. The conidia are dispersed by wind alone and are thus not
reliant on rain-fall. This contrasts with N. galligena in which spore production is
relatively low and the spores are dispersed by rain splash (Byrde & Willetts, 1977;
Swinburne 1975)."
2591
7.997 In the light of the above, and the Panel's findi ngs under Article 5.1 of the SPS Agreement in
regard to European canker, the Panel finds that Ne w Zealand has demonstrated that brown rot can be
more easily transmitted through fruit than European canker.
Potential biological and economic consequences
7.998 As to the potential biological and economic consequences of the two pests, New Zealand
argues that both diseases cause fruit rots in apples and pears. 2592 Dr Latorre points out that "there is
not enough published information to allow an ad equate comparison of the risk of entrance,
establishment and spread between brown rot and Europ ean canker." Nevertheless, he explains that in
general the potential biological and economic con sequences of the two pests could be similar,
although he emphasizes that this also depends on weather conditions:
"The biological impact of both diseas es would be highly dependent on weather
conditions during fruit maturity. Among other factors, the severity of both diseases
depends on the presence of frequent rains during harvest. If this is accepted, the
economic and biological impact on Australian agriculture, particularly for apple and
pear production, would be similar.
"... Brown rot rarely causes economical losses, unless frequent summer rains occur, it
is weather dependant. The same is true for European canker."
2593

2590 New Zealand's first written submission, para. 4.441 (footnote omitted).
2591 Dr Swinburne's reply to Panel question 61, in List of Replies from the scientific experts to
questions posed by the Panel, para. 381.
2592 New Zealand's first written submission, para. 4.440.
2593 Reply of Dr Latorre to Panel question 61, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 379-380.

7.999 The Panel notes that New Zealand has not s ubmitted evidence on the weather conditions in
Japanese nashi pear-producing areas.
7.1000 Australia argues that, in its environment, the consequences of Monilinia fructigena are less
severe than those of European canker. 2594 Dr Deckers supports this view by explaining that European
canker has more pernicious biological consequences:
"The introduction of brown rot on pear would surely create a large problem of rotting
phenomena on different fruit species. But the introduction of European canker should
not only create rotten fruit problems but also problems of NG infections on branches
or on the rootstock and can even kill fruit trees completely. The impact of NG on
apple is thus more important than the impact of brown rot on pear."
2595
7.1001 In the light of the expert views and in the absence of arguments from New Zealand on
weather conditions for brown rot in Japan, the Pane l finds that New Zealand has not made a prima
facie case that the potential biological and economic consequences of brown rot in Japanese nashi
pears are similar to, or more severe than, those of European canker in New Zealand apples. Indeed,
although the Panel refrains from making a specifi c finding on this, it seems from Dr Deckers's
statement that under certain circumstances brown ro t may have less severe potential biological and
economic consequences than European canker.
Range of host plants
7.1002 New Zealand argues that brown rot has a wider range of host plants, given that it is also a
significant disease of apricots, cherrys, peaches and plums, which European canker is not. 2596
Australia does not contest this. Dr Swi nburne states that "the host range of M. fructigena, including
as it does fruit types of importance to Australia, ... suggests that it poses a greater risk to commerce
than N. galligena."2597
7.1003 The Panel therefore finds that New Zealand has demonstrated that brown rot has a wider
range of host plants than European canker.
Presence of the two pests in export areas
7.1004 As indicated above, most apple export productio n in New Zealand takes place in areas where
European canker has either never been recorded or the disease occurs only sporadically in very wet
seasons.2598
7.1005 As regards brown rot, New Zealand argues th at brown rot has been observed in several
prefectures in Japan since at least 1986. 2599 New Zealand does not disput e Australia's contention that
it has only ever imported Nashi pears from Tottori prefecture. New Zealand also concedes that under
the 2003 Arrangement, "apples [sic] are to be exporte d from an area (Tottori prefecture), which is
certified as free from brown rot." 2600 New Zealand argues, however, that it appears that Australia is

2594 Australia's first written submission, p. 302.
2595 Dr Deckers's reply to Panel question 61, in List of Replies from the scientific experts to questions
2596 New Zealand's first written submission, para. 4.440.
2597 Dr Swinburne's reply to Panel question 61, in List of Replies from the scientific experts to
questions posed by the Panel, para. 382.
2598 See para. 2.18 above.
2599 New Zealand's first written submission, para. 4.440.
2600 New Zealand's second written submission, para. 2.857.

content to manage risks on the basis of an assu mption and Japanese government assurances that pears
would be sourced from a pest free area.
2601
7.1006 Australia argues that it has only imported Japanes e nashi pears from Tottori. Brown rot had
occurred in Tottori but not since at least 1976, as confirmed by ten years of surveys and petal testing
data supplied by Japan to support their access request in 1988.
2602 In fact, Japan's survey
methodology was audited and verified by AQIS prio r to the commencement of trade, and since 1989
Japan has provided Australia with over ten year s of survey, petal and flower testing data. 2603 Tottori's
freedom from brown rot was recognized in the im port conditions, which are based on the assumption
that pears would be sourced only from Tottori. 2604 As brown rot may have previously occurred in
Tottori prefecture, Australia requires certificati on of area freedom by Japanese authorities through
surveys and orchard inspections. Further, area free dom in Tottori is a formal import requirement in
respect of brown rot. 2605 In the light of Article 6 of the SPS Agreement, Australia submits that its
recognition of area freedom in relation to Japanese Erwinia is clearly consistent with the
requirements of the SPS Agreement. 2606 By comparison, Australia argues, European canker is
reported in several districts of New Zealand wher e apple export orchards are located. New Zealand
has not demonstrated that it has pr ocedures in place to establish, ma intain and verify either area
freedom or areas of low pest prevalence in relation to European canker.2607
7.1007 Dr Latorre and Dr Swinburne explain that if Japanese nashi pears are exported effectively
from pest-free areas, the risk involved in brown rot is lower than the risk of European canker in
New Zealand apples. Dr Latorre states that "Austra lia claims that pears are imported only from pest-
free areas ("areas of freedom"), which I assume was demonstrated previously. If so, the likelihood of
the entrance of M. fructigena drops down considerably, to negligible." 2608 Dr Swinburne agrees: "if
the Japanese pears are indeed coming from localities verifiably free of the disease then perhaps the
risk is small."2609
7.1008 The panel in Australia – Salmon explained that Article 5.5 involves a comparison between
current situations. "Article 5.5 directs us to comp are for different situations the related levels of
protection as they are currently considered to be ap propriate by Australia and this whether or not the
sanitary measures enacted to achieve that level are based on a risk assessment."2610
7.1009 The Parties reference the 2003 Review of the Australian requirement for Petal Testing and
Flower Cluster Examination at Blossoming for Po me Fruit from Japan, The Republic of Korea and
The People's Republic of China as the most rece nt modification of Australia's import regime
applicable inter alia to Japanese nashi pears. As the 2003 Re view explains, "Nashi fruit has been
imported into Australia from Tottori Prefecture in Honshu Island, Japan since 1989. The quarantine

2601 New Zealand's second written submission, para. 2.835. See also New Zealand's second written
submission, para. 2.858.
2602 Australia's reply to Panel question 119 after the second substantive meeting.
2603 Australia's first written submission, para. 992.
2604 Australia's first written submission, para. 988. See also Australia's second written submission,
para. 741 and Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 218.
2605 Australia's reply to Panel question 119 after the second substantive meeting.
2606 Ibid.
2607 Australia's first written submission, para. 993. See also Australia's reply to Panel question 119 after
the second substantive meeting.
2608 Dr Latorre's reply to Panel question 61, in List of Replies from the scientific experts to questions
2609 Dr Swinburne's reply to Panel question 61, in List of Replies from the scientific experts to
questions posed by the Panel, para. 382.
2610 Panel Report on Australia – Salmon, para. 8.126.

measures for each season have b een mutually agreed through an annual 'Arrangement' between BA
and Japan's MAFF. The last 'Arrangement' signed in October 2001 permits imports of nashi pear into
Australia from 2001 until a review is deemed necessary."2611
7.1010 Importantly, the 2003 Review was only a par tial review of Australia's SPS measures
applicable to Japanese nashi pears. In fact, the 2003 Review notes that its "scope is limited to existing
requirements for petal and blossom cluster testing for brown rot ( Monilinia fructigena ), black spot
(Alternaria gaisen) and scab ( Venturia nashicola) in Asian pome fruit orchards in Korea, Japan and
China that are designated by quarantine authorities for the purpose of exporting fruit to Australia."2612
7.1011 Under the header "Australia's concerns re garding diseases and existing risk management
measures", the 2003 Review includes two Tottori-sp ecific "[q]uarantine measures implemented to
address identified risk." The first one expressly limits exports to registered orchards located in parts
of Tottori prefecture by providing for "fruit to be sourced only from registered orchards in designated
export areas of Tottori Prefecture". The second Totto ri-specific measure is "orchard inspection for
brown rot by MAFF – immediate notification by MAFF to BA if there is a detection of brown rot
anywhere in Tottori Prefecture, including in unregistered orchards or household fruit trees."
2613
7.1012 Further, the "amended import protocol for nashi pear fruit from Japan to Australia" resulting
from the 2003 Review includes measures, which also seem to be based on the assumption that
Japanese nashi pears would be exported to Australia only from Tottori prefecture:
"1. Certification by Ministry of Agricultu re, Forestry and Fisheries (MAFF) that
Tottori Prefecture is free from brown rot (Monilinia fructigena) and scab based on
Prefectural surveys. If the level of black spot exceeds a threshold of 0.5% after
orchard inspection, those orchards will be excluded from the export program.
2. MAFF to inform BA immediately if there is a detection of M. fructigena
anywhere in Tottori Prefecture, including in unregistered orchards or household fruit
trees.
3. Registration of orchards in export areas.
Each orchard registered for export as a result of meeting conditions in (1) is to be
numbered and the location identified by MAFF. This information is to be given to
the AQIS inspector by MAFF.
4. MAFF to notify BA immediately if unusual weather conditions occur
resulting in brown rot, black spot or scab in export orchards.
[…]

2611 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 26.
2612 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 13.
2613 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 26.

13. MAFF is to apply door seals to the sh ipping containers in Tottori and again
after Customs' verification inspection in K obe port and ensure that the container
numbers are correctly recorded on the phytosanitary certificates."
2614
7.1013 In the light of the above, the Panel finds that Australia has demonstrated that its current
measures applicable to Japanese n ashi pears are based on the assumption that exports will be sourced
only from Tottori prefecture. The Panel notes in this regard that New Zealand does not contest that
since 1989 Australia has imported Japanese nashi pear s only from Tottori prefecture. As mentioned
above, New Zealand also concedes that freedom fro m brown rot is certified in Tottori prefecture. 2615
Also, as noted above, the 2003 Review limits Japanese nashi pear exports to Tottori prefecture.
7.1014 Nevertheless, should the 2003 Review be read as allowing imports from Japanese orchards
outside of Tottori prefecture, the Panel notes that the Review imposes several requirements to make
sure that Japanese nashi pears may be exported only from orchards free from brown rot. In fact, the
2003 Review concludes that:
"[I]t is proposed that the requirement for petal testing for brown rot
(Monilinia fructigena) and flower cluster examination for scab ( Venturia nashicola )
be removed, to be replaced by a requirement for orchard freedom from both diseases,
as verified by orchard surveillance through the growing season.
Orchards in which brown rot is identified w ill be deregistered by the NPPO and will
not be allowed to export fruit to Australia. Due to the potential for latent infections
from external infection sources, the bag c overing the developing export fruit is an
essential and effective barrier to infecti on and a significant phytosanitary measure.
NPPOs will be required to notify Australia of any detection of brown rot in fruit
export regions and the measures that have been taken to control outbreaks.
[…]
The import protocols contain a series of cont rols that will ensure that only fruit free
from diseases of concern to Australia are allowed for import. BA is confident that this
change does not compromise the ALOP established through IRAs on pome fruit
imports from Japan, Korea and China.
Given the possibility of changes to the status of the diseases in pome fruit orchards in
Japan, Korea and China resulting from unusual weather conditions that give rise to
conducive conditions for disease developmen t, BA has included an additional
requirement stating that the quarantine authority in the exporting country must notify
BA immediately if unusual weather conditions occur which result in disease
development in export orchards above the thresholds indicated."
2616
7.1015 Further, the part of the 2003 Review entitle d "Framework for Review" emphasizes the central
role of area freedom as a precondition for Japanese nashi pear imports to Australia:
"BA is to consider the removal of the requi rement for petal testing in export orchards
for brown rot ( Monilinia fructigena) and black spot ( Alternaria gaisen), and flower

2614 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China,
Appendix 2, pp. 61-62.
2615 New Zealand's second written submission, para. 2.857.
2616 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, pp. 23-24.

cluster examination for scab ( Venturia nashicola ) in pear orchards designated to
export pear fruit to Australia. BA will undert ake the review in accordance with the
International Standards for Phytosanitary Measures (ISPM) developed by the FAO, in
particular, Part 4 of the ISPM - Pest Surveillance: Requirements for the
establishment of pest free areas (ISPM No. 4, 1996). The three main components in
establishing and maintaining a PFA are:
1. systems to achieve area freedom
2. measures to maintain area freedom
3. procedures to verify maintenance of area freedom."
2617
7.1016 As the experts explained, this significantly re duces the risk involved in the importation of
Japanese nashi pears into Australia.
7.1017 In the light of the above, the Panel finds that Australia has demonstrat ed that, even if its
current measures applicable to Japanese nashi pears should be read as allowing imports from Japanese
orchards outside of Tottori prefecture, these me asures ensure that Japanese nashi pears may be
exported only from orchards free from brown rot.
Presence of the two pests in Australia
7.1018 As indicated above, European canker was identified in 1954 in four orchards in Spreyton,
Tasmania, but was eradicated by 1991.2618
7.1019 As regards brown rot, both Parties accept th at Australia is free of brown rot proper. 2619
Australia argues, however, that other species of brown rot are already present in Australia
(for example, Monilinia laxa and Monilinia fructicola ). Since this is not the case for European
canker, the economic impact for the Australian apple and pear industry would be lower if
M. fructigena were to establish in Australia than if Eu ropean canker were to establish in Australia. 2620
New Zealand responds that the other species of brown rot referred to by Australia ( M. fructicola and
M. laxa) relate primarily to stone fruit.2621
7.1020 As noted above, the compliance panel in Australia – Salmon (Article 21.5 – Canada) found
that a disease exotic to the importing country invo lves a higher risk than a non-exotic disease. 2622
The Panel cannot tell whether this principle applies in regard to brown rot and European canker in the
current dispute, since neither Party has submitte d arguments concerning any similarities between
brown rot proper and "other species of brown rot already present in Australia."2623

2617 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 25.
2618 See para. 2.18 above.
2619 New Zealand's first written submission, para. 4. 440; and Australia's first written submission,
para. 1004.
2620 Australia's first written submission, para. 1004.
2621 New Zealand's second written submission, para. 2.850.
2622 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.93.
2623 Australia's first written submission, para. 1004.

Volumes of trade

7.1021 New Zealand asserts that trade in nashi pear s from Japan is comparable to trade in
New Zealand apples.2624 The 1998 Final Import Risk Analysis of the New Zealand Request for the
Access of Apples into Australia accepted that "'trad e in pears from Japan is broadly comparable to the
[New Zealand] proposal in that it involves trade in a susceptible host product from a country with a
disease similar to fire blight'. 2625"2626 According to the trade figures submitted by New Zealand, since
2005 Japan has exported no pears and quinces to Australia. 2627 New Zealand concedes that plant
health status, trade volumes and risk management practices may change ove r time; however, unless
the ALOP also changes, it is entirely appropriate to consider past situations as evidence of an ongoing
breach of Article 5.5. 2628 New Zealand adds that the ALOP is best ascertained by considering
measures in the light of the risk as it exis ted at the time the measures were adopted. 2629 A subsequent
drop off in trade or eradication of a pest does not change the ALOP being applied. 2630 If the volume
of trade is relevant at all, the relevance lies in the volume of trade as predicated at the time the
comparator risk assessment was conducted. Yet the 1988 investigation and measures imposed under
the Quarantine Circular Memorandum made no assump tions about the potential volume of trade.
Further, the risk management measures under the 20 03 Arrangement for the Shipment of Nashi Fruit
from Japan to Australia are not limited to speci fic volumes. There is nothing on the face of the
Arrangement that indicates that at higher volumes , different measures would apply. Moreover,
nothing prevents Japan from re-establishing trade at any time and at any volume on the basis of the
measures set out under the 2003 Arrangement.2631
7.1022 Australia refers to the significantly differen t volumes of trade involved in the respective
products. Australia notes Dr Sgrillo's statement th at risk is directly proportional to the volume
imported, and Dr Latorre's point that as the volume of trade increases, so too does the likelihood of a
biological event occurring.
2632 Australia concedes that the 1998 Final IRA Report for New Zealand
apples recognized that trade in nashi pears fro m Japan was broadly comparable to trade in
New Zealand apples in that it involved a susceptible host product (i.e. nashi pears) from a country
with a disease similar to fire blight (i.e. Japanese Erwinia). However, the 1998 IRA also identified
several fundamental differences between the two situ ations, one of which was the potential volume of
trade.2633
7.1023 Australia argues that if there is no trade in a pr oduct, there is no risk that a pest or disease will
gain entry into a Member's territory via trade in that product. 2634 Australia points out that there has
been no trade in Japanese nashi p ears between Australia and Japan si nce 2003, when 36 tonnes were
imported by Australia. Prior to 2003, the maximum volume imported in any one year since 1994 was

2624 New Zealand's reply to Panel question 131 after the first substantive meeting.
2625 (footnote original) Exhibit AUS-112, Final Import Risk Analysis of the NZ Request for the Access
of Apples Into Australia (December 1998), p. 27. The statement is made with reference to bacterial shoot blight
(BSB), the disease name for Japanese Erwinia.
2626 New Zealand's second written submission, para. 2.828.
2627 New Zealand's reply to Panel question 120 after the second substantive meeting, Annex 2.
2628 New Zealand's second written submission, paras. 2.823 and 2.824.
2629 New Zealand's second written submission, para. 2.823.
2630 Ibid.
2631 New Zealand's second written submission, para. 2.838. See also New Zealand's second written
submission, para. 2.845.
2632 Australia's comments on the experts' replies to questions 12 and 61, para. 271.
2633 Australia's first written submission, para. 994.
2634 Australia's first written submission, para. 995. See also Australia's second written submission,
para. 739.

86 tonnes.2635 These figures are confirmed by the trade figures submitted by New Zealand on pear
(and quince) exports from Japan to Australia. 2636 This is much lower than the likely volume of trade
in New Zealand apples 2637, estimated in the IRA as 150 million apples per year, or approximately
27,000 tonnes. 2638 Even New Zealand's more conservative estimate of 50 million apples
(approximately 9,000 tonnes) per year dwarfs the past, and now non-existent, volume of trade in
Japanese nashi pears.2639
7.1024 In response to a question from the Panel whethe r Australia took into account volume of trade
in its assessment of Japanese nashi p ears, Australia points out that, on the basis of the PRA for nashi
pears in 1988-1989, a trial shipment of 5,600 cartons (roughly 101 tonnes) of nashi pears from Japan
to Australia was conducted in 1989 to determine if the proposed risk management measures would be
successful. Following that trial shipment, trade was allowed to continue, and up until 2003 the
highest total volume of trade was 86 tonnes in 1994. This is an evidence-based, consistently low
volume of trade. The low volumes of trade were also referred to in the 2003 review, which is the
most recent assessment of unrestricted risk and measures associated with nashi pears from Japan.
Further, the volume of trade for the trial shipment was never exceeded in the following years.
2640
7.1025 Australia agrees with New Zealand that Japan c ould seek to re-establish trade at any time.
However, Japan could not re-establish trade unilatera lly. Since there has been no trade in nashi pears
in six years, and since there are currently no va lid import permits for the importation of nashi pears
into Australia, Australia would reconsider th e relative risks associated with any proposed
recommencement of trade, including with respect to th e likely volume of trade. Further, it is highly
improbable that trade which averaged around 37 tonnes per year between 1994 and 2003 would
suddenly jump to between 9,000 and 27,000 tonnes per year.2641
7.1026 Australia also notes that the IRA for New Zeal and apples provides for a review of the import
conditions applying to New Zealand apples after one year of trade. A similar review of the import
conditions applying to Japanese nashi pears occu rred after taking into account surveys or export
orchards, the history of trade and visits by Australian plant pathologists 2642, and again in 2003. 2643
The reviews considered the results of orchard surveys, petal and flower testing data, history of trade,
and reports from Australian plant pathologists, orchard management programmes, AQIS inspector
pre-clearance reports, and latency testing results. Further, national surv eillance data by Japan's
national plant protection organization indicated that the diseases of concern in the review had either
not been reported for a number of years, or had occurred sporadically and were readily controlled by
contemporary orchard management practices. Import conditions were modified on the basis of these
reviews. Analysis of the outcomes of each measu re included in the existing importation conditions
indicated areas of overlap between orchard surv eillance, disease management measures and disease
tests. Where there was a clear redundancy in overlap ping measures, Biosecurity Australia considered
that it would be possible to remove or modify them without loss of phytosanitary security.2644

2635 Australia's first written submission, para. 996. See also, Australia's reply to Panel question 120
after the second substantive meeting.
2636 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 217.
2637 Australia's first written submission, p. 300.
2638 Australia's first written submission, para. 997. See also Australia's second written submission,
para. 739.
2639 Australia's first written submission, para. 997.
2640 Australia's reply to Panel question 121 after the second substantive meeting.
2641 Ibid.
2642 Australia's first written submission, para. 1019.
2643 Australia's reply to Panel question 133 after the first substantive meeting.
2644 Ibid.

7.1027 As the Panel noted above, the panel in Australia – Salmon explained that an analysis of
Article 5.5 involves a comparison between current situ ations. "Article 5.5 directs us to compare for
different situations the related leve ls of protection as they are currently considered to be appropriate
by Australia and this whether or not the sanitary m easures enacted to achieve that level are based on a
risk assessment."
2645
7.1028 In the current dispute, Australia's de facto ALOP needs to be determined in part based on the
risks related to Japanese nashi pear imports. An impo rtant element of that risk is the volume of trade
in Japanese nashi pears.
7.1029 The May and September 1989 Quarantine Circul ar Memoranda both refer to a requirement
for a trial shipment before the initiation of ex ports. The September 1989 Quarantine Circular
Memorandum also confirms Australia's argument th at the trial shipment involved 5600 cartons of
Japanese nashi pears. 2646 Australia alleges that this corres ponds to roughly 110 tonnes, and that up
until 2003 the highest total of trade was 86 tonnes in 1994. In other words, according to Australia, the
volume of trade for the trial shipment was never exceeded in the following years. 2647 New Zealand
does not contest these arguments by Australia, nor that the trial shipment has taken place.
7.1030 Further, the 2003 Review references annual revi ews for Japanese nashi pears. "Nashi fruit
has been imported into Australia from Tottori Pref ecture in Honshu Island, Japan since 1989. The
quarantine measures for e ach season have been mutually ag reed through an annual 'Arrangement'
between BA and Japan's MAFF. The last 'Arrange ment' signed in October 2001 permits imports of
nashi pear into Australia from 2001 un til a review is deemed necessary." 2648 Presumably, these
annual reviews provided an opportunity for Austra lia to adjust its measures should trade suddenly
surge.
7.1031 Also, the 2003 Review explicitly notes that it has taken the history of trade into account:
"[H]istory of trade has been taken into account. As a result of ongoing trade and
dialogue with respective countries, AQIS and BA have devel oped a high level of
confidence in the outcomes achieved by ph ytosanitary measures applied through the
existing importation conditions. They also have confidence in the verification and
validation of measures by each of the N PPOs as evidenced through outturn and
inspection and audit of the export pathway by AQIS officers and Australian technical
experts. The end result is that there have been no quarantine pests or diseases
detected in imported pome fruit from North Asia."2649
7.1032 As regards the period since 2003, Australia ar gues that there have been no Japanese nashi
pear imports at all. New Zealand does not contest this. Japanese nashi pear exports could
recommence subject at least to an import permit from Australia. Nevertheless, as Australia argues, it
is highly unlikely that they would surge above thei r previous levels. New Zealand certainly has not
provided any evidence to show why that should happen. Accordingly, the Panel finds that the history
of trade in Japanese nashi pears, including the lack of trade in the last years, clearly informs
Australia's current assumptions of the risks involve d in that product. New Zealand has not brought
forward evidence that would lead the Panel to disr egard Australia's assumption that any volume of

2645 Panel Report on Australia – Salmon, para. 8.126.
2646 September 1989 Quarantine Circular Memorandum, p. 7.
2647 Australia's reply to Panel question 121 after the second substantive meeting.
2648 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 26.
2649 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, pp. 19-20.

imports of Japanese nashi pears would be significantly lower than the volume of trade predicted for
New Zealand apples in its IRA (approximately 27000 t onnes) or even that estimated by New Zealand
(9000 tonnes).
Existing controls in Australia
7.1033 Australia argues that existing controls in Australia reduce the risk of brown rot. According to
Australia, brown rot caused by M. fructigena , is only one particular species of brown rot.
Other species of brown rot are already present in Australia (for example, Monilinia laxa and
Monilinia fructicola ) and Australian industry already has c ontrols in place for these diseases that
would also be effective for M. fructigena. This is not the case for Eur opean canker. Accordingly, the
economic impact for the Australian apple and pear industry would be lower if M. fructigena were to
establish in Australia than if European canker were to establish in Australia.2650
7.1034 New Zealand responds that Australia's recent draft IRA for apples from China does not refer
to any such effect. 2651 The other species of brown rot referenced in Australia's arguments, namely
M. fructicola and M. laxa, relate primarily to stone fruit, so th e controls applied to stone fruit trees
would not have any effect on the risk of infection of apple trees by M. fructigena.2652 F u r t h e r ,
New Zealand contends, there are comparable controls that would also be effective against European
canker in Australia. The IRA for New Zealand appl es notes that "'[c]ultural practices and chemical
measures used to control apple scab … in most Australian apple-growing regions (except Western
Australia) would assist in controlling European canker'.
2653"2654
7.1035 Dr Latorre seems to agree with this, stating that "[s]everal of the fungicides used to prevent
apple scab (V. inaequalis) can also control European canker."2655
7.1036 Accordingly, the Panel finds that Australia ha s not made the case that there is a major
difference between the two situations in terms of existing controls.
Overall consideration of the various risk factors
7.1037 Having analyzed these seven risk factors argued by the Parties, the Panel would need to draw
conclusions as to how the overall risks regarding European canker in New Zealand apples compare
with the overall risks for brown rot in Japanese nashi pears.
7.1038 The Panel recalls that it is:
"[N]ot asked to make a scientific risk comp arison nor to state with scientific certainty
that one product is riskier than the other. We can only weigh th e evidence put before
us and, on the basis of the rules of burde n of proof we adopted, including the use of
factual presumptions, decide whether suffici ent evidence is before us – evidence
which has not been rebutted – in order to state that it can be presumed that one
product is riskier than the other."2656

2650 Australia's first written submission, para. 1004.
2651 New Zealand's second written submission, para. 2.849.
2652 New Zealand's second written submission, para. 2.850.
2653 (footnote original) IRA, p. 148.
2654 New Zealand's second written submission, para. 2.851.
2655 Dr Latorre's reply to Panel question 61, in List of Replies from the scientific experts to questions
2656 Panel Report on Australia – Salmon, para. 8.126.

7.1039 The above analysis of the seven factors argued by the Parties shows a mixed picture. In light
of the Parties' arguments and the evidence on record, some factors, namely the facility of transmission
and the range of host plants, point towards a higher risk associated with brown rot. Some others,
namely volumes of trade and presence in export areas, imply a higher risk of European canker in
New Zealand apples. In regard to existing controls , there appears to be no major difference between
the two situations. Two factors, potential biological and economic consequences and the presence of
the pests in Australia, appear to be inconclusive with regard to the risk of the comparable situations.
7.1040 It would not be appropriate for the Panel to comp are the number of risk factors in favour of a
higher risk of one or the other pest, and then conc lude that one comparable situation involves a higher
risk than the other one. Such a simplistic approa ch would disregard that overall risk results from
various factors, where each factor has a specific weight . In fact, it is possible that one single factor –
with the proper weight attributed to it – might tilt the comparison of overall risks in favour of one or
the other situation. The Panel does not know what weight to attribute to the various factors, as
New Zealand has not submitted any specific arguments in this regard. Accordingly, the Panel cannot
assess how the overall risks in the two comparable situations relate to each other.
7.1041 In regard to the overall level of risks, New Zealand argues that "Australia's ... Draft IRA
Report – Fresh Apple Fruit from the People's Republic of China ..., released in January 2009,
2657
identified the risk associated with M. fructigena as higher than that associated with N.
galligena.2658"2659 The same draft IRA also identified the consequences of M. fructigena as higher
than that associated with N. galligena.2660
7.1042 This argument sounds appealing: it suggests that the defendant itself has found that brown rot
poses a higher risk than European canker. At th e same time, New Zealand refers to an assessment
Australia made in the context of apple imports fro m China. This is a distinct situation from both
European canker in New Zealand apples and brown ro t in Japanese nashi pears. Again, New Zealand
has not provided any argument or evidence to demonstrate how the situation of Chinese apple imports
into Australia can be relevant for assessi ng a comparison between Japanese nashi pears and
New Zealand apples. Accordingly, the Panel finds New Zealand's reference to Australia's Draft IRA
on Fresh Apple Fruit from the People's Republic of China unconvincing.
7.1043 In the light of the above, the Panel does not have sufficient evidence from New Zealand to
assess how the overall risks for European canker in New Zealand apples compare with the overall
risks for brown rot in Japanese nashi pears. Con sequently, the Panel cannot continue its analysis
under Article 5.5 with regard to the comparison of European canker in New Zealand apples and
brown rot in Japanese nashi pears. In fact, a comparis on of the risks in the two situations would be an
essential element of the Panel's analysis of whethe r the two situations i nvolve distinctions, in
particular arbitrary or unjus tifiable distinctions, in the de facto ALOP reflected in the measures
applied by Australia. Since the Panel is not able to compare the risks in the two situations, it will not
engage in a detailed comparison of the measures that serve to achieve Australia's de facto ALOP.

2657 ( footnote original ) Draft Import Risk Analysis Report for Fresh Apples Fruit from the People's
Republic of China, January 2009 (Draft IRA – China Apples), Exhibit NZ-128.
2658 ( footnote original ) The probability of entry, establishment and spread for M. fructigena was
assessed for Chinese apples as "hig h", and the overall unrestricted risk (both PEES and consequences) was
assessed as "moderate": Draft IRA – China Apples, Exhibit NZ-128, p. 131. This is to be compared with the
conclusions in respect of N. galligena (described in the Draft IRA – Ch ina Apples with the alternate name
N. Ditissima), which was assessed in the Draft IRA – China A pples (consistent with the IRA for New Zealand
apples) as "low" and "low" for PEES and overall unrestricted risk respectively.
2659 New Zealand's second written submission, para. 2.843.
2660 New Zealand's second written submission, para. 2.846.

7.1044 The Panel notes New Zealand's argument that th e measures applied by Australia in the two
comparable situations show significant differen ces, which are indicative of an unjustifiable or
arbitrary distinction in the ALOP. However, as noted above, New Zeal and itself concedes that
measures alone do not provide conclusive evidence in respect of Australia's ALOP. In fact,
New Zealand identifies risks as a key first element of the analysis of its Article 5.5 claim. "While
New Zealand agrees that measures alone do not constitute conclusive proof of differences in levels of
protection, if the risks associated with the compar able products are substantially the same, then the
measures applied should be examined to determine whether they may reflect differences in the level
of protection."2661
7.1045 The Panel also recalls the Appellate Body's statement in EC – Hormones that Article 5.5 does
not contain a legal obligation of absolute or perfect consistency between ALOPs in different
situations:
"The objective of Article 5.5 is formulated as the "achieving [of] consistency in the
application of the concept of appropria te level of sanitary or phytosanitary
protection". Clearly, the desired consistency is defined as a goal to be achieved in the
future. ... We agree with the Panel's view that the statement of that goal does not
establish a legal obligation of consistency of appropriate levels of protection. We
think, too, that the goal set is not absolu te or perfect consiste ncy, since governments
establish their appropriate levels of protection frequently on an ad hoc basis and over
time, as different risks present themselves at different times. It is only arbitrary or
unjustifiable inconsistencies that are to be avoided."
2662
7.1046 Finally, the Panel recalls that Australia has a dopted the same generically stated ALOP in both
situations. In these circumstances and in the lig ht of the foregoing arguments, without a better
understanding of how the overall risks involved in the two situations relate to each other, the Panel
concludes that New Zealand has not demonstrated th e second element of the Article 5.5 test in regard
to the comparison of European canker in New Zealan d apples with brown rot in Japanese nashi pears.
Accordingly, the Panel also concludes that Ne w Zealand has not demonstrated that there are
distinctions in the levels of protection actually ach ieved by the measures applied in the two situations,
which is the outstanding part of the first element of the Article 5.5 test.
(ii) Comparison of the risks of fire blight in New Zealand apples and of Japanese Erwinia in
Japanese nashi pears
7.1047 New Zealand argues that Australia seeks to elimin ate completely the negligible risk of fire
blight being vectored by New Zealand apples, yet it is willing to tolerate, without any efforts at
mitigation, the risk of Japanese Erwinia from Japanese pears. New Zealand adds that given the
comparable risk profiles at issue, the significant di fference in treatment constitutes an arbitrary and
unjustifiable distinction in the levels of protection.2663
7.1048 Australia argues that since both the likelihoods and the consequences of entry, establishment
and spread into Australia in relation to Japanese Erwinia are lower than the associated likelihoods in
relation to fire blight, the risk associated with Japanese nashi pears is much lower than the risk
associated with New Zealand apples.2664 As a result of this lower risk, different measures are required

2661 New Zealand's reply to Panel question 131 after the first substantive meeting.
2662 Appellate Body Report on EC – Hormones, para. 213.
2663 New Zealand's first written submission, para. 4.445.
2664 Australia's first written submission, para. 1006.

in order to achieve Australia's ALOP. Australia asserts that New Zealand ignores these important
points, and thereby fails to establish that Australia's measures in practice reflect different ALOPs.
2665
7.1049 For the reasons explained earlier, the Panel w ill assess the following thr ee risk factors argued
by the Parties in this context:
(a) the presence of the two pests in export areas;
(b) the presence of the two pests in Australia; and
(c) the potential biological and economic conse quences of the two pests, including the
range of host plants.
7.1050 In addition, the Panel recalls its earlier analysis on volume of trade in Japanese nashi
pears.2666
Presence of the two pests in export areas
7.1051 New Zealand argues that, to determine any diffe rences in ALOP, one needs to consider the
pest status at the time the comparable risk was assessed. Japanese Erwinia was reported in Japan in
1972 and may have been present in Japan from the early 1900s. 2667 Eradication was not claimed until
2003.2668 Still, the 1988 investigation by AQIS into pest risk associated with the import of nashi pears
did not assess the risks associated with Japanese Erwinia.2669 Despite the presence of
Japanese Erwinia in Japan, it was not analysed as part of any pest risk analysis and no measure
requiring area freedom from the pest in export areas w as adopted. It appears that Australia is content
to rely on assurances that Japan (including Tottori Prefecture) is free from Japanese Erwinia.2670
In fact, to this day, no measures are in place to en sure that Tottori Prefecture is and remains free of
Japanese Erwinia. The only reference to Japanese Erwinia in the 2003 Arrangement is a requirement
that the Japanese Ministry of Agriculture Forestry and Fisheries notify Biosecurity Australia should
there be an outbreak "in Hokkaido or elsewhere in Japan". There is no explicit requirement to notify
Biosecurity Australia if there is an outbreak in Tottori Prefecture (the only prefecture from which
nashi pears are allegedly exported to Australia). Further, the consequence of notification of an
outbreak is discretionary. Import conditions coul d be reviewed under the Arrangement. However,
despite Australia’s assertion in its responses to Panel questions that such a review would, "of course"
follow, this is not in fact a requirement under the Arrangement.2671
7.1052 Australia argues that the geographic area relevant to the risk associated with the importation
of nashi pears to Australia is Tottori prefecture – not the whole of Japan. 2672 Japanese Erwinia was
restricted to Hokkaido island in Japan, whereas Au stralia has imported nashi pears only from Tottori
prefecture on Honshu island, which is free from Japanese Erwinia and geographically remote from

2665 Australia's first written submission, para. 1018. See also Australia's first written submission,
para. 1009.
2666 See paras. 7.1021-7.1032 above.
2667 New Zealand's first written submission, para. 4.436.
2668 New Zealand's reply to Australia's question 16 after the second substantive meeting, para. 39.
2669 New Zealand's second written submission, para. 2.837.
2670 New Zealand's reply to Australia's question 16 after the second substantive meeting, para. 39.
2671 New Zealand's second written submission, para. 2.859.
2672 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 218.

Hokkaido. Australia has never imported nashi pears from Hokkaido, and the import conditions are
based on the assumption that pears would be sourced only from Tottori.2673
7.1053 Australia recognizes that the 1989 pest risk anal ysis for Japanese nashi pears did not mention
Japanese Erwinia. However, Australia argues that, at the Panel's meeting with the experts,
Dr Schrader confirmed that there is no need to assess the risk of a pest or disease which does not
occur in the geographical area in relation to which a risk assessment is conducted. ISPM No. 11 also
supports this view. Accordingly, Japanese Erwinia was not, and is not, a pest relevant to the
importation of nashi pears from Tottori prefecture in Japan. 2674 Given the limitation of nashi pear
exports to Tottori prefecture, Japanese Erwinia is not, and never has been, a pest of direct concern in
relation to trade in Japanese nashi pears to Australia. 2675 In the light of Article 6 of the
SPS Agreement, Australia argues that its recognition of area freedom in Tottori prefecture in relation
to Japanese Erwinia is consistent with the requirements of the SPS Agreement.2676
7.1054 New Zealand responds that Article 6 of the SPS Agreement also provides that:
"Exporting members claiming that areas with in their territories are pest- or disease-
free areas … shall provide the necessary evidence thereof in order to objectively
demonstrate to the importing Member that such areas are, and are likely to remain
pest- or disease-free areas … For this purpose, reasonable access shall be given,
upon request, to the importing member for in spection, testing and other relevant
procedures."
New Zealand argues that there is no evidence that AQIS was ever involved in auditing any surveys for
area freedom done by MAFF in Tottori or anywhere else in Japan.
2677
7.1055 In any event, Australia adds, Japan no tified to the IPPC the eradication of Japanese Erwinia
from Hokkaido in 2003 2678, resulting from intensive emergency co ntrols to eradicate the disease. 2679
As a result of the review of the import conditi ons applying to Japanese nashi pears conducted by
Biosecurity Australia in 2003, and taking into accoun t Japan's eradication notification, Australia now
requires Japan's Ministry of Agriculture, Fisheries a nd Forestry to notify Biosecurity Australia of any
further detection of Japanese Erwinia in Hokkaido or elsewhere in Japan. To date, no such
notifications have been made to Biosecurity Austra lia, but in the event of notification of an outbreak
of Japanese Erwinia in Japan, Australia would review the relevant import conditions.2680
7.1056 In effect, Australia argues, the notifi cation requirement of any outbreaks of Japanese Erwinia
anywhere in Japan operates as an area freedom requirement: Tottori prefecture must remain free from
Japanese Erwinia.
2681 The efficacy of the requirement was confirmed in November 2008, when Japan
notified Australia of an outbreak of a "Bacterial Bl ack Shoot disease of European pear" in Yamagata
prefecture, a geographical area again remote from Tottori prefecture. The disease is reportedly a "new

2673 Australia's first written submission, para. 988. See also Australia's second written submission,
para. 741 and Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 218.
2674 Australia's reply to Panel question 119 after the second substantive meeting.
2675 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 218.
2676 Australia's reply to Panel question 119 after the second substantive meeting.
2677 New Zealand's comments on Australia's reply to Panel question 119 after the second substantive
meeting, para. 275.
2678 Australia's first written submission, para. 989.
2679 Australia's reply to Panel question 132 after the first substantive meeting.
2680 Ibid. See also, Australia's first written submission, para. 989.
2681 Australia's second written submission, para. 740.

bacillus of the Erwinia genus", but it is distinct from Erwinia amylovora . As a result of this
notification, Australia immediately suspended the issuance of import permits for Japanese nashi pears
until further information is obtained.
2682
7.1057 Australia contends that the only requirement in place for Japanese Erwinia, namely that
Japan notify Australia of any future outbreaks of the disease anywhere in Japan, was included in the
2003 review as a result of the 1995 outbreak in Hokkaido. 2683 No further requirements were deemed
necessary, given the confinement of the outbreak to the geographically remote island of Hokkaido, the
eradication programme implemented by Japan and the absence of Japanese Erwinia occurrences
elsewhere in Japan.2684
7.1058 By comparison, Australia argues, fire blight is widely distributed in the apple-growing areas
of New Zealand, and New Zealand has not provided evidence to confirm that it has procedures in
place to establish, maintain and verify areas free from the disease. 2685 If the disease is no longer
present in Hokkaido, and Australia imports nashi p ears only from Tottori prefecture, the basis for a
comparison of the likelihood of entry, establishmen t and spread (along with the basis of comparison
of risk) disappears.2686
7.1059 New Zealand responds that in regard to Japanese Erwinia, Australia simply relies on a
generic notification to the IPPC in 2003 that Japanese Erwinia is absent from Japan, which post-dates
the commencement of trade, and a requirement th at Australia be notified should it reoccur – the
efficacy of which may be called into question. New Zealand notes that Australia exhibits a letter from
November 2008 which refers to an outbreak of bacterial black shoot disease of European pear
(belonging to the same genus with the pathogenic bacteria of fire blight Erwinia amylovora ) in
Yamagata prefecture.
2687 However, the Japanese notification related to an outbreak reported one and a
half years earlier – hardly a demonstration of a f unctioning area freedom requirement. In response to
this belated notification (by which stage Japan had in fact taken measures to protect and confine the
organism and no further detections had been made), Australia asserts that it immediately suspended
the issuance of import permits, although it provides no evid ence of this. Indeed, in the light of the fact
that no imports have occurred since 2003, this presumably amounted to doing nothing.2688
7.1060 Dr Paulin notes that:
"The key-difference between the two situations , as far as risk associated with fruits is
concerned, is that, according to Australia (following Japan statement), this disease
caused by Erwinia sp. on Nashis is present only in the Hokkaido Island. This allows
Australia to import fruits from an other area, remote from Hokkaido. This is a clear
objective difference between Erwinia/Japan, and E. amylovora/New Zealand
situations."2689

2682 Australia's reply to Panel question 119 after the second substantive meeting.
2683 Ibid.
2684 Ibid.
2685 Australia's first written submission, para. 990. See also Australia's reply to Panel question 119 after
the second substantive meeting.
2686 Australia's first written submission, para. 989.
2687 Ministry of Agriculture, Forestry and Fisheries, Japan "Detection and measures of Bacterial Black
Shoot disease of European pear (provisional name)", MAFF press release, 6 November 2008 (English
translation provided by Australia), in Exhibit AUS-174.
2688 New Zealand's comments on Australia's reply to Panel question 119 after the second substantive
meeting, para. 272.
2689 Dr Paulin's reply to Panel question 12, in List of Replies from the scientific experts to questions
posed by the Panel, para. 108 (original emphasis).

7.1061 The Panel notes that the original pest risk analysis conducted by Australia in 1989 did not
involve Japanese Erwinia. Neither of the two Quarantine Ci rcular Memoranda identified by the
Parties from May and September 1989 refer to that p est. The Memoranda do not explain if this is
because Dr Kable during his two visits did not encounter Japanese Erwinia in Tottori prefecture, or
because he encountered the pest but did not consider it to be of quarantine concern for Australia.
7.1062 As Australia argues, the 2003 Review of the Australian Requirement for Petal Testing and
Flower Cluster Examination at Blossoming for Po me Fruit from Japan, The Republic of Korea and
The People's Republic of China includes the followi ng notification requirement: "MAFF is to notify
BA of any further detections of bacterial shoot b light (BSB) in Hokkaido or elsewhere in Japan as
soon as confirmed."2690 New Zealand does not contest that this measure covers the pest referenced in
this dispute as Japanese Erwinia.
7.1063 As noted above, the panel in Australia – Salmon explained that Article 5.5 involves a
comparison between current situations. "Article 5.5 directs us to compare for different situations the
related levels of protection as they are currently co nsidered to be appropriate by Australia and this
whether or not the sanitary measures enacted to ach ieve that level are based on a risk assessment." 2691
The panel in Australia – Salmon added that: "[t]o determine whethe r Australia makes a distinction in
the levels of protection it considers to be appropria te for the situations compared, we thus need to
examine the sanitary measures Australia currently imposes for these different situations."2692
7.1064 The Panel therefore needs to focus on the 2003 Review and the notification requirement spelt
out in that review. Indeed, the 2003 Review is the most recent reflection of Australia's de facto ALOP
with regard to Japanese Erwinia.
7.1065 The 2003 Review does not contain an explic it requirement for area freedom from
Japanese Erwinia. Still, as Australia argues, it is highly probable that notification of bacterial shoot
blight would result in a suspension of trade in Japan ese nashi pears. In the context of Fuji apple from
Japan to Australia, the 2003 Review recognizes bact erial shoot blight of pear as a disease of
quarantine concern to Australia, and prescribes immedi ate notification of the disease for Japan, to be
followed by appropriate action by Australia:
"Detection/monitoring surveys for pests and diseases must be conducted by MAFF in
orchards registered for export within the designated areas. MAFF must submit the
results using a standardised reporting form at to BA. The standardised reporting
format is to be determined by MAFF. These surveys must include ... bacterial shoot
blight of pear (Erwinia amylovora) or related species ... . The designated export areas
must be free of th[is] disease[]. If any specified pest or disease or other exotic pest or
disease of quarantine concern to Australia is detected through detection/monitoring
surveys or joint inspection of orchards, th en BA must be notified immediately for
appropriate action to be taken."
2693
7.1066 Further, the 2003 Review explicitly foresees the suspension of trade if bacterial shoot blight
in pear is detected. "MAFF has indicated that designated export ar eas are free from bacterial shoot
blight of pear ( Erwinia amylovora). MAFF will monitor for this exotic disease of quarantine concern
and notify BA immediately if it is detected in the designated export areas. If bacterial shoot blight of

2690 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 63.
2691 Panel Report on Australia – Salmon, para. 8.126.
2692 Panel Report on Australia – Salmon, para. 8.124.
2693 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 45.

pear ( Erwinia amylovora ) or related species is found, impor ts will be suspended pending an
investigation."
2694
7.1067 Likewise, the 2003 Review explains that:
"Bacterial shoot blight of pear caused by Erwinia amylovora, a disease similar to fire
blight, is restricted to Chinese pear in Hokkaido, according to information provided
by MAFF. Adequate internal quarantines must be maintained to prevent the
movement of host material from Hokkaido into designated export areas to preserve
the area freedom status for b acterial shoot blight of pear. Details of any changes to
these control measures should be provided to BA. If this disease, or related species, is
detected outside of Hokkaido then AQIS must be notified immediat ely and trade will
cease, pending the outcome of an investigation."
2695
7.1068 Although these latter passages from the 2003 Review relate to Japanese Fuji apples, they do
reflect a general concern of Australia with bacteria l shoot blight and related species in Japanese pear.
It is therefore highly probable that Japanese nashi pear imports would be suspended if Japan notified
Australia of bacterial shoot blight and related species.
7.1069 In principle, Australia's reliance on Japanese au thorities in this regard does not reduce the
validity of this conclusion. In fact, Annex A(6) of the SPS Agreement defines "pest- or disease-free
area" as "[a]n area, whether all of a country, part of a country, or all or parts of several countries, as
identified by the competent authorities, in which a specific pest or disease does not occur."
7.1070 Yet, the Panel notes the significant delay in Japan's 2008 notification to Australia of bacterial
shoot blight of pear in Yamagata prefecture in mid-2007. The notification indicates that Japan took
steps to eradicate the disease, including by burning the trees affected, immediately after detection in
mid-2007. While this amounts to an effort by Japan to restore pest freedom as quickly as possible, the
notification does not explain what steps were taken to prevent the transmission of the pest through
exported fruit, either by Japan or Australia.
7.1071 Having considered all of these points, the Panel finds that the 2003 Review does not include a
de facto requirement of area freedom from Japanese Erwinia.
7.1072 At the same time, the Panel notes that New Zealand does not contest Australia's argument that
Japanese nashi pear exports have b een limited to Tottori prefecture, and that Tottori has been free of
Japanese Erwinia. New Zealand does not contest either that Japanese Erwinia or bacterial shoot
blight in pears was present only in regions of Japan that are distant from Tottori prefecture.
7.1073 The Panel has analysed above whether Austra lia effectively limited Japanese nashi pear
exports to Tottori prefecture. In the light of the relevant documents, th e Panel concluded that
Australia applies a de facto limitation to that effect. If that is the case, the risk arising from
Japanese Erwinia in Japanese nashi pears is reduced. The Pane l notes, in comparison, that fire blight
is present in various apple production areas in New Zealand since 1919.2696
7.1074 Even if Australia should not de facto limit the importation of Japanese nashi pears to Tottori
prefecture, the Panel notes that in 20 03 Japan notified that it had eradicated Japanese Erwinia even
from Hokkaido. Again, New Zealand does not contest this, but rather Australia's reliance on Japanese

2694 2003 Review of the Australian requirement for Petal Testing and Flower Cluster Examination at
Blossoming for Pome Fruit from Japan, The Republic of Korea and The People's Republic of China, p. 46.
2695 Ibid.
2696 See para. 2.8 above.

assertions in this regard. In the light of the de finition of pest-free areas in the SPS Agreement, in
principle the Panel does not see any problem with Australia's reliance on statements by Japan's
competent authorities. In fact, Article 6 of the SPS Agreement implies a reliance in recognizing pest-
free areas on statements by the exporting Member's authorities in regard to eradication programmes
and control measures:
"1. Members shall ensure that their sa nitary or phytosanitary measures are
adapted to the sanitary or phytosanitary char acteristics of the area – whether all of a
country, part of a country, or all or pa rts of several countries – from which the
product originated and to which the product is destined. In assessing the sanitary or
phytosanitary characteristics of a regi on, Members shall take into account, inter alia,
the level of prevalence of specific diseases or pests, the existence of eradication or
control programmes, and appropriate crite ria or guidelines which may be developed
by the relevant international organizations.
2. Members shall, in particular, recogni ze the concepts of pest- or disease-free
areas and areas of low pest or disease prevalence. Determination of such areas shall
be based on factors such as geography, ecosystems, epidemiological surveillance, and
the effectiveness of sanitary or phytosanitary controls.
3. Exporting Members claiming that areas within their territories are pest- or
disease-free areas or areas of low pest or disease prevalence shall provide the
necessary evidence thereof in order to obj ectively demonstrate to the importing
Member that such areas are, and are likely to remain, pest- or disease-free areas or
areas of low pest or disease prevalence, resp ectively. For this purpose, reasonable
access shall be given, upon request, to th e importing Member for inspection, testing
and other relevant procedures."
7.1075 The Panel concludes that, although the 2003 Review does not include a de facto requirement
of area freedom from Japanese Erwinia, it limits Japanese nashi pear imports to Tottori prefecture,
and New Zealand does not contest Australia's argument that this prefecture has been free from
Japanese Erwinia. Accordingly, the Panel finds that Au stralia has demonstrated that it imports
Japanese nashi pears from an area free from Japanese Erwinia. Furthermore, in the meantime, the
pest has been reported to have been eradicated from Japan, so even if Australia imported Japanese
nashi pears outside of Tottori prefecture, those imports would come from areas free from Japanese
Erwinia.
Presence of the two pests in Australia

7.1076 Currently both pests are absent from Australia . The Panel notes that Australia does not
contest New Zealand's argument that Japanese Erwinia has not been detected in Australia. 2697
In comparison, as noted above, fire blight was det ected in Australia in the Melbourne Royal Botanic
Gardens in 1997, but eradication efforts were undertaken and no further outbreaks have been
reported.2698

2697 New Zealand's first written submission, para. 4.436.
2698 Australia's first written submission, para. 77; Austra lia's IRA, Part C, p. 107; New Zealand's first
written submission, para. 3.55.

Potential biological and economic consequences (range of host plants)

7.1077 New Zealand argues that Japanese Erwinia and Erwinia amylovora produce very similar
symptoms2699, and the biological and economic conse quences of the diseases are also similar. 2700
Given the close similarities between Japanese Erwinia and Erwinia amylovora, these pests also result
in comparable biological and economic consequences for Australia. 2701 New Zealand concedes that
Japanese Erwinia has a narrower range of host plants, since in the field it has been recorded only on
pears, while Erwinia amylovora appears on both pears and apples. 2702 Nevertheless, New Zealand
argues that Australia has a large domestic pear pr oduction industry, comprising more than 2.1 million
trees with an annual fruit pr oduction of over 150,000 tonnes. 2703 In 2007-2008, Australian pear
production corresponded to 33 per cent of total Australian pipfruit production. 2704 Also, the IRA
indicates that yield reduction as a result of a fire b light outbreak may be more significant for the pear
industry than the apple industry.2705
7.1078 Australia argues that the narrowe r range of host plants of Japanese Erwinia alone
immediately differentiates the potential consequences of Japanese Erwinia from fire blight.
Given that the Australian industry produces roughly half as many pears as apples, the difference in
potential economic consequences is obvious. 2706 Accordingly, in Australia's circumstances, the
consequences associated with Japanese Erwinia are lower than those for fire blight.2707
7.1079 Dr Deckers explains that the two diseases have quite similar symptoms:
"There is a great similarity between the Japanese Erwinia associated with nashi pears
and Erwinia amylovora on apples from New Zealand. In both cases it concerns a
bacterial disease on fruits ... . [..] ... [T]he risk for epiphytical presence of the bacteria
on the surface of the fruits is comparable for both bacteria and should ask for a
comparable strategy to avoid entrance of the disease."2708
7.1080 At the same time, Dr Deckers accepts Australia 's argument that the narrower range of host
plants for Japanese Erwinia involves a lower risk for that pest. " Japanese Erwinia [is a bacterial
disease] on pear and the other fire blight one on appl e and pear. This distinction will of course have
consequences for the global risk evaluation."2709
7.1081 Likewise, Dr Paulin sees the two pests as rather similar, while he also attributes importance to
the difference in range of host plants:
"Otherwise it seems that the bacteria ( Erwinia-Japan and E. amylovora ) are very
similar but not identical, and the symptoms seem similar as well, but Erwinia from
Nashis shows a narrow range of host plan ts, which could account for lower risks

2699 New Zealand's first written submission, para. 4.437.
2700 New Zealand's second written submission, para. 2.830.
2701 New Zealand's first written subm ission, para. 4.438. See also New Zealand's second written
submission, para. 2.839.
2702 New Zealand's first written submission, para. 4.437.
2703 New Zealand's first written submission, para. 4.438.
2704 New Zealand's second written submission, para. 2.839.
2705 Ibid.
2706 Australia's first written submission, para. 1000.
2707 Australia's first written submission, p. 302.
2708 Dr Deckers's reply to Panel question 12, in List of Replies from the scientific experts to questions
2709 Ibid.

(limited to pears?). To be honest it is important to recognise that little is known in the
literature about this Nashi disease."2710
7.1082 The Panel finds that New Zealand has not made a prima facie case that Japanese Erwinia in
Japanese nashi pears and E. amylovora in New Zealand apples have comparable biological and
economic consequences for Australia. In addition, Australia has shown that the narrower host range
of Japanese Erwinia would likely result in less severe biological and economic consequences of that
disease than the consequences of Erwinia amylovora in New Zealand apples.
Overall consideration of the various risk factors
7.1083 Having analysed the various risk factors argued by the Parties, the Panel would again need to
draw conclusions on how the overall risks associated with Erwinia amylovora in New Zealand apples
compare with the overall risks associated with Japanese Erwinia in Japanese nashi pears.
7.1084 Three risk factors argued by the Parties, namely the volume of trade, the potential biological
and economic consequences (includi ng the range of host plants) and the presence of the pests in
export orchards, seem to point towards a lower risk for Japanese Erwinia in Japanese nashi pears. As
to the presence of the pests in Australia, there seems to be no difference between the two situations.
7.1085 The Panel notes that New Zealand argues that Japanese Erwinia in Japanese nashi pears and
Erwinia amylovora in New Zealand apples have "similar risk profiles". 2711 Since three of the risk
factors argued by the Parties in regard to these pests point towards a higher risk profile of Erwinia
amylovora and with regard to the fourth risk factor there seems to be no difference between the two
situations, the Panel finds that New Zealand has not demonstrated that Japanese Erwinia in Japanese
nashi pears and Erwinia amylovora in New Zealand apples have similar overall risk profiles. In fact,
it seems that Erwinia amylovora has the higher overall risk profile of the two pests.
7.1086 The Panel notes New Zealand's argument that th e measures applied by Australia to the two
comparable situations show significant differences, which may be indicative of an unjustifiable or
arbitrary distinction in ALOP. However, as noted above, New Zealand itself concedes that measures
alone are not conclusive in respect of Australia's ALOP.
7.1087 The Panel also recalls the Appellate Body's statement in EC – Hormones that Article 5.5 does
not involve a legal obligation of absolute or perfe ct consistency between ALOPs adopted in different
situations.2712
7.1088 Finally, Australia has the same generically stated ALOP for both situations. In these
circumstances and in the light of the foregoing argu ments, the Panel finds that New Zealand has not
demonstrated the second element of the Article 5. 5 in the context of the comparison between
Japanese Erwinia in Japanese nashi pears and Erwinia amylovora in New Zealand apples.
Accordingly, the Panel also concludes that Ne w Zealand has not demonstrated that there are
distinctions in the levels of protection actually ach ieved by the measures applied in the two situations,
which is the outstanding part of the first element of the Article 5.5 test.

2710 Dr Paulin's reply to Panel question 12, in List of Replies from the scientific experts to questions
posed by the Panel, para. 109 (original emphasis).
2711 New Zealand's reply to Panel question 131 after the first substantive meeting. See also,
New Zealand's first written submission, para. 4.445 and New Zealand's second written submission, para. 2.854.
2712 Appellate Body Report on EC – Hormones, para. 213.

4. The Panel's conclusion on New Zealand's Article 5.5 Claim
7.1089 The Panel has found in regard to both pairs of comparator situations advanced by
New Zealand that New Zealand has not demonstrated the second and the first elements of the three-
pronged Article 5.5 test.
7.1090 As the Appellate Body explained, the three elemen ts of this tests are cumulative: each has to
be demonstrated by the complainant to prove a violation of Article 5.5 of the SPS Agreement.
Accordingly, the Panel will not proceed to the th ird element, and dismisses New Zealand's claim
under Article 5.5 of the SPS Agreement.
E. N
EW ZEALAND'S CLAIM UNDER ARTICLE 2.3 OF THE SPS AGREEMENT
7.1091 In its panel request New Zealand claims a violation of "both sentences" 2713 of Article 2.3 of
the SPS Agreement, which reads:
"Members shall ensure that their san itary and phytosanitary measures do not
arbitrarily or unjustifiably discriminate between Members where identical or similar
conditions prevail, including between their ow n territory and that of other Members.
Sanitary and phytosanitary measures shall not be applied in a manner which would
constitute a disguised restriction on international trade."
7.1092 New Zealand's claim under Article 2.3 is consequential on its claim under the first sentence of
Article 5.5. Referring to the Appellate Body report in Australia – Salmon , New Zealand argues that
since Australia is in violation of its obligations under Article 5.5, it is accordingly also in violation of
its obligations under Article 2.3.
2714 While Article 2.3 is more general than Article 5.5, a finding of
violation will necessarily imply a violation of Article 5.5. 2715 Where there is a relationship between
two provisions such that proof of a breach of one implies a breach of the other, it is not necessary to
explicitly establish inconsistency with all of the terms in the provision for which a breach is implied.
This is inherent in the notion that the breach is "implied" as opposed to established explicitly.2716
7.1093 In response, Australia recognizes that "there is a close relationship between Articles 2.3 and
5.5 [of the SPS Agreement]", and agrees with New Zealand that Article 2.3 has a broader application
than Article 5.5. Accordingly, where a violation of Article 5.5 has been established, there is an
implied violation of Article 2.3.2717
7.1094 Australia points out that New Zealand's con sequential claim under Article 2.3 is entirely
dependent on the result of its claims under Article 5.5. 2718 New Zealand, however, fails to establish a
violation of Article 5.5; therefore its con sequential claim under Article 2.3 must also fail. 2719
Since New Zealand has not provided any separate ar guments or evidence in relation to its claims

2713 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-2 to this report, p. 3. See also New Zealand's reply to Panel question
136 after the first substantive meeting.
2714 New Zealand's first written submission, para. 4.483.
2715 New Zealand's reply to Panel question 122 after the second substantive meeting. See also
New Zealand's reply to Panel question 137 after the first substantive meeting.
2716 New Zealand's second written submission, para. 2.872.
2717 Australia's reply to Panel question 137 after the first substantive meeting.
2718 Australia's first written submission, para. 1068. See also Australia's second written submission,
para. 183 and Australia's reply to Panel question 122 after the second substantive meeting.
2719 Australia's first written submission, para. 1068.

under Article 2.3, in effect it h as abandoned its Article 2.3 claim. 2720 Because New Zealand has not
presented substantive arguments in relation to Artic le 2.3, if the Panel finds consistency with
Article 5.5, there will be no arguments or evidence for the Panel to take into account in deciding on
consistency with Article 2.3. Recalling the fundamental principle that a Member's measures are
presumed WTO-consistent unless sufficient evidence is presented to the contrary, Australia's
measures should therefore be presumed consistent with Article 2.3.2721
7.1095 The Panel notes that New Zealand's claim under Ar ticle 2.3 is entirely dependent on its claim
under Article 5.5 of the SPS Agreement. Since th e Panel has dismissed New Zealand's Article 5.5
claim, it also has to dismiss New Zealand's consequential Article 2.3 claim.
F. NEW ZEALAND'S CLAIM UNDER ARTICLE 5.6 OF THE SPS AGREEMENT
1. The Panel's approach to assessing New Zealand's claim
(a) Three cumulative conditions of the Article 5.6 test
7.1096 New Zealand claims that each of the 16 measures that remain at issue in this dispute 2722 are
inconsistent with Australia's obligations under Article 5.6 of the SPS Agreement2723, which provides:
"Without prejudice to paragraph 2 of Artic le 3, when establishing or maintaining
sanitary or phytosanitary measures to achieve the appropriate level of sanitary or
phytosanitary protection, Members shall en sure that such measures are not more
trade-restrictive than required to achieve their appropriate level of protection,
taking into account technical and economic feasibility."
7.1097 The footnote to Article 5.6 adds:
"For the purposes of paragraph 6 of Article 5, a measure is not more trade-restrictive
than required unless there is another me asure, reasonably available taking into
account technical and economic feasibility, that achieves the appropriate level of
sanitary or phytosanitary protection and is significantly less restrictive to trade."2724
7.1098 The Parties agree that three cumulative conditions need to be fulfilled to establish a violation
of Article 5.6. 2725 As the Appellate Body explained, to p ass this three-pronged test of Article 5.6,
the complainant needs to demonstrate that another, alternative measure:
"(1) is reasonably available taking into account technical and economic
feasibility;

2720 Australia's first written submission, paras. 1 068-1069. See also Australia's second written
submission, para. 161.
2721 Australia's reply to Panel question 137 after the first substantive meeting. See also Australia's
second written submission, paras. 183 and 1068.
2722 Measure 12 relating to European Canker is no longer at issue in this dispute. See para. 2.96 above.
2723 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3. See also th e preliminary ruling, where the Panel
found that "[it] understands that New Zealand has claimed that 'every measure ... [identified] in its panel request
is inconsistent with each of the [nine] provisions referred to [in the panel request]'", including Article 5.6 of the
SPS Agreement. Australia – Apples, Communication From the Chairman of the Panel: Preliminary Ruling by
the Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, para. 10 (footnote omitted).
2724 Footnote 3 to Article 5.6 of the SPS Agreement.
2725 New Zealand's first written submission, paras. 4. 487-4.488; Australia's first written submission,
paras. 1073-1074.

(2) achieves the Member's appropriate level of sanitary or phytosanitary
protection; and
(3) is significantly less restrictive to trade than the SPS measure contested."
2726
7.1099 New Zealand argues that alternative measures to the 16 that remain at issue in this dispute
fulfil these three cumulative conditions. In partic ular, New Zealand identifies alternatives for the
measures at issue relating to fire blight and Eur opean canker, and to ALCM, as well as for the three
"[g]eneral"2727 measures that apply to all three pests. Australia contests New Zealand's Article 5.6
claim, arguing inter alia that the alternatives identified by New Zealand would not achieve Australia's
ALOP and that, in any event, New Zealand has failed to properly identify certain alternative
measures.
7.1100 In light of these arguments, the Panel will struct ure its analysis of New Zealand's Article 5.6
claim according to the three categories of measu res contested by New Zealand under Article 5.6,
namely:
(a) The measures at issue relating to fire blight and European canker;
(b) The ALCM measure; and,
(c) The general measures.
7.1101 Under each of these three categories, the Panel will assess what alternative measures
New Zealand has properly identified, and whether the alternative measure satisfies the three-pronged
Article 5.6 test.
(b) The Panel's order of analysis of the three conditions of the Article 5.6 test
7.1102 As to the order of analysis of the three conditio ns of the Article 5.6 test, Australia argues that
the most logical starting point for the Panel would be the second condition, namely whether the
alternative measures identified by Ne w Zealand achieve Australia's ALOP. 2728 Australia submits that
without first determining that a particular alternative measure achieves Australia's ALOP, it is
meaningless to assess a particular alternative meas ure's relative trade-restrictiveness or reasonable
availability.2729 Throughout its submissions, in the contex t of Article 5.6, Australia focuses on the
second condition of the test.
7.1103 New Zealand argues that Australia's assertion regarding the most logical starting point reveals
that it does not contest that the alternative measure s proposed by New Zealand meet the first and third
conditions of the Article 5.6 test. In any event, New Zealand contends, regardless of which one of the
three conditions is examined first, the conclusion will be that Australia has breached its obligations
under Article 5.6 of the SPS Agreement.2730

2726 Appellate Body Report on Australia – Salmon, para. 194; and Appellate Body Report on Japan –
Agricultural Products II, para. 95.
2727 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
2728 Australia's first written submission, para. 1075. See also Australia's second written submission,
paras. 154-155.
2729 Australia's first written submission, para. 1075.
2730 New Zealand's second written submission, para. 2.884.

7.1104 The Panel recalls that the three elements of the Article 5.6 test are cumulative. 2731
The Appellate Body explained in EC – Hormones that the complainant must establish a prima facie
case by presenting "evidence and legal arguments" su fficient to demonstrate that the defendant has
breached its obligations with respect to a specific provision. 2732 In the context of Article 5.6,
the Appellate Body confirmed in a subsequent dispute that "[p]ursuant to the rules on burden of proof
... it was for the [complainant] to establish a prima facie case that there is an alternative measure that
meets all three elements under Article 5. 6 in order to establish a prima facie case of inconsistency
with Article 5.6."2733
7.1105 New Zealand needs to demonstrate that all three conditions of the Article 5.6 test are fulfilled.
7.1106 Previous panels and the Appellate Body did not establish a specific order for analysing the
three conditions of the Article 5.6 test. They followed different approaches. In Australia – Salmon ,
the panel and the Appellate Body followed the or der of the three conditions as they appear in
footnote 3 to Article 5.6 of the SPS Agreement: they analysed the first, the second and then the third
condition.2734 Conversely, the panel in Japan – Agricultural Products II analysed the first and third
conditions of the Article 5.6 test be fore turning to the second condition. 2735 The compliance panel in
Australia – Salmon (Article 21.5 – Canada) followed a third approach. It first examined the second
condition, which it described as the "most controve rsial element" of the three-pronged Article 5.6
test.2736 After having found that the second condition was fulfilled, the compliance panel turned to the
other two conditions.2737
7.1107 In light of Australia's request, the Panel will follow the same sequence in the present dispute
in regard to the pest-specific measures contested by New Zealand (Measures 1-8 for fire blight,
Measures 9-11 and 13 for European canker, and Measu re 14 for ALCM). The Panel will first analyse
whether the second condition of the Article 5.6 test is fulfilled, namely whether the alternative
measures properly identified by New Zealand for these pest-specific measures achieve Australia's
ALOP. Only if the Panel finds that the second conditi on is fulfilled, will it turn to the first and third
of the three cumulative conditions under Article 5.6.
7.1108 As regards the general measures (Measures 15-17), the Panel will start its analysis with the
third prong of the Article 5.6 test, since it involv es the threshold issue whet her the alternative put
forward by New Zealand can be usefully compared w ith these measures, or at least with Measure 15.
If the Panel finds that the third condition of the Article 5.6 test can be and is fulfilled in regard to the
general measures, the Panel will turn to the first and second conditions of the test.
2. Measures at issue regarding fire blight and European canker
(a) Alternative measure regarding fire blight and European canker identified by New Zealand
7.1109 For the eight fire blight measures (Measures 1-8) and four European canker measures
(Measures 9-11 and 13) at issue, New Zealand's fi rst written submission references one alternative
measure, and argues that it would fulfil the three cumulative conditions of the Article 5.6 test:

2731 Appellate Body Report on Australia – Salmon, para. 194; and Appellate Body Report on Japan –
Agricultural Products II, para. 95.
2732 Appellate Body Report on EC – Hormones, para. 109.
2733 Appellate Body Report on Japan – Agricultural Products II, para. 126.
2734 See Panel Report on Australia – Salmon , paras. 8.167-8.183; and Appellate Body Report on
Australia – Salmon, paras. 194-213.
2735 Panel Report on Japan – Agricultural Products II, paras. 8.72-8.104.
2736 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.127.
2737 Panel Report on Australia – Salmon (Article 21.5 – Canada), paras. 7.146-7.152.

"There is a very simple and straightforward measure which accords with the scientific
evidence on the transmission of fire blight and European canker that could have been
imposed by Australia. It is the restriction of imports to apple fruit that are mature
and symptomless . ... [S]uch a measure is reasonably available, it would achieve
Australia's ALOP and it is significantly less trade restrictive than the measures
imposed by Australia."
2738
7.1110 Continuing, New Zealand refe rences two possible additiona l alternative measures for
fire blight, although it then immediately discount s their relevance as proper alternative measures
under its Article 5.6 claim:
"With regard to fire blight, alternativ e measures that would also be reasonably
available, be less trade restrictive and achieve Australia's ALOP include restricting
apple fruit imports to those fruit that have been cold stored , or limiting imports to
apples that are 'retail-ready packaged fruit.' Such measures have little justification,
however, as they would be based on an assu mption that mature, symptomless apples
could be a vector for the transmission of fire blight. Since there is no scientific basis
for any such assumption, New Zealand will restrict its consideration to the alternative
measure of restricting imports to mature, symptomless apple fruit."2739
7.1111 Likewise, New Zealand references two possible additional alternatives for European canker,
but immediately excludes their consideration as valid alternative measure s in the context of
Article 5.6:
"With regard to European canker, alternativ e measures that would also be reasonably
available, be less trade restrictive and achieve Australia's ALOP include restricting
imports of apples to those that are sourced from 'pest-free places of production', to be
determined by a single inspection of each exporting orchard and maintained through
controls on the subsequent movement of nursery stock , or limiting imports to apples
sourced from areas of 'low pest prevalen ce' to be determined by inspection of a
sample of orchards. Again, such measures are without justification, as they would be
based on an assumption that mature, symp tomless apples could transmit European
canker, and an assumption that the climatic conditions in Australia are conducive to
European canker establishing and spreading. Since there is no scientific basis for
either assumption, New Zealand will restrict its consideration to the alternative
measure of restricting imports to mature, symptomless apples."2740
7.1112 In light of these statements, Australia argues that for fire blight and European canker
New Zealand has limited its Article 5.6 claim to a single alternative measure: the restriction of
imports to mature, symptomless apples. Therefore, Australia submits, the Pa nel should not consider
the other four possible measures referenced by New Zealand as genuine alternatives under
Article 5.6.
2741
7.1113 New Zealand contests this, and reiterates that th e four additional alternatives it proposes are
based on the incorrect assumption that mature, symp tomless apples are vectors for fire blight, and
would therefore violate Articles 2.2 and 5.1 of the SPS Agreement:

2738 New Zealand's first written submission, para. 4.489 (emphasis added).
2739 New Zealand's first written submission, para. 4.490 (emphasis added).
2740 New Zealand's first written submission, para. 4.491 (emphasis added).
2741 Australia's first written submission, paras. 1087-1088.

"In its first written submission, New Zealand also identified various other alternative
measures for fire blight, European ca nker and ALCM that would meet the
requirements of Article 5.6, but which woul d still be more trade restrictive than
required. A measure limiting imports to apples that are retail-ready packaged fruit
was identified. Indeed, as noted above in respect of Article 5.1 and as confirmed by
the experts, such a measure would effectively exclude the primary pathway for
ALCM identified by the IRA. In respect of fire blight, an alternative measure
restricting apple fruit imports to those fruit that have been cold stored was noted.
In respect of European canker, alternativ es such as restricting imports of apples to
those that are sourced from 'pest-free places of production,' ... or limiting imports to
apples sourced from areas of 'low pest prevalence' were identified.
Australia argues in respect of those additi onal alternatives, that they should be
ignored by the Panel because New Zealand 'cho se not to substantiate' them. As made
clear in New Zealand's first written submission, New Zealand considers that these
alternative measures meet the requirements of Article 5.6 . Relative to the measures
imposed by Australia they are significantly less trade restrictive, reasonably available,
and would meet Australia's ALOP. However, given that these additional alternatives
are based on the assumption that matu re, symptomless apples are vectors for fire
blight and European canker, they are s till more trade restrictive than required and
would not be consistent with Articles 2.2 and 5.1 of the SPS Agreement. The fact that
less trade restrictive measures than the me asures at issue are still more trade
restrictive than required simply indicates the severity of the breach in this case."
2742
7.1114 In its response to the Panel after the second meeting, New Zealand elaborates on these points
in regard to one of the four additional requirements, namely the retail-ready requirement:
"Contrary to Australia's claims, New Zealand has identified a retail ready requirement
as an alternative to Australia's measures pur suant to Article 5.6. See paragraph 4.490
of New Zealand's first written submission and paragraph 2.894 of New Zealand's
second written submission.
As explained in New Zealand's written submissions, relative to the measures imposed
by Australia, a retail ready measure is signi ficantly less trade restrictive, reasonably
available and would meet Australia's ALOP. However, it is still more trade
restrictive than a mature, symptomless appl es requirement. Indeed, the fact that a
retail ready requirement is less trade restrictive than the measures at issue, yet still
more trade restrictive than required simply indicates the severity of the breach of
Article 5.6 in this case.
As a result, the fact that New Zealand did not base its primary arguments under
Article 5.6 on a retail ready measure do es not mean that there was no obligation on
Australia to consider it under Article 5.1 and Annex A(4) . It was a genuine,
reasonable and feasible measure (though not, in New Zealand's view, the least trade
restrictive one).
Indeed, had the IRA come to an objectively justifiable conclusion that a retail ready
measure was necessary, New Zealand may have accepted this. As explained in
New Zealand's written submissions, in expressly requesting that the IRA Team
evaluate a retail ready measure, New Zealand clearly indicated that it would be

2742 New Zealand's second written submission, paras. 2.894-2.895 (emphasis added). See also
New Zealand's reply to Panel questions 123 and 125 after the second substantive meeting.

prepared to accept such a requirement in the event that Biosecurity Australia
determined through a science-based assessment of risk that it was necessary to meet
Australia's ALOP."
2743
7.1115 The Panel notes that New Zealand identifies the f our additional alternatives for fire blight and
European canker as "various other alternative measures "2744, and asserts that they fulfil the three-
pronged Article 5.6 test. At the same time, immedi ately after having identified these four alternatives
in its first written submission, New Zealand discoun ts their relevance for its Article 5.6 claim as
proper alternative measures for fire blight and Eu ropean canker. In its subsequent submissions
New Zealand insists that these measures should be considered as alternatives under its Article 5.6
claim; however, each time New Zealand does so, it confirms its earlier arguments for discounting the
relevance of these measures for its Article 5.6 clai m. Accordingly, the Panel considers that the
restriction of imports to mature, symptomless appl es is the only alternative measure validly identified
by New Zealand for its Article 5.6 claim in the context of fire blight and European canker.
7.1116 Even if New Zealand had validly identified th e four additional alternatives, New Zealand
argues that these measures are based on an unacce ptable assumption, and would therefore violate
Articles 2.2 and 5.1 of the SPS Agreement. The Pane l has found that there is no evidence in the IRA
to support the contention that fire blight or Eu ropean canker may be intr oduced through trade in
mature apple fruit. Accordingly, the IRA's reasoning in this regard has been found by the Panel not to
be coherent and objective and therefore the resulting measures in the IRA at issue in this dispute
violate Articles 5.1, 5.2 and 2.2 of the SPS Agreement.
2745 Consequently, it would be inappropriate
for the Panel to assess these four additional alterna tives, even if New Zealand had validly identified
them. The Panel cannot review th e consistency of the fire blight and European canker measures at
issue with Article 5.6 in light of alternatives that the complainant regards as based on an assumption
that could result in a violation of Articles 5.1, 5.2 and 2.2 of the SPS Agreement. Through its analysis
of New Zealand's Article 5.6 claim, the Panel cannot promote alternative measures based on such an
assumption.
7.1117 In fact, Article 3.7 of the DSU stipulates that "[t]he aim of the dispute settlement mechanism
is to secure a positive solution to a dispute." Furt her, Article 3.5 of the DSU prescribes that all
solutions shall be consistent with the covered agreements:
"All solutions to matters formally raised under the consultation and dispute settlement
provisions of the covered agreements, in cluding arbitration awards, shall be
consistent with those agreements and shall not nullify or impair benefits accruing to
any Member under those agreements, nor impe de the attainment of any objective of
those agreements."
7.1118 In any event, the Panel could not carry out the substantive analysis of these four alternatives
under Article 5.6, even if it was appropriate for it to do so. As Australia points out
2746, New Zealand
does not develop arguments for these four additi onal alternatives in regard to all cumulative
conditions of the Article 5.6 test. In the context of its Article 5.6 claim relating to fire blight and
European canker, New Zealand advances argument s and evidence for all three conditions of the
Article 5.6 test only in regard to the alternative measure restricting imports to mature, symptomless
apples. For three of the four additional altern atives, New Zealand does not advance any specific
arguments or evidence in the context of fire bli ght or European canker in regard to the three

2743 New Zealand's reply to Panel question 124 after the second substantive meeting (emphasis added).
2744 New Zealand's second written submission, para. 2.894 (emphasis added).
2745 See paras. 7.445 and 7.741 above.
2746 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 209.

conditions of the Article 5.6 test. For the retail-re ady measure, in the context of fire blight and
European canker, New Zealand advances arguments only in regard to the first condition of the
Article 5.6 test, but not for the other two conditions.2747 Further, New Zealand explicitly notes that the
four additional alternatives "simply [serve to] indicate[] the severity of the breach"2748 of Article 5.6.
7.1119 In Chile – Price Band System the Appellate Body held that panels act ultra petita and
inconsistently with Article 11 of the DSU if they assess claims that the complainant has not
articulated or for which it has not submitted arguments. 2749 The Panel considers that this applies also
to the current dispute, even if the question before th e Panel arises in regard to alleged alternatives to
the measures within the Panel's terms of reference under Article 5.6 of the SPS Agreement. In the
absence of arguments and evidence by New Zealand on how the four additional alternatives fulfil all
three cumulative conditions of the Article 5.6 test , it would be inappropriate for the Panel to assess
whether, in comparison with these four alternatives, the fire blight and European canker measures at
issue violate Article 5.6. If necessary, the Panel can take these alternatives into account only as
argued by New Zealand: an alleged indication of the severity of the breach of Article 5.6 under the
comparison of the fire blight and European canker measures at issue with the alternative measure of
restricting imports to mature, symptomless apples.
7.1120 The Panel will proceed accordingly, and assess whether this single alternative measure
properly identified and adequately argued by New Zeal and for fire blight and European canker fulfils
the three cumulative conditions of the Article 5.6 test.
(b) Whether restricting imports to mature, symptomless apples satisfies the three-pronged
Article 5.6 test
(i) Second condition: whether restricting impor ts to mature, symptomless apples achieves
Australia's ALOP in regard to fire blight and European canker
Summary of the Parties' arguments
7.1121 New Zealand alleges that restricting imports to mature and symptomless apples will achieve
Australia's ALOP, which the IRA determines as "provi ding a high level of sanitary or phytosanitary
protection aimed at reducing risk to a very low level, but not to zero". 2750 According to New Zealand,
there is no scientific evidence that mature, sy mptomless apples can provide a pathway for the
transmission of fire blight and European canker. Thus, the risk of transmission is even lower than
Australia's ALOP; it is negligible. Therefore, New Zealand's alternative will achieve Australia's
ALOP.2751
7.1122 New Zealand also argues that Australia's clim atic conditions in the apple-producing areas
preclude the establishment or spread of European canker. 2752 New Zealand stresses its experience as
one of the world's "top ten apple exporters", an d that it has never been associated with the
transmission of any pests, including fire blight and European canker.2753

2747 New Zealand's reply to Panel question 114 after the second substantive meeting.
2748 New Zealand's second written submission, paras. 2.894-2.895 (original emphasis). See also
New Zealand's second written submission, para. 2.895; and New Zealand's reply to Panel question 127 after the
second substantive meeting.
2749 Appellate Body Report on Chile – Price Band System , para. 173. See also Appellate Body Report
on US – Certain EC Products, para. 114.
2750 New Zealand's first written submission, para. 4.498.
2751 New Zealand's first written submission, paras. 4.499-4.500.
2752 New Zealand's first written submission, para. 4.501.
2753 New Zealand's first written submission, para. 4.502.

7.1123 New Zealand refers to Japan – Apples (Article 21.5 – US) , where the compliance panel found
that requiring apples to be mature and symptoml ess achieves the defendant's ALOP which aimed at
"preventing the introduction of E. amylovora with the security equivale nt of import prohibition".
In New Zealand's view, this ALOP, while different, is the functional equivalent of Australia's ALOP,
if not a stricter level of protection.
2754
7.1124 New Zealand argues that Aust ralia's defence under Article 5.6 is contingent on the
consistency of the IRA with Article 5.1. The IRA does not find support in the scientific evidence and
is inconsistent with Article 5.1. New Zealand also contends that there is no scientific evidence that
mature symptomless apples provide a pathway for fire blight and European canker. 2755 Australia's
argument that New Zealand's alternative has alre ady been factored in the IRA misses the point
because New Zealand is challenging the validity of that assessment and argues that it is not supported
by scientific evidence.2756
7.1125 According to New Zealand, Australia relies on the experts' responses to questions not linked
to whether restricting imports to mature, sympto mless apples would achieve Australia's ALOP.
Australia attempts to take the experts' responses out of context to support its view that the alternative
would not achieve its ALOP. Australia relies on experts' responses, which in some instances are
premised on an assumption that the risk assessment in the IRA is correct, or directed to only certain
aspects of the pathway (for example probability of entry). New Zealand claims that the experts'
responses taken "as a whole", meaning the experts' responses on exposure
2757, establishment and
spread2758 and consequences 2759, demonstrate that requiring apples to be mature and symptomless
would achieve Australia's ALOP.2760
7.1126 New Zealand refers to the responses of Dr Pau lin and Dr Deckers to support its arguments
that there is a lack of scientif ic evidence underpinning the IRA's conclusions under several of the
main importation steps for fire blight as well as the IRA's conclusion on the percentage of
New Zealand apples that would be contaminated with fire blight.
2761 Dr Paulin indicated that the risk
of fire blight being introduced by New Zealand a pples was "probably of the same order of magnitude
as the transport of contaminated insects by natural way from New Zealand to Australia by air jet or
things like that".2762 In light of Dr Paulin's response, New Zealand states that measures on apple fruit
would provide no additional protection for Australia against fire blight than having no measures, and
that fire blight is equally (un)likely to be transmitted by existing natural means as by mature
apples.2763
7.1127 In relation to European canker, New Zealand argues that the experts have confirmed that there
is no risk of entry, establishment and spread of the disease from trade in fruit, other than the kind of
theoretical possibility that can never be ruled out. 2764 New Zealand claims that Dr Swinburne
suggested that New Zealand's alternative measure may be more than adequate to meet the negligible
risk of entry, establishment and spread through trade in apple fruit.2765

2754 New Zealand's first written submission, para. 4.503.
2755 New Zealand's second written submission, para. 2.891.
2756 New Zealand's second written submission, para. 2.892.
2757 New Zealand's second written submission, para. 2.635.
2758 New Zealand's second written submission, para. 2.659.
2759 New Zealand's second written submission, para. 2.685.
2760 New Zealand's second written submission, para. 2.893.
2761 New Zealand's reply to Panel question 126 after the second substantive meeting, para. 203.
2762 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 380.
2763 New Zealand's reply to Panel question 126 after the second substantive meeting, para. 204.
2764 New Zealand's reply to Panel question 126 after the second substantive meeting, para. 207.
2765 New Zealand's reply to Panel question 126 after the second substantive meeting, para. 208.

7.1128 Australia disagrees with New Zealand that rest ricting imports to mature, symptomless apples
would achieve Australia's ALOP. 2766 New Zealand's alternative has already been factored into the
assessment of the IRA as implying a "low" risk, which is in excess of the "very low level" of
Australia's ALOP as established by the IRA.2767 Even if the IRA Team has limited its analysis for fire
blight and European canker to "mature apple fru it free of trash", it assessed "the potential for
symptomless apples to carry the diseases". 2768 The external (epiphytic) infestation by E. amylovora
bacteria, which would be symptomless, was the IRA Team's primary concern for fire blight. With
respect to European canker, latent infection by N. galligena which would also be symptomless was
the risk scenario of greatest concern for the IR A Team. Bacteria and latent European canker
infections are not visible to the naked eye. 2769 Thus, Australia claims that restricting imports to
mature symptomless apples would in no way reduce the risks of concern to Australia associated with
fire blight and European canker. Accordingly, this restriction would not achieve Australia's
ALOP.2770
7.1129 According to Australia, New Zealand's arguments against the measures at issue are predicated
on Australia's calculations of the un restricted risk for fire blight2771 and European canker2772 not being
valid. But the IRA Team considered that apples wh ich are externally (epiphy tically) infested with
E. amylovora bacteria (fire blight) and apples which ar e latently infected (or infested) with
N. galligena (European canker), would not show symptoms, and therefore restricting imports to those
"symptomless" apples would have no impact whatsoever on the relevant risk scenario of concern for
the IRA Team. Also, New Zealand has not demonstrated any serious flaws with the IRA's analysis of
the unrestricted risk.
2773
7.1130 Australia submits that the IRA is a valid risk assessment. Accordingly, Australia is entitled to
rely upon the IRA's findings on the unrestricted risk associated with fire blight and European canker,
and to implement the measures that should be take n to reduce those risks to achieve Australia's
ALOP.2774 Australia argues that restricting imports to mature symptomless apples would not achieve
its ALOP without further risk management measures. 2775 If the Panel finds no violation under
Article 5.1, Australia's measures are consequentially consistent with Article 5.6.2776
7.1131 As regards the experts' responses, Australia point s out that Dr Deckers and Dr Paulin explain
that the alternative measure identified by New Zeal and would not achieve Australia's ALOP for fire
blight.2777 Responding to New Zealand's reliance on Dr Pa ulin's statement to as sert that no measures
are warranted for fire blight, Australia notes that the experts' responses confirm the IRA Team's

2766 Australia's first written submission, para. 1088. See also, Australia's second written submission,
para. 452.
2767 Australia's first written submission, para. 1084. See also, Australia's reply to Panel question 138
after the first substantive meeting.
2768 Australia's reply to Panel question 138 after the first substantive meeting. See also, Australia's first
written submission, para. 1084.
2769 Australia's first written submission, para. 1084. See also, Australia's reply to Panel question 138
after the first substantive meeting.
2770 Australia's reply to Panel question 138 after the first substantive meeting.
2771 Australia's second written submission, para. 448.
2772 Australia's second written submission, para. 609.
2773 Australia's second written submission, para. 452. See also, Australia's second written submission,
para. 611-612.
2774 Australia's first written submission, para. 1085.
2775 Australia's first written submission, para. 1086.
2776 Australia's second written submission, paras. 613.
2777 Australia's second written submission, para. 315 and 451. See also Australia's comments on the
experts' replies to questions, Australia's communication to the Panel, 25 March 2009, para. 38.

conclusions.
2778 In particular, Australia claims that Dr Pa ulin agreed with Australia's principal risk
reduction measures.2779 Consequently, the conclusion that the risk of fire blight introduction through
mature symptomless apples exceed s Australia's ALOP falls within the spectrum of legitimate
science.2780
7.1132 In relation to European canker, Australia argu es that New Zealand has not demonstrated any
serious flaws regarding the IRA's conclusion on the unr estricted risk or established that its alternative
would achieve Australia's ALOP. 2781 Australia notes that even if Dr Latorre did not specifically
address whether the alternative would achieve Au stralia's ALOP, his response confirmed that
restricting imports to mature symptomless apples w ould not take into account that latent infection
may occur on mature apple fruit. 2782 In addition, Australia relies on Dr Swinburne's response that the
latent infection of apples with European canke r may not be visible at the time of inspection. 2783
Accordingly, Australia submits, th e experts' views support Australia's conclusion that New Zealand's
alternative would not achieve Australia's ALOP for European canker.2784
The Panel's analysis
The Panel's approach to the second condition of the Article 5.6 test
7.1133 Although New Zealand identifies one altern ative measure for both fire blight and
European canker, the Panel will assess the second conditio n of the Article 5.6 test separately for these
two pests. The matters the Panel intends to address in this context are specifically linked to the two
pests, and whether restricting the imports of New Zealand apples to mature, symptomless apples
would achieve Australia's ALOP needs to be analysed in the specific pest context.
7.1134 As regards the Panel's approach to analysing the second condition of the Article 5.6 test,
the Panel agrees with Australia
2785 that it cannot conduct a de novo review. But the Panel cannot read
Article 5.6 out of the SPS Agreement either. Even if Australia has the right to establish its ALOP and
to devise risk management measures if necessary to achieve such ALOP, Australia has to do so
consistently with the SPS Agreement. The panel in Australia – Salmon has addressed this question:
"We fully agree with Australia that the determination of its level of sanitary
protection is a decision to be made by Australia, not by any other WTO Member or
international organization. ... However, this decision on what level of protection is
appropriate has to comply with the SPS Agreement ... . The same applies to
Australia's decision as to which sanitary measure will achieve Australia's level of
protection. It is for Australia to decide on this, but, again, in so doing it has to act
consistently with the SPS Agreement, in pa rticular Articles 2, 5.1 to 5.3 and 5.6.
Our examination under Article 5.6 is not aimed at a de novo review of what sanitary

2778 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 132.
2779 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 133.
2780 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 134.
2781 Australia's second written submission, para. 612.
2782 Australia's comments on the experts' replies to questions; Australia's communication to the Panel,
25 March 2009, para. 209.
2783 Australia's comments on the experts' replies to questions; Australia's communication to the Panel,
25 March 2009, para. 210.
2784 Australia's comments on the experts' replies to questions; Australia's communication to the Panel,
25 March 2009, para. 211.
2785 Australia's first written submission, para. 1098.

measure Australia should have chosen to achie ve its appropriate le vel of protection.
On the other hand, we cannot completely defe r this decision to Australia and thus not
give effect to Article 5.6. Our mandate under Article 11 of the DSU requires us to
'make an objective assessment of the matter before [us], including an objective
assessment of the facts of the case'."
2786
7.1135 On appeal, the Appellate Body confirmed this a pproach, and held in the context of Article 5.6
that "[i]t would obviously be wrong to interpret the SPS Agreement in a way that would render
nugatory entire articles or paragraphs of articles of this Agreement and allow Members to escape their
obligations under this agreement."2787
7.1136 Australia has a qualitative ALOP, defined as "pr oviding a high level of protection aimed at
reducing risk to a very low level, but not to zero." 2788 In Australia – Salmon (Article 21.5 – Canada) ,
the compliance panel held that such an ALOP might complicate, but should in no way prevent,
a panel's analysis of Article 5.6 claims, in partic ular as regards the second condition of the Article 5.6
test:
"[A]lthough, according to the Appellate Body, Australia determined its ALOP with
sufficient precision to apply Article 5.6, we find it rather difficult to evaluate whether
any of the options before us would also meet Australia's somewhat vaguely
determined level of 'a high or very conser vative level of protection aimed at reducing
risk to very low levels, while not based on a zero-risk approach'. We are of the view,
however, that this should not prevent us from carrying out the task. As noted by the
Appellate Body, '[o]therwise, a Member's failure to comply with the implicit
obligation to determine its appropriate level of protection – with sufficient precision –
would allow it to escape its obligations under this Agreement and, in particular, its
obligations under Articles 5.5 and 5.6'. We note, parenthetically, that a more explicit
and in particular a quantitative expression of a Member's ALOP would greatly
facilitate the consideration of compliance with not only Article 5.6 but with other
provisions of the SPS Agreement as well."
2789
7.1137 In light of the above, the Panel will not refrain from a substantive analysis of New Zealand's
Article 5.6 claim in this dispute. As regards the second condition of the Article 5.6 test, the Panel will
follow the Appellate Body's guidance in Australia – Salmon , and assess "whether [the] ... alternative
SPS measures [advanced by New Zealand] meet the appropriate level of protection as determined by
[Australia]."2790 Bearing in mind the standard rules on burden of proof, applicable also in SPS
disputes, the Panel will assess whether New Zealand has "establish[ed] a prima facie case of
inconsistency [with Article 5.6]" 2791, in particular as regards the second condition of the Article 5.6
test. In other words, the standard rules on burden of proof, as articulated by the Appellate Body in US
– Wool Shirts and Blouses , apply here. 2792 Accordingly, the Panel will assess whether New Zealand

2786 Panel Report on Australia – Salmon , para. 8.172 (original emphasis). See also Appellate Body
2787 Appellate Body Report on Australia – Salmon, para. 206.
2788 Australia's IRA, Part A, p. 3.
2789 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.129 (footnotes omitted).
2790 Appellate Body Report on Australia – Salmon, para. 204 (original emphasis).
2791 Appellate Body Report on EC – Hormones, para. 98. See also Appellate Body Report on Japan –
Agricultural Products II, para. 122.
2792 In US – Wool Shirts and Blouses the Appellate Body held that " it is a generally-accepted canon of
evidence in civil law, common law and, in fact, most jurisdictions, that the burden of proof rests upon the party,
whether complaining or defending, who asserts the affirmative of a particular claim or defence. If that party
adduces evidence sufficient to raise a presumption that what is claimed is true, the burden then shifts to the other

has adduced sufficient evidence to raise a presump tion that the proposed alternative measure would
achieve Australia's ALOP. If New Zealand succeeds in raising this presumption, then the burden of
proof shifts to Australia, who must adduce suffici ent evidence to rebut the presumption. If Australia
fails to rebut this presumption, then, as a matter of law, New Zealand will have satisfied the second
prong of the Article 5.6 test.
7.1138 Annex A(5) of the SPS Agreement defines ALOP as follows:
"Appropriate level of sanitary or phytosanitary protection – The level of protection
deemed appropriate by the Member establishing a sanitary or phytosanitary measure
to protect human, animal or plant life or health within its territory.
NOTE: Many Members otherwise refer to this concept as the ' acceptable level of
risk'." (Emphasis added)
7.1139 Further, Article 5.6 of the SPS Agreement refere nces "sanitary or phytosanitary measures to
achieve the appropriate level of sanitary or phytosa nitary protection." Likewise, Article 5.3 of the
SPS Agreement makes reference to "assessing the risk to animal or plant life or health and
determining the measure to be applied for ach ieving the appropriate level of sanitary and
phytosanitary protection from such risk." This is underscored by the Guidelines to Further the
Practical Implementation of Article 5.5, which re peatedly refer to SPS measures designed and applied
to achieve the ALOP.
2793
7.1140 These passages from the SPS Agreement and the Guidelines to Further the Practical
Implementation of Article 5.5 make it clear that the measures necessary to meet a Member's ALOP
must flow from, and reflect, the Member's risk asse ssment. In fact, Article 5.1 of the SPS Agreement
explicitly lays down this requirement.
7.1141 In other words, risk management measures are warranted only if the risk exceeds the ALOP.
The Panel notes in this regard that ISPM No. 5 de fines "Pest risk analysis" as "[t]he process of
evaluating biological or other scientific and economic evidence to determine whether an organism is a
pest, whether it should be regulated, and the stre ngth of any phytosanitary measures to be taken
against it [FAO, 1995; revised IPPC, 1997; ISPM No. 2, 2007]".
2794 In turn, ISPM No. 11 explains
that risk management measures should be adopted only if the risk exceeds the ALOP:
"Overall risk is determined by the examin ation of the outputs of the assessments of
the probability of introduction and the econom ic impact. If the risk is found to be
unacceptable, then the first step in ri sk management is to identify possible
phytosanitary measures that will reduce the risk to, or below an acceptable level.
Measures are not justified if the risk is already acceptable or must be accepted
because it is not manageable (as may be the case with natural spread). ...
Appropriate measures should be chosen b ased on their effectiveness in reducing the
probability of introduction of the pest."2795

party, who will fail unless it adduces sufficient evidence to rebut the presumption." Appellate Body Report on
US – Wool Shirts and Blouses, p. 14.
2793 SPS Committee's Guidelines to further the practical implementation of Article 5.5 (G/SPS/15),
18 July 2000, Part B.
2794 Glossary of phytosanitary terms, 2008 (ISPM No. 5, FAO, Rome), in Exhibit AUS-164, p. 13.
2795 Pest risk analysis for quarantine pests, including analysis of environmental risks and living
modified organisms, 2004 (ISPM No. 11, FAO, Rome), in Exhibit AUS-6, pp 130-131 (emphasis added).

7.1142 Further, the higher the margin by which the risk exceeds the ALOP, the stricter the risk
management measures that might be necessary to reduce the risk to the ALOP. By the same token, if
the assessment of risk is exaggerated, there may be reason to believe that the measures that are
designed to protect against that risk may also be exaggerated – or too strict.
7.1143 Accordingly, the Panel will assess first whet her New Zealand has demonstrated that
Australia's calculation of the risk resulting of the importation of New Zealand apples is exaggerated.
If New Zealand is successful in making this case, it would cast doubt on whether the risk would
exceed Australia's ALOP to the extent calculated by the IRA, and warrant as strict risk management
measures as those developed by the IRA. Further, it would cast doubt on whether the risk of the three
pests at issue necessarily exceeds Au stralia's ALOP and warrants risk management measures at all.
Since risk management measures are necessary only if the risk exceeds the ALOP, in case there is
doubt that the risk exceeds the ALOP to the extent calculated, or doubt that it exceeds the ALOP at
all, then it is appropriate for the Panel to go on to consider whether the less strict alternative measure
suggested by New Zealand may meet Australia's ALOP.
7.1144 Second, the Panel will assess more directly whether, assuming that risk management
measures are necessary, the alternative measures properly identified by New Zealand might
sufficiently reduce the risk to, or below, Austra lia's ALOP. Obviously, the Panel cannot conduct a de
novo risk assessment. The Panel's task is to assess wh ether New Zealand has raised a presumption,
not successfully rebutted by Australia, that the alte rnative measures have a sufficient risk reduction
effect. The Panel will analyse whether New Zealan d has advanced sufficient indices for such a risk
reduction effect, and consider what the experts say a bout such an effect. The Panel will also assess
whether the IRA evaluated the alternatives identified by New Zealand, and – if they were evaluated –
whether their eventual rejection by the IRA was justified.
Analysis of the second condition of the Article 5.6 test for fire blight
7.1145 The Panel will assess first whether New Zealand h as demonstrated that Australia's calculation
of the fire blight risk resulting from the importati on of New Zealand apples is exaggerated. Under
Article 5.1 of the SPS Agreement, the Panel has already found this to be the case. In particular:
(a) In regard to importation step 1
, the Panel has found that the IRA's estimation that
E. amylovora will always be present in the source orchards in New Zealand is not
sufficiently supported by the scientific evidence that the IRA relied upon and,
accordingly, is not coherent and objective. 2796 In particular, the Panel has found that,
while the IRA's basis with respect to this importation step comes from respected and
qualified scientific sources, the IRA's reasoni ng in this regard is not coherent and
objective and the resulting likelihood assigne d to this step is exaggerated. 2797 T h e
Panel has added that importation step 1 is a very important starting point for
Australia's IRA. The following step, importa tion step 2, assesses the likelihood that
picked fruit is contaminated with Erwinia amylovora . The likelihood in step 2 is
directly related to the history of fire blight in the year of cropping (whether active
symptoms producing inoculum were present) and in the previous years (for the
possibility of internal presence of Erwinia amylovora in the xylem).
2798
(b) For importation step 2, the Panel has found that the IRA's estimation of the likelihood
that fruit coming from an infected or infested orchard is infected or infested with

2796 See para. 7.259 above.
2797 See para. 7.258 above.
2798 See para. 7.257 above.

E. amylovora is not coherent and objective.
2799 The Panel has noted that according to
Dr Paulin the probability range for this step is high. 2800 The Panel has held that it is
not clear from the IRA how the results from different studies were aggregated in
order to arrive at an estimation for th e probability range assigned to importation
step 2 and why, in this context, less weight was given to studies that found lower
frequencies of contamination with fire blight.
2801 Dr Paulin also pointed out that no
general and reasonable conclusion for the presence of Erwinia amylovora on or in
mature apple fruit can be based on the disparate results in the relevant studies.2802
(c) For importation step 3, the Panel has found that the IRA's estimation of the likelihood
that clean fruit from infected or infest ed orchards is contaminated with E. amylovora
during picking and transport to the packi ng house does not rely on adequate scientific
evidence and is accordingly not coherent and objective. 2803 The Panel has also noted
that according to Dr Deckers, 1 per cent as the most likely value of the triangular
distribution for this importation step seems too high.2804
(d) For importation step 4 , the Panel has concluded that New Zealand has not made a
case that the IRA's estimation of the likelihood that E. amylovora survives routine
processing procedures in the packing house is exaggerated and does not rely on
adequate scientific evidence. At the same time, the Panel has noted that according to
some of the experts the probability range and pattern distribution estimated by the
IRA for this importation step seems too hi gh, particularly considering the possible
effect of the use of disinfectants.
2805
(e) For importation step 5, the Panel has found that the IRA's estimation of the likelihood
that clean fruit is contaminated by E. amylovora during processing in the packing
house is not coherent and objective. The Pa nel has noted that the experts considered
the IRA's estimation regarding importation step 5 to be strongly exaggerated.2806
(f) For importation step 6 , the Panel has found that New Zealand has not made a case
that the IRA's estimation of the likelihood that Erwinia amylovora survives
palletization, quality inspection, containeri zation and transportation to Australia is
inflated or that it is not based on a coherent and objective reasoning. Nonetheless, the
Panel has noted Dr Deckers's statement that "[t]he survival of the [ E. amylovora]
bacteria during palletization, containerization and transport is considered to be low,
surely after the external disinfection of the fruits during the packaging process."2807
(g) For importation step 7 , the Panel has found that the IRA's conclusion that the
likelihood that clean fruit is contaminated by Erwinia amylovora during palletization,
quality inspection, containerization and tran sportation is negligible appears to be
coherent and objective.2808 The separate question of the IRA's choice of a probability
interval of zero to one in one million fo r such type of "negligible" events was

2799 See para. 7.275 above.
2800 See para. 7.273 above.
2801 See para. 7.274 above.
2802 Ibid.
2803 See para. 7.290 above.
2804 See para. 7.288 above.
2805 See paras. 7.305-7.306 above.
2806 See paras. 7.318-7.320 above.
2807 See paras. 7.330-7.331 above.
2808 See para. 7.342 above.

subsequently addressed by the Panel in th e context of New Zealand's allegations
regarding the IRA's methodological flaws.2809
(h) For importation step 8 , the Panel has noted that New Zealand did not call into
question the IRA's estimation of the like lihood of the event represented by this
particular importation step. The Panel h as concluded that there is no reason to
believe that such estimation is not cohere nt and objective in light of the scenario
addressed by the IRA.2810
7.1146 In light of the above, the Panel has also found that the IRA's estimation of the overall
probability of importation does not rely on adequate scientific evidence and, accordingly, is not
coherent and objective.2811 The Panel has held in this context that if the estimations of one or more of
the individual likelihoods are questionable, because those estimations are either not supported by
adequate scientific evidence or not based on an coherent and obj ective reasoning, the overall figure
necessarily becomes questionable.2812 Moreover, the IRA does not attempt to find justification for the
estimated overall probability of importation, other than the aggregation of the different individual
likelihoods represented by each importation step. The Panel has also noted that according to
Dr Deckers this overall probability is a relatively high value and is probably overestimated.2813
7.1147 As to the probability of entry of fire blight into Australia through apples imported from
New Zealand, in particular as regards exposure, th e Panel has found that the scientific evidence cited
in the IRA supports the conclusions on the viability and the survival of fire blight bacteria on
imported apples. The Panel has stated, however, that both conclusions rest on the assumption that
there will be some bacterial populations on matu re apples from New Zealand. Additionally, both
conclusions must be qualified by the caveat that any bacterial populations would decrease and would
be unlikely to be able to multiply. The Panel has found that the IRA's conclusions on the transfer
mechanisms are not supported by scientific evidence, especially in regard to the proposition of a
mechanical transmission mechanism. The browsi ng insects scenario, while not totally unreasonable
seems to correspond to a highly unlikely scenario. The IRA's conclusions on inoculum dose and host
receptivity are generally coherent and supported by evidence, although the former fails to recognize
the importance of the number of bacteria for the likelihood of initiating an infection, and the latter
tends to exaggerate the number of potential hos t plants and does not take into account the
discontinuity in the receptivity of host plants. Finally, the IRA's conclusions on environmental
conditions seem generally c oherent. In light of the assumptions and qualifications that affect most of
the sections of the IRA's conclusions on exposure, the Panel has found that overall these conclusions
do not rely on adequate scientific evidence and, accordingly, are not coherent and objective.
2814
7.1148 As regards the probability of fire blight establishment , the Panel has noted that the IRA's
discussion on the minimum population needed for establishment reflects an assumption that has
already been addressed by the Panel, regarding the alleged capacity of such low bacterial populations
to initiate an infection. This assumption is an important factor in any conclusion regarding the
probability of establishment of fire blight. It had been found by the Panel not to be supported by
scientific evidence nor based on a coherent and objective reasoning.
2815

2809 See paras. 7.484 and 7.508 above.
2810 See para. 7.349 above.
2811 See para. 7.356 above.
2812 See para. 7.355 above.
2813 See para. 7.356 above.
2814 See para. 7.417 above.
2815 See para. 7.420 above.

7.1149 As regards fire blight spread
, the Panel has found that the IR A's conclusions regarding the
probability of spread seem generally coherent. At the same time, the Panel has pointed out that the
value assigned to such probability should be comm ensurate to the extremely low likelihood of
transmission through the browsing insects scenario.2816
7.1150 In light of the above, in regard to exposure, establishment and spread in general, the Panel has
concluded that with respect to several aspects of its discussion on exposure, establishment and spread,
the IRA's reasoning seems on its face generally cohere nt. The Panel has added, however, that all of
these sections rest on the assumption that at leas t some imported apples will be infested with
Erwinia amylovora.2817 Furthermore, the Panel has stated that throughout the discussion of the
different factors, the IRA tends to exaggerate the risk, by not emphasizing that any bacterial
populations would likely be small, diminishing and not able to multiply and that no infection can
occur unless host plants are in a susceptible stage. The IRA instead emphasizes certain factors that
would tend to increase the likelihood of entry, estab lishment and spread, in the absence of adequate
scientific evidence or even disregarding available evidence to the contrary. 2818 The Panel has also
found that the reasoning articulated in Australia's IRA, with respect to the likelihood of entry,
establishment and spread of fire blight, including the IRA's estimation of the value for the respective
probabilities, does not rely on adequate scientific evidence and, accordingly, is not coherent and
objective.2819
7.1151 Further, the Panel has found that, with respect to the methodological flaws identified by
New Zealand, the IRA overestimates the overall probab ility of the entry, establishment and spread of
fire blight in this dispute. The Panel has found that th e choice of a probability interval of 0 to 10 -6
(zero to one in one million), and a midpoint (if uniform distribution is used) of 5 × 10 -7 (0.5 in one
million) for events with a "negligible" like lihood of occurring (corresponding to the qualitative
descriptor "the event would almost certainly not occu r") is not properly justif ied in the IRA and leads
to an overestimation of the probability of entry, estab lishment and spread of fire blight. Likewise, the
Panel has concluded that the combination of this probability interval for events with a "negligible"
likelihood of occurring, with the IRA's use of a uni form distribution to model the likelihood of these
events, would tend to result in an additional over estimation of the likelihood of such "negligible"
events. The Panel has agreed with New Zealand that these two flaws "magnify the assessment of risk,
turning what are often the remote st of possibilities into events th at are assessed as occurring with
some frequency."2820
7.1152 Finally, with respect to consequences , the Panel has found that the IRA's evaluation of the
potential consequences associated with the entry, establis hment or spread of fire blight into Australia
does not rely on adequate scientific evidence and, accordingly, is not coherent and objective.2821
7.1153 In the light of these findings under Articles 5.1 and 5.2 of the SPS Agreement, the Panel
concludes that for the purposes of its Article 5.6 claim New Zealand has made the case that Australia's
IRA overestimates the fire blight risk resulti ng from imports of New Zealand apples. Thus,
New Zealand has cast doubt on whether the fire bli ght risk would exceed Australia's ALOP to the
extent calculated by the IRA, and warrant as strict risk management measures as those developed by
the IRA. Further, New Zealand has cast doubt on whether the unrestricted fire blight risk would
necessarily exceed Australia's ALOP. Accordingly, th ere is no reason to believe that the alternative
measure suggested by New Zealand would not meet Australia's ALOP.

2816 See para. 7.423 above.
2817 See para. 7.428 above.
2818 See para. 7.429 above.
2819 See para. 7.448 above.
2820 See para. 7.508 above. See also, New Zealand's second written submission, para. 2.297.
2821 See para. 7.470 above.

7.1154 As outlined above2822, the Panel now turns to assessing more directly whether, assuming that
risk management measures are necessary, New Zealand has raised a presumption, not successfully
rebutted by Australia, that its alternative measure suffi ciently reduces the fire bli ght risk to, or below,
Australia's ALOP.
7.1155 The Panel notes that Australia's IRA did not fo rmally consider restricting New Zealand apple
imports to mature, symptomless apples as a potentia l risk management measure. The IRA rejected
certain "other potential risk management measures fo r fire blight" without mentioning the possibility
of restricting imports to mature symptomless apples:
"Other potential risk management measures
The IRA team considered other possibl e risk management measures including
irradiation, fumigation and treatments with different bactericidal agents, vacuum
infiltration of disinfectants and the use of pest free places of production. There was
insufficient data relevant to fire blight for the IRA team to adequately assess the
efficacy of these alternatives. However, the proposed measures are always open to
review if additional relevant information is forthcoming that suggests alternative
measures may be capable of reducing the risks to Australia's ALOP."
2823
7.1156 At the same time, Australia argues that the unde rlying basis of the IRA Team's analysis for
fire blight and European canker was predominan tly concerned with mature, symptomless apples. 2824
In the context of importation step 2 (the likelihood that fruit coming from an infected or infested
orchard is infected or infested with E. amylovora), the IRA did look at whether mature, symptomless
apples from New Zealand can carry fire blight:
"In considering the appropriate value that should be assigned to [Importation Step 2],
the IRA team assessed the relevance of the information reviewed above. It should be
noted that, at this stage, only the unrestrict ed risk is being assessed. As such, this
evaluation ... needs to take into account th e fact that apples could be sourced from
anywhere in New Zealand irrespective of the fire blight status of orchards. For
example, mature, symptomless apples could be sourced from, among other things,
orchards:
with active fire blight, including many fire blight strikes on each tree; or
that show few or no symptoms, but are very close to active fire blight in hedgerow
plants (such as cotoneaster); or
that show no symptoms and are some distance from an active fire blight host.
Given the widespread distribution of fire blight in New Zealand, the IRA team
concluded that more weight should be gi ven to those studies on apples sourced from
orchards that were showing symptoms of fire blight disease.
The IRA team acknowledged that there are several studies that found no evidence of
the presence of fire blight bacteria on mature symptomless apples and that some of
these studies were carried out on orchards showing symptoms of fire blight.

2822 See para. 7.1144 above.
2823 Australia's IRA, Part B, p. 113. See also, Australia's IRA, Part B, pp. 105 and 112.
2824 Australia's second written submission, paras. 450 and 611; Australia's first written submission,
para. 1084; Australia's replies to Panel question 138 after the first substantive meeting.

However, given that there are a number of studies that confirm the presence of fire
blight bacteria on such fruit, studies that f ound no evidence of fire blight bacteria on
mature symptomless apples were given much less weight.
Turning to the studies that det ected fire blight bacteria on mature, symptomless
apples, there is a considerable amount of variation on the infestation rates reported.
For example, Roberts et al. (1998) review ed the literature and concluded that the
average infestation rate for apples sourced from orchards with symptoms was around
4.9%, and from orchards with no cons ideration of orchard symptoms was
approximately 0.35%. One stakeholder has claimed that Roberts et al. (1998) used an
inappropriate method to combine results from different studies to calculate infestation
rates. The stakeholder concluded that the infestation rates should be higher. The IRA
team has reviewed this paper and agrees th at there may be better ways of combining
the data. However, the IRA team’s conclu sions on [importation step 2] are based on
a consideration of all relevant information – not just the Roberts et al. (1998) paper –
and the IRA team considers that the values suggested in the draft are appropriate."
2825
(emphasis added)
7.1157 In its analysis of New Zealand's Article 5.1 cl aim, the Panel has found that this Part of the
IRA does not find sufficient support in the scientific evidence relied upon and, accordingly, is not
coherent and objective. The Panel has stated that there is no adequate justification for the IRA's
statement that more weight should be given to studies on apples sourced from orchards that were
showing symptoms of fire blight disease. 2826 As noted by Dr Paulin, this statement does not seem to
take adequately into account that there is no indication that fire blight will be present at all times, even
in an infected orchard. While it is reasonable to assume that no orchard in New Zealand is or has
been permanently free of fire blight, that does not mean that all orchards will permanently show active
symptoms.
2827 According to the evidence cited in the IRA, one year with Erwinia amylovora
infection may alternate with years with a much lower fire blight incidence, and even in an infected
orchard, there may be years without fire blight symptoms.2828
7.1158 While the Panel has found that most of the sci entific sources cited by the IRA in the context
of importation step 2 seem respected and credible, th e Panel has also noted that the IRA should have
used great caution when relying on the two studies th at find that mature, symptomless apples could
carry fire blight. 2829 As noted by Dr Paulin, the van der Zwet et al. (1990) study should have been
considered with extreme caution, in light of the subsequent qualifications made by its own first
author.2830 In a declaration made in July 2002, Dr va n der Zwet advised that the results of his 1990
study were obtained from fruit harvested in West Virg inia, United States, in a situation of severe fire
blight. In the view of that author, the results from the study "are not relevant for purposes of setting
quarantine measures on exported, mature fruit".
2831 Dr Paulin also noted that other data, such as in the
paper from Sholberg et al. (1988), which found an infestation/infection rate of at least 33 per cent,

2825 Australia's IRA, Part B, p. 65.
2826 See para. 7.272 above. See also, Australia's IRA, Part B, p. 65.
2827 Dr Paulin's reply to Panel question 25, in List of Replies from the scientific experts to questions
2828 Dr Deckers's reply to Panel question 25, in List of Replies from the scientific experts to questions
posed by the Panel, para. 176. See also, Dr Deckers's reply in Transcript of the Panel's meeting with experts,
para. 323.
2829 See para. 7.270 above.
2830 Declaration of Tom van der Zwet, 16 July 2002, in Exhibit AUS-32. Van der Zwet et al .,
"Population of Erwinia amylovora on External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31.
Dr Paulin's reply to Panel question 24, para. 175. But see, Australia's IRA, Part B, pp. p. 63.
2831 Declaration of Tom van der Zwet, 16 July 2002, p. 4, in Exhibit AUS-32. Van der Zwet et al.,
"Population of Erwinia amylovora on External and Internal Apple Fruit Tissues" (1990), in Exhibit AUS-31.

should be considered with care as the paper seems to describe a specific case study, which may be
different from the normal situation in an orchard devoted to export of apples.2832
7.1159 Also, the Panel has called into question in gene ral the IRA's reliance on the scientific papers
mentioned in the context of importation step 2. 2833 The Panel has held that because of the wide
variation in the information reported in the various st udies cited in the relevant Part of the IRA, it is
not possible to find justification from these studies for the probability range assigned by the IRA to
importation step 2. The results of the various studi es are not comparable, since the papers do not deal
with the same type of fruit (some deal with mature fruit, others with immature fruit, and still others do
not indicate with precision the type of fruit). A dditionally, each paper has its own technique of
detecting the bacteria. As a result, no gene ral and reasonable conclusion for the presence of
E. amylovora on or in mature apple fruit can be based on the simple aggregation of these disparate
results.2834
7.1160 Australia explains that the external (epiphytic) infestation by E. amylovora bacteria, which
would be symptomless, was the IRA Team's primary concern for fire blight. 2835 The IRA confirms
this by stating that "[t]he importation ri sk scenario of particular relevance to E. amylovora is the one
that is associated with th e epiphytic (external) infestation. Ep iphytic infestations can occur at the
stem- and calyx-end and on the surface of mature fruit. E. amylovora cannot be detected by visual
inspection."2836
7.1161 Dr Deckers agrees, explaining that "[t]here is not sufficient qualified research available that
indicate the importance of endophytic populations of Erwinia amylovora in apple fruits." 2837
Dr Paulin notes that to his knowledge there is no evidence of endophytically infected but symptomless
and mature apple fruit. 2838 Likewise, Dr Deckers explains that there is no scientific evidence in fire
blight epidemiology that endophytically infected fruit would have a chance of developing into
healthy-looking mature fruit.
2839
7.1162 As regards epiphytic fire blight infestation, Dr Paulin explains that it is rare and has important
prerequisites: "orchards (or areas) where there is an available inoculum (ooze), produced nearby by
active symptoms of fire blight ... ."2840
7.1163 Dr Deckers also explains that, although mature apple fruits may harbour fire blight bacteria
epiphytically, such bacteria do not survive or multiply well because "multiplication of the epiphytical

2832 Australia's IRA, Part B, pp. p. 56-57. Reply of Dr Paulin to Panel question 24, para. 175. Sholberg
et al., "Occurrence of Erwinia amylovora of pome fruit in British Columbia in 1985 and its elimination from the
apple surface" (1988), in Exhibit AUS-34.
2833 See para. 7.270 above.
2834 See para. 7.274 above.
2835 Australia's first written submission, para. 1084. See also Australia's reply to Panel question 138
after the first substantive meeting.
2836 Australia's IRA, Part B, p. 52.
2837 Dr Deckers's reply to Panel question 7, in List of Replies from the scientific experts to questions
2838 Dr Paulin's reply to Panel question 6, in List of Replies from the scientific experts to questions
2839 Dr Deckers's reply to Panel question 6, in List of Replies from the scientific experts to questions
2840 Dr Paulin's reply to Panel question 7, in List of Replies from the scientific experts to questions

[fire blight] bacteria in the calyx end of the fruits will not occur; multiplication of the bacteria will
only occur on a medium rich in sugar or in amylum."
2841 As a result, according to Dr Deckers:
"[T]he level of epiphytic populations of the [fire blight] bacteria on the apple fruits
will remain low. This will make it difficult to detect these low number of bacteria on
the fruit skin. The chance that this epiphytic population of [E. amylovora] serves as a
new source of infestation in the orchard is very small is not described in the
biological cyclus of an [ E. amylovora] infection under orchard condition. The calyx
of the fruit is not a place where the [fire blight] bacteria can multiply; in the best case
the bacteria can survive for a period on that place."
2842
7.1164 At the Panel's meeting with the experts, Dr Paulin also stated that fire blight is not a truly
epiphytic bacteria, and would be present on apple surfaces only in residual populations, diminishing
over time:
"[T]he term epiphytic is probably not the best term to be used in the case of
E amylovora. This is a bacteria which has a poor fitness with plant surfaces. So if
you have bacteria on a plant surface, on apple trees surface, this is something which is
temporary and not permanent. We tend to qualify as epiphytes bacteria which are
able to multiply on plant surfaces without producing symptoms. This, I think
everyone would agree, is not the case with E amylovora on apple or pear. We may
have on apple and fire blight the presence of a bacteria which is sourced from
elsewhere, such as ooze or progressive infection in the same tree in the orchard. You
may have, sometimes, a bacterial population. If this population is not able to infect
the plant tissues, for some reason, then this population will tend to disappear and you
will have residual populations like the one that was being evocated in the calyx of the
fruits. E amylovora is not a true epiphytic bacteria."
2843
7.1165 Similarly, in a written response to the Panel, Dr Paulin states that:
"The available scientific evidence shows that E. amylovora is not a true 'epiphyte',
hence it cannot multiply, but only survive, with decreasing population on
contaminated surfaces. It could multiply , and then maintain a high level of
population, only if it were able to infect the plant. On a mature fruit this possibility of
infection does not exist. Mature fruits are then concerned only at best with transient
populations, which are likely to be soon disappearing. In addition, these transient
populations would be present in the case where active, ooze producing fire blight
lesions are present in the orchard at, or ju st before, picking time. Such a condition
seems easy to avoid.
Therefore mature symptomless fruit will not bring in a packing house significant
population of E. amylovora on their surface. Consequent ly, the evaluation of risk for
this step seems too high, for mature symptomless fruits. Decaying fruits and trashes
would represent a higher risk."
2844

2841 Dr Deckers's reply to Panel question 7, in List of Replies from the scientific experts to questions
2842 Ibid.
2843 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 230.
2844 Dr Paulin's reply to Panel question 26, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 187-188.

7.1166 In another written response to the Panel, Dr Paulin similarly states that:
"We have already commented on the pr obability of the presence of residual
population of bacteria on fruit surface. Some people prefer to use the word 'epiphytic'
exclusively for microorganisms that are able to multiply, and therefore to reach high
level of population on leaves or plant surface s, without producing symptoms. This is
typically the case of some phytopathogenic bacteria called Pseudomonas syringae
(some pathovars of this species). Such a capacity does not exist in the case of
E amylovora (Thomson 2000), except on stigma in flowers. Therefore the bacterial
cells eventually present on the fruit surface could not multiply on the same site. They
should be first carried to a suitable site for multiplication (i.e. an infection site,
presumably an open flower on a host plant)."
2845
7.1167 Dr Paulin is also sceptical about the likeli hood that apples entering packing houses free of
E. amylovora would become contaminated during processing (importation step 5):
"The liquid medium (in which mature symptomless apple fruits are immersed during
the process), even without disinfectant, can not be considered as a culture medium for
E. amylovora: an artificial medium for such bacteria must content among other
elements a rather high level of soluble sugar (0,5g/l is a minimum, 5g/l is the standard
for a culture medium for E. amylovora). Therefore it is rather a dilution effect that
could be expected from this step. In this particular case, the probability suggested in
the IRA seems to be strongly exaggerated. Only if decaying apples (supposedly
decaying from E. amylovora infection-then immature and not 'symptomless') or large
amount of infected trashes, were present, the dilution effect in a non-disinfectant
medium could lead to a significant amount of bacterial cells on fruit surfaces. This
seems very unlikely in practical conditions.
The scientific evidence is that, in artificial medium E. amylovora does not compete
very successfully against natural antagonistic bacteria (such as Pantoea agglomerans
or Pseudomonas fluorescens, Vanneste, 2008), which are naturally found in high
concentration on plant and on fruit su rface, and which would compete with
E. amylovora, thus preventing a multiplication of E. amylovora, if present. Finally I
would therefore consider that the risk of contamination of apples by packing shed
machinery is negligible."
2846
7.1168 Likewise, as regards the likelihood of clean fruit being contaminated by E. amylovora during
palletization, quality inspection, containerization a nd transportation (importation step 7), Dr Paulin
explains that:
"In its analysis of this step, IRA does not provide any scientific evidence that such
external pollution can happen, except in the case of oozing fruits. It referred to van
der Zwet 1999 paper, which has already been considered as not providing the correct
information on the case, which the author r ecognizes himself. In addition, internally
infected fruits immature producing ooze, if any, would have been discarded well
before this step.

2845 Dr Paulin's reply to Panel question 19, in List of Replies from the scientific experts to questions
posed by the Panel, para 140 (original emphasis).
2846 Dr Paulin's reply to Panel question 30, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 216-217.

I would consider the probability to be nil in this case, for symptomless mature
apples."
2847
7.1169 Dr Paulin adds that:
"Ooze can only be produced following a progressive invasion of susceptible tissue by
the bacteria. Oozing out from mature fruit is not described in fire blight symptoms.
It could possibly (?) happen in the case of a delayed evolution originating from an
infection of an immature fruit, but as far as I know, this as not been described in the
scientific literature. The only scientific b asis for oozing on mature fruit (?) is from
van der Zwet 1990, which has already been discussed, and which can be considered
as irrelevant for the case."2848
7.1170 Likewise, Dr Deckers states that "[i]nternally infected mature fruits will not be able to
produce bacterial ooze. These fruits will immediatel y be invaded by fungal infections. Ooze
production occurs only on immature fruits where the st arch of the immature fru its is used by the EA
bacteria during the multiplication phase."2849
7.1171 Dr Paulin explains that transfer to a host plant is also highly unlikely:
"The transfer to an host plant could be performed most likely by insects or wind
driven rain, but the probability of successful localization at the right place should be
very low, and the probability of infection even lower. The highest probability I can
think of is a pollinating insect taking the fe w bacterial cells to the hypantium of a
flower of an host plant. This remain s unlikely because trace bacterial populations
(not multiplying) will be hardly grasped by insects (it would be easier in the case of a
multiplying population, where cells are embe dded in exudate). Finally the likelihood
of successful multiplication on the hypantium and infection would be extremely low.
In addition, it would be necessary that su ch open flower be available when these
surface polluted fruits are present. All this cannot be considered to constitute an
evidence."
2850
7.1172 Dr Paulin confirms this in one of his later written responses to the Panel:
"E. amylovora is not able to multiply on plant su rface (except for a short time, on the
hypantium of stigmates in flowers). It is difficult to imagine conditions conducive to
actively growing cells in natural conditions on the surface of a symptomless apple.
The spread of surface population from fruit to infection sites is similarly hard to
imagine, especially because these non-multiplying cells are not embedded in exudate,
and therefore not attractive to insects or ot her vectors. In ar tificial inoculations,
bacterial populations at low level need to be placed very precisely at the right site of

2847 Dr Paulin's reply to Panel question 32, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 227-228.
2848 Dr Paulin's reply to Panel question 33, in List of Replies from the scientific experts to questions
2849 Dr Deckers's reply to Panel question 33, in List of Replies from the scientific experts to questions
2850 Dr Paulin's reply to Panel question 19, in List of Replies from the scientific experts to questions

infection, to successfully infect its host plant (Crosse et al.). This is probably a
difficulty impossible for the bacteria to tackle in natural conditions."2851
7.1173 Dr Deckers agrees that the chan ces of epiphytic fire blight infestation on mature apple fruit
sufficient to initiate an infection on a host plant w ould be very low. "The chance that the epiphytic
bacteria that can be present on mature apple fruits initiate an infection on an other host plant will be
very low. The critical point will be the transfer of viable [fire blight] bacteria to susceptible organs of
an other host plant where the bacteria can multiply before a new infection can take place."2852
7.1174 Dr Deckers confirms this in a later written r esponse to the Panel. "As mentioned earlier there
is a possibility that mature apple fruit can harbour viab le epiphytic [fire blight] bacteria. The step of
the transfer from these infected fruits to the possible host plant stays the most critical step and will be
difficult to prove."2853
7.1175 Dr Paulin adds that "it can be assumed that most of the time during the year most host plants
should not be at a receptive stage when the impor t of apple would take place (peak in winter)." 2854
Likewise, Dr Deckers states that "[d]uring dormant season, there is no infection possibility of the fire
blight host plants when the host plants don't have the susceptible organs or when the climatological
conditions are not allowing bacterial multiplication."2855
7.1176 Further, Dr Deckers explains that:
"Mature symptomless apple fruits coming from heavily infected orchards can harbour
an epiphytic population of [fire blight] bacteria in their calyx end or as bacterial ooze
sticked [sic] on the fruit skin and dried out, but the chance that this bacterial
population will be capable to start a new infection on a susceptible host plant under
natural conditions is rather low.
When the fruits are harvested from orchard without active fire blight symptoms in
and around the orchard, without the presence of hail and when the fruits have been
disinfected during preparation in the pack ing house, the chance for an initiation and
establishment of the disease under natural cond itions in another area is considered to
be extremely low."
2856
7.1177 Dr Paulin confirms this, by explaining that:
"[M]ature symptomless apple may harbour some surface cells of E. amylovora, at
least if collected in an orchard showing active symptoms before cropping time. The
only 'mechanisms' I can think of for the transfer of such bacteria to infection site on a
living susceptible host plant at the proper stage of receptivity are:

2851 Dr Paulin's reply to Panel question 27, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 190-191 (original emphasis).
2852 Dr Deckers's reply to Panel question 27, in List of Replies from the scientific experts to questions
2853 Dr Deckers's reply to Panel question 37, in List of Replies from the scientific experts to questions
2854 Dr Paulin's reply to Panel question 10, in List of Replies from the scientific experts to questions
2855 Dr Deckers's reply to Panel question 10, in List of Replies from the scientific experts to questions
2856 Dr Deckers's reply to Panel question 18, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 135-136.

– Insects (whatever they are, pollinating or not), which could take bacterial
cells to open blossoms, or to wounds on growing shoots,
– Wind driven rain.
These two 'mechanisms' suppose a close pr oximity between these fruits and the
infection sites. Both are questionable, due to the expected low or very low level of
the bacterial population present on these fruits, and its localisation (calyx), which
makes the accessibility of cells rather difficult. In addition, bacterial cells on fruit are
probably not embedded in ooze (as they are when actively multiplying from active
lesions) and therefore not well protected from adverse conditions, and, which is more,
probably have no the adhesive capacity, which is said to be a facilitating factor for
transportation by insects."
2857
7.1178 Further, Dr Deckers explains that the chance of a successful transfer and multiplication of
bacteria will be rather exceptional:
"There will be no multiplication of the ep iphytic bacterial population on the fruit
surface or in the calyx tissue. The fire b light bacteria are not surviving well as an
epiphytic bacterial population. The bact eria should be transferred first to a
susceptible organ of a fire blight host pl ant like a stigma of a flower where the
bacteria can multiply and start a new inf ection. The chance for such a successful
transfer and multiplication of bacteria will be rather exceptional."2858
7.1179 Dr Deckers adds that:
"The [ Erwinia amylovora] bacteria can indeed multiply rapidly but not on the
epiphytic surfaces of the fruits. This multiplication can only occur on susceptible
organs like immature fruitlets or on the stigma of the flowers and only when the
climatological conditions (temperature and relative humidity) are optimal for
bacterial growth. The question here is if these circumstances will be present at the
time that the fruits from New Zealand arrives in Australia."
2859
7.1180 Likewise, Dr Paulin states that:
"The rapid multiplication of E. amylovora in natural orchard environment can be
observed only after infection (or artificial i noculation) of a susceptible host plant.
The values indicated in the literature are st rictly linked to the conditions in which
they are obtained (no nutrient limitation, no water limitation, opt imal and constant
temperature..). They are obtained from credible scientific sources, but need to be
considered as the maximum potential for the bacterial multiplication, in absence of
any limiting factor. In addition the multiplication rates obtained in the laboratory
(for example on sections of immature fruits ) follow relatively massive inoculations
with young fresh bacterial cultures.
The most likely limiting factor for E. amylovora in orchard condition is the site where
it could multiply. Except in laboratory conditions, no multiplication of E. amylovora

2857 Dr Paulin's reply to Panel question 18, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 137-138 (original emphasis).
2858 Dr Deckers's reply to Panel question 19, in List of Replies from the scientific experts to questions
2859 Dr Deckers's reply to Panel question 40, in List of Replies from the scientific experts to questions

outside an infection of host plant (the first step being on the hypantium) has ever been
described. So a rapid multiplication is possible in an orchard, but only after infection,
in the plant tissues."2860
7.1181 These responses from the experts indicate that the likelihood of fire blight spreading through
mature, symptomless apples is very low. Indeed, as regards mature symptomless apples in general,
Dr Deckers notes that:
"In the biological cycle of [ E. amylovora] mature apples are not included as an
important way of spreading the fire blight disease. In contrast to the absence of
specific measures on export on fruits, specific measures are imposed in Europe in the
countries with fire blight around the fruit tree nurseries with the aim to prevent export
of contaminated trees from infected countries to countries free of fire blight. The
trade of apple fruits between the differen t countries is not subjected to special
measures. This means that the spread of the fire blight disease by fruit tree nursery
material is considered to be much more important than the risk for spread by the
export of contaminated apple fruits."2861
7.1182 Dr Deckers adds that:
"Between the different countries in the Eu ropean union, the risk for fire blight
introduction in new countries by infected plant material ( variety and or rootstock) is
estimated much more important than the introduction possibility by infected apple
fruits. In Spain there is a strong indication that some of the fire blight infections was
[sic] related to the import of infected hos t plants coming from Belgium. Therefore
there is a European legislation regulating the control measures in and around the fruit
tree nurseries. The risk for introduction of the disease by infected fruits is estimated
much lower and no special measures for th e export of fruits are undertaken between
the different countries in Europe."
2862
7.1183 Likewise, Dr Paulin states that:
"In my view, the importation of bacteria with apple is probably possible. The further
step from this imported bacterial population to a new plant in Australia is probably
even less likely. And I think that the tota l process, the risk represented by the total
process, is probably of the same order of magnitude as the transport of contaminated
insects by natural way from New Zealand to Australia by air jet or things like that.
So that is my personal view, that there is a possibility which level of risk is not far
higher than the natural spreading possibilit y of the bacteria to go from place to
another with something else, I would say, which has no connection with trade of
apples."
2863
7.1184 In its conclusions under Articles 5.1 and 5.2 re garding fire blight exposure, establishment and
spread, the Panel has noted that the experts agreed that there is a theoretical possibility of the
importation of fire blight bacteria with apple fruit. Dr Paulin acknowledged that, although he is not

2860 Dr Paulin's reply to Panel question 40, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 262-263 (original emphasis).
2861 Dr Deckers's reply to Panel question 6, in List of Replies from the scientific experts to questions
2862 Dr Deckers's reply to Panel question 16, in List of Replies from the scientific experts to questions
2863 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 380.

aware of any scientific evidence to support such scen ario, as a scientist it is not possible to exclude
that it may happen:
2864
"Australia has shown that you can imagine a system in which mature apple fruits can
carry the bacteria from New Zealand to Austra lia. The point is that it is difficult to
estimate the value of 'can'. Is it a rare possibility, a frequent event or something
exceptional? This is far more difficult to tell. ... [A]nything which goes from
New Zealand or from a contaminated c ountry to another country 'can' carry
something including bacteria, including pathogenic bacteria, that is the minimum
level. Then you may have specific transport of specific bacteria, e.g., with rootstock
material which would be the maximum dange r for the installation of the disease in a
new country. So, the apple fruit, which is in-between these two limits, cannot be
excluded. That that can be considered as a real risk, is the matter in question."
2865
7.1185 The Panel has noted also that Dr Deckers agreed that, in other countries when they are trying
to limit the risk of introduction of fire blight, "the y are not talking in the first place about fruits, they
are talking more about plant material and potential infections on plant material, root stock or variety
materials".2866
7.1186 The Panel has concluded that the experts did not consider that the IRA contains any adequate
scientific evidence to support the proposition that the introduction of fire blight via mature apple fruit
has occurred or could occur. They found even le ss likely the further step of transfer from this
imported bacterial population to a new plant in Australia. 2867 The likelihood of introduction via
mature apple fruit would, in any event, be less than that of introduction via plant material or root
stock. There would not be a higher likelihood of introducing Erwinia amylovora through mature
apple fruit than "the natural spreading possibility of the bacteria to go from place to another with
something else ... which has no connection with trade of apples".2868
7.1187 When asked specifically whether restricting imports of New Zealand apples to mature,
symptomless apples would achieve Australia's ALOP, Dr Paulin responds in the affirmative:
"'Mature symptomless apples'
Mature: Indicates that fruits have completed their development on trees, and
therefore that they were not infected at an early stage (otherwise they would not
achieve this development up to the mature stage). Mature fruits are recognized as
resistant to infection: they do not develop symptoms if inoculated , because they do
not allow the multiplication of bacteria.
Symptomless means that they show no fire blight (or other disease) symptoms: this
eliminates infected fruits issued from early infections.

2864 Dr Paulin's reply to Panel question 37, in List of Replies from the scientific experts to questions
posed by the Panel, para. 253. See also, Dr Paulin's reply in Transcript of the Panel's meeting with experts,
para. 380.
2865 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 226. See also, Dr Paulin's
reply in Transcript of the Panel's meeting with experts, para. 254.
2866 Dr Deckers's reply in Transcript of the Panel' s meeting with experts, para. 379. See also,
Dr Deckers's reply to Panel question 16, in List of Replies from the scientific experts to questions posed by the
Panel, para. 123.
2867 See para. 7.443 above.
2868 See para. 7.445 above and Dr Paulin's reply in Transcript of the Panel's meeting with experts,
para. 380. See also, Dr Paulin's reply to Panel question 16, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 129-131.

Both these measures are actually necessary to eliminate the more evident risks of
transfer of the bacteria with fruit. It de creases the risk drastically in eliminating the
opportunities of carrying high population of E. amylovora which are associated with
tissues harbouring progressive infection, for example in immature fruits.
Nevertheless it cannot be considered as eliminating absolutely the risk of introduction
of low (external) bacterial populations associated with fruits. It can then be
considered to decrease the likelihood for en try of the bacteria with fruits from very
low to extremely low, in the ALOP."2869
7.1188 While Dr Paulin states that limiting imports from New Zealand to mature, symptomless
apples would "decrease the likelihood for entry of the bacteria with fruits from very low to extremely
low, in the ALOP", in response to the Panel's qu estion No. 15 he also states that it would be even
safer to combine New Zealand's alternative measure with Australia's contested fire blight measures:
"The restriction of export to mature sy mptomless apples would make even safer the
different measures taken by Australia (disin fection, storage...), but could not replace
any of them."2870
7.1189 The Panel notes the answers quoted above by Dr Paulin, where he casts doubt on the key
importation steps reviewed by the IRA in the context of fire blight. In summary, Dr Paulin states that
the risk represented by the total process of importation:
"[I]s probably of the same order of magnitude as the transport of contaminated insects
by natural way from New Zealand to Australia by air jet or things like that. So that is
my personal view, that there is a possibility which level of risk is not far higher than
the natural spreading possibility of the bacteria to go from place to another with
something else, I would say, which has no connection with trade of apples."2871
7.1190 Taking these answers of Dr Paulin together with his answer to the Panel's Question No. 15,
the Panel finds that the totality of Dr Paulin's expe rt advice indicates that while, as a matter of fact,
combining New Zealand's alternative measure with Australia's contested measures will make the trade
in apples "even safer", limiting trade to "mature sy mptomless apples" renders the risk extremely low
and akin to the risk of the bacteria making its wa y from New Zealand to Australia on air jet or some
other mode of transport not connected to trade in apples.
7.1191 In his responses cited above Dr Deckers explai ns that apple fruit are not considered an
important way of spreading the fire blight disease and thus the trade in apple fruit in Europe is not
subject to fire blight control measures. This said, Dr Deckers is sceptical whether New Zealand's
alternative measure would achieve Australia's ALOP on its own:
"The limitation of apple exports to mature symptomless apples is not enough to
achieve Australia's ALOP. Traceability of the fruits to the level of orchard where the
apples have been produced is necessary for the risk evaluation in Australia.
Fruits from heavy infected orchards or fro m orchards with hail damage can harbour
the bacteria in the calyx end of the fruits."
2872

2869 Dr Paulin's reply to Panel question 15, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 118-121.
2870 Dr Paulin's reply to Panel question 15, in List of Replies from the scientific experts to questions
2871 Dr Paulin's reply in Transcript of the Panel's meeting with experts, para. 380.
2872 Dr Deckers's reply to Panel question 15, in List of Replies from the scientific experts to questions

7.1192 Despite this latter response from Dr Deckers, the Panel finds that the previously cited
statements from Dr Deckers and Dr Paulin show that they consider the overall risk of fire blight entry,
establishment and spread through mature, symptomless apples imported from New Zealand to be very
low – both overall and in regard to specific key points in the import scenario assessed by the IRA.
7.1193 As noted above, in the context of Article 5.5, the panel in Australia – Salmon explained that
its legal analysis is different from the scientific assessment and certainty that scientific experts
consulted by panels might prefer.
2873 The Panel considers that this also applies in the context of
Article 5.6 of the SPS Agreement, in particular when assessing the second condition of the Article 5.6
test. If the Panel tried to achieve the same scientific certainty as scientific experts, it would slip into
conducting a de novo review. If the Panel were to recoil from carrying out its legal analysis merely
because it could not achieve the same scientific certa inty, it would not be acti ng in conformity with
Article 11 of the DSU. As noted above, what the Panel has to look at, in the context of the second
prong of Article 5.6 of the SPS Agreement, is wh ether New Zealand has ra ised a presumption, not
successfully rebutted by Australia, that the altern ative measures would achieve Australia's ALOP.
Obviously, the Panel can conclude this only if Ne w Zealand has advanced sufficient and convincing
arguments and evidence to that effect.
7.1194 The Panel notes that it has found that New Zeal and has demonstrated that the IRA does not
constitute a proper risk assessment under Article s 5.1 and 5.2 of the SPS Agreement and that
consequently the resulting fire blight measures ar e also inconsistent with Article 2.2 of the
SPS Agreement. The Panel has reached this find ing partly based on arguments from New Zealand
comparing the IRA's importation scenario and ri sk assessment with the importation of mature,
symptomless apples.
7.1195 The Panel also notes that the experts consider that New Zealand would only export to
Australia mature, symptomless apples that would al so be free of trash. Dr Deckers describes the
Pipfruit New Zealand, Class 1 export fruit standard as "a standard method of maturity and fruit quality
determination."2874 Likewise, Dr Paulin confirms that the Pipfruit New Zealand, Class 1 export fruit
standard corresponds to a "high standard of quality" and "[t]he specifications for absence of damage
are of a proper level of precision to guarantee 'symptomless fruits'". 2875 Dr Latorre finds that
"the requirements established by Pipfruit New Zealan d with regard to maturity and absence of fruit
damage are acceptable." 2876 He also suggests that in light of the relevant exhibit submitted by
New Zealand there is no risk that apples exporte d from New Zealand "will not always be mature,
asymptomatic and free of trash".2877 Likewise, according to Dr Schrader:
"With regard to the requirements for maturity, the inclusion of background colour and
ethylene content as established by Pipfruit New Zealand goes beyond the
requirements asked by the Streifindex. Regarding absence of damage, class 1 as
defined in Exhibit NZ-93 is more detailed than e.g. quality standards required by the
European Union, where trade class 1 refers to good quality, slight shape and

2873 Panel Report on Australia – Salmon, para. 8.126 (emphasis added).
2874 Reply of Dr Deckers to Panel question 2, in List of Replies from the scientific experts to questions
2875 Dr Paulin's reply to Panel question 2, in List of Replies from the scientific experts to questions
2876 Dr Latorre's reply to Panel question 2, in List of Replies from the scientific experts to questions
2877 Dr Latorre's reply to Panel question 3, in List of Replies from the scientific experts to questions

development defects, slight colouring de fects, only slightest bruises, sufficient
firmness."2878
7.1196 Further, the Panel has found in the context of Articles 5.1 and 5.2 of the SPS Agreement that
the choice of a probability interval of 0 to 10 -6 (zero to one in one million), and a midpoint (if uniform
distribution is used) of 5 × 10 -7 (0.5 in one million) for events with a "negligible" likelihood of
occurring (corresponding to the qualitative descriptor "the event would almost certainly not occur") is
not properly justified in the IRA and leads to an overestimation of the probability of entry,
establishment and spread of fire blight.2879
7.1197 Australia has a qualitative ALOP, defined as "pr oviding a high level of protection aimed at
reducing risk to a very low level, but not to zero." 2880 In light of the above considerations, the Panel
finds that New Zealand has raised a sufficiently convincing presumption, not successfully rebutted by
Australia, that the alternative fire blight measure of restricting imports of New Zealand apples to
mature, symptomless apples would meet this ALOP. Accordingly, this alternative measure fulfils the
second condition of the Article 5.6 test in the context of fire blight.
Analysis of the second condition of the Article 5.6 test for European canker
7.1198 As outlined above2881, the Panel will assess first whether New Zealand has demonstrated that
Australia's calculation of the European canker risk resulting from the importation of New Zealand
apples is exaggerated. Under Article 5.1 of the SPS Agreement, the Panel has already found this to be
the case. In particular:
(a) For importation step 1 , the Panel has noted that New Zealand has not called into
question the IRA's estimation of the likelihood that N. galligena is present in the
source orchards in New Zealand. The Pane l has pointed out that the IRA's value of
this importation step "takes into account th e variations in climatic conditions across
New Zealand, and the information indica ting that about 95% of the apple export
production in New Zealand comes from orchards in areas where the disease has either
never been recorded or the disease occurs only sporadically in very wet seasons."2882
(b) For importation step 2, the Panel has noted that the IRA's estimation of the likelihood
that fruit coming from an infected or infested orchard is infected or infested with
N. galligena does not find sufficient support in the scientific evidence relied upon by
the IRA and is therefore not coherent and objective. 2883 The Panel has also noted that
the IRA does not contain adequate scientific evidence that would allow an estimation
of the frequency of apple infection and la tency in New Zealand or elsewhere.
Moreover, the studies on fruit infection cited in the IRA are based on research
conducted in areas or periods with frequent summer rainfalls at harvest. Accordingly,
the Panel has found that the IRA fails to pr operly take into account the existence of
climatological conditions in New Zealand that would be necessary for inoculum
production, dissemination and infection.
2884

2878 Dr Schrader's reply to Panel question 2, in List of Replies from the scientific experts to questions
2879 See paras. 7.484, 7.496 and 7.508 above.
2880 Australia's IRA, Part A, p. 3.
2881 See para. 7.1143 above.
2882 See paras. 7.520-7.521. Australia's IRA, Part B, p. 121.
2883 See para. 7.545 above.
2884 See para. 7.544 above.

(c) For importation step 3
, the Panel has found that the IRA's estimation of the likelihood
that clean fruit is contaminated with N. galligena during picking and transport to the
packing house is not sufficiently supporte d by the scientific evidence that the IRA
relied upon and, accordingly, is not coherent and objective. 2885 In this regard, the
Panel has noted Dr Latorre's opinion that the IRA's analysis overestimates the risk of
inoculum dispersal. 2886 The Panel has pointed out that the IRA does not contain
scientific evidence regarding the possibility that latently infected but symptomless
fruit could develop rot and generate N. galligena spores, which could then be
transferred to clean fruit. Also, the Panel h as noted that there is no indication in the
IRA of the existence of climatological c onditions in New Zealand that are necessary
for inoculum production, dissemination and infection of clean fruit during picking
and transport to the packing house. The IRA's discussion fails to take into account
that conidia are poor epiphytes. Further, there is no scientific evidence in the IRA to
support the proposition that perithecia would play a role in the contamination of clean
fruit.2887
(d) For importation step 4 , the Panel has concluded that the IRA's estimation of the
likelihood that N. galligena survives routine processing procedures in the packing
house is not objectively justifiable. 2888 There is no explanation in the IRA for the
estimation that there would be a minimum 70 per cent likelihood that N. galligena
survives routine processing procedures in th e packing house, and a most likely value
of 85 per cent.2889
(e) For importation step 5, the Panel has found that the IRA's estimation of the likelihood
that clean fruit is contaminated by N. galligena during processing in the packing
house is not sufficiently supported by the scientific evidence relied upon by the IRA
and is accordingly not coherent and objective. There is no support in the IRA for the
estimation made for the likelihood of this importation step either in the scientific
evidence cited in the IRA, nor on the IRA's discussion in this regard.
2890
(f) For importation step 6, the Panel has found that the IRA's estimation of the likelihood
that N. galligena survives palletization, quality inspection, containerization and
transportation to Australia is not sufficientl y supported by the scientific evidence that
the IRA relied upon and, accordingly, is not coherent and objective. 2891 T h e I R A
acknowledges that some infected fruit not detected during sorting may be identified at
quality inspection. Moreover, the IRA fails to take into account the effects that the
processes occurring during this step could have on external infestation. The scientific
evidence cited in the IRA does not support the estimation that there would be a 100
per cent likelihood that Neonectria galligena survives palletisation, quality
inspection, containerization and transporta tion to Australia. The likelihood of the
removal of some surface contamination in fr uits and the detection of some latently
infected apples during this step may be very small, but it would be different from
zero.
2892

2885 See para. 7.573 above.
2886 See para. 7.562 above.
2887 See para. 7.572 above.
2888 See para. 7.594 above.
2889 See para. 7.593 above.
2890 See para. 7.606 above.
2891 See para. 7.620 above.
2892 See para. 7.619 above.

(g) For importation step 7, the Panel has found that the IRA's estimation of the likelihood
that clean fruit is contaminated with N. galligena during palletization, quality
inspection, containerization and transporta tion is not supported by a coherent and
objective reasoning.2893
(h) For importation step 8 , the Panel has noted that New Zealand has not called into
question the IRA's estimation of the likelihood that N. galligena survives and remains
with the fruit after on-arrival minimu m border procedures is 1 (100 per cent). 2894 In
this context, the Panel has also noted that the IRA provides that "[o]n-arrival
inspections of documentation would fail to detect fruit rot symptoms or latent
infections, and these would remain when the fruit arrives in Australia. The likelihood
rating for this importation step would not be significantly reduced by any normal on-
arrival procedure."2895
7.1199 In the light of the Panel's conclusions re garding the IRA's estimations of individual
importation steps, and of the lack of separate ju stification and evidence in the IRA regarding the
estimated overall likelihood of importation, the Pa nel has found that the IRA's estimation of the
overall probability of importation is not supported by the scientific evidence relied upon by the IRA
and, accordingly, is not coherent and objective.2896 The Panel has held that if the estimations of one or
more of the individual likelihoods are questionable, because those estimations are either not supported
by adequate scientific evidence or not based on a coherent and objective reasoning, the overall figure
necessarily becomes questionable. Moreover, the IR A does not attempt to find justification for the
estimated overall probability of importation, other than the arithmetic aggregation of the different
individual likelihoods represented by each importation step.2897 The Panel has noted Dr Sgrillo's view
that this overall probability value could be overestimated. 2898 The Panel has also noted Dr Latorre's
statement that the overall value falls out of the range that could be considered legitimate on the basis
of general knowledge rega rding the European canker. 2899 Dr Swinburne agreed, adding that "all the
uncertainty in the calculations ... does not inspire confidence".2900
7.1200 In estimating the probability of entry, est ablishment and spread of European canker , the IRA
has taken into account the following factors in addition to the probability of importation: "proximity",
i.e. the proportion of utility points near host plants susceptible to the pest in each exposure group;
the probability of exposure of a susceptible host plant in the exposure group to the pest by an
infested/infected apple discarded near it; the pr obability of establishment; and the probability of
spread.2901
7.1201 With regard to the proximity values, the Panel has found that New Zealand has not made a
prima facie case that the IRA's discussion on utilit y points and estimated pr oximity ratings for the
combination of each utility point with exposure groups is not objectively justifiable. At the same

2893 See para. 7.631 above.
2894 See para. 7.637 above. See, Australia's IRA, Part B, p. 128.
2895 See para. 7.636 above. See, Australia's IRA, Part B, p. 128.
2896 See para. 7.649 above.
2897 See para. 7.646 above.
2898 Ibid. See also, Dr Sgrillo's reply to Panel question 84, in List of Replies from the scientific experts
to questions posed by the Panel, para. 489.
2899 See para. 7.647 above. See also, Dr Latorre's reply to Panel question 84, in List of Replies from the
scientific experts to questions posed by the Panel, para. 486.
2900 See para. 7.648 above. Dr Swinburne's reply to Panel questions 84 and 85, in List of Replies from
the scientific experts to questions posed by the Panel, para. 497.
2901 See para. 7.650 above. See also, Australia's IRA, Pa rt B, p. 129. See also, Australia's IRA, Part B,
p. 17.

time, the Panel has noted that the IRA offers little explanation and supporting evidence for its
reasoning regarding the estimation of the different proximity values.
2902
7.1202 In relation to exposure , the Panel has found that the IRA's conclusions on this value do not
rely on adequate scientific evidence and, accordingly, are not coherent and objective. 2903 The Panel
has found with respect to waste disposal, for exampl e, that the IRA's assertion that consumer waste
would present "potential inoculum sources for transfer to susceptible host plants" is not supported by
evidence. The IRA's exposure analysis also rests on assertions regarding the possibility that latently
infected but symptomless fruit could develop rot and generate N. galligena spores, the mummification
of fruits, and the possibility that perithecia would play a role in the contamination of new hosts that do
not find sufficient support in the scientific evidence relied upon. With respect to the survival and
viability of the fungus, there is no support in the evidence for the IRA's apparent assumption that
inoculum for infection would always be available. With respect to the transfer mechanism for
N. galligena, the Panel has noted that the IRA does not contain scientific evidence that wind can serve
as a dispersal mechanism for conidia in the absence of rain. Also, the IRA's reasoning is not coherent
and objective, as it fails to take into account that di spersion of conidia by rain splash would be very
limited and, in order to achieve transfer, would also require certain climatic conditions, which are
unlikely to be present in Australia, particularly du ring the most critical periods for infection. The
Panel has found that there is no evidence in the IR A in support of the possibility that birds or insects
could be involved as vectors in the transfer of N. galligena. The IRA's discussion on the availability
of entry points fails to take into account that conidia are poor epiphytes and will not survive as a
surface contaminant. Regarding the discussion on inoc ulum dose, the Panel has pointed out that the
IRA fails to explain how it took into account th e inoculum dose necessary for infection when
estimating the probability of exposure to susceptib le host plants. Moreover, the IRA fails to
adequately recognize the importance of the number of spores and other factors, such as the host
cultivar, for the likelihood of initiating an infectio n. Finally, the Panel has found that the IRA's
discussion regarding environmental factors fails to take into account that the necessary climatological
conditions for inoculum production, dissemination and infection, in terms of the appropriate
combination of cool temperatures and wetness, are unlikely to be present in Australia, particularly
during summer and early fall, the most critical periods for infection.
2904
7.1203 The Panel has found that the IRA's estimation of the overall entry, establishment and spread
of European canker does not rely on adequate scientific evid ence and, accordingly, is not coherent
and objective.2905 The IRA tends to exaggerate the risk, fo r example, by not taking into account that
any epiphytical fungal populations would likely be small and diminishing and that the number of
latently infected apples would also diminish over tim e, by not considering the climatic conditions that
are necessary for inoculum production, dissemination and infection, and by assuming that inoculum
for infection and infection sites would be always available. The IRA instead emphasizes a number of
factors and assumes some hypotheses that would tend to increase the likelihood of entry,
establishment and spread, despite th e absence of adequate scientific evidence to support these factors
or even in the face of available evidence to the contrary.
2906
7.1204 The Panel has also found that the IRA's evalua tion of the potential consequences associated
with the entry, establishment or spread of Europ ean canker into Australia does not rely on adequate
scientific evidence and, accordingly, is not coherent and objective.2907

2902 See para. 7.675 above.
2903 See para. 7.717 above.
2904 See para. 7.715 above.
2905 See para. 7.749 above.
2906 See para. 7.744 above.
2907 See para. 7.777 above.

7.1205 Regarding the alleged methodological flaws iden tified by New Zealand, the Panel has found
that the choice of a probability interval and midpoi nt for events with a "negligible" likelihood of
occurring, as well as the combination of this probability interval with the use of a uniform distribution
to model the likelihood of these events, are not properly justified in the IRA and lead to an
overestimation of the probability of entry, establishment and spread of European canker.2908
7.1206 The Panel has found that, in regard to the anal ysis of the likelihood of entry, establishment
and spread of European canker, Australia's IRA is not a proper risk assessment within the meaning of
Article 5.1 and paragraph 4 of A nnex A of the SPS Agreement. The flaws also constitute a failure by
the IRA to take sufficiently into account factors such as the available scientific evidence, the relevant
processes and production methods in New Zeala nd and Australia, and the actual prevalence of
European canker, as required by Article 5.2 of the SPS Agreement. Accordingly, Australia's
European canker measures contested by New Zealand are inconsistent with Articles 5.1 and 5.2 and,
consequently also inconsistent with Article 2.2 of the SPS Agreement.2909
7.1207 In the light of these findings under Articles 5.1 and 5.2 of the SPS Agreement, the Panel
concludes that for the purposes of its Article 5.6 claim New Zealand has made the case that Australia's
IRA overestimates the European canker risk resu lting from imports of New Zealand apples. Thus,
New Zealand has cast doubt on whether the European canker risk would exceed Australia's ALOP to
the extent calculated by the IRA, and warrant as st rict risk management measures as those developed
by the IRA. Further, New Zealand has cast doubt on whether the unrestricted European canker risk
would necessarily exceed Australia's ALOP. Accordingl y, there is no reason to believe that the less
strict alternative measure suggested by New Zealand would not meet Australia's ALOP.
7.1208 As outlined above, the Panel now turns to assessing more directly whether, assuming that risk
management measures are necessary, New Zealand has raised a presumption, not successfully
rebutted by Australia, that its alternative measure sufficiently reduces the European canker risk to, or
below, Australia's ALOP.
2910
7.1209 As in the context of fire blight, the IRA did not formally consider restricting New Zealand
apple imports to mature, symptomless apples as a risk management measure for European canker.
In fact, the IRA's main risk scenario is "any latent infection in fruit that would not have been detected
at harvesting or during processing in the packing house".2911 "The risk pathway of greatest concern to
export with regard to European canker is symptomles s infection and infestation of fruit that cannot be
detected by inspection. Under suitable conditions the fungus could develop to produce spores that
transmit the disease."2912
7.1210 With regard to the likelihood that N. galligena is present in the source orchards in
New Zealand (importation step 1), the Panel has not ed the IRA's statement that the range estimated
for this importation step takes into account the vari ations in climatic conditions across New Zealand,
and the information indicating that about 95 per cen t of the apple export production in New Zealand
comes from orchards in areas where the disease has e ither never been record ed or the disease occurs
only sporadically in very wet seasons.2913
7.1211 As to whether there is a likelihood that pick ed fruit is latently infested/infected with
N. galligena (importation step 2), Dr Swinburne and Dr Lato rre explain that in principle it is possible

2908 See paras. 7.780-7.781.
2909 See paras. 7.778-7.779 above.
2910 See para. 7.1144 above.
2911 Australia's IRA, Part B, p. 118.
2912 Australia's IRA, Part B, p. 151.
2913 See para. 7.520 above. Australia's IRA, Part B, p. 121.

for infected fruit of all varieties to be harvested with no visible symptoms.
2914 Dr Latorre defines the
occurrence of endophytically infected mature apples as "a possibility ra ther than a real issue, which
needs to be proven before admitting this as an important mechanism for long-distance dissemination
of N. galligena."2915 At the same time, Dr Latorre identifi es three cumulative factors that would be
indispensable for apples to carry latent infections:
"[T]hree key factors are necessary for the in fection of apple fr uit with European
canker: (i) conducive climatic conditions; (ii) the presence of a susceptible host; and
(iii) sufficient inoculum concentration. The co-occurrence of th ese three factors is
necessary for fruit infection. It has been demonstrated that humid (wet) conditions
are necessary for inoculum production and libe ration. Frequent rains are essential for
conidia and ascospore dissemination from cankered lesions to fruits within infected
trees. Therefore, mature fruits would only carry latent infection in cool and rainy
summer climates."
2916
7.1212 The experts explain that it is highly unlikel y that these three factors would occur in
New Zealand at the same time. As regards Ne w Zealand's climatic conditions conducive to the
infection of apple fruit with Neonectria galligena, the IRA refers to a study by Braithwaite:
"In the higher rainfall areas of Auckland and the Waikato region, where European
canker is present and climatic conditions are more conducive to spore production
mainly due to wetter winters (NIWA, 2004), fruit could become infected during the
harvest period. Fruit infected late in the season, and showing no obvious rot
symptoms, could be picked from these orchards.
Braithwaite (1996), in a report to MA FNZ, acknowledged the possibility that
European canker could go unnoticed at harvest or during the early part of storage, and
therefore could be transmitted in fruit as latent infections."
2917
7.1213 However, both Dr Swinburne and Dr Latorre criticize the IRA's reliance on this study.
As Dr Swinburne explains:
"Braithwaite (1996) contains an unc onfirmed report that fruit rotting with
[Neonectria galligena] has been detected in NZ, and it seems to be accepted by both
parties that this does occur occasionally, although it is by no means clear if these
reports refer to pre- or postharvest. Braith waite then goes on to speculate that rotted
fruit can transmit infection, basing his argument on European observations on the
formation of ascospores on mummified fruit. This is a very rare occurrence, and
most unlikely to be found in the climates of NZ or Australia ... For these reasons this
aspect of the paper can be disregarded."
2918
7.1214 Dr Latorre agrees that the Braithwaite study is not a reliable basis for the IRA to conclude that
latent infections may occur in mature apples in New Zealand:

2914 Dr Swinburne's and Dr Latorre's replies to Panel qu estion 49, in List of Replies from the scientific
experts to questions posed by the Panel, paras. 310-314 and 306-309.
2915 Dr Latorre's reply to Panel question 49, in List of Replies from the scientific experts to questions
2916 Dr Latorre's reply to Panel question 56, in List of Replies from the scientific experts to questions
2917 Australia's IRA, Part B, p. 122.
2918 Dr Swinburne's reply to Panel questions 54 and 55, in List of Replies from the scientific experts to
questions posed by the Panel, para. 349.

"Braithwaite (1996) (Exhibit NZ-34) publis hed a brief review on the currently
available knowledge regarding European ca nker, based on studies of the disease's
development in the United Kingdom and Northern Europe, without examining
conditions in New Zealand. No new objec tive data is reported in this paper.
Therefore, I agree that it is not a reli able and relevant re ference to support the
hypothesis that latent infections may also occur in mature apple in New Zealand."
2919
7.1215 Dr Latorre adds that care should be exercised when attempting to draw conclusions for
New Zealand from the research conducted in Europe and referenced by the IRA:
"Australia's IRA based their risk assessm ent on the information already published
from studies in Northern Ireland (Swinburne, 1964, 1975, Exhibits NZ-11 and NZ-9,
respectively). These results were obtaine d on apple varieties quite different from
those produced today in New Zealand a nd under environmental conditions that
appear to be far more conducive to fruit in fection (in Northern Ireland) than those in
New Zealand. Although this does not inva lidate the risk assessment analysis, and it
does not reject the hypothesis that latent in fections may occur in mature fruits in
New Zealand, it is a factor that should be ta ken into consideration by Australia's IRA.
Latent infection on mature fruits should not be under discussion, but the probability
of latent infection in many apple culti vars produced under different environmental
conditions in New Zealand is of utmost interest."2920
7.1216 Indeed, Dr Latorre is of the view that New Zealand's meteorological conditions are
unfavourable for European canker development. "[I]t appears that summer conditions in
New Zealand are very unfavourable for the developmen t of European canker, and that fruit infection
would be an extremely rare event. Therefore, th e likelihood of latent infection on mature apple fruits
would be extremely low or negligible."2921
7.1217 Dr Swinburne concurs. In his opinion, it is im portant to consider not only annual rainfall, but
rainfall patterns, in order to determine whether there are sufficiently long periods of leaf wetness:
"The essential weakness of the approach in the IRA is that it assumes that inoculum
(spores) for infection is always available, and all that is required is a suitable period
(hours of leaf wetness within given temper ature limits) for infection to occur.
The major flaw in this argument is the assu mption that regions can be compared on
the basis of annual rainfall, without regard to rainfall patterns. Even in regions such
as N. Ireland (Loughgall) with rain in all seasons, more than 5hrs of leaf wetness was
required following a few dry days before ascospore discharge resumed (Swinburne,
1971b). The situation in regions with a pronounced dry season, such as California
and the Pacific Northwest in the USA, spore formation does not even begin until
some time (as yet undetermined) into the ra iny period (Zeller, 1926, Wilson, 1966/8).
For such an area data relating only to simple 'infection periods' would greatly
overestimate the risk of disease establishment."2922

2919 Dr Latorre's reply to Panel question 54, in List of Replies from the scientific experts to questions
2920 Dr Latorre's reply to Panel question 55, in List of Replies from the scientific experts to questions
2921 Dr Latorre's reply to Panel question 57, in List of Replies from the scientific experts to questions
2922 Dr Swinburne's reply to Panel question 66, in List of Replies from the scientific experts to
questions posed by the Panel, para. 399. See also, Dr Swinburne's and Dr. Latorre's replies in Transcript of the
Panel's meeting with experts, paras. 525-526.

7.1218 As regards the presence of a susceptible host, Dr Swinburne notes that a fruit becomes
infected if its own tree is infected. He points out in this regard that the IRA acknowledges that
95 per cent of New Zealand's orchards should be canker free:
"[F]or fruit to become infected it generally requires to be grown on a tree which is
itself infected..., so we are talking about fruit being infected from its mother tree,
from its own particular tree. So if you pick fruit from trees which have no canker, the
likelihood of them having latent infection is vanishingly small. And as I gather, 95
per cent of New Zealand's orchards are largely canker free, from the exhibits
presented."
2923
7.1219 Dr Swinburne adds that, "[g]iven that some 95% of New Zealand orchards are either disease
free or have very low levels of infection, coupled with a climate that is not well suited to summer fruit
infection, it necessarily follows that the probabilit y of there being post harvest rots is very low
indeed."2924
7.1220 Likewise, Dr Latorre points out that "[l]atent infections may occur in a small proportion of
the fruits harvested from cankered trees if frequent summer rainfalls occurred at harvest". "[L]atent
infections would be extremely unlikely in appl es from orchards free of European canker in the
absence of summer rains. Under these circumstances, the risk of latent infection is close to zero (in
practice zero)."2925
7.1221 As regards the way in which an mature, sympto mless apple fruit would become a true vector
for European canker, Dr Swinburne notes that "fru it has to produce conidia in order to become an
infectious unit." 2926 Dr Latorre agrees, and explains that "conidia are only formed under very wet
conditions in the orchard, mainly in the cankers and almost never, or never at least in my experience,
on the fruit".2927
7.1222 Dr Swinburne adds that European canker needs an entry point in order to actually infect:
"In the discussion concerning fire blight Erwinia, we were pointing out that Erwinia
is not an epiphytic organism and neither is Cylindrocarpon heteronema, which is the
asexual stage of Nectria. The conidia are relatively short lived in any event,
particularly in a dry climate, and they cannot survive on the unbroken surface of an
apple. They do require an entry point in order to infect. Conidia merely
contaminating the surface of fruit at harvest w ill not play a part in any future latent
infection. Those infections will alread y have taken place, as is known in the
European context, either through the cal yx end, stem end or under very rare
circumstances through open lenticels, becau se in very wet climates the lenticels on
the fruit are actually open, enabling spores to enter."
2928
7.1223 Dr Latorre agrees with Dr Swinburne that coni dia can survive only for a short period of time
on the surface of apple fruit:

2923 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 432.
2924 Dr Swinburne's reply to Panel questions 62 and 63, in List of Replies from the scientific experts to
questions posed by the Panel, para. 388.
2925 Dr Latorre's reply to Panel guideline (g), in List of Replies from the scientific experts to questions
posed by the Panel, para. 2. See also, Dr Latorre's reply to Panel question 49, in List of Replies from the
scientific experts to questions posed by the Panel, para. 306.
2926 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 419.
2927 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 413.
2928 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 434.

"[O]n my experience conidia cannot multiply on the surface of the fruit, and they can
only survive maybe for a very short period of time, depending on weather conditions
of the environment where they are. ... Th ere is no data showing that conidia can
really survive for a long period of time outside the host, on the surface of the host, in
this case on the fruit, nor that they can multiply on clean fruit."
2929
7.1224 The Panel has already noted that Europ ean canker would not survive as a surface
contaminant.2930 As explained by Dr Latorre, "[t]here is no information demonstrating that conidia or
ascospores of N. galligena can survive epiphytical ly (as surface contaminant) on mature apple
fruits."2931 Likewise, the survival and viability of th e fungus would require sp ecific climatological
conditions. The Panel has noted, with regard to the IRA's discussion of importation steps 2 and 3, that
certain meteorological conditions are necessary for inoculum production, dissemination and
infection.2932 Dr Latorre explains that "favourable clim atic conditions are compulsory for sporulation
(inoculum production, mainly conidia), dissemination and survival of the inoculum."2933
7.1225 Furthermore, Dr Swinburne explains that the presence of lesions cannot predict the likelihood
of fruit infection:
"The sequence of events outlined above are applicable to regions where wood cankers
are frequent and weather c onditions favour production of conidia during the summer
months (e.g. the U.K., and N. Ireland in particular). The presence of stem lesions
alone can not predict the likelihood of fruit infec tion. It is unfortunate that there is so
little data on the causes and extent of rotting of fruit in New Zealand, but what there
is suggests that summer weather conditions are not favourable for infections by
N. galligena and the challenged requirements seem excessive (see Q72)."
2934
7.1226 Dr Swinburne also points out that in New Zealand fruit rots attributable to N. galligena
should not be common:
"The limited information available in [the Parties first written submission] suggests
that rots attributable to N. galligena in fruit grown in New Zealand are by no means
as common as they are in Europe, and (of course) are seemingly confined to regions
of [New Zealand] where tree cankers are present. The weather data presented in
Annex 2 of [New Zealand's first writte n submission] would accord with a low
incidence of fruit infection, and, based on Wilson's (1966) observations in California,
even conidial production from stem cankers may be sparse duri ng summer. It is
perhaps significant that in what was descri bed as an epidemic of canker in Auckland
that Brooke & Bailey (1965) only found o ccasional fruit rots. Unfortunately that
paper does not record whether the rots were found before or after harvest."
2935

2929 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 435.
2930 See, for example, paras. 7.682, 7.702 and 7.715 above.
2931 Dr Latorre's reply to Panel question 49, in List of Replies from the scientific experts to questions
2932 See paras. 7.531-7.534 and 7.564-7.566 above.
2933 Dr Latorre's reply to Panel question 66, in List of Replies from the scientific experts to questions
2934 Dr Swinburne's reply to Panel question 49, in List of Replies from the scientific experts to
questions posed by the Panel, para. 314.
2935 Dr Swinburne's reply to Panel question 57, in List of Replies from the scientific experts to
questions posed by the Panel, para. 361. See, Wilson, "Development of European canker in a California apple
district" (1966), in Exhibit NZ-64.

7.1227 Dr Swinburne emphasises the importance of adequate climatic conditions for fruit rots. "Both
parties seem to agree that the frequency of fru it rotting is low, given the paucity of positive
identifications. That this is so, even from regions with tree cankers (e.g. Auckland) this [sic] must be
attributable to unfavourable weather conditions, especially the absence of rain, during the summer
months."
2936
7.1228 The Panel has noted that the IRA does not contain scientific evidence regarding the
possibility that latently infected but symp tomless fruit could deve lop rot and generate Neonectria
galligena spores, which could then be transferred to clean fruit. The Panel has concluded that there is
no scientific evidence in the IRA to support the pro position that perithecia would play a role in the
contamination of clean fruit.2937
7.1229 Dr Swinburne explains that, in any event, most fruit infections would not occur at harvest:
"The majority of fruit infections in the European context are to be found either at the
stem end or the calyx end, and generally speaking it means that the core has been
infected. The time at which that infecti on occurs [would be] surprisingly early on in
the fruits development. It isn't at the time of harvest, it isn't in the dump tank. That
core rot is taking place at some stage when either the calyx or the stem end is
enabling an entry point for conidia whic h are washing down over the surface of the
tree and either accumulating it in the stem well or going around and entering the
calyx. I don't have any information which would ever suggest that infestation of
apples at harvest, and I stress that point, or even after harvest leads to any significant
level of rotting in commercial conditions."
2938
7.1230 Dr Swinburne adds that it would seem "extraordi nary, if true" that a high proportion of apples
rotted with N. galligena would go unnoticed by research centres in New Zealand and that
"[a]lternatively, the arbitrary probability maximum set in the IRA is too high."2939
7.1231 As regards survival of European canker after cold storage, Dr Latorre points out that the
evidence in the IRA suggests that in principle the fungus may survive even after cold storage, but only
inside apple fruit. "Australia states that cool storage and transport processes would not adversely
affect the viability of the fungus. This may be tr ue only for the fungus inside the fruit ... In other
words, mycelia can survive in late ntly infected fruits; growth may resume after cool storage and
eventually the fungus may sporulate on the surface of mummified fruits."2940
7.1232 Dr Latorre adds that "[f]requent summer ra infalls are necessary for inoculum production,
dissemination and infection. If summer rainfalls ar e frequent, it would be reasonable to assume that
some of the infected fruits may develop symptoms on the tree, and other fruits may be latently
infected, developing symptoms after several weeks or even months in cold storage."2941

2936 Dr Swinburne's reply to Panel question 75, in List of Replies from the scientific experts to
questions posed by the Panel, para. 438.
2938 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 441.
2939 Dr Swinburne's reply to Panel question 75, in List of Replies from the scientific experts to
questions posed by the Panel, para. 439. See also, Dr Deckers's reply to Panel question 75, in List of Replies
from the scientific experts to questions posed by the Panel, para. 436.
2940 Dr Latorre's reply to Panel question 71, in List of Replies from the scientific experts to questions
2941 Dr Latorre's reply to Panel question 57, in List of Replies from the scientific experts to questions
posed by the Panel, para. 357. See also, Dr Latorre's reply to Panel question 66, in List of Replies from the
scientific experts to questions posed by the Panel, para. 398.

7.1233 Both Dr Latorre and Dr Swinburne explain that there is no evidence of perithecia forming on
rotten fruit. As explained by Dr Latorre:
"I have no information indicating that Eur opean canker can develop from rotten fruit.
In my experience, rotten fruit is very rare, almost never occurs in our conditions and
sometimes we do see it after several months or weeks of cold storage in a very low
proportion and never sporulated on the surface of the fruit. If this fruit are not
sporulating it is impossible to admit that it can spread at least easily to the clean fruit.
Well, I think the observation about perithecia on the fruit is something that has to be
reviewed. We have never seen perithecia form on the fruit. I don't have any good
paper that can really demonstrate that in the recent years they have seen perithecia in
very susceptible varieties, but not in today's apple varieties."
2942
7.1234 As regards the likelihood that N. galligena survives routine processing procedures in the
packing house (importation step 4), the experts agree in principle with the IRA's proposition that:
"[N]o aspect of the process in the pack ing house reduces the number of latently
infected fruits. Once the fungus has penetr ated mature fruits, the normal post-harvest
management including brushing, waxing, sorting and grading, cold storage and even
fungicide treatments, will be unable to a rrest the fungus inside the fruits. Cold
temperature would only be able to retard symptom development by lowering the rate
of fungal growth."
2943
7.1235 In particular, according to Dr Latorre, cold storage, for example, would "retard symptom
development by lowering the rate of fungal growth", but would not reduce infections.2944 At the same
time, Dr Latorre agrees with New Zealand that the use of water dump tanks, followed by high-
volume, high-pressure water washing, would be effective in removing external contaminants.2945 This
is also noted by the IRA. 2946 In the words of the expert, "[t]he likelihood that inocula contaminating
the surface of the fruits can survive this process, attached to the fruit surface, is negligible or zero and
it should be disregarded from the risk analysis."2947
7.1236 Nevertheless, Dr Latorre and Dr Swinburne cauti on that the IRA fails to take into account the
effect of store conditions and the duration of storage. Dr Swinburne explains that:
"It is usual for dessert apples to be harveste d into bulk bins that are transported to on-
site CA (controlled atmosphere) stores, where they are cooled, and sealed in
chambers with adjusted CO2 and O2 con centrations. At intervals dictated by
marketing strategies they are removed from these stores and dispatched to specialist

2942 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 413. See also,
Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 461.
2943 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 454. See also, reply of Dr Swinburne to Panel questions 77, 78 and 79, para. 459; and
Dr Deckers's reply to Panel question 79, in List of Replies from the scientific experts to questions posed by the
Panel, para. 453.
2944 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
2945 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 456. See also, Dr Sgrillo's reply to Panel question 80, in List of Replies from the
scientific experts to questions posed by the Panel, para. 465.
2946 Australia's IRA, Part B, p. 125.
2947 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 456. See also, Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of
Replies from the scientific experts to questions posed by the Panel, para. 459.

pack houses, where the operations of wash ing, grading and packed for retail.
The process may extend over many months, which has not been factored into the IRA
model. Any infections present may develop into rots during this time, and this will be
strongly influenced by both the store temperature and environment (Berrie et al 2007,
appendix 1). At grading these would be removed, so the numbers of infected fruit
will diminish with time, consequently th e statement that 'none of the pack house
measures would reduce infection' is incorr ect, as it must also embrace the CA store
period."
2948
7.1237 In the words of Dr Swinburne, "[t]he probabiliti es assigned in the IRA to these steps are all
difficult to reconcile with the observations above, es pecially as they all omit the factor of time." 2949
Dr Swinburne concludes that "the store conditions and the duration of the holding period will be a
factor in any subsequent development of any quiescen t infections that may be present (Berrie, Xu &
Johnson 2007 in appendix)." 2950 Likewise, Dr Latorre notes that "symptoms may appear after several
weeks of cold storage. If lots of mature asymptomatic fruits are kept for several weeks in cold storage
in New Zealand, it would be possible to remove in fected fruits before export to Australia, lowering
the risk of entrance."2951
7.1238 Furthermore, Dr Latorre and Dr Swinburne fi nd no justification in the IRA for the likelihood
values assigned to importation step 4. Dr Latorre states that "[t]here is no scientific literature to
support" the likelihood values estimated by the IRA for importation step 4. 2952 This likelihood "falls
within a range that is difficult to legitimize, if th is assumption implies that the inoculum must remain
on the fruit surface. Rather, it would be possible fo r the inoculum to be present internally in the
fruit."2953
7.1239 As regards the probability of European canker entering Australia, Dr Latorre confirms that
specific climatic conditions and the prevalence of infected trees are essential factors for European
canker infections in new areas:
"Latent infections may occur in a small proportion of the fruits harvested from
cankered trees if frequent summer rainfalls o ccurred at harvest. Fruit infections are
negligible or extremely low in areas with dry climate conditions at harvest.
If cankered trees are not prevalent (0% infected trees), I would not expect to observe
any latent infections, even under high summer rainfalls. Therefore, the risk of

2948 Dr Swinburne's reply to Panel questions 78, 80, 81, 82 and 83, in List of Replies from the scientific
experts to questions posed by the Panel, para. 482. See also, Dr Swinburne's reply to Panel questions 77, 78 and
79, in List of Replies from the scientific experts to questions posed by the Panel, para. 459.
2949 Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of Replies from the scientific experts
to questions posed by the Panel, para. 460.
2950 Dr Swinburne's reply to Panel questions 77, 78 and 79, in List of Replies from the scientific experts
to questions posed by the Panel, para. 459. See also, Dr Deckers's reply to Panel question 80, in List of Replies
from the scientific experts to questions posed by the Panel, para. 461.
2951 Dr Latorre's reply to Panel question 79, in List of Replies from the scientific experts to questions
posed by the Panel, para. 455. See also, Dr Deckers's reply to Panel question 79, in List of Replies from the
scientific experts to questions posed by the Panel, para. 453.
2952 Dr Latorre's reply to Panel question 80, in List of Replies from the scientific experts to questions
posed by the Panel, para. 462. See also, Dr Sgrillo's reply to Panel question 80, in List of Replies from the
scientific experts to questions posed by the Panel, para. 467.
2953 Dr Latorre's reply to Panel question 80, in List of Replies from the scientific experts to questions

entrance would vary considerably based on climate conditions and disease prevalence
and severity."2954
7.1240 Dr Latorre explains that "temperatures a nd rainfalls are relatively unfavourable for
N. galligena during summer and early fall in Australia, which may be the most critical period for
infection."2955
7.1241 Likewise, Dr Swinburne notes that even if a New Zealand apple was infected, it would not
necessarily be capable of initiating a new series of European canker infections in Australia:
"The production of conidia from an apple rotted with Nectria discarded in an
Australian orchard and thinking in terms of its ability to initiate a new series of
infections in an area which had never had it. As I have said, there is no information
concerning the possibility that that would happen. The point that I want to emphasize
is that fruit has to produce conidia in order to become an infectious unit. It may be
infected, but it is not necessarily infectious and even if it does become infectious,
being presumably on the ground and not deliberately placed somewhere up in a tree,
the dissemination of those conidia which depends on splash dispersal is actually
going to be over a very limited area but I wouldn't want to overemphasize that
particular possibility but there is no inform ation which tells us that it cannot happen
and as biologists one can never say it would never happen."
2956
7.1242 While Dr Latorre accepts the IRA's conclusion in regard to European canker development in
Australia, he notes that the values relied upon by th e IRA have not been validated locally and seem
exaggerated:
"The available information demonstrating that mature asymptomatic apples (infected
or latently infected) can readily sporulate under the Australian environment is not
provided. Based on published scientific information, Australia assumes that fungal
growth and fruit rot resume when fruit is removed from cool storage, sold to
consumers and stored at room temperature. Therefore, rotted fruits discarded near
susceptible hosts could be potentially (but not necessarily) a source of inoculum
(mainly conidia) for infections in new areas. This conclusion is acceptable and
likelihood values for establishment and sp read in Australia have been assigned
(Table 34, AUS-2BA p.144). However, th e likelihood assigned seems to be high and
these values have not been validated locally. Based on the general information
available, I would assume that these events have a likelihood of occurring different
from zero, but still extremely low."
2957
7.1243 Further, Dr Swinburne is sceptical about the risk presented in retail packs or in a domestic
environment:
"As discussed in Q58 rotted fruit incuba ted under conditions of high humidity can
produce conidia, but it is extremely unlikely that they would produce perithecia, still
less that ascospores would be released. The importance of high humidity to conidia

2954 Dr Latorre's reply to Panel question 49, in List of Replies from the scientific experts to questions
posed by the Panel, para. 306. See also, Dr Latorre's reply to Panel question 56, in List of Replies from the
scientific experts to questions posed by the Panel, paras. 351-352.
2955 Dr Latorre's reply to Panel question 66, in List of Replies from the scientific experts to questions
2956 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 419.
2957 Dr Latorre's reply to Panel question 69, in List of Replies from the scientific experts to questions

production has to be stressed. The surface of fruit held in cold stores is usually moist,
and fully developed rots usually produce conidia. Fruits rotting subsequently in retail
packs or in a domestic environment at less than 100% RH are not likely to produce
conidia. In the uncertain event that an apple shipped to Australia from New Zealand
rotted with N. galligena its ability to act as vector of disease would depend on the
handling system on arrival. (See Q52)"
2958
7.1244 When asked specifically whether restricting imports to mature, symptomless apples would
achieve Australia's ALOP , Dr Latorre responds that under New Zealand's alternative, apples may
carry Neonectria galligena; the likelihood of this is "close but not equal to zero":
"Exporting only 'mature asymptomatic apples' from New Zealand would disregard the
fact that latent infection may occur on a ma ture apple fruit, the main issue of this
dispute. Latent infection (fruits that are infected but asymptomatic at harvest) may be
extremely rare in New Zealand, considering that weather conditions at harvest are not
very favourable for European canker in New Zealand apple-producing areas, as
previously discussed. However, it has to be admitted that the likelihood of such an
occurrence is close but not equal to zer o; at least, until objective results prove
otherwise."
2959
7.1245 Likewise, Dr Swinburne notes that New Zealand's alternative measure would involve a very
low level of transmission:
"Given that some 95% of New Zealand orchards are either disease free or have very
low levels of infection, coupled with a cl imate that is not well suited to summer fruit
infection, it necessarily follows that the pr obability of there being post harvest rots is
very low indeed. Exclusion of exports from the remaining 5% of orchards would
reduce the risk to insignificance.
Australia's insistence on receiving only fruit from inspected orchards certified as free
from canker would eliminate virtually all risk of fruit being infected. Moreover, as
there is no evidence to support Australia's concerns that cross contamination might
occur in the pack house during grading etc. no further measures would be
necessary."
2960
7.1246 Referencing the experience of other apple expor ting countries, Dr Latorre points out that the
IRA's conclusion that symptomless apples from New Ze aland would carry latent infections is not
supported by scientific information:
"The [pest risk analysis], and particularly the ALOP, is the crucial aspect of this
dispute with regard to European canker. Au stralia considers [the probability of entry,
establishment and spread as] low. However, there is a general perception that [the
probability of entry, establishment and spread] is extremely low or negligible in other
apple-producing countries. Data provided by Australia to support their conclusion
appear to be insuffici ent. For instance, data to validate the probability of

2958 Dr Swinburne's reply to Panel question 69, in List of Replies from the scientific experts to
questions posed by the Panel, para. 408.
2959 Dr Latorre's reply to Panel question 63, in List of Replies from the scientific experts to questions
2960 Dr Swinburne's reply to Panel question 63, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 388-389.

N. galligena entrance via asymptomatic fruits has not been provided; similarly, data
supporting the probability of establishment and spread were not presented.
The long experience of other exporting c ountries where European canker is present
(e.g., Chile, United States) suggests that the probability that asymptomatic fruits
carrying latent infection may introduce N. galligena into a new area is negligible
(extremely rare), rather than low. This probability would increase if apples were
harvested from infected orchards located in areas with high summer rainfalls.
Therefore, the risk of long-distance disease spread by infected fruits (fruits with latent
infection or visible symptoms of the disease) should be considered extremely low or
negligible until sufficient experimental evidence is provided to neglect this
conclusion."
2961
7.1247 When meeting with the Panel, the experts we re more doubtful about whether New Zealand's
alternative would achieve Australia's ALOP. Dr Swinburne stated that:
"The assumption behind this particular measure is that fruit which become infected
during the growing season will all show sympto ms of rotting, at or before they are
mature harvestable fruit, because of the natu re of the varieties. And the point that
was made in some of the presentations was that the resistance mechanism, which is
expressed by cooking apples which restricts the fungus for some period of time,
wasn't present in modern dessert varieties. That is not the European experience.
In Europe, and particularly in United Kingdom, we know that fruit of the same sort of
varieties as we are discussing here, can a nd do become infected during the growing
season are harvested at the appropriate moment but still symptomless and are then
placed in store, and this is the important thing is what happens to them in store,
because the conditions the gas and temperat ure conditions within those stores is
critical to the development of subsequent ro tting, but they can therefore develop rots
some weeks perhaps months after they have been picked in a mature symptomless
condition. So it is incorrect to assume that that particular measure would satisfy the
requirement."
2962
7.1248 Dr Latorre agreed: "I agree with Dr Swinburne has mentioned [sic]. Since it is impossible to
differentiate symptomless fruit from those having the in ternal infection, I think this measure would be
very difficult to satisfy the requirement, in my opinion."2963
7.1249 As noted above in regard to fire blight 2964, what the Panel has to look at, in the context of the
second prong of Article 5.6 of the SPS Agreement, is whether New Zealand has raised a presumption,
not successfully rebutted by Australia, that the alternative measures would achieve Australia's ALOP.
As the panel in Australia – Salmon explained2965, this legal analysis is different from the scientific
assessment and certainty that scientific experts consulted by panels might prefer.
7.1250 The Panel accepts that it might be impossible to differentiate symptomless fruit from fruit
having latent internal infection. However, th e distinction between mature, symptomless fruit and
latently infected fruit is not the key issue here. The key issue is the probability of New Zealand
apples successfully initiating a European canker infe ction in Australia. Significantly, Dr Latorre and

2961 Dr Latorre's reply to Panel question 51, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 323-324 (emphasis added).
2962 Dr Swinburne's reply in Transcript of the Panel's meeting with experts, para. 426.
2963 Dr Latorre's reply in Transcript of the Panel's meeting with experts, para. 427.
2964 See para. 7.1137 above.
2965 Panel Report on Australia – Salmon, para. 8.126 (emphasis added).

Dr Swinburne clearly state – and the Panel has f ound under Articles 5.1 and 5.2 – that the IRA's risk
assessment is flawed at various key points co ncerning the probability that latently infected
New Zealand apples would actually carry Neonectria galligena. In particular, Dr Latorre and
Dr Swinburne explain that it would be highly unlikel y that latently infected apples would appear in
New Zealand and be harvested in the first place. They are also sceptical ab out the survival of the
N. galligena for a sufficiently long time on th e surface of apple fruit. Further, they question the
possibility of latently infected New Zealand apples initiating a European canker infection in Australia.
7.1251 As also noted in the context of fire blight, the experts confirm that New Zealand would only
export to Australia mature, symptomless apples that would also be free of trash.
2966 Further, the Panel
has found under Articles 5.1 and 5.2 of the SPS Agre ement that the choice of a probability interval
and a midpoint for events with a "negligible" like lihood of occurring, as well as the combination of
this probability interval with the use of a uniform distribution to model the likelihood of these events,
are not properly justified in the IRA and lead to an overestimation of the probability of entry,
establishment and spread of European canker.2967
7.1252 Australia has a qualitative ALOP, defined as "pr oviding a high level of protection aimed at
reducing risk to a very low level, but not to zero." 2968 In the light of the above considerations, the
Panel finds that New Zealand has raised a su fficiently convincing presumption, not successfully
rebutted by Australia, that the alternative European canker measure of restricting imports of
New Zealand apples to mature, symptomless apples would meet this ALOP. Accordingly, this
alternative measure fulfils the se cond condition of the Article 5.6 t est in the context of European
canker, too.
(ii) First condition: whether restricting imports to mature, symptomless apples is reasonably
available taking into account technical and economic feasibility
7.1253 New Zealand claims that restricting imports to apple fruit that are mature and symptomless
instead of the 12 measures at issue for fire blight and European canker is reasonably available taking
into account technical and economic feasibility.
2969 New Zealand explains that "international fruit
buyers" require New Zealand apples to meet the minimum standard set out as the Pipfruit
New Zealand Class 1 export fruit standard. This standard requires apples to be mature and
symptomless2970, and New Zealand's pipfruit industry h as pre- and post-harvest quality control
measures to ensure that the apples to be exporte d meet the Pipfruit New Zealand Class 1 export fruit
standard for fruit maturity.2971 Thus, the requirement for apples to be mature and symptomless would
only make New Zealand's current practice mandatory. 2972 New Zealand quotes the experts' responses
to confirm that compliance with such standards would ensure that only mature and symptomless
apples will be exported to Australia.2973 New Zealand also refers to the Japan – Apples (Article 21.5 –
US) dispute where the compliance panel found that an alternative measure requiring apples to be
mature and symptomless was reasonably availa ble taking into account technical and economic

2966 See para. 7.1195 above.
2967 See paras. 7.780, 7.781 and 7.1205 above.
2968 Australia's IRA, Part A, p. 3.
2969 New Zealand's first written submission, para. 4. 497. See also, New Z ealand's second written
submission, para. 2.889.
2970 New Zealand's first written submission, para. 4.492.
2971 New Zealand's first written submission, para. 4.493.
2972 New Zealand's first written subm ission, para. 4.495. See also New Zealand's second written
submission, para. 2.888.
2973 New Zealand's second written submission, para. 2.888.

feasibility.2974 New Zealand submits that Australia does not contest that the alternative fire blight and
European canker measure is reasonably available.2975
7.1254 Australia does not directly contest that New Zealand's alternative is reasonably available
taking into account technical and economic feasibility. Australia refers to the Japan – Apples
(Article 21.5 – US) dispute and argues that an alternative measure is reasonably available if it could be
reasonably implemented "in practice" taking into account technical and economic feasibility "in the
real world". Australia also submits that the risk of the "incorrect enforcement" of an alternative
measure is part of its technical feasibility.2976
7.1255 The Panel considers that New Zealand has demonstrated that the requirement for apples to be
mature and symptomless is part of its current apple production and export practice. In fact, the
requirement for apples to be mature and symptomless is part of the Pipfruit New Zealand, Class 1
export standard, which New Zealand submitted to the Panel. 2977 Accordingly, New Zealand has
demonstrated that it has quality control measures in place to ensure that the mature, symptomless
requirement is respected.
7.1256 As noted above, Dr Deckers describes the Pip fruit New Zealand, Class 1 export fruit standard
as "a standard method of maturity and fruit quality determination." 2978 Likewise, Dr Paulin confirms
that the Pipfruit New Zealand, Class 1 export fruit standard corresponds to a "high standard of
quality" and "[t]he specifications for absence of damage are of a proper level of precision to guarantee
'symptomless fruits'".2979 Dr Latorre finds that "the require ments established by Pipfruit New Zealand
with regard to maturity and absence of fruit damage are acceptable." 2980 He also confirms that in light
of the exhibit submitted by New Zealand there is no risk that apples exported from New Zealand "will
not always be mature, asymptomatic and free of trash".2981 Likewise, according to Dr Schrader:
"With regard to the requirements for maturity, the inclusion of background colour and
ethylene content as established by Pipfruit New Zealand goes beyond the
requirements asked by the Streifindex. Regarding absence of damage, class 1 as
defined in Exhibit NZ-93 is more detailed than e.g. quality standards required by the
European Union, where trade class 1 refers to good quality, slight shape and
development defects, slight colouring de fects, only slightest bruises, sufficient
firmness."
2982
7.1257 The Panel agrees with Australia that whether an alternative is considered reasonably available
taking into account technical and economic feasibility must be assessed "in the real world" as
suggested by the compliance panel in Japan – Apples (Article 21.5 – US) . As stated in the same
dispute, the "risk of incorrect enforcement" is also part of the technical feasibility of the

2974 New Zealand's first written submission, para. 4.496.
2975 New Zealand's second written submission, para. 2.886.
2976 Australia's first written submission, para. 1077.
2977 Pipfruit New Zealand Incorporated, "Best Practices Guidelines for Production, Harvest, Cool-chain
and Packing of NZ pipfruit: Industry Quality Recommendations" (January 2005), in Exhibit NZ-93.
2978 See para. 7.1195 above. Dr Deckers's reply to Panel question 2, in List of Replies from the
scientific experts to questions posed by the Panel, para. 20.
2979 See para. 7.1195 above. Dr Paulin's reply to Panel question 2, in List of Replies from the scientific
experts to questions posed by the Panel, para. 22.
2980 See para. 7.1195 above. Dr Latorre's reply to Panel question 2, in List of Replies from the
scientific experts to questions posed by the Panel, para. 21.
2981 See para. 7.1195 above. Dr Latorre's reply to Panel question 3, in List of Replies from the
scientific experts to questions posed by the Panel, para. 29.
2982 See para. 7.1195 above. Dr Schrader's reply to Panel question 2, in List of Replies from the
scientific experts to questions posed by the Panel, para. 23.

alternative.
2983 Nonetheless, Australia failed to explain how these two parameters apply in the current
dispute to refute the prima facie case made by New Zealand that the first condition of the Article 5.6
test is fulfilled in the context of fire blight a nd European canker. In fact, Australia did not even
contest New Zealand's specific arguments in regard to fire blight and European canker under the first
condition of the Article 5.6 test.
7.1258 In light of its aforementioned arguments and these responses by the experts, New Zealand has
made a prima facie case that the first condition of the Article 5. 6 test is fulfilled in the context of fire
blight and European canker, which Australia has failed to rebut.
(iii) Third condition: whether restricting imports to mature, symptomless apples is significantly
less trade restrictive than Australia's current fire blight and European canker measures
7.1259 New Zealand argues that its alternative would be significantly less trade restrictive than the
eight measures in place for fire blight and that it already has procedures in place to ensure that it
would export only mature, symptomless apples to Australia. The additional costs for the
implementation of the alternative measure would be limited to merely validating this procedure.
2984
The alternative measure that simply validates, th rough auditing, existing arrangements for the export
of apples is less trade restrictive than measures imposing multiple new requirements.2985
7.1260 New Zealand claims that Australia's contested fire blight and European canker measures
introduce a high degree of risk for any New Zeala nd apple grower since a single fire blight or
European canker strike would make the appl es from that orchard ineligible for export. 2986 This would
not happen under the alternative proposed by New Zealand. 2987 Also, orchards without any history of
fire blight and European canker would still have to comply with Australia's existing requirements,
whereas New Zealand's alternative would not impose such compliance. 2988 The potential reduction of
costs of the alternative measure would promote the competitiveness of New Zealand apple growers, in
contrast to Australia's existing requirements that impose increased compliance costs.2989 New Zealand
also contends that Australia does not contest that the alternative measure is "significantly less trade
restrictive".2990
7.1261 Australia indicates that a WTO Member does not need to adopt the least trade-restrictive
measure.2991 When comparing the trade restrictivene ss between the existing and the alternative
measure, it is not enough to establish that the alterna tive is merely less trade restrictive; rather, the
alternative must be significantly less trade restri ctive, "significant" meaning "important, notable,
consequential".2992 Australia's understanding of the panel report in EC – Approval and Marketing of
Biotech Products is that a given risk assessment may be supported by a range of possible measures
and it is within the Member's discretion to choose a measure providing the best protection taking into
account its ALOP. 2993 Accordingly, Australia submits that th e Panel must respect "a Member's right

2983 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.171.
2984 New Zealand's first written submission, para. 4.505.
2985 New Zealand's first written submission, para. 4.506.
2986 New Zealand's first written submission, para. 4.507.
2987 New Zealand's first written submission, para. 4.508.
2988 New Zealand's first written submission, para. 4.509.
2989 New Zealand's first written submission, para. 4.510.
2990 New Zealand's second written submission, para. 2.886.
2991 Australia's first written submission, para. 1078.
2992 Australia's first written submission, para. 1079.
2993 Australia's first written submission, para. 1080.

to choose its preferred measure, unless there is another measure that is significantly less restrictive to
trade".2994
7.1262 Previous panels assessed the third condition of the Article 5.6 test by looking at the difference
in market access under the measures at issue and the alternative measure(s) identified by the
complainant. In particular, previous panels analysed whether, under th e alternative measure,
"market access would be obtained significantly more easily than under the current regime" 2995 and
whether "the increased market access that would result under the alternative[] ... would be
significant."2996 At least two fire blight measures (M4 and M5) and one European canker measure
(M13) have a direct effect on market access, and thus trade, in that they involve a suspension of trade
in case of non-compliance.
7.1263 A comparison of New Zealand's alternative me asure with the 12 contested fire blight and
European canker measures also confir ms that the former would be signi ficantly less trade restrictive.
In fact, Australia's contested fire blight measure s are not just more numerous, they are also more
stringent and costly to comply with. In contrast, through its Class 1 export fruit standard,
New Zealand already complies with the alternative requirement of restricting the import of
New Zealand apples to mature, symptomless apples.
7.1264 The Panel agrees with Australia that the third cond ition of the Article 5.6 test requires that the
complainant identify an alte rnative measure that is " significantly less restrictive to trade" than the
contested measure. This is in line with the language of footnote 3 to Article 5.6 of the
SPS Agreement
2997, and it also accords with how previous panels and the Appellate Body have
identified this third condition. 2998 Nonetheless, Australia does not explain why New Zealand's
alternative measure for fire bli ght and European canker would be merely less trade restrictive.
Nor does Australia contest any of the specific argumen ts advanced by New Zealand in the context of
fire blight and European canker in regard to the third condition of the Article 5.6 test.
7.1265 Accordingly, the Panel finds that New Zealand has demonstrated that a measure requiring that
imports of New Zealand apples be mature and sympto mless is significantly less trade restrictive than
Australia's contested fire blight and European canker measures.
(c) Conclusion on New Zealand's Article 5.6 claim with regard to fire blight and European canker
7.1266 The Panel has found that New Zealand has demonstr ated that its alternative measure for fire
blight and European canker fulfils the three cu mulative conditions of the Article 5.6 test.
Accordingly, the Panel finds that the fire b light and European canker measures contested by
New Zealand (Measures 1-11 and 13) are inconsistent with Article 5.6 of the SPS Agreement.

2994 Australia's first written submission, para. 1081.
2995 Panel Report on Japan – Agricultural Products II, para. 8.96.
2996 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.151.
2997 Footnote 3 to Article 5.6 of the SPS Agreement provides that "[f]or the purposes of paragraph 6 of
Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably
available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary
or phytosanitary protection and is significantly less restrictive to trade." (emphasis added).
2998 See, Appellate Body Report on Australia – Salmon, paras. 186 and 194; Panel Report on Japan –
Agricultural Products II, para. 8.72; and Appellate Body Report on Japan – Agricultural Products II, para. 95.

3. Measure regarding ALCM
(a) Alternative measure regarding ALCM identified by New Zealand
7.1267 New Zealand claims that Australia's measure regarding ALCM listed in the panel request
(Measure 14)
2999 is inconsistent with Australia's obligations under Article 5.6 of the
SPS Agreement3000 because requiring inspection of a 600-fruit sample of each import lot is an
alternative measure satisfying all three cumulative conditions of the Article 5.6 test. "A single
measure could have been imposed by Australia in respect of ALCM that would be consistent with
standard AQIS inspection procedures for detection of quarantine pests. This single measure is the
inspection of a 600 fruit sample from each import lot."3001
7.1268 Australia argues that this is the only alterna tive measure identified by New Zealand regarding
ALCM.3002 New Zealand, however, contends that it has also identified the retail-ready requirement as
a further alternative measure regarding ALCM th at would satisfy the three-pronged Article 5.6
test.3003
7.1269 New Zealand refers to the retail-ready requirement as an alternative measure for the first time
in its first written submission, but only in the context of fire blight:
"With regard to fire blight, alternativ e measures that would also be reasonably
available, be less trade restrictive and achieve Australia's ALOP include restricting
apple fruit imports to those fruit that have been cold stored, or limiting imports to
apples that are 'retail-ready packaged fruit.'"
3004
7.1270 In its second written submission, New Zealand ex tends the relevance of this alternative to
ALCM:
"In its first written submission, New Zealand also identified various other alternative
measures for fire blight, European ca nker and ALCM that would meet the
requirements of Article 5.6, but which woul d still be more trade restrictive than
required. A measure limiting imports to apples that are retail-ready packaged fruit
was identified.
3005 Indeed, as noted above in respect of Article 5.1 and as confirmed
by the experts, such a measure would e ffectively exclude the primary pathway for
ALCM identified by the IRA.3006"3007
7.1271 This argument by New Zealand references inter alia the retail-ready requirement that it raised
originally only in regard to fire blight. To expa nd the relevance of this alternative measure to ALCM,

2999 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 2. See also, New Zealand's first written submission,
para. 3.83.
3000 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
attached as Annex A-1 to this report, 7 December 2007, p. 3.
3001 New Zealand's first wr itten submission, para. 4.513. S ee also, New Zealand's first written
3002 Australia's reply to Panel question 138 after the first substantive meeting.
3003 New Zealand's second written submission, para. 2.894.
3004 New Zealand's first written submission, para. 4.490.
3005 (footnote original) NZFWS, para. 4.490.
3006 (footnote original) See paras. 2.251 to 2.257. Cross RPQ, Q 105 p. 15. Professor Cross confirms
that "if fruit were supplied from New Zealand 'retail ready' or 'just in time', then it seems most unlikely that any
fruit would be returned to the orchard wholesalers for repacking": Cross RPQ, Q 122, p. 22.
3007 New Zealand's second written submission, para. 2.894.

New Zealand's argument references the followi ng two responses by Dr Cross on whether the
importation of retail-ready packaged apples might be an effective measure against ALCM:
"Question 105
Please comment on whether the considera tion in Australia's IRA regarding the
inadequacy of an inspection and treatment system based on a 600 fruit sample to
manage the risk for ALCM was objective and credible, relying on respected and
qualified scientific sources. Is such c onsideration sufficiently supported by the
available scientific evidence? (IRA, Part B, p. 188-190; paras. 1094-1096 of
Australia's FWS; paras. 4.517-4.522 of New Zealand's FWS)
Dr Cross:
The adequacy of the 600 fruit sample size will very much depend on the way fruit is
handled in Australia in particular the number of fruit that are likely to be placed or
disposed of in the vicinity of an apple tr ee or trees. As set out in my answer to
question 98, two very different fruit hand ling scenarios would give very different
risks of entry and establishment and quite different sampling sizes would be
appropriate.
If higher value, fruit is retail ready in pack s or cartons ready for sale held in cold
stores and redistributed to markets with mi nimal breaks in the cold chain and there
were minimal losses resulting in disposal of fruits in the vicinity of orchards, the
potential risks in this scenario are very low: [sic] There would be virtually no
opportunity for leaf midge adults to emerge, mate, exit the pack house and locate a
susceptible apple tree. A 600 fruit sample size would be very adequate to give a very
minimal risk from disposal of small numbers of fruits by consumers etc in gardens or
near orchards etc.
If fruit arrived in bulk bins for grading and packing with larger numbers of discarded
fruit being held temporarily at ambient temper atures outside before being disposed of
possibly nearby in the vicinity of an apple orchard, the potential risks for this scenario
are much higher.

Question 122
Does Australia's IRA provide an objective and coherent assessment of the likelihood
and implications of New Zealand apples be ing repacked at rural packing houses in
close proximity to orchards, when assessi ng the risks related to fire blight, European
canker and ALCM? Was such assessment m ade with proper methodological rigour?
(Para. 4.418 of New Zealand's FWS; and R 99 by Australia)
Dr Cross

Australia's IRA did provide an objective and coherent assessment with respect to
'apples free from trash either packed or so rted and graded bulk from New Zealand'
but appears it did not consider the case of re tail ready fruit. It took into account two
scenarios of different amounts of fruit being handled by the orchard pack house, 70-
100% versus 0.1-5%. This lead to very la rge (33 fold) differences in the estimates of
the numbers of infested apples being handles [sic] at the orchard wholesaler utility

points (Tables 42 and 43) which resulted in the estimates of the partial probabilities
of entry, establishment and spread which are high for the orchard wholesalers
(Tables 44 and 45). However, if fruit were supplied from New Zealand 'retail ready'
or 'just in time', then it seems most unlik ely that any fruit would be returned to the
orchard wholesalers for repacking. The IRA n eeds to be recalculated with respect to
this scenario."
3008
7.1272 To extend the relevance of the retail-ready re quirement regarding ALCM, New Zealand also
references an earlier part of its second written submission.3009 In this earlier part New Zealand argues,
under its Article 2.2 claim, that, as regards ALCM, Australia's IRA failed to take into account that
New Zealand apples would be exported retail-ready.3010
7.1273 As noted above, New Zealand identified in its first written submission the retail-ready
requirement as an alternative only for fire blig ht, but immediately excluded the possibility of
considering that as an alternative fire blight measure for the purposes of its Article 5.6 claim:
"Such measures have little justification, however, as they would be based on an
assumption that mature, symptomless apples could be a vector for the transmission of
fire blight. Since there is no scientific basis for any such assumption, New Zealand
will restrict its consideration to the alter native measure of restricting imports to
mature, symptomless apple fruit."3011
7.1274 Likewise, as noted above, in its second wr itten submission New Zealand argues that the
retail-ready requirement would not be consistent with Articles 2.2 and 5.1 of the SPS Agreement:
"However, given that these additional a lternatives are based on the assumption that
mature, symptomless apples are vectors for fi re blight and European canker, they are
still more trade restrictive than required and would not be consistent with Articles 2.2
and 5.1 of the SPS Agreement. The fact that less trade restrictive measures than the
measures at issue are still more trade restrictive than required simply indicates the
severity of the breach in this case."3012
7.1275 In the light of these statements by New Zealand, the Panel has found that New Zealand did
not validly identify the retail-ready requirement as an alternative measure regarding fire blight in the
context of Article 5.6. 3013 Given the absence of evidence and arguments by New Zealand under the
three-pronged Article 5.6 test, the Panel has also found that, even if New Zealand had properly
identified the retail-ready requirement as an alternat ive fire blight measure, it would not have been
appropriate or possible for the Panel to analyse this alternative under Article 5.6.3014
7.1276 New Zealand attempts to extend the relevan ce of the retail-ready requirement regarding
ALCM; however, as the Panel has found, without havi ng validly identified it in the first place as an
alternative in the context of fire blight. Accord ingly, it would be inappropriate for the Panel to
consider the mere reference in New Zealand's second written submission as having validly identified
this requirement as an alternative in the context of ALCM. As Australia points out, New Zealand's

3008 Dr Cross's replies to Panel questions 105 and 122, in List of Replies from the scientific experts to
questions posed by the Panel, paras. 629-631 and 692.
3009 New Zealand's second written submission, para. 2.894, footnote 1305.
3010 New Zealand's second written submission, paras. 2.251 to 2.257.
3011 New Zealand's first written submission, para. 4.490 (emphasis added).
3012 New Zealand's second written submission, para s. 2.894-2.895 (original emphasis). See also,
New Zealand's reply to Panel question 124 after the second substantive meeting.
3013 See para. 7.1115 above.
3014 See paras. 7.1118-7.1119 above.

second written submission misrepresents the relevant part of New Zealand's first written submission,
which identified the retail-ready requirement only as an alternative in the context of fire blight and not
ALCM.
7.1277 The question is therefore, whether New Zeal and's attempt in its second written submission
can be considered as identifying a new, second alte rnative measure regarding ALCM for the first
time. In principle, New Zealand would not be prevented from doing so. According to the
Appellate Body, "[t]here is no requirement in the DSU or in GATT practice for arguments on all
claims relating to the matter referred to the DSB to be set out in a complaining party's first submission
to the panel." 3015 Likewise, the panel in Japan – Apples found that "it is well established that a
complainant is not prevented, as a matter of principle, from developing in its second submission
arguments relating to a claim that is within the terms of reference of the panel, even if it did not do so
in its first written submission."3016
7.1278 In its second written submission New Zealand does not merely reference its argument in its
first written submission concerning the retail-ready re quirement constituting an alternative fire blight
measure but tries to extend its relevance to ALCM by also referencing another part of its same
submission and two responses from Dr Cross on the issue of retail-ready apple imports. Although
these referenced materials relate to New Zealand's Article 2.2 claim, the Panel sees no problem with
New Zealand using these materials also in regard to its Article 5.6 claim for ALCM. At the same
time, the party in question needs to explain how cross-referenced arguments and evidence advanced
under another claim are relevant for the claim in question.
7.1279 In the context of Article 5.6, New Zealand explicitly references arguments and evidence it has
made under its Article 2.2 claim. Given the su bject-matter addressed in these cross-referenced
arguments and evidence, New Zealand's cross-refe rencing under Article 5.6 could be read as
advancing arguments and evidence on how the retail-ready requirement might fulfil the second
element of the three-pronged Article 5.6 test, name ly whether it would achieve Australia's ALOP.
The problem, however, is that neither these cross-referenced materials, nor any argument advanced by
New Zealand in this dispute in the context of ALCM relates to the first and third conditions of the
Article 5.6 test. In its attempt at extending the retail-ready requirement to ALCM, New Zealand
merely alleges that these two conditions are fulfille d, without advancing any specific arguments on
how the retail-ready requirement might be reasona bly available taking into account technical and
economic feasibility as well as being significantly less trade restrictive than the contested
SPS measure.
7.1280 Later on in the proceedings, New Zealand has ad vanced arguments in regard to the first
condition of the Article 5.6 test for the retail-ready measure, but not for the other two conditions.
3017
7.1281 As New Zealand also recognizes, the three conditions of the Article 5.6 test are
cumulative.3018 Also, it is the complainant's task to adduce arguments and evidence to demonstrate
that all three elements are fulfilled. Since, in th e context of ALCM, New Zealand has not done that in
regard to the third element of the Article 5.6 test for the retail-ready requi rement, the Panel refrains
from analyzing that requirement as an alternative measure for ALCM in the context of New Zealand's
Article 5.6 claim.

3015 Appellate Body Report on EC – Bananas III, para 145.
3016 Panel Report on Japan – Apples, para 8.64.
3017 New Zealand's reply to Panel question 114 after the second substantive meeting, paras. 178-180.
3018 New Zealand's first written submission, para. 4.487.

7.1282 As the Appellate Body stated in Japan – Agricultural Products, panels "[can]not ... make the
case for a complaining party"
3019. "[I]t was for the [complainant] to establish a prima facie case that
there is an alternative measure that meets all thr ee elements under Article 5.6 in order to establish a
prima facie case of inconsistency with Article 5.6."3020
7.1283 By alleging that a retail-ready requirement fulfils the first and third elements of the Article 5.6
test for ALCM, New Zealand has articulated a cl aim under Article 5.6. However, by advancing
arguments for that measure only in regard to the first condition of the Article 5.6 test, New Zealand
cannot be found to have made a prima facie case for that claim.
7.1284 In the light of the above, the Panel will restri ct its Article 5.6 analysis under ALCM to the
sole alternative measure properly identified and argued by New Zealand in this context: the
inspection of a 600-fruit sample from each import lot.
(b) Whether inspection of a 600-fruit sample from each import lot satisfies the three-pronged
Article 5.6 test
7.1285 As indicated above, the Panel will first assess whether New Zealand has made a prima facie
case that the alternative ALCM measure suggested by New Zealand fulfils the second condition of the
Article 5.6 test. Only if the Panel has found th at the second condition is fulfilled, will it turn to
assessing the first and third of the three cumulative conditions under Article 5.6.3021
(i) Second condition: whether the inspection of a 600-fruit sample from each import lot achieves
Australia's ALOP in regard to ALCM
Summary of the Parties' arguments
7.1286 New Zealand asserts that the inspection of a 600-fruit sample from each import lot will
achieve Australia's ALOP and thus fulfils the second condition of the Article 5.6 test. According to
New Zealand, there is no basis for Australia's imposition of a 3,000-unit sample and the additional
sensitivity it provides. The IRA's assessment of th e risk of ALCM is not valid because it failed to
take into account viability, key aspects of ALCM biology and normal trade practices. Had the IRA
taken such matters into account, the unavoidable conclusion would have been that the unrestricted risk
of ALCM through the export of apples from New Zeala nd is negligible. This would meet Australia's
ALOP.3022
7.1287 New Zealand contends that even assuming, for the sake of argument, that the IRA's
assessment of the unrestricted risk was valid, a 600-unit sample inspection would meet Australia's
ALOP because it would ensure that the number of viable cocoons entering Australia is not enough to
allow for establishment to occur and the risk of transmission would remain negligible.
3023
The standard AQIS fruit inspection of a 600 fruit sample would provide 95 per cent confidence that
no more than 0.5 per cent (1 in 200) fruit have coco ons on them. On this assumption, at least 4,000
fruit (20 apples with cocoons ÷ 0.005 (infestation leve l) = 4,000) would need to be deposited in one
place at the same time to obtain three apples with three live ALCM. 3024 According to the
New Zealand interception data provided to Australia and set out in the IRA, the actual infestation

3019 Appellate Body Report on Japan – Agricultural Products II, para. 129.
3020 Appellate Body Report on Japan – Agricultural Products II, para. 126.
3021 See 7.1107 above
3022 New Zealand's reply to Australia's question 4 after the first substantive meeting, paras. 11-14. See
also, New Zealand's reply to Panel question 139 after the first substantive meeting, para. 293.
3023 New Zealand's reply to Australia's question 4 after the first substantive meeting, paras. 12-14;
New Zealand's reply to Panel question 139 after the first substantive meeting, para. 293.
3024 New Zealand's first written submission, para. 4.127.

level is much lower than that detected with 95 per cent confidence with a 600 fruit sample, and is
more likely to be 0.13 per cent, not 0.5 per cent, suggesting that over 15,000 fruit would need to be
deposited in one place at the same time to obtain three apples with live ALCM (20 apples with
cocoons ÷ 0.0013 (infestation level) = 15,384).
3025
7.1288 New Zealand argues that apple exports to Aust ralia will be retail ready and are therefore
unlikely to be sent to orchard wholesalers. As appl es will be sent straight to urban centres, the chance
of large quantities of apples being discarded near apple trees is minimal. 3026 In any event, large
quantities of apples would not be discarded uncovered near apple trees at an orchard wholesaler.
In Australia, where removal of discarded fruit from orchards is essential for good fruit fly
management, it would be contrary to good operational practice for commercial packing house
operators, or even nearby orchardists, to leave any discarded fruit uncovered and exposed to pests.
Also, fruit discarded in a landfill would almost cert ainly be covered within hours of it being left
there.
3027 Even if large quantities of apples were left uncovered for a short time, emergence would be
unlikely to occur. ALCM will not emerge from fr uit as soon as it is removed from cold storage.
It first has to break diapause and complete pupation, which takes at least 13-18 days. Thus, an ALCM
could not emerge from a viable cocoon attached to a discarded apple during the few hours it might
remain uncovered as waste. 3028 The likelihood of an Australian buyer of New Zealand apples
disposing of at least 4,000 (let alone 15,000) of those apples uncovered at a single site near apple trees
with new shoots is negligible.3029
7.1289 In a later submission, New Zealand advances si milar arguments with slightly higher figures.
New Zealand contends that the effect of a 600- unit sample would be that no more than 1 in
approximately 6,500 New Zealand apples enteri ng Australia would have a viable cocoon.
This equates to a final importation rate for tota l imports of 0.015 per cent (i.e. only 0.015 per cent of
New Zealand apples entering Australia would have viable cocoons). On the basis of such an
importation rate (even discounting the prolonged period of adult em ergence) approximately 19,000
apples would need to be left outside of cold storag e, uncovered, in the same place at the same within
30-50 metres of newly unfurling apple trees, for th ere to be any likelihood of ALCM mating and egg
laying occurring. However, the likelihood of such a sequence of events occurring is negligible – it is
an event that would almost certainly not occur. Therefore, the 600-fruit inspection would clearly meet
Australia's ALOP.3030
7.1290 New Zealand concedes that the IRA has reviewed and rejected the possibility that a 600-fruit
inspection would achieve Australia's ALOP. However, New Zealand points out, the IRA's
calculations on the effect of a 600-unit sample insp ection were incorrect because they failed to factor
in cocoon viability, ALCM biology and normal trade practices. 3031 Further, the IRA's analysis of the
appropriate measure for ALCM is incorrectly premised on the infestation level, rather than the overall
likelihood of ALCM entry, establishment and spread. 3032 As confirmed by Dr Cross, the IRA should
not have relied on the infestation level, but on the ov erall risk of entry, establishment and spread, as
the key determinant of the appropriate measure for ALCM. The infestation level is relevant only as
an aspect of that assessment of the overall risk. Had the IRA correctly focused on the overall risk of
ALCM entry, establishment and spread – which, as explained above in respect of Article 5.1 is

3025 New Zealand's first written submission, para. 4.128.
3026 New Zealand's first written submission, para. 4.129.
3027 New Zealand's first written submission, para. 4.130.
3028 New Zealand's first written submission, para. 4.131.
3029 New Zealand's first written submission, para. 4.132.
3030 New Zealand's second written submission, para. 2.902. See also, New Zealand's reply to
Australia's question 4 after the first substantive meeting, para. 13.
3031 New Zealand's reply to Australia's question 4 after the first substantive meeting, para. 14.
3032 New Zealand's second written submission, para. 2.900

negligible – it would have been clear that a 600- unit sample goes beyond what is required to meet
Australia's ALOP.
3033
7.1291 According to New Zealand, contrary to Austra lia's claims, Dr Cross did not express the view
that the intensity of any inspection would need to be determined by reference to more reliable data
such as viability. Rather, he confirmed New Zeal and's position that the intensity of any inspection
(i.e. the appropriate sample size) should be selecte d on the basis of a tolerance infestation level,
determined on the basis of the overall risk and re levant ALOP. Moreover, New Zealand argues that
Dr Cross confirmed in both his written and oral resp onses that this was not th e approach used in the
IRA.3034 Instead of identifying a tolerance level, the IRA simply used the infestation level as the key
determinant in setting its measures and selected measures that would result in fumigation of virtually
every apple, effectively taking a zero risk approach. 3035 In New Zealand's view, Dr Cross has
confirmed that the Australian measures were d esigned to detect all ALCM cocoons present on
New Zealand apples. The IRA is explicit on this point. It states that the reason the 600-unit
inspection was not considered appropriate w as because it "would allow lots to pass without
treatment."3036
7.1292 New Zealand adds that, contrary to Australia's claim, ISPM 31 confirms that in selecting an
appropriate sample size a tolerance infestation leve l should be identified to determine what would be
an unacceptable risk. In New Zealand's view, it does not endorse an approach of selecting measures
designed to detect all infestation present. No r did Dr Sgrillo endorse the IRA's approach. New
Zealand claims that, to the contrary, Dr Sgrillo c onfirmed only that a high inspection rate is required
to detect low infestation levels. 3037 While, New Zealand agrees with this statement, it submits that
there was no need for Australia to put in place measures th at would detect all ALCM cocoons on
New Zealand apples. Imposing a measure with such an aim is akin to taking a zero risk approach.
But, as Australia acknowledges, its ALOP is not zer o risk. Therefore, in New Zealand's view, as
confirmed by Dr Cross, Australia should only have put in place measures designed to bring the risk
within its ALOP.3038
7.1293 Australia argues that its ALOP is not review able by a WTO panel or the Appellate Body. 3039
Application of the appropriate standard of review precludes a panel from conducting a de novo review
of whether a particular alternative measure would achieve a Member's ALOP, where the efficacy of
such measure has been previously evaluated as Part of a risk assessment.
3040 If a panel has determined
that the risk assessment is "objectively justifiabl e" (or where the validity of a particular risk
assessment has not been challenged), that panel may not substitute its judgment on these Article 5.6
questions for that of the risk assessor. If a compla inant fails to demonstrate serious flaws with those
aspects of the risk assessor's analysis, the pane l should accept the relevant findings of the risk
assessment in the context of a claim under Article 5.6.3041

3033 New Zealand's second written submission, para. 2.901. See also New Zealand's second written
submission, paras. 2.896-2.902.
3034 New Zealand's reply to Panel question 126 after the second substantive meeting, paras. 209-210.
See, Dr Cross's reply to Panel question 120, in List of Replies from the scientific experts to questions posed by
the Panel, para. 686.
3035 New Zealand's reply to Panel question 126 after the second substantive meeting, paras. 209-210.
3036 New Zealand's comments to Australia's reply to Panel question 104 after the second substantive
meeting, para. 246.
3037 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 683.
3038 New Zealand's comments to Australia's reply to Panel question 104 after the second substantive
meeting, para. 249.
3039 Australia's first written submission, para. 1075.
3040 Australia's first written submission, para. 1098.
3041 Australia's second written submission, para. 53.

7.1294 Australia argues that it does not aim for zero ri sk; its ALOP is "very low". Measures only
need to be sufficient to bring the risk down to achieve the ALOP. In the case of ALCM, there may be
a situation where the infestation of New Zealand appl es with viable ALCM is at such a low level that
the unrestricted risk would no longer exceed the AL OP; in such a case, SPS measures would not be
required.3042 Australia contends that it based its measu res on the findings in the IRA indicating that
the unrestricted risk for ALCM is "low", and th erefore exceeds Australia's ALOP. The IRA Team
assessed the alternative measure proposed by New Zealand, but found that a 600-unit inspection
system alone would not reduce the risks associated with ALCM sufficiently to achieve Australia's
ALOP. As New Zealand has failed to show that the Final IRA Report is not valid, the Panel should
find that New Zealand's has not properly made its ALCM claim under Article 5.6.3043
7.1295 Australia adds that its ALCM measure was not de vised to detect the pest on the majority of
New Zealand apple samples. In this regard, Dr Cross has not fully understood the IRA Team's
reasoning for finding that a 600-unit inspection woul d not be adequate. The IRA Team took into
account both its estimate that the unrestricted infestation rate for ALCM would be 4.1 per cent (mean)
of the total proposed number of apples imported from New Zealand annually, and the August 2005
data provided by New Zealand that the infestati on rate of the varieties of New Zealand apples
exported to the United States (by the methods deployed) was between 0.1 and 0.38 per cent. 3044 The
IRA Team initially examined whether a 600-unit in spection would reduce the risk to Australia's
ALOP, and found that a 600-unit inspection is very e ffective in detecting lots carrying pests at an
infestation rate of 4.1 per cent. However, the IRA Team's analysis concluded that if the infestation
rate is as low as New Zealand's in formation suggested it may be (0.17 per cent), a 600-unit inspection
system would not detect infestation in a certain pr oportion of lots. At this rate, a 600-unit inspection
system would allow lots to pass without treatment resulting in a final importation rate of ALCM for
total imports of around 0.06 per cent. When placed in the model by the IRA Team this importation
rate resulted in a restricted risk estimate that ex ceeded Australia's ALOP, indicating that, at least for
infestation levels below 0.5 per cent, an inspec tion/treatment system based on a 600 fruit sample
would not be adequate to manage the risk for AL CM. The IRA Team found that at these infestation
rates, a 3,000-unit inspection was needed to achieve Australia's ALOP. All of these figures are based
on the 95 per cent confidence level.
3045
7.1296 Australia adds that New Zealand has assumed th at the level of unrestricted risk for ALCM
determined in the Final IRA Report is false, but it has not demonstrated that its alternative measure
for ALCM would achieve Australia's ALOP on the b asis of the level of risk calculated by the IRA
Team.3046
7.1297 Australia agrees with Dr Cross that the choice of a risk management measure should be aimed
at reducing the risk to a level which would achieve the importing Member's ALOP. There is a very
close connection between the ALOP and the intens ity of sampling for inspection. The purpose of
Australia's inspection requirement for ALCM is to detect lots where the numbers of ALCM present
are at a level that results in a risk that would ex ceed Australia's ALOP. In other words, the ALOP is
used to derive the level of ALCM that could be to lerated in imported lots of apples but would still
achieve Australia's ALOP. The sampling intensity needs to be set based on both the level of ALCM

3042 Australia's reply to Panel question 104 after the second substantive meeting, para. 468. See also,
Australia's first written submission, paras. 1093-1097.
3043 Australia's first written submission, para. 1092. See also, Australia's first written submission,
para. 1098.
3044 Australia's first written submission, para. 1093.
3045 Australia's reply to Panel question 104 after the second substantive meeting, paras. 464-465. See
also, Australia's first written submission, paras. 1093-1097.
3046 Australia's first written submission, para. 1091. See also Australia's first written submission,
paras. 155 and 1089.

present before any inspection, and the level of ALCM that can be tolerated which would still remain
following the inspection.
3047
7.1298 Australia points out that Dr Sgrillo confirmed the following three significant factors relevant
to selection of an inspection level. First, that th e underlying level of infestation is the appropriate
starting point for determining the requisite rate of inspection. Second, that one would expect the
inspection rate required to increase as the underlyi ng infestation level decreases. Third, that a
confidence level of 95 per cent is typically used by the scientific community when determining an
appropriate phytosanitary inspection rate, although th ere is no accepted international standard in this
regard. According to Australia, ISPM No. 31 also provides support to its contentions.3048
The Panel's analysis
7.1299 As Australia points out, the IRA has reviewed the 600-unit inspection suggested by
New Zealand, and rejected it as inappropr iate for achieving Australia's ALOP. 3049 Australia argues
that this should prevent the Panel from reviewing the same alternative measure under Article 5.6 of
the SPS Agreement, unless New Zealand proves that the IRA does not constitute a proper risk
assessment.
7.1300 In the current dispute, the Panel has already f ound that Australia's IRA is not a proper risk
assessment for ALCM within the meaning of Ar ticle 5.1 and Annex A(4) of the SPS Agreement. 3050
Accordingly, even accepting Australia's arguments, there is no reason for the Panel to refrain from
assessing whether the 600-unit inspection discarded by the IRA fulfils the second condition of the
Article 5.6 test.
7.1301 The IRA's assessment of ALCM risk management measures started by considering the
alternative measure of 600-unit inspection suggested by New Zealand. 3051 First, the IRA concluded
that this measure would be effective in certain circ umstances. "With an infestation rate of 4.1% apple
leafcurling midge will be detected in practically ev ery lot and therefore every lot will be fumigated.
A 600 unit inspection is very effective in detecting lots carrying pests at this infestation rate.
This combined with the high efficacy of a treatment results in a high degree of risk reduction."3052
7.1302 However, the IRA then added that:
"Clearly as the infestation rate decre ases then the probability that a 600-unit
inspection system will detect apple leafcurling midge in a lot decreases. Therefore
some lots may not be treated but may still contain some apple leafcurling midge.
... It was found that the 'worst case' for the total number of apple leafcurling midge
that would enter Australia undetected if a 600 fruit inspection/treatment system was
used is with an infestation rate for apple fruit of about 0.17%. If the infestation rate
was around 0.17% then inspection followed by treatment based on a 600 fruit sample
would allow lots to pass without treatment resulting in a final importation rate for the
total imports of around 0.06%. When placed in the model this importation rate was

3047 Australia's reply to Panel question 104 after the second substantive meeting, paras. 462-463.
3048 Australia's reply to Panel question 104 after the second substantive meeting, para. 466.
3049 Australia's IRA, Part B, pp. p. 188-192.
3050 See para. 7.886 above.
3051 The IRA's analysis of "Risk management for appl e leafcurling midge" states at the outset that
"[t]he assessment of the restricted ri sk starts by first considering the ef fect of a 600-unit inspection and any
remedial action taken as a result of that inspection finding pests of quarantine concern." Australia's IRA, Part B,
p. 188.
3052 Australia's IRA, Part B, p. 190.

found to result in a restricted risk estimate that exceeded Australia's
ALOP. This indicates that, at least for some infestation levels, an inspection/treatment
system based on a 600 fruit sample may not be adequate to manage the risk for apple
leafcurling midge."
3053
7.1303 The IRA concluded that a 3,000-fruit inspection is necessary at this "worst case" infestation
rate:
"This predicted 'worst case' prevalence of 0.17% falls into the range of the 'August 05
data' (0.1%–0.38%) on infestation provided by Pipfruit, New Zealand (Pipfruit NZ,
2005). ... The relationship between sample sizes and the number of apple leafcurling
midge that could be imported for infest ation rates between 0.1% and 0.38% was
explored using standard statistical techniques ... . On the basis of this analysis it was
concluded that a sample size of 3000 per lot was needed. With these infestation rates
with a 3000 sample size the 'worst case' in festation rate that could be present in
imports after inspection and treatment was 0.005%.

On the basis of this analysis the IRA team concluded that if infestation rates of export
fruit were in the range of 0.1% to 0.38% then a 3000 fruit inspection would be
effective in detecting apple leafcurling midge."
3054
7.1304 The IRA added that the IRA Team was not ready to revert to the 600-unit inspection
requirement, despite New Zealand's arguments about limited cocoon viability:
"New Zealand provided additional data (Rogers et al., 2006) showing that 36–42% of
apple leafcurling midge cocoons on apples were empty, and nearly 60% of all
cocoons contained dead apple leafcurling midge. However, the IRA team still
considers that this low level of infesta tion is still a risk, albeit a lower risk and
maintains that a 3000 fruit inspection is required."
3055
7.1305 The IRA then identified an alternative risk ma nagement measure to the 3,000-unit inspection,
namely the treatment, e.g. fumigation, of all export lots:
"An alternative to the inspection/treatment approach may be the routine use of a
mandatory treatment such as fumigation to all export lots. This may be a less trade
restrictive approach if the prevalence of appl e leafcurling midge is such that most or
all lots are likely to fail at inspection. A stakeholder suggested that fumigation should
be mandatory. However, the IRA team c oncluded that inspection as specified above
with treatment only if live insects are found would be adequate to manage the risk.
Therefore a requirement for mandatory fumigation was not justified."
3056
7.1306 As a result of this analysis, the IRA identified two risk management options:
"1. Inspection of a random sample of 3000 fruit from each lot. Application of a
suitable treatment (e.g. fumigation) or rej ection of any lots where apple leafcurling
midge is found; or

3053 Australia's IRA, Part B, p. 190.
3054 Australia's IRA, Part B, p. 191.
3055 Australia's IRA, Part B, p. 192.
3056 Ibid.

2. Treatment of all lots with a suitable treatment to kill apple leafcurling
midge."
3057
7.1307 These are the measures whose consistency with Article 5.6 New Zealand contests in this
dispute in the context of ALCM. As noted above, the Panel has already found in regard to these
measures that the IRA's evaluation of the likelihood of entry, establishment and spread of ALCM is
not based on a proper risk assessment. 3058 The Panel has also found that various flaws in the IRA
constitute a failure by the IRA to adequately take into account factors such as the available scientific
evidence, the relevant processes and production me thods in New Zealand and Australia, the actual
prevalence of viable ALCM, and relevant environm ental conditions, as required by Article 5.2 of the
SPS Agreement.3059 In particular:
(a) The Panel has found that the IRA's reasoning regarding the viability of ALCM , is not
objectively justifiable, because the IRA does not adequately take into account the data
on occupancy and viability of ALCM in cocoons and because the IRA contains no
indication of how the exercise of expert judgement was exercised.3060
(b) Similarly, the Panel has found that the IRA's reasoning regarding the viability of
ALCM in the light of the possible incide nce of parasitism, caused by the wasp
Platygaster demades, is not objectively justifiable, because the IRA does not consider
the impact of parasitism by Platygaster demades on cocoon occupancy and viability
in its estimations.3061
(c) The Panel has also found that the IRA's reasoning regarding the likelihood of transfer
of ALCM in light of the protracted emergence of ALCM , is not objectively
justifiable, because the IRA fails to ta ke into account the diminished chances of
mating of ALCM due to the protracted period of emergence of ALCM adults relative
to their short life span.
3062
(d) Further, the Panel has found that the IRA's reasoning regarding the likelihood of
establishment and spread of ALCM in Aust ralia, in the light of the existence of
necessary climatic conditions and geogra phic range of these conditions, is not
objectively justifiable.3063
(e) Finally, the Panel has found that the IRA's reasoning regarding the unrestricted risk
for ALCM through the importation of New Zealand apples into Australia, in the light
of the mode of trade of those apples, is not objectively justifiable, because
consideration of the different possible m odes of trade does not seem to have been
adequately considered or transparently reflected in the IRA and has not had any
evident impact on the IRA's conclusions.
3064
7.1308 The Panel has found that New Zealand has not made a prima facie case that orchards
surrounding wholesale packing houses would not be located at a distance that is within the flying
range of ALCM. 3065 Nevertheless, the Panel has conclude d that the flaws mentioned above are

3057 Australia's IRA, Part B, p. 192. See also, Australia's IRA, Part B, pp. 319-322.
3058 See paras. 7.886-7.887 above.
3059 Ibid.
3060 See paras. 7.800-7.806 above.
3061 See paras. 7.810-7.812 above.
3062 See paras. 7.840-7.841 above.
3063 See para. 7.854 above.
3064 See paras. 7.866-7.867 above.
3065 See para. 7.824 above.

sufficient as to create reasonable doubts about the IRA as a pr oper risk assessment evaluating the
likelihood of entry, establishment and spread of ALCM because the IRA has not properly considered
a number of factors that could have a major impa ct on the assessment of this particular risk. 3066
Hence, the Panel has concluded that the IRA's inspection and treatment requirements regarding
ALCM on New Zealand apples are inconsistent w ith Articles 5.1 and 5.2 of the SPS Agreement. 3067
The Panel has also found that since the two altern ative ALCM requirements are not based on a risk
assessment as provided in Article 5.1 of the SPS Ag reement, they can be presumed, more generally,
not to be based on scientific principles or not to be maintained with suffi cient scientific evidence
within the meaning of Article 2.2. 3068
7.1309 These findings under Article 2.2 call into ques tion the two alternative ALCM requirements
primarily because they are based on a flawed risk assessment. The findings also cast doubt on the
IRA's justification for not accepting that the initia lly analysed 600-unit inspection would achieve
Australia's ALOP, but instead imposing the two alternative ALCM measures.
7.1310 Significantly, the IRA justifies the rejection of the 600-unit inspection alternative by the
lower, "worst case" infestation level originating in the August 2005 data supplied by New Zealand.
New Zealand, however, makes the case that the IRA' s analysis of New Zealand apple imports leading
to an unrestricted risk exceeding Australia's ALOP is not objective and coherent. Also, New Zealand
argues that, even if that were not the case, th e 600-unit inspection would reduce the risk below
Australia's ALOP – even at the "worst case" infestation level.
7.1311 The Panel has found in the context of Articles 5.1 and 5.2 of the SPS Agreement that the
IRA's risk assessment has various flaws. These flaws show that the IRA has not properly considered
a number of factors that could have a major impact on the assessment of the risk of ALCM from
New Zealand apples. In fact, these flaws create reasonable doubts about the IRA as a proper risk
assessment evaluating the likelihood of entry, establishment and spread of ALCM into Australia.
7.1312 Based on the factors where Australia's IR A shows the above-men tioned flaw s (c ocoon
viability, parasitism, adult emergence, climat e conditions and trade patterns) New Zealand
demonstrates that with the "worst case" infest ation level, several thousand apples (15,000-19,000
apples) imported from New Zealand would need to be deposited uncovered for a sufficiently long
period of time for any ALCM transmission to occur. New Zealand also makes a convincing case that
this situation will probably almost never occur.
7.1313 The Panel recalls that it has found that New Zealand has not made a prima facie case that
orchards surrounding wholesale packing houses would not be located at a distance that is within the
flight range of ALCM.
3069 However, New Zealand refers to Australia's modern packing house
practices, which would make it highl y unlikely (should there be a serious incidence of waste deposit
in the first place) that a large number of deposited apples would be left uncovered. The Panel also
notes Dr Cross's statement that ALCM normally stay close to the ground, and that they are weak fliers
(in particular in wind). "They are rather weak fl yers. This particular species spends a lot its time
close to the ground and only flies up into the tree to oviposit in the shoots when the wind conditions
are rather slight. So, it seems unlikely that it would have a very long range of dispersal."3070
7.1314 The Panel notes that at the meeting with the experts, Australia asked Dr Sgrillo whether
"[he w]ould ... agree that in order to have confidence in detecting a pest within a consignment that has

3066 See para. 7.871 above.
3067 See para. 7.887 above.
3068 Ibid.
3069 See para. 7.824 above.
3070 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 586.

low levels of underlying infestation, a higher rate of inspection may be required, compared to a
consignment which had a higher level infestation ... ."
3071 In response, Dr Sgrillo explains that:
"Usually, considering the same population size, if the infestation is higher you have
to sample less, because … I mean, if you have more units infested in the population,
this will require a smaller number of sample s to catch this infestation. However,
if you have a very low number, a very low per cent of infestation, you have to
increase your sample size to catch it."3072
7.1315 Dr Sgrillo confirms this in another of his responses to Australia: "The infestation will tell you
how much you have to decrease this infestation to r each your appropriate level of risk. And also how
sensitive has to be your inspection system to catch any infestation above this level."3073
7.1316 This response was, however, given to a question which Australia introduced by mentioning an
important precondition:
"Dr Sgrillo. I'd like to ask you a ques tion about determining an appropriate
inspection rate for a consignment in circumstances where it has been determined that
the unrestricted risk is above the appropriate level of protection, and therefore that
risk management measures are required . Would you agree that the relevant factor
for determining the appropriate rate of in spection for ALCM is the underlying level
of infestation?"3074
7.1317 It is evident from this precondition that even Au stralia considers the issue of infestation rate
secondary to establishing whether, in relation to AL CM, the unrestricted risk of New Zealand apples
(i.e. the risk arising from importing apples without imposing risk mitigation measures) would exceed
Australia's ALOP.
7.1318 Australia argues that ISPM No. 31 provides s upport for its assertion that a lower infestation
rate requires a higher sample size. 3075 ISPM No. 31 states that as in the case of Australia's IRA,
inspection can be a legitimate and essential management tool for pest risks:
"[Inspection] provides the statistical b asis for, and complements, ISPMs No. 20
(Guidelines for phytosanita ry import regulatory systems ) and No. 23 ( Guidelines for
inspection). Inspection of consignments of re gulated articles moving in trade is an
essential tool for the management of pest risks and is the most frequently used
phytosanitary procedure worldwide to de termine if pests are present and/or the
compliance with phytosanitary import requirements."
3076
7.1319 ISPM No. 20, referenced by ISPM No. 31 states that "[p]hytosanitary inspections ... should be
technically justified" 3077, and explains that a pest risk analysis might be the basis for technical
justification for a risk management measure, such as inspection. "Technical justification such as
through pest risk analysis (PRA) is required to de termine if pests should be regulated and the strength

3071 Australia's question to Dr Sgrillo in Transcript of the Panel's meeting with experts, para. 682.
3072 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 683.
3073 Dr Sgrillo's reply in Transcript of the Panel's meeting with experts, para. 681.
3074 Australia's question to Dr Sgrillo in Transcript of the Panel's meeting with experts, para. 680
(emphasis added).
3075 Australia's reply to Panel question 104 after the second substantive meeting, para. 466.
3076 Methodologies for sampling of consignments , 2008 (ISPM No. 31, FAO, Rome), submitted as
Exhibit AUS-30, p. 6.
3077 Guidelines for a phytosanitary import regulatory system , 2004 (ISPM No. 20, FAO, Rome),
submitted as Exhibit AUS-170, p. 240.

of phytosanitary measures to be taken against them (ISPM No. 11: Pest risk analysis for quarantine
pests, including analysis of environmental risks and living modified organisms , 2004; ISPM No. 21:
Pest risk analysis for regulated non-quarantine pests)."3078
7.1320 ISPM No. 23, also referenced in ISPM No. 31, confirms that inspection as a risk management
measure is closely related to the pest risk that is being addressed. "[A]n inspection may be required to
detect specified regulated pests at the desired le vel and confidence depending on the risk associated
with them (see also ISPM No. 11: Pest risk analysis for quarantine pests including analysis of
environmental risks and living modified organisms , 2004, and ISPM No. 21: Pest risk analysis for
regulated nonquarantine pests)."3079
7.1321 As New Zealand argues, ISPM 31 confirms that in selecting an appropriate sample size a
tolerance infestation level should be identified to determine what would be an unacceptable risk. 3080
ISPM No. 31 defines "tolerance level" as "the percen tage of infestation in the entire consignment or
lot that is the threshold for phytosanitary action." 3081 While ISPM No. 31 states that "[m]ost NPPOs
have a zero tolerance level for all quarantine pests", it states:
"However, an NPPO may determine to establish a tolerance level for a quarantine
pest based on pest risk analysis (as described in ISPM No. 11: Pest risk analysis for
quarantine pests including analysis of environmental risks and living modified
organisms, section 3.4.1) and then determine sampling rates from this. For example,
NPPOs may determine a tolerance level that is greater than zero because small
numbers of the quarantine pest may be acceptable if the establishment potential of the
pest is considered low or if the intended end use of the product (for example, fresh
fruit and vegetables imported for processing) lim its the potential of entry of the pest
into endangered areas."3082
7.1322 In turn, ISPM No. 11, which is referenced by ISPMs Nos. 20, 23 and 31, explains that the risk
assessment involves the establishment of an ALOP , and that risk management measures should be
adopted only if the ALOP is exceeded:
"Overall risk is determined by the examin ation of the outputs of the assessments of
the probability of introduction and the economic impact. If the risk is found to be
unacceptable, then the first step in ri sk management is to identify possible
phytosanitary measures that will reduce the risk to, or below an acceptable level.
Measures are not justified if the risk is already acceptable or must be accepted
because it is not manageable (as may be the case with natural spread). ...
Appropriate measures should be chosen b ased on their effectiveness in reducing the
probability of introduction of the pest."
3083
7.1323 With these elements of the relevant ISPMs in mind, the Panel notes that Dr Cross explains
that the sample size should not be adjusted to the infestation level but to the ALOP, and that in the

3078 Guidelines for a phytosanitary import regulatory system , 2004 (ISPM No. 20, FAO, Rome),
submitted as Exhibit AUS-170, p. 239.
3079 Guidelines for inspection, 2005 (ISPM No. 23, FAO, Rome), p. 277.
3080 New Zealand's comments to Australia's reply to Panel question 104 after the second substantive
meeting, para. 248.
3081 Methodologies for sampling of consignments , 2008 (ISPM No. 31, FAO, Rome), submitted as
Exhibit AUS-30, p. 8.
3082 Ibid.
3083 Pest risk analysis for quarantine pests including analysis of environmental risks and living
modified organisms, 2004 (ISPM No. 11, FAO, Rome), submitted as Exhibit NZ-124, pp 130-131.

latter respect the IRA's flawed risk analysis s hould be recalculated taking into account the factors
which it has not properly considered:
"The unrestricted risk estimation presented in Table 49 of Australia's IRA Part B
p 187 needs to be recalculated for two different importation scenarios:
1. Mature apple fruit free of trash, either packed or sorted and graded bulk from
New Zealand
2. Retail ready fruit which would not be handled at sensitive utility points
The August 2005 infestation rate data should be used and viability, parasitism and the
time span of adult emergence relative to adu lt longevity need to be taken into account
in the recalculation. The inclusion or excl usion of different utility points for the two
importation scenarios is crucial. Consideration needs to be given to the numbers of
fruit that are likely to be placed or discarde d within the flight range of a susceptible
host at the relevant utility points in formula ting the risk estimates. It might be found
that the unrestricted risk estimates for one or both of these scenarios then falls below
Australia's ALOP.
If not, then the sample sizes required to meet Australia's ALOP should then be
recalculated for fruit subject to fumigation and not subject to fumigation for each of
the two importation scenarios. Note that the sample size should not be adjusted to fit
the infestation rate which appears to be the case in the current analysis. It should be
set to meet Australia's ALOP.
Until this is done, then it is inappropriate to comment on the sample sizes and the
need or otherwise for fumigation treatment required to meet Australia's ALOP."
3084
7.1324 Dr Cross confirmed this at the Panel's meeti ng with the Parties and the experts, where he
explained that the factors that the IRA has not properly taken into account are fundamental in
establishing the appropriate sample size for any inspection requirement:
"[I]f a 600-fruit sample showed that there is a 95 per cent chance of the 0.5 per cent
of fruit being infested, if half of those fruit are non-viable, another 30 per cent
parasitized and, in any case, there is only a 1 in 5 chance that the male and female
would mate and meet each other in their life, then that effective infestation level is
reduced by a factor of 10, 20, 30 times, wh atever the factors are that are determined
by doing this risk assessment and then that needs to be applied to the sample sizes
that are needed. And I find it difficult to prejudge what those sample sizes should be.
Clearly one factor that I believe would make quite a big difference to the risk is the
mode of trade question. If the apples we re retail-ready, ready-packed in smaller
packs, that were not handled at the seven wholesalers, that would greatly reduce the
risk, maybe that would overcome the risk all together, but until that calculation is
redone, it's difficult to decide what the sample size should be."
3085
7.1325 In response to a question from the Panel, Dr Cr oss also confirmed that standard statistical
techniques support the view that a 600-fruit sample would provide 95 per cent confidence that no
more than 0.5 per cent (1 in 200) fruit have cocoons:

3084 Dr Cross's reply to Panel question 120, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 684-687 (emphasis added).
3085 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 662.

"The 600 fruit sample would provide 95% confidence that no more than 0.5% (1 in
200 fruit) have occupied cocoons, but the actua l infestation rate would be reduced by
a factor 0.5 x 0.7 for reduced viability and parasitism and probably by a further factor
of 0.1 – 0.5 for the protracted emergen ce relative to the short life span, actual
effective infestation rates of 0.1% or even 0.05% would be more realistic.
Note also that the average rate of infestation of NZ apples by ALCM as indicated by
the August 2005 data is 0.16%, 3 x lower than the 0.5% 95% confidence value that
would be detected by a 600 fruit sample.
Thus approximately 100, 500 or >1000 fruits would have to be discarded for
infestation rates of 0.5, 0.1, and 0.05% in one place for a 5% chance of at least one
male and one female emerging to start an infestation.
So to answer the latter Part of the questi on, a 0.5% infestation rate of occupied
cocoons would have a 5% chance of initia ting an infestation if perhaps 500-1000
fruits were discarded in one place within the female flight range of a susceptible
host."
3086
7.1326 In response to the Panel's subsequent question, Dr Deckers was sceptical about the need for
fumigating all New Zealand apples for ALCM. "The necessity to treat all the lots when a fruit sample
of only 600 apples is inspected is surprising: why not only treat the lots of apples when they come
from an infected orchard or when some ALCM have been found."3087
7.1327 Dr Cross added in one of his written responses to the Panel that "[t]he requirements for a
3,000-fruit inspection or for fruit fumigation are clea rly restrictive and alternative measures coupled
with a 600-fruit inspection would be preferable provided they met Australia's ALOP."3088
7.1328 In the light of above, the Panel finds th at New Zealand has made a prima facie case that –
given the flawed risk analysis in Australia's IRA, including the flawed comparison between
Australia's ALCM measure and the alternative measure identified by New Zealand – a 600-unit
inspection would achieve Australia's ALOP. Australia's reference to ISPM No. 31 and its own flawed
analysis in the IRA has not successfully rebutted th is prima facie case. Thus the alternative ALCM
measure identified by New Zealand fulfils the second condition of Article 5.6 of the SPS Agreement.
7.1329 The Panel notes in this context that Australia has a qualitative ALOP, defined as "providing a
high level of protection aimed at reducing risk to a very low level, but not to zero." 3089 In assessing
the second condition of the Article 5.6 test, the Pane l had to review whether New Zealand has made a
prima facie case that its alternative measure would achieve this qualitative ALOP.
7.1330 In this dispute the Panel needs to review Australia's IRA, not conduct its own risk assessment.
The Panel notes that the IRA acknowledges, when describing its ALCM risk management measures,
that "it may be possible to develop other risk management measures (for example, perhaps based on

3086 Dr Cross's reply to Panel question 104, in List of Replies from the scientific experts to questions
posed by the Panel, paras. 624-627.
3087 Dr Deckers's reply to Panel question 105, in List of Replies from the scientific experts to questions
3088 Dr Cross's reply to Panel question 120, in List of Replies from the scientific experts to questions
3089 Australia's IRA, Part A, p. 3.

low pest prevalence in orchards or pest free places of production) but this would require more detailed
information on apple leafcurling midge than is currently available."
3090
7.1331 The Panel therefore reaches its above finding in regard to the second condition of the
Article 5.6 test in the specific context of the IRA reviewed in the current dispute. In other words,
the Panel's finding that New Zealand has raised a pr esumption (i.e., made a prima facie case) that the
600-unit inspection would reach Australia's ALOP is a legal, not a scientific finding. If Australia
conducts a proper risk assessment for New Zealand apples, subject to an objectively justifiable
analysis it may conclude that the ALCM risk exceeds Australia's ALOP. In light of such a
conclusion, Australia may also impose a risk mana gement measure that is different from a 600-unit
inspection. Any such future risk assessment and ev entual adoption of risk management measures by
Australia must comply with the relevant provisi ons of the SPS Agreement, in particular with
Articles 2.2, 5.1, 5.2 and 5.6.
(ii) First condition: whether the inspection of a 600-fruit sample from each import lot is
reasonably available taking into account technical and economic feasibility
7.1332 New Zealand argues that the alternative measu re of inspecting a 600-fruit sample from each
import lot would satisfy the first condition of the Article 5.6 test, as this alternative measure is
reasonably available taking into account technical and economic feasibility. 3091 According to
New Zealand, this is the standard export and impor t phytosanitary inspection procedure for detection
of quarantine pests applying to all plant commoditi es currently being traded between Australia and
New Zealand, and it is used by many other c ountries. The procedures to implement it already
exist.3092 New Zealand adds that Australia has not cont ested that this alterna tive measure fulfils the
first element of the Article 5.6 test.3093
7.1333 Australia does not contest this, nor advance any specific arguments in this specific context.
Australia makes only general arguments with regard to the first condition of the Article 5.6 test.
Referencing the compliance panel report in Japan – Apples (Article 21.5 – US) , Australia argues that
the technical and economic feasibility of a proposed alternative measure "in the real world" is a
fundamental element for determining whet her such measure should be considered
"reasonably available".3094
7.1334 The Panel agrees with Australia that, as the aforementioned compliance panel stated, "when
considering whether an alternative measure is re asonably available taking into account technical and
economic feasibility, [the adjudicator] should dete rmine whether the alternative measure would
constitute an option reasonably available taking into account technical and economic feasibility in the
real world."3095
7.1335 The Panel considers that this is exactly what New Zealand has demonstrated in the current
dispute. As New Zealand argues, the 600-fruit inspection is already the standard sanitary and
phytosanitary export and import inspection procedur e between the Parties, and the procedures to
implement it already exist. New Zealand contends that the 600-fruit inspection is also applied by
other WTO Members. Australia does not contest an y of these arguments by New Zealand. In fact,
Australia's IRA references in the context of ALCM the " standard 600-fruit inspection" advanced by

3090 Australia's IRA, Part B, p. 319.
3091 New Zealand's first written submission, p. 192. See also New Zealand's first written submission,
para. 4.516.
3092 New Zealand's first written submission, para. 4.515.
3093 New Zealand's second written submission, para. 2.896.
3094 Australia's first written submission, para. 1077.
3095 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.171.

Pipfruit NZ.3096 Likewise, in the context of mealybugs, the IRA references " standard 600-unit AQIS
sampling procedures (to provide 95 per cent confiden ce of detecting a 0.5 per cent defect level or
greater)"3097, and "note[s] that the requirement for inspec tion of 600 fruit is a general requirement to
address a range of quarantine risks, not just mealybugs."3098
7.1336 Accordingly, the 600-fruit inspection is an a lternative measure that is technically and
economically feasible in the real world, and therefor e reasonably available – not only in theory but in
actual practice. Hence, the Panel finds that the alternative measure New Zealand advances in this
dispute for ALCM fulfils the first condition of the Article 5.6 test.
(c) Third condition: whether the inspection of a 600-unit sample from each import lot is
significantly less trade restrictive than Australia's current ALCM requirements
(i) Summary of the Parties' arguments
7.1337 New Zealand argues that the alternative measu re of inspecting a 600-fruit sample from each
import lot would satisfy the third condition of th e Article 5.6 test. The alternative would be
significantly less trade restrictive than the two re quirements currently imposed by Australia, namely:
(i) the inspection of a 3,000 fruit sample from each lot with a find resulting in mandatory treatment or
rejection for export; or (ii) the inspection of a 600 fruit sample from each lot, combined with
mandatory treatment of all fruit. 3099 The expert responses confirm that "[t]he requirements for a 3000
fruit inspection or for fruit fumigation are clearly restrictive .'3100"3101 In response to Australia's
argument that the alternative measure would need to be "significantly" less trade restrictive than
Australia's current ALCM measure, New Zealand submits that the alternative measure meets that
threshold.
3102
7.1338 New Zealand argues in particular that it is already required to undertake a 600-fruit sample
inspection of export apple fruit in order to comp ly with other more general quarantine pest
requirements in the IRA. Hence, the coverage of ALCM within the same 600-fruit inspection would
certainly be a less time-consuming and expensiv e measure than sampling 3,000 fruit or requiring
mandatory treatment of all fruit in addition to a 600 fruit sample.3103
7.1339 As regards fumigation, New Zealand points out that both Australia's alternative requirements
result in fumigation of virtually all consignments. 3104 Also, New Zealand concedes that at a cocoon
infestation level of 4.1 per cent, a 600-unit inspec tion would detect ALCM cocoons in most lots,
which would mean that nearly all lots would be subject to fumigation. But, according to
New Zealand, that is irrelevant because the co coon infestation rate of New Zealand apples is
significantly lower than 4.1 per cent and only viable co coons are a risk factor. On the basis of actual
infestation rates of 0.16 per cent, and taking in to account that only 60 per cent of cocoons are
occupied, only approximately 44 per cent of consignm ents would be expected to have an occupied
ALCM cocoon found by inspecting a 600-unit sample. Assuming that only detection of occupied

3096 Australia's IRA, Part B, p. 166, footnote 32 (emphasis added).
3097 Australia's IRA, Part B, p. 289 (emphasis added).
3098 Australia's IRA, Part B, p. 290.
3099 New Zealand's first written subm ission, para. 4.514. See also New Zealand's second written
submission, paras. 2.884 and 2.896.
3100 (footnote original) Cross RPQ, Q 120, p. 22.
3101 New Zealand's second written submission, para. 2.907 (original emphasis).
3102 New Zealand's second written submission, para. 2.903.
3103 New Zealand's first written subm ission, para. 4.520. See also New Zealand's second written
submission, para. 2.904.
3104 New Zealand's second written submission, para. 2.905. See also, New Zealand's reply to Panel
question 141 after the first substantive meeting, para. 296.

cocoons will lead to fumigation, 56 per cent of cons ignments would pass without fumigation. This is
significantly less trade restrictive than a measure requiring a 600 unit inspection plus mandatory
treatment, both in terms of the costs of fumiga tion and the negative impact of fumigation on the
quality, and therefore the competitiveness, of the product.
3105 In fact, not only is fumigation costly, it
may have a negative impact on fruit quality. Fumigation can cause a number of fruit disorders,
including scalding, internal damage and staining, a ll of which restrict the marketability and therefore
the competitiveness of the product.3106
7.1340 Regarding Australia's suggestion that the 3, 000-unit sample could be minimized through a
flexible operationalization of the measure, Ne w Zealand contends that apples exported by
New Zealand to Australia would be subject to two inspections: one by MAF in New Zealand prior to
export and one by Australian officials in Austra lia. The Australian requirement of a 3,000-unit
inspection relates to the inspection completed by Aust ralian officials in Australia (or in New Zealand,
if part of a pre-clearance programme). In prac tice, prior to issuing a phytosanitary certificate,
New Zealand would replicate the inspection requi rement carried out on the Australian side, and
therefore incur the costs of both the 3,000-unit sample in New Zealand and the sample in Australia.
This would be necessary to ensure that lots cleared by MAF are not rejected by Australia. Australia's
proposal of combining 600 unit inspections in Ne w Zealand is therefore not appropriate, because it
would not match the same confidence/sensitivity le vel as the 3,000-unit inspection being carried out
by Australia.3107 In fact, a 600-fruit sample would provide 95 per cent confidence that less than 0. 5
per cent of the fruit are infested with ALCM. A 3,000-fruit sample, being a significantly larger
sample, would provide 95 per cent confidence that less than 0.1 per cent fruit are infested.3108
7.1341 At a later point in the proceeding, New Zeala nd argues that Australia misses the point in
suggesting the flexible operationalization of the 3,000-unit inspection.3109 In New Zealand's view, the
key problem with Australia's proposal is that it relates not to the inspection completed by Australian
officials in Australia but to the inspection comple ted by New Zealand officials in New Zealand.
What Australia is proposing is that, while the Au stralian inspection would remain a 3,000 sample,
New Zealand could combine individual 600-unit inspections in New Zealand towards the 3,000
requirement.
3110 New Zealand submits that this measure will affect inspections undertaken by
New Zealand officials since these inspections w ill fail to match the confidence/sensitivity levels
applied by Australia.3111
7.1342 New Zealand adds that its apple growers woul d be discouraged from exporting to Australia
because of Australia's costly, time-consuming and unnecessary ALCM measure. According to
New Zealand, the economic risk factors for New Zealand growers set out with respect to fire blight
and European canker also apply in the case of ALCM. 3112 In the context its fire blight and European
canker arguments under the third condition of the Article 5.6 test, New Zealand contends that
compliance with Australia's onerous measures combin ed with the risk of being excluded from exports
as a result of a single fire blight or European canker strike in an orchard creates a significant level of
economic risk for New Zealand apple growers. F aced with this risk, New Zealand apple growers
would rather refrain from registering their orchards for Australian export in the first place, and would
turn to other export markets. Conversely, under the alternative measure of restricting trade to mature,

3105 New Zealand's reply to Panel question 141 after the first substantive meeting, paras.295-297 See
also, New Zealand's second written submission, paras. 2.905-2.906.
3106 New Zealand's second written submission, para. 2.906.
3107 New Zealand's reply to Panel question 139 after the first substantive meeting, paras. 291-292.
3108 New Zealand's second written submission, para. 2.910.
3109 New Zealand's second written submission, para. 2.908.
3110 New Zealand's second written submission, para. 2.909.
3111 New Zealand's second written submission, para. 2.910.
3112 New Zealand's first written submission, para. 4.521.

symptomless apple fruit, an orchard would not be disqualified as a result of the discovery of a single
fire blight or European canker strike on a tree. Thus, New Zealand apple growers would avoid risking
the loss of their investment.3113
7.1343 New Zealand confirms Australia's argument that New Zealand apple exports to the
United States are already subjected to much highe r inspection rates (up to 20,000 apples) than that
required by Australia. New Zealand points out th at regarding New Zealand apples, US sample sizes
vary from 3,000 to 20,000 per consignment, depending on the mode of trade. However, as stated in
the third party written submission of the United States, this sampling regime is designed to detect light
brown apple moth, not ALCM.3114
7.1344 Australia accepts that New Zealand's alternativ e measure may be less trade restrictive than
Australia's current ALCM measure. Australia cont ests, however, that the alternative measure would
be "significantly" less trade restrictive. 3115 According to Australia, it is not sufficient for a
complainant to identify an alternativ e measure that is merely less rest rictive to trade than the existing
measure. Based on the language of footnote 3 to Article 5.6 of the SPS Agreement, the alternative
measure must be "significantly less restrictive to tr ade" than the existing measure in order to find a
violation of Article 5.6. Thus, an alternative meas ure would need to be less restrictive to trade by a
degree which is important, notable or consequential.3116
7.1345 Australia submits that if the infestation rate of New Zealand apples is around 4.1 per cent, the
alternative measure would clearly not be significantly less restrictive to trade than Australia's existing
measure. The IRA found that at an infestation rate of 4.1 per cent a 600-unit inspection will detect
ALCM in practically every lot and therefore prac tically every lot will be fumigated, which would
effectively result in mandatory fumigation. Such a measure would then be hardly less trade-restrictive
than Australia's current option of a 600-unit inspection plus mandatory treatment. 3117 In response to
New Zealand's argument that Australia's selected measures would result in fumigation of virtually
every apple, Australia notes that it is entitled to set its own ALOP. Furthermore, the IRA indicates
that some New Zealand apples would not be fu migated because a 3000-unit inspection would still
allow 0.005 per cent of New Zealand apples to enter Australia with viable ALCM on them.3118
7.1346 In response to New Zealand's argument that a 300-unit inspection would be undertaken by
Australian officials in addition to the 300-unit insp ection required to be undertaken by New Zealand,
Australia submits that it requires only a single 3000- unit inspection per consi gnment (rather than per
orchard) to be conducted under the auspices of New Zealand. 3119 Australia adds that it is flexible
about how the 3,000-unit inspection measure could be operationalized. New Zealand packing houses
typically conduct a 600-unit pest inspection of each grow er lot that is received by a packing house.
Multiple grower lots may be received in a day or processed in a single packing run, and go on to
comprise a single consignment. The 600-unit inspecti ons per grower lot could be aggregated for the
single consignment, towards achieving the required 3,000-unit inspection. In effect, this means that in

3113 New Zealand's first written submission, paras. 4.507-4.508.
3114 New Zealand's reply to Panel question 140 after the first substantive meeting, para. 294.
3115 Australia's first written submission, paras. 1099-1100. See also Australia's reply to Panel
question 138 after the first substantive meeting.
3116 Australia's first written submission, para. 1079.
3117 Australia's first written submission, para. 1101. See also, Australia's reply to Panel question 141
after the first substantive meeting.
3118 Australia's comments on New Zealand's reply to Panel questions after the second substantive
meeting, para. 202.
3119 Australia's opening oral statemen t at the second substantive meeting of the Panel with the Parties,
para. 106.

many cases there would be no additional requirement to that which New Zealand packing houses
already apply, and therefore minimal trade-restrictive effects.
3120
7.1347 Australia points out that the IRA defines "lot" as "all apple fruit packed for export to Australia
each day by a registered packing house." Therefore, a "lot" is not a fixed quantity. Each lot would be
inspected on the basis of a 3,000-unit sample selected at random across the whole lot. A unit is one
piece of fruit. Where a lot comprises apples from more than one supplying orchard or block, then the
inspection sample would be selected proportionally across all orchards/blocks. The 3,000-unit
inspection would be undertaken by, or under the au spices of, MAFNZ. The cost implications will
depend upon the circumstances of individual packing houses.
3121 In any event, the visual inspection
required by Australia for ALCM is not a destructiv e examination – that is, it does not require cutting
or other damage to the fruit. Therefore, any fruit examined would remain available for export.3122
7.1348 Australia points out that the practice of multiple units of inspection is not unusual for trade
between Australia and New Zealand. For example, in respect of fresh fruit exports from Australia
that pose a risk of providing a vector for fruit fly, New Zealand requires each grower lot in a
consignment to be subject to a 600-unit inspecti on by a delegated inspector, followed by a further
600-unit inspection of the consignment by AQIS, followed by mandatory treatment.
7.1349 According to Australia, under some circumstances New Zealand apple exports to the
United States are already subjected to much highe r inspection rates (up to 20,000 apples) than that
required by Australia.3123 Although the United States' measure is targeted at light brown apple moth,
this measure is not indifferent to ALCM. ALCM is an actionable quarantine pest for California, and
if any ALCM is discovered during such an inspecti on, then a notation would have to be made on the
phytosanitary certificate to that effect, and it woul d also have to be marked "not suitable for
California". Further, lots inspected and found fr ee of ALCM during USDA pre-clearance inspections
may enter all US States including California subject to the ALCM-free status being indicated on the
relevant form.3124
(ii) The Panel's analysis
7.1350 The Panel agrees with Australia that the third cond ition of the Article 5.6 test requires that the
complainant identify an alte rnative measure that is " significantly less restrictive to trade" than the
contested measure(s). This is in line with th e language of footnote 3 to Article 5.6 of the
SPS Agreement3125, and it also accords with how previous pa nels and the Appellate Body identified
this third condition.3126
7.1351 Previous panels assessed the third condition of the Article 5.6 test by looking at the difference
in market access under the measures at issue and the alternative measure(s) identified by the
complainant. In particular, previous panels analysed whether, under th e alternative measure,

3120 Australia's first written submission, para. 1102. See also, Australia's reply to Panel question 139
after the first substantive meeting.
3121 Australia's reply to Panel question 139 after the first substantive meeting.
3122 Ibid.
3123 Australia's first written submission, para. 1103.
3124 Australia's reply to Panel question 140 after the first substantive meeting.
3125 Footnote 3 to Article 5.6 of the SPS Agreement provides that "[f]or the purposes of paragraph 6 of
Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably
available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary
or phytosanitary protection and is significantly less restrictive to trade." (emphasis added).
3126 See Appellate Body Report on Australia – Salmon, paras. 186 and 194; Panel Report on Japan –
Agricultural Products II, para. 8.72; and Appellate Body Report on Japan – Agricultural Products II, para. 95.

"market access would be obtained significantly more easily than under the current regime" 3127 and
whether "the increased market access that would result under the alternative[] ... would be
significant."3128 This Panel will assess, in light of the Par ties' arguments, whether this is the case in
the current dispute.
7.1352 Australia's contested ALCM measure has two alternative requirements. As regards inspection
intensity, only the first requirement, the 3,000-unit inspection, would differ from the 600-unit
inspection alternative advanced by New Zealand. In fact, the sample size of Australia's first
requirement (3,000) is five times the sample size of the alternativ e advanced by New Zealand (600).
Australia's second alternative requirement involv es the same 600-fruit sample size as New Zealand's
alternative. Importantly, the two requirements under Australia's ALCM measure are alternatives. 3129
According to the IRA, "New Zealand could choo se either [of the two alternative requirements]." 3130
Accordingly, in the context of inspection, the alternative measure advanced by New Zealand might be
less – let alone significantly less – trade restrictive only in comparison with Australia's first alternative
requirement and not the second.
7.1353 In principle, a more intensive inspection is cer tainly more costly and time-consuming than an
alternative inspection with a five times smaller samp le size. These cost a nd time burdens would arise
on the New Zealand side, since under the IRA, MAFNZ or its accredited agency would be involved in
the 3,000-unit inspection requirement.3131 Although New Zealand does not explain exactly how much
more costly or time-consuming a 3,000-unit inspec tion might be than a 600-unit inspection, the Panel
notes that New Zealand is advancing an alternative measure with a five times smaller sample size,
which has been found to meet Australia's ALOP. The Panel also recalls Dr Cross's statement that
"[t]o inspect 3,000 fruits is a big requirement and w ould be, I think, quite a restriction on the possible
trade. It would be very difficult to do, in my view – expensive to do, if it was done for every
orchard."
3132
7.1354 Likewise, in response to the Panel Dr Cross e xplains that "[t]he requirements for a 3000 fruit
inspection or for fruit fumigation are clearly restrictive and alternative measures coupled with a
600 fruit inspection would be preferable provided they met Australia's ALOP."3133
7.1355 The Panel considers that the higher costs of Australia's 3,000-unit inspection requirement are
somewhat mitigated since, as Australia points out , visible inspection for ALCM is not invasive.
Inspected apples would not be physically destroyed and could still be used for export. This would
reduce but not eliminate the difference in trade -restrictiveness between a 600-unit and a 3,000-unit
inspection.
7.1356 Ultimately, any differences between the trade restrictiveness of a 600-unit and a 3,000-unit
inspection would only partly answer the questi on whether the alternative measure advanced by
New Zealand would be significantly less trade restrictive overall than the ALCM measure imposed by
Australia. As noted above, this latter has two a lternative requirements, and the first of these
requirements differs from the alternative measure advanced by New Zealand only in terms of
inspection sample rate.

3127 Panel Report on Japan – Agricultural Products II, para. 8.96.
3128 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.151.
3129 Australia's IRA, Part B, p. 192. See also, Australia's IRA, Part B, pp. 319-322.
3130 Australia's IRA, Part B, p. 319.
3131 Ibid.
3132 Dr Cross's reply in Transcript of the Panel's meeting with experts, para. 662.
3133 Dr Cross's reply to Panel question 120, in List of Replies from the scientific experts to questions

7.1357 The Panel therefore turns to assessing whether in terms of fumigation the alternative measure
advanced by New Zealand would be significan tly less trade restrictive than Australia's
ALCM measure.
7.1358 In light of the information submitted by the Partie s, the Panel has reasons to believe that the
first alternative requirement under Australia's ALCM measure, a 3,000-unit inspection, would
effectively result in a fumigation of all lots. In turn, the second alternative requirement under
Australia's ALCM measure explicitly prescribes the fumigation of all lots.
7.1359 Whether the alternative measure advanced by New Zealand would result in a lower
fumigation rate of New Zealand apples depends on the ALCM infestation rate of New Zealand apples.
The Parties agree that at an infestation rate of 4. 1 per cent, there would not be a significant difference
in fumigation rates since at that infestation ra te the 600-unit inspection would find ALCM and result
in fumigation for almost every lot. At the same time , at an infestation rate of 0.16 per cent and taking
into account that only 60 per cent of cocoons are occupied, according to New Zealand, only
approximately 44 per cent of cons ignments would be expected to have an occupied ALCM cocoon
found during a 600-unit sample. Thus, assuming that only detection of occupied cocoons will lead to
fumigation, 56 per cent of consignments would pass without fumigation at an ALCM infestation rate
of 0.16 per cent.
7.1360 The Panel notes that it has already found that the IRA's conclusion that New Zealand apples
have a 4.1 per cent infestation rate does not result from a coherent and objective risk assessment. As
noted above, New Zealand has made a prima facie case that an infestation rate more in the range
found in the August 2005 data would be more realistic in light of the various factors that the IRA did
not properly take into account.
7.1361 If only around 44 per cent of lots would be exp ected to have an occupied cocoon and would
need to be fumigated, the costs of fumigati on under the alternative measure advanced by
New Zealand would be around half of the costs of mandatory or de facto fumigation of all lots under
Australia's ALCM measure. Australia does not c ontest New Zealand's argument that fumigation is
costly. Thus, at an infestation rate of around 0. 16 per cent, the fumigation costs of the alternative
measure would be significantly lower than the fu migation costs under either of the alternative
requirements of Australia's ALCM measure.
7.1362 This significant difference in fumigation costs would also result in a significant difference in
trade restrictiveness. An SPS measure that is signi ficantly more costly for the complainant than an
alternative measure, would certainly reduce market access or make it more difficult.
7.1363 The Panel also notes that Australia does not contest New Zealand's argument that,
unlike inspection, fumigation has an impact on the quality and marketability of apples. In other
words, fumigation directly affects the market acces s of New Zealand apples to Australia. Hence, a
measure involving half the fumigation rate of a nother measure would be significantly less trade
restrictive than that other measure.
7.1364 In the light of the above, the Panel concludes that New Zealand has demonstrated that the
alternative measure of a 600-unit inspection of e ach import lot would be significantly less trade
restrictive than Australia's current ALCM measure.
(d) Conclusion on New Zealand's Article 5.6 claim in regard to ALCM
7.1365 New Zealand has demonstrated that the alte rnative for the ALCM measure (Measure 14)
fulfils all three cumulative conditions of the Article 5.6 test. Accordingly, the Panel finds that
Measure 14 is inconsistent with Article 5.6 of the SPS Agreement.

4. General measures
(a) Alternative measure identified by New Zealand for the general measures
7.1366 In the context of Article 5.6 of the SPS Ag reement, in its first written submission
New Zealand references "auditing by AQIS officers of New Zealand systems applicable to the import
of apples to Australia from New Zealand" 3134 as an alternative to the "[g]eneral" measures
(Measures 15-17) identified in its panel request as follows:
"[15] The requirement that Australian Qu arantine and Inspection Service officers
be involved in orchard inspections for Eur opean canker and fire blight, in direct
verification of packing house procedures, and in fruit inspection and treatment.
[16] The requirement that New Zealand en sure that all orchards registered for
export to Australia operate under standard commercial practices.
[17] The requirement that packing houses provide details of the layout of
premises."3135
7.1367 In response, Australia argues that New Zealand failed to identify any real alternative for either
of these three general measures. 3136 First, Australia contends, New Zealand's alleged alternative is
identical to Australia's existing requirement under Measure 15:
"Australia's requirement in respect of AQIS officers is that they will conduct systems
audits only. New Zealand's description of potential AQIS systems audits accords
with Australia's view of its requirement. Therefore, New Zealand has not identified
an 'alternative' measure because it is in fact the same requirement as that which
Australia imposes."
3137
7.1368 Second, according to Australia, the alternative measure proposed by New Zealand cannot be
an alternative for Measures 16 and 17. Although New Zealand argues that Australia has not explained
the basis for imposing these two measures, New Ze aland has not identified any alternative measure
for these measures. Therefore, New Zealand has failed to support its claim under Article 5.63138:
"[New Zealand] has failed to demonstrate how any 'alternative' measure could replace
the other two general requirements. In particular, Australia's requirement that
'MAFNZ will ensure that all orchards regi stered for export to Australia are operating
under standard commercial practices', is not related to New Zealand's concern with
'AQIS involvement' in inspections, etc. Th e measure as challenged by New Zealand
[as Measure 16] is:
The requirement that New Zealand ensure that all orchards registered for export to
Australia operate under standard commercial practices.

3134 New Zealand's first written submission, para. 4.525.
3135 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, p. 3.
3136 Australia's first written submission, paras. 1 106-1112. See also Australia's second written
submission, para. 737.
3137 Australia's first written submission, para. 1107. See also Australia's second written submission,
para. 737.
3138 Australia's first written submission, para. 1112.

Thus, the measure at issue is not any AQIS verification of this requirement – rather,
the challenge is against the substantive re quirement that orchards must operate under
standard commercial practices. Thus, an 'alternative' to the 'AQIS involvement'
requirement is not an alternative to the standard commercial practice requirement."
3139
7.1369 Australia adds that New Zealand is wrong in ar guing that there is no justification in the IRA
for Measures 16 and 17:
"New Zealand has alleged that 'Australia does not provide any justification' for its
requirement in respect of standard commerc ial practice. This is clearly incorrect,
as the Final IRA Report makes it clear that the IRA Team assumed that New Zealand
exporters would operate under standard commercial practice throughout its
assessment of the unrestricted risk associated with importing New Zealand apples,
and therefore assurance was required that all orchards registered for export to
Australia would be operating under standard commercial practices.
New Zealand also challenges the justification for the requirement that packing houses
provide details of the layout of premises. As explained above, a basic map of packing
houses is sought in order that AQIS officers can identify areas of potential risk in the
packing houses in preparation for the required packing house audits."
3140
7.1370 In response, New Zealand explains that it sees important differences between Measure 15 and
the alternative measure, which it identified in its first written submission as "auditing by AQIS
officers of New Zealand systems applicable to the import of apples to Australia from
New Zealand".
3141 "New Zealand's characterisation of an AQIS audit is very different from
Australia's. While, as explained above, Australia has characterised the IRA's measure requiring
'AQIS involvement' as '100% audit of survey t eams and packing houses', New Zealand's proposed
alternative would involve the audit of only a sample of the relevant New Zealand systems. These are
two very different things."3142
7.1371 In its second written submission New Zealand slightly rephrases the suggested alternative
measure as "an audit by AQIS officials of a sample of the New Zealand systems that implement the
relevant requirements"3143, and confirms that it proposes this alternative instead of "all three general
measures."3144 According to New Zealand:
"In terms of the relevant New Zealand systems that would be audited, in accordance
with the findings of the panel in Japan – Apples, any AQIS involvement should relate
only to those requirements imposed by Austra lia that are scientifically justified in
accordance with Article 2.2. Since none of the Australian measures at issue are
scientifically justified, AQIS involvement should extend only to the two less trade
restrictive alternatives available for fi re blight, European canker and ALCM
(the requirements that apples be mature a nd symptomless and be subject to a 600 unit
sample inspection)."
3145
7.1372 New Zealand adds that "[c]onsequently, the l ess trade restrictive alternative for the three
general measures would be an audit by AQIS of a sa mple of: (i) the relevant New Zealand systems

3139 Australia's first written submission, paras. 1108-1109 (footnotes omitted).
3140 Australia's first written submission, paras. 1110-1111 (footnotes omitted).
3141 New Zealand's first written submission, para. 4.525.
3142 New Zealand's second written submission, para. 2.914 (footnote omitted).
3143 New Zealand's second written submission, para. 2.916.
3144 Ibid.
3145 New Zealand's second written submission, para. 2.915 (footnote omitted).

designed to ensure that apples are mature and symp tomless, and (ii) the procedures for inspection of a
600-unit sample."3146
7.1373 In the light of New Zealand's response to Au stralia's arguments, the Panel considers that
New Zealand suggests the following alternative meas ure for all three general measures (Measures 15-
17) in the context of its Article 5.6 claim: "an audit by AQIS of a sample of: (i) the relevant
New Zealand systems designed to ensure that apples are mature and symptomless, and (ii) the
procedures for inspection of a 600-unit sample."3147
7.1374 As New Zealand explains, it suggests this alte rnative not only for Measure 15 but also for
Measures 16 and 17. Accordingly, the Panel turn s to assessing whether this alternative satisfies the
three cumulative conditions of the Article 5.6 test in regard to Measures 15-17.
(b) Whether an audit by AQIS of a sample of: (i) the relevant systems designed to ensure that
apples are mature and symptomless, and (ii) the procedures for inspection of a 600-unit
sample satisfies the three-pronged Article 5.6 test
7.1375 As the Appellate Body explained, to pass this three-pronged test of Article 5.6,
the complainant needs to demonstrate that another, alternative measure:
"(1) is reasonably available taking into account technical and economic
feasibility;
(2) achieves the Member's appropriate level of sanitary or phytosanitary
protection; and
(3) is significantly less restrictive to trade than the SPS measure contested."
3148
7.1376 As mentioned above, the Panel starts its anal ysis of the general measures with the third
condition of the Article 5.6 test. 3149 This condition entails whether the alternative measure identified
by the complainant is significantly less trade restri ctive than the respondent's contested measure(s).
Unlike the first two conditions of the Article 5.6 t est, the third condition requires a direct comparison
between the contested and the alternative measure(s).
7.1377 The Parties dispute whether such a comparison is possible, at least in regard to Measure 15.
The possibility of such a comparison is thus an impor tant threshold issue for the Panel's analysis of
the third condition of the Article 5.6 test. Since the th ree conditions of this test are cumulative, this is
also a threshold issue for the Panel's analysis of the three-pronged Article 5.6 test as such.
(i) Summary of the Parties' arguments
7.1378 New Zealand argues that its alternative is l ess trade restrictive than Australia's general
measures (Measures 15-17). New Zealand notes that Australia's current measures would be time-
consuming, labour-intensive and costly. Also, th ey are unprecedented and not required in respect of
any other exports from New Zealand to Australia.3150

3146 New Zealand's second written submission, para. 2.915.
3147 Ibid.
3148 Appellate Body Report on Australia – Salmon , para. 194; and Appellate Body Report on Japan –
Agricultural Products II, para. 95.
3149 See para. 7.1108 above.
3150 New Zealand's first written submission, para. 4. 534. See also, New Z ealand's second written
submission, para. 2.920.

7.1379 New Zealand does not agree with Australia's characterization of Measure 15 as a systems
audit.
3151 An AQIS audit of New Zealand's systems would involve only a sample of all necessary
aspects of the export programme. ISPM No. 20 also requires "some sort of sampling process" of the
relevant systems.
3152 Conversely, Measure 15 requires AQIS to conduct an audit of all survey teams
and all packing houses 3153, and none of Australia's explanati ons suggest less than 100 per cent
inspection intensity. In fact, Australia confirmed th at it would be necessary to audit each survey team
at least in the first year of trade. 3154 New Zealand adds that 100 per cent AQIS involvement for
New Zealand apples is unprecedented. Under Austra lia's regime applicable for stone fruit, AQIS will
audit a sample of the systems being implemented by each of the sample operators.3155
7.1380 New Zealand argues that its alternative would involve the audit of New Zealand relevant
systems implementing scientifically justified requirements 3156, which is significantly less trade
restrictive than a measure requiring an audit of all survey teams and all packing houses. 3157
These systems audits would be less frequent and le ss intrusive since they would review and assess
New Zealand phytosanitary practices only from time to time. According to New Zealand, this would
validate existing procedures which Australia h as never suggested would be inadequate.
The alternative would involve minimal additional co sts and would not require the creation of new,
expensive and unnecessary systems.3158
7.1381 New Zealand claims that Measure 15 would double the number of inspectors and it would
more than double the cost of orchard and pack ing house inspections. New Zealand would be
responsible for the time costs of the AQIS inspec tors involved, as well as for their travel and
accommodation expenses. For instance, the orch ard inspections under Measure 15 involve an
intensive and time-consuming requirement to use la dders to inspect the tops of trees for European
canker. New Zealand growers and exporters would incur these heavy and unjustifiable costs, which
would be significantly trade restrictive.3159
7.1382 New Zealand points out that Measure 16 would require NZMAF to verify through a costly
compliance program that the apple industry is operating in accordance with standard commercial
practices. Australia does not provide any justifi cation for Measure 16, neither for Measure 17.
These two measures have the effect of placing a trade restriction behind the border and are
unwarranted.3160 In addition, New Zealand relies on the e xperts' responses to support its view that
Australia does not provide any scientific basis for Measure 17.3161
7.1383 New Zealand argues that even if the details of Measure 16, which requires compliance with
standard commercial practices, have not yet been developed, it would require MAFNZ to audit a

3151 New Zealand's reply to Panel question 46 after the first substantive meeting, para. 71. See also,
New Zealand's comments on Australia's reply to Panel questions 105-106 after the second substantive meeting,
para. 250.
3152 New Zealand's comments on Australia's reply to Panel questions 105-106 after the second
substantive meeting, para. 252.
3153 New Zealand's second written submission, para. 2.921.
3154 New Zealand's comments on Australia's reply to Panel questions 105-106 after the second
substantive meeting, para. 253.
3155 New Zealand's reply to Panel question 109 after the second substantive meeting, para. 164.
New Zealand's comments on Australia's reply to Panel question 107 after the second substantive meeting,
para. 255.
3156 New Zealand's second written submission, para. 2.915.
3157 New Zealand's second written submission, para. 2.921.
3158 New Zealand's first written submission, para. 4.536.
3159 New Zealand's first written submission, para. 4.535.
3160 New Zealand's first written submission, para. 4.537.
3161 New Zealand's second written submission, para. 2.279.

sample of growers in order to verify that th e growers had followed the recommendations of the
Industry Integrated Fruit Production Manual. According to New Zealand, this verification component
makes the process trade restrictive. It is sci entifically unjustified, it would be costly and
time-consuming, and it would have flow-on effect s concerning maintenance of auditable records of
growers' monitoring and pest control activities. 3162 In addition, Australia does not require the same
verification under any other import risk analysis, for any other fruit exported to Australia, including
stone fruit, kiwi or avocadoes.3163
7.1384 New Zealand disagrees with Australia's argum ent that the standard commercial practice
requirement is also included in other Australian import risk analyses. The examples cited by
Australia do not contain a requirement for the NPPO in the exporting country to verify that fruit has
been produced in accordance with standard commercial practice. For instance, Australia's risk
analysis for longan and lychee fruit from China a nd Thailand states that all export orchards are
expected to produce commercial longan and lychee under standard cultivation, harvesting and packing
activities, and Australia's import risk analysis fo r Indian mango provides that the existing commercial
practice of a post-harvest fungicida l dip is an underlying requirement for export to Australia. By
contrast, the IRA for New Zealand apples requires that MAFNZ ensure that all orchards registered for
export operate under standard commercial practice.3164
7.1385 New Zealand also contests Australia's reliance on the assumption that all New Zealand
exporting orchards would operate under standard commercial practices. 3165 The IRA provides no
explanation how standard commercial prac tices would mitigate against assessed risk. 3166 A risk
assessment should not be allowed to build on unjustified assumptions that only serve to impose
obligations on exporting countries.3167
7.1386 Australia argues that New Zealand has accepted that all of Australia's measures are based on
the IRA, i.e. that there is a rational relations hip between the risk assessment and the measures
recommended by the IRA. Accordingly, the Panel needs to determine only whether Australia's risk
assessments for the three pests at issue are objectiv ely justifiable and whether the measures are more
trade restrictive than required within the meaning of Article 5.6. Australia advances that the
justification of the general measures flows from th e technical justification of the pest-specific
measures.3168
7.1387 Australia contends that in the context of the third prong of the Article 5.6 test, it is not enough
for the complainant to demonstrate that the alternativ e is merely less trade restrictive. The alternative
must be significantly less trade restrictive; "significant" meaning "important, notable,
consequential".3169 Australia's understanding of the panel report in EC – Approval and Marketing of
Biotech Products is that a given risk assessment may be s upported by a range of possible measures,
and it is within the Member's discretion to choose a measure providing the best protection taking into

3162 New Zealand's second written submission, para. 2.922.
3163 New Zealand's second written submission, para. 2.923. See also, New Zealand's reply to Panel
question 53 after the first substantive meeting, para. 80.
3164 New Zealand's second written submission, para. 2.924.
3165 New Zealand's comments on Australia's reply to Panel question 113 after the second substantive
meeting, para. 266.
3166 New Zealand's second written submission, para. 2.289.
3167 New Zealand's comments on Australia's reply to Panel question 113 after the second substantive
meeting, para. 266.
3168 Australia's reply to Panel question 113 after the second substantive meeting, para. 493.
3169 Australia's first written submission, para. 1079.

account its ALOP. Accordingly, the Panel must re spect "a Member's right to choose its preferred
measure, unless there is another measure that is significantly less restrictive to trade".
3170
7.1388 Australia argues that the IRA does not define the level of AQIS involvement required by
Measure 15. The requirement does not demand the involvement of Australia's authorities in all
orchard inspections and packing houses operations. For orchards inspections, the audit would include
100% of survey teams in the field and the intensity of the audits would be adjusted over time
depending on performance. In the first year of trade, all relevant packing houses would be audited.3171
Australia contends that these audits will be facilitated by Measure 17. 3172 The latter requires packing
houses to provide a basic map of the layout of their premises, so that AQIS officers can identify areas
of potential risk in preparation for the required packing house audits. 3173 Australia explains that AQIS
clarified these requirements on a number of occasions during bilateral discussions on the standard
operating procedure in 2007 and early 2008. 3174 The extent of AQIS involvement in fruit inspections
will be determined when New Zealand completes th e required standard operating procedure and work
plan to operationalize the requirements of the Fi nal IRA Report. At that point and based on
New Zealand's intentions, there may be a number of options to minimize costs and avoid duplication,
as demonstrated by Australia's experience in join t inspections with the United States' authorities. 3175
Based upon information provided by New Zealand during a meeting with Australian officials,
Australia offered that AQIS would conduct system audits and verifications in the first year of
trade.
3176
7.1389 With regard to Measure 16, Australia argues that the data provided by New Zealand during
the IRA process was based on, or derived from, or chards and packing houses that follow standard
commercial practices such as the Integrated Fruit Production (IFP) manual. According to Australia,
New Zealand did not provide any data relating to orchards or packing houses that do not follow the
IFP manual. Based on its meetings with New Z ealand officials and the New Zealand submissions,
Australia asserts that New Zealand's access request concentrated on apples processed under standard
commercial practices. Therefore the IRA did not assess the risk associated with other types of
production, and the measures required by the IR A only apply to apples produced under standard
commercial practices. 3177 Australia adds that it does require operation under standard commercial
practices in the context of table grapes from Ch ile, longans and lychees from China and Thailand and
for mangoes from India.3178
(ii) The Panel's analysis
7.1390 The Panel first addresses the threshold issu e whether the alternative advanced by
New Zealand can be usefully compared with the ge neral measures, or at least Measure 15, for the
purposes of the third condition of the Article 5.6 test.
7.1391 In its earlier analysis of the Parties' disagreements concerning Measure 15, the Panel has
noted how, despite its efforts and questions, it ne ver received a clear explanation of these procedures
and how they would function, and particularly of the frequency of AQIS involvement. 3179 The Panel
has also been unable to establish whether Measure 15 relates solely to the part of the IRA entitled

3170 Australia's first written submission, paras. 1080-1081.
3171 Australia's first written submission, para. 151.
3172 Australia's first written submission, para. 152.
3173 Australia's first written submission, para. 153.
3174 Australia's first written submission, para. 154.
3175 Australia's reply to Panel question 102 after the second substantive meeting, para. 458.
3176 Australia's reply to Panel question 105 after the second substantive meeting, para. 471.
3177 Australia's reply to Panel question 113 after the second substantive meeting, para. 491.
3178 Australia's first written submission, para. 968.
3179 See para. 2.231 above.

"Requirement for pre-clearance" or whether it is al so addressed in the subsequent part of the IRA,
entitled "Audit". 3180 The Panel could not establish either whether Measure 15 involves
"systems audits" as that term is understood by the Par ties; the Panel merely noted that this issue is
more directly related to New Zealand's claim under Article 5.6 of the SPS Agreement.3181
7.1392 Further, the Panel has found that these uncertainti es with regard to the IRA in the context of
Measure 15 are underscored by the IRA's requirement that the details of pre-clearance be addressed
by the Parties in the standard operating manual and work plan, which have not yet been adopted.3182
7.1393 While the Panel understands that New Zealand may not be responsible for the uncertainty
regarding the scope of Measure 15, the burden still falls on New Zealand as the complainant to make
a prima facie case regarding these requirements. In the light of the above uncertainties in the IRA
regarding Measure 15 and in the absence of the st andard operating manual and work plan, the Panel
cannot usefully compare Measure 15 with New Zealand' s alternative. In particular, the Panel cannot
assess whether New Zealand's alternative measure is less trade restrictive than Measure 15, let alone
whether it is significantly less trade restrictive.
7.1394 The Panel will continue its analysis of the third prong of the Article 5.6 test by looking at
Measures 16 and 17. The Panel will assess whet her New Zealand's alternative measure is
significantly less trade restrictive than these two measures.
7.1395 The Panel agrees with Australia that the third cond ition of the Article 5.6 test requires that the
complainant identify an alte rnative measure that is " significantly less restrictive to trade" than the
contested measure. This is in line with the language of footnote 3 to Article 5.6 of the
SPS Agreement3183, and it also follows how previous panels and the Appellate Body have identified
this third condition.3184
7.1396 Previous panels analysed the third condition of the Article 5.6 test by looking at the difference
in market access under the meas ures at issue and the alterna tive measure identified by the
complainant. In particular, previous panels analysed whether, under th e alternative measure,
"market access would be obtained significantly more easily than under the current regime" 3185 and
whether "the increased market access that would result under the alternative[] ... would be
significant."3186
7.1397 In regard to Measure 16, New Zealand contest s the IRA's assumption that all New Zealand
growers interested in exporting to Australia w ould operate under standard commercial practices.
However, New Zealand does not explain what pro portion of New Zealand growers would need to
adapt to standard commercial practices, or what woul d be the costs of such adaptation. In fact, the
element of Measure 16 that New Zealand contests most vigorously is not growers' compliance with
standard commercial practices, but the verificati on by MAFNZ of such compliance. New Zealand
argues that it is this verification component th at makes Measure 16 trade restrictive because it is
scientifically unjustified, it would be costly and time-consuming, and it woul d have flow-on effects

3180 See para. 2.215 above.
3181 See para. 2.231 above.
3182 See para. 2.225 above.
3183 Footnote 3 to Article 5.6 of the SPS Agreement provides that "[f]or the purposes of paragraph 6 of
Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably
available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary
or phytosanitary protection and is significantly less restrictive to trade." (emphasis added).
3184 See Appellate Body Report on Australia – Salmon, paras. 186 and 194; Panel Report on Japan –
Agricultural Products II, para. 8.72; and Appellate Body Report on Japan – Agricultural Products II, para. 95.
3185 Panel Report on Japan – Agricultural Products II, para. 8.96.
3186 Panel Report on Australia – Salmon (Article 21.5 – Canada), para. 7.151.

concerning maintenance of auditable records of gr owers' monitoring and pest control activities.
New Zealand adds that Australia does not require the same verification under any other import risk
analysis, for any other fruit exported to Australia, including stone fruit, kiwi or avocadoes.
7.1398 The Panel can accept only part of these arguments as relevant for New Zealand's claim that
the third prong of the Article 5.6 test is fulfille d in the context of Measure 16. Indeed, whether
Measure 16 is scientifically justified is distinct fro m its alleged trade restrictiveness. The scientific
justification of an SPS measure is not a matter of Article 5.6 but Articles 5. 1 and 5.2 and 2.2 of the
SPS Agreement. The Panel has already addressed this matter for Measure 16 in the context
New Zealand's claim under the latter three provisions of the SPS Agreement. Likewise, whether other
IRAs have similar verification requirement s says little about Measure 16's alleged trade
restrictiveness, and is a matter for Article 2.3, not Article 5.6 of the SPS Agreement.
7.1399 New Zealand argues that verification of growers' compliance with standard commercial
practices would be costly and time-consuming, and it would have flow- on effects concerning
maintenance of auditable records of growers' mon itoring and pest control activities. The Panel does
not necessarily contest this. Nonetheless, the Pa nel considers that New Zealand should have
advanced more arguments and evidence to demonstr ate that its alternative is less – let alone
significantly less – trade restrictive than Measure 16. In particular, New Zealand should have
explained and demonstrated how, by being less cos tly and time-consuming, its alternative measure
would involve significantly increased market acc ess for New Zealand apples to Australia than
Measure 16. By merely referencing flow-on effects, and asserting that Measure 16 is costly and time-
consuming, New Zealand has not demonstrated that its alternative measure would involve
significantly increased market access for New Zealand apples to Australia.
7.1400 Moving on to Measure 17, the Panel notes that New Zealand argues only that this measure is
unwarranted and scientifically unjustified. Agai n, the Panel cannot consider these arguments as
sufficient to demonstrate that New Zealand's alte rnative measure would be significantly less trade
restrictive than Measure 17.
7.1401 In the light of the above, the Panel concludes th at New Zealand has not demonstrated that its
alternative for the three general measure is significan tly less trade restrictively than the three general
measures (Measures 15-17) either individually or ta ken as a whole. Accordingly, New Zealand has
not made a prima facie case that the alternative for the three general measures fulfils the third
condition of the Article 5.6 test.
(c) Conclusion on New Zealand's Article 5.6 claim in regard to the general measures
7.1402 New Zealand has not made a prima facie case that the third condition of the Article 5.6 test is
fulfilled in the context of the general measures. Sin ce the three conditions of this test are cumulative,
the Panel finds that New Zealand has not demonstr ated that Measures 15, 16 and 17 are inconsistent
with Article 5.6 of the SPS Agreement.
5. The Panel's conclusions on New Zealand's Article 5.6 Claim
(a) The Panel's conclusions under Article 5.6
7.1403 In the light of the above anal ysis, the Panel concludes that New Zealand has demonstrated
that the contested pest-specific measures (Measures 1-11 and 13-14) are inconsistent with Article 5.6
of the SPS Agreement, while New Zealand has failed to demonstrate the same for the three general
measures (Measures 15-17).

(b) New Zealand's arguments linking its Article 5.6 claim to Article 2.2 of the SPS Agreement
7.1404 In its first submission, New Zealand states at the end of its arguments under Article 5.6 that:
"In addition, because they are more trade rest rictive than required, the measures also
breach the requirement in Article 2.2 that measures be 'applied only to the extent
necessary to protect human, animal or plan t life or health.' Australia has also,
therefore, again, acted inconsistently with Article 2.2."3187
7.1405 Article 2.2 provides that:
"Members shall ensure that any sanitary or phytosanitary measure is applied only to
the extent necessary to protect human, animal or plant life or health , is based on
scientific principles and is not maintained without sufficient scientific evidence,
except as provided for in paragraph 7 of Article 5." (emphasis added)
7.1406 In response to New Zealand, Australia argu es, that in the absence of any substantive
argument, it appears that New Zealand has e ffectively abandoned any claim under the first
requirement of Article 2.2, and the Panel s hould refrain from considering the matter further. 3188
Australia points out that New Zealand has devoted only a single paragraph in its first written
submission in support of any claim that Australia 's measures are inconsistent with the first
requirement of Article 2.2. New Zealand's argument is a postscript to its arguments in relation to
Article 5.6, in particular the third condition of the Article 5.6 test.
3189
7.1407 Australia submits that New Zealand has failed to provide any explanation or argument as to
why any finding under Article 5.6 of the SPS Agre ement that measures are "more trade restrictive
than required" should automatically lead to a cert ain finding under Article 2.2. Australia points out
that the respective texts of Article 2.2 and Artic le 5.6 make no mention of the other provision.
Previous panels or the Appellate Body have provided no guidance on this question. They have opined
merely that the first element of Article 2.2 is relevant context for interpreting the obligation in
Article 5.6.3190
7.1408 In any event, Australia adds, any outstanding claim by New Zealand in respect of the first
requirement of Article 2.2 is clearly dependent on the outcome of its claims in respect of Article 5.6.
Since New Zealand has failed to discharge its burden of proof in respect of Article 5.6, it has also
failed to make such a case in respect of the first requirement of Article 2.2.
3191
7.1409 The Panel has already found that the measures at issue in this dispute are inconsistent with the
clause of Article 2.2 requiring that Members' SPS measures be "based on scientific principles and is
not maintained without sufficient scientific evidence."
3192 Accordingly, a positive settlement of the
dispute does not require the Panel to assess whet her the same measures also violate the first
requirement of Article 2.2.
7.1410 The Panel therefore does not consider it nec essary to analyse this Article-5.6-related
Article 2.2 claim by New Zealand, nor whether Ne w Zealand has properly articulated arguments for
this claim. Consequently, the Panel does not need to engage in a detailed anal ysis of the relationship

3187 New Zealand's first written submission, para. 4.528.
3188 Australia's first written submission, para. 1115. See also, Australia's second written submission,
para. 160.
3189 Australia's first written submission, para. 1114.
3190 Australia's first written submission, para. 1115.
3191 Australia's first written submission, para. 1116.
3192 See paras. 7.510, 7.779, 7.887 and 7.905 above.

between the third condition of the Article 5.6 test and the first requirement of Article 2.2 of the
SPS Agreement.
G. N
EW ZEALAND'S CLAIMS UNDER ARTICLE 8 AND ANNEX C(1)(A) OF THE SPS AGREEMENT
1. Summary of the Parties' arguments
7.1411 New Zealand makes claims under Annex C(1 )(a) and Article 8 of the SPS Agreement: 3193
according to New Zealand, Australia's violation of Annex C(1)(a) necessarily results in a violation of
Article 8, which requires complian ce with the provisions of Annex C. 3194 Australia disagrees,
primarily by calling into question whether these clai ms, in particular the measures to which they
relate, are within the Panel's terms of reference.3195
(a) Parties' arguments on the substance of Annex C(1)(a)
7.1412 In regard to Annex C(1)(a), New Zealand pr ovides a chronology of the issues regarding the
access of its apples to Australia's market since 1919. 3196 New Zealand points out that in January 1999
it lodged its fourth request that Australia allow the importation of New Zealand apples. 3197
New Zealand "makes no complaint about th e commencement of the approval process." 3198
New Zealand contests the fact that "the approval procedures were not completed until November 2006
and the measures formally endorsed in March 2007, more than eight years after the filing of the
request."3199
7.1413 New Zealand argues that, in the light of the panel report in EC – Approval and Marketing of
Biotech Products , the duration of the approval process le ading to the IRA constitutes undue delay
within the meaning of Annex C(1)(a) of the SPS Agreement. The delay was not due to science-
related factors. 3200 Australia had already reviewed th e relevant science in the context of
New Zealand's three earlier apple entry requests. 3201 Moreover, the Japan – Apples dispute had dealt
with phytosanitary measures for fire blight. Rather, the delay was due to repeated changes to the risk
assessment process and a parallel and interlinked, highly charged political process.3202
7.1414 New Zealand adds that in April 1999 Aust ralia informed stakeholders, including
New Zealand, that due to the review of New Zealand' s three previous entry requests, the risk analysis
should not be technically complex and it "[would] ta ke approximately twelve months to complete".
Accordingly, New Zealand hoped that the draft IRA would be released in November 1999. That
ended up not being the case, and eventually the final IRA was issued after 94 months.3203

3193 New Zealand's communication to the Panel, 7 April 2008, submission regarding Australia's request
3194 New Zealand's first written submission, para. 4.563.
3195 Australia's second written submission, para. 218.
3196 New Zealand's first written submission, Annex 1.
3197 New Zealand's first written submission, para. 4.551.
3198 New Zealand's first written submission, para. 4.553.
3199 New Zealand's first written submission, para. 4.551.
3200 New Zealand's first written submission, para. 4.559.
3201 New Zealand's first written submission, para. 4.561.
3202 New Zealand's first written submission, paras. 4.55 4-4.559. See also New Zealand's closing oral
statement at the first substantive meeting of the Panel w ith the Parties, para. 11; New Zealand's reply to Panel
question 146 after the first substantive meeting, paras. 299-306; and New Zealand's closing oral statement at the
second substantive meeting of the Panel with the Parties, para. 12.
3203 New Zealand's second written submission, para. 2.934.

7.1415 New Zealand references a recent independent review of Australian quarantine and biosecurity
arrangements initiated by the Australian Government. 3204 New Zealand argues that, in principle,
the Australian Government agrees with the outcome of this review. 3205 This review identifies the IRA
for New Zealand apples as one of the IRAs that have "done much to generate international
perceptions [concerning] trade-restrictiveness, unreasonable delays and questionable science." 3206
The report concludes that "these [IRAs] may have involved complex scientific assessments ... [but]
the time taken [for completing these IRAs] is difficult to justify." 3207 The report notes that the 2007
changes to the regulations governing IRAs prescr ibe much tighter timelines: 30 months for an
expanded IRA, and 24 mont hs for a standard one. 3208 New Zealand points out that the IRA for
New Zealand apples has exceeded these maximum timelines more than threefold.3209
7.1416 In response, Australia reject s New Zealand's substantive arguments under Annex C(1)(a) and
Article 8 of the SPS Agreement. Australia submit s that New Zealand's arguments that the IRA is
tainted by an intertwined political process are spurious and unsupported by evidence. 3210 I n t e n s e
political and public debate, parliamentary enquiries a nd domestic court proceedings "are not evidence
of 'politicisation', but rather the normal functioning of a healthy democracy." 3211 The SPS Agreement
recognizes WTO Members' right to base their SPS measu res on scientific evidence, and this is what
Australia has done in regard to New Zealand apples.3212
7.1417 Australia provides a detailed list of the steps in its IRA process to fill in the gaps it perceives
in the chronology put forward by New Zealand. 3213 Australia points out that the independent report
referenced by New Zealand recognized that the time taken to complete certain of Australia's IRAs was
not unique.3214
(b) Parties' arguments on whether New Zealand's claims are within the Panel's terms of reference
7.1418 A key point of discord between the Parties unde r Annex C(1)(a) and Article 8 is whether the
Panel's terms of reference cover New Zealand's claims, and the measures to which these claims relate.
(i) Parties' arguments leading to Australia's second preliminary ruling request
7.1419 In its written submission on Australia's first pr eliminary ruling request under Article 6.2 of
the DSU, New Zealand argues that "the final IR A as a whole is inconsistent with Australia's

3204 One Biosecurity: A Working Partnership, The Independent Review of Australia's Quarantine and
Biosecurity Arrangements, Report to the Australian Government, 30 September 2008. See New Zealand's
3205 New Zealand's second written submission, para. 2.935, footnote 101.
3206 One Biosecurity: A Working Partnership, The Independent Review of Australia's Quarantine and
Biosecurity Arrangements, Report to the Australian Government, 30 September 2008, p. 112. See
New Zealand's second written submission, para. 2.935.
3207 One Biosecurity: A Working Partnership, The Independent Review of Australia's Quarantine and
Biosecurity Arrangements, Report to the Australian Government, 30 September 2008, p. 100. See
New Zealand's second written submission, para. 2.935.
3208 One Biosecurity: A Working Partnership, The Independent Review of Australia's Quarantine and
Biosecurity Arrangements, Report to the Australian Government, 30 September 2008, p. 100. See
New Zealand's second written submission, para. 2.937.
3209 New Zealand's second written submission, para. 2.938.
3210 Australia's first written submission, para. 1125.
3211 Australia's first written submission, para. 28.
3212 Australia's first written submission, para. 32.
3213 Australia's first written submission, para. 1058 and Annex 1.
3214 Australia's reply to Panel question 127 after the second substantive meeting, paras. 536-537.

obligations under the SPS Agreement. That is the essence of New Zealand's Article 8 and
Annex C(1)(a) claim."
3215
7.1420 In response, Australia points out that New Zeal and's panel request did not identify "the IRA
as a whole" as a measure at issue. 3216 By challenging the IRA in and of itself as a measure at issue,
"New Zealand has attempted to ... introduce a new claim in the dispute."3217
7.1421 In its preliminary ruling on Australia's first preliminary ruling request, the Panel found that
"New Zealand's panel request do es not identify with sufficient precision any measures contained in
Australia's FIRA, other than the 17 specific items identified through bullet points."3218
7.1422 After this preliminary ruling, New Zealand argues in its first written submission that
"Australia's process for considering New Zealand's request for access for New Zealand apples to the
Australian market was delayed well beyond any reasonable period of time for considering the
request."3219 In the light of the panel report in EC – Approval and Marketing of Biotech Products ,
undue delay in this "IRA process" is covered by Annex C(1)(a) of the SPS Agreement.3220
7.1423 In response, in its first written submission Australia argues that the "IRA process" is not a
measure at issue, either. The IRA process does not fall within the scope of New Zealand's panel
request3221 because "no possible characterisation of th e 17 measures [identified in bullet points in
New Zealand's panel request] could encapsulate the IRA process."3222 The IRA process is also
outside the Panel's terms of reference as clar ified by the Panel in its preliminary ruling. 3223 Indeed, in
its preliminary ruling the Panel effectively rejected New Zealand's argument that the inconsistency of
the final IRA as a whole is the essence of New Zealand's Article 8 and Annex C(1)(a) claim. 3224
Australia adds that New Zealand has not argued that any of the 17 measures at issue are subject to a
claim of undue delay. In any event, New Zeal and has failed to establish that the 17 measures are
approval procedures within the meaning of Annex C(1).3225
7.1424 Days before the Panel's first substantive m eeting, Australia submitted a second preliminary
ruling request, making similar arguments. Australia ask ed the Panel to rule that, in the light of the
Panel's first preliminary ruling, New Zealand's undue delay claim as it relates to the IRA process is
outside the scope of the dispute.3226
7.1425 Following the first substantive meeting, in th e course of which the Panel heard the Parties'
and Third Parties' arguments on Australia's sec ond preliminary ruling request, the Panel found that
Australia had not shown good cause for the Panel is suing a second preliminary ruling. The Panel

3215 New Zealand's communication to the Panel, 7 April 2008, submission regarding Australia's request
3216 Australia's communication to the Panel, 14 April 2008, submission regarding Australia's request for
a preliminary ruling, paras. 5 and 12.
3217 Australia's communication to the Panel, 14 April 2008, submission regarding Australia's request for
a preliminary ruling, para. 3.
3218 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, p. 4, para. 13(b).
3219 New Zealand's first written submission, para. 4.541.
3220 New Zealand's first written submission, para. 4.546.
3221 Australia's first written submission, para. 1122.
3222 Australia's first written submission, para. 1119 (o riginal emphasis). See also Australia's opening
oral statement at the first substantive meeting of the Panel with the Parties, para. 60.
3223 Australia's first written submission, para. 1122.
3224 Australia's first written submission, para. 1120.
3225 Australia's first written submission, paras. 1123-1124.
3226 Australia's second preliminary ruling request, 22 August 2008.

informed the Parties that it intended to addr ess New Zealand's claim regarding Article 8 and
Annex C(1)(a) in its final report, together with New Zealand's other claims.3227
(ii) The Parties' further arguments
7.1426 After this communication from the Panel, the Pa rties continued their exchange of arguments
triggered by Australia's second preliminary ruling request. These arguments by the Parties address in
particular the type of measure covered by A nnex C(1)(a) of the SPS Agreement, and whether
New Zealand's panel request had identified such a measure.
New Zealand
7.1427 New Zealand argues that "it has never claimed that the measure at issue is the
'IRA process'."3228 New Zealand did not refer to th e IRA process in its panel request 3229, and
furthermore it is unclear how the IRA process could be regarded a measure at issue. 3230 N o r i s
New Zealand arguing that the undue delay is the measure at issue. 3231 Rather, "the measures at issue
under New Zealand's Annex C(1)(a) and Article 8 claim are the 17 measures identified in
New Zealand's panel request."3232 New Zealand contends that "the 17 measures ... at issue ... were not
developed and adopted without undue delay." 3233 In other words, the "SPS measures resulting from
an unduly delayed process have not been imposed in accordance with the SPS Agreement."3234
7.1428 New Zealand references the Appellate Body report in EC – Selected Customs Matters3235, and
argues that Australia "blurs the distinction between legal claims and measures at issue ."3236
New Zealand refers to the IRA process because that approval procedure must be undertaken and
completed without undue delay. 3237 There is a close relationship between the IRA process and the
measure at issue because "[t]he IRA process was th e process by which the measures at issue were
developed."3238 So the IRA process is certainly relevant to New Zealand's claim, but it is not the

3227 Panel's response to Australia's second preliminary ruling request, 8 September 2008.
3228 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
3229 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 125.
3230 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 131.
3231 New Zealand's reply to Panel question 143 after the first substantive meeting, para. 298.
3232 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
3233 New Zealand's reply to Panel question 143 after the first substantive meeting, para. 298.
3234 New Zealand's second written submission, para. 2.928.
3235 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 112.
3236 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 129 (original emphasis). See also New Zealand's second written submission, para. 2.930.
3237 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 129.
3238 New Zealand's reply to Panel question 143 after the first substantive meeting, para. 298.

measure at issue.
3239 It is the "procedure to check and ensure the fulfilment of SPS measures" 3240, that
is the "subject of the obligation [under Annex C(1)(a)], ... not the measure at issue."3241
7.1429 According to New Zealand, in a literal sense, the combined actions, omissions and decisions
of various actors in the Australian system cumulatively resulted in an eight-year delay. But it would
be unrealistic to expect the complainant to identify these multiple causes as the measures at issue in an
Annex C(1)(a) claim.
3242 In a broader sense, the cause of th e delay is inextricably linked to the
intertwined political process. However, the politici zation of the IRA process cannot be thought of as
the measure at issue. 3243 As the Panel explained in its preliminary ruling, the complainant need not
provide the arguments with respect to the undue delay claim in its panel request.3244
7.1430 New Zealand contends that Article C(1)(a ) should be read in the context of the
General Provisions of the SPS Agreement, in particular Article 1.1, which provides that SPS measures
shall be "developed and applied" in accordance with the provisions of the Agreement. Consequently,
the obligation to undertake and complete approval procedures without undue delay is an obligation
that relates directly to the "development" of SPS measures.3245
7.1431 New Zealand adds that Australia is mistaken in believing that the "measures at issue" under
Annex C(1) must be the "procedures to check and ensure the fulfilment of SPS measures" referred to
in the chapeau of Annex C(1).3246 In the present dispute, the IRA process for New Zealand apples is
the procedure to check and ensure the fulf ilment of SPS measures within the meaning of
Annex (C)(1).3247 In fact, "[t]he IRA process is a specific application of Australia's more general
approval requirements relating to the importation of fresh fruit and vegetables ... [,] set out in
Australia's Quarantine Proclamation 1998, and Australia's Import Risk Analysis Handbook." 3248
The "sanitary and phytosanitary measures" referenced in the chapeau of Annex C(1) are Australia's
regime relating to the approval of fresh fruit or vegetables. 3249 This is not a measure at issue, and
New Zealand is not claiming that Annex C(1) relates to the development of that SPS measure.3250
7.1432 According to New Zealand, in the light of the panel report in EC – Approval and Marketing
of Biotech Products , the measures at issue do not th emselves need to satisfy the chapeau of
Annex C(1). The European Communities' generic approval legislation relating to GMOs was not a

3239 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 129.
3240 New Zealand's reply to Panel question 146 after the first substantive meeting, paras. 299-306.
3241 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 112. See also, New Zealand's comments on Australia's reply to Panel question 128 after the
second substantive meeting, paras. 284-289.
3242 New Zealand's comments on Australia's reply to Panel question 128 after the second substantive
meeting, paras. 284-289.
3243 Ibid.
3244 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 114.
3245 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 130.
3246 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 126.
3247 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 128.
3248 Ibid.
3249 New Zealand's reply to Panel question 146 after the first substantive meeting, paras. 299-306.
3250 New Zealand's second written submission, para. 2.930.

measure at issue in that dispute. The measure at issue was the de facto moratorium on approvals,
which was not in itself a procedure to check and ensure the fulfilment of SPS measures.3251
7.1433 New Zealand points out that where SPS measu res were adopted following an approval
process, the approval process itself has ceased to exist. 3252 The IRA process is not challengeable in
this dispute because it has ceased to exis t by the time the Panel was established. 3253 In EC – Chicken
Cuts the Appellate Body established that "the measur es included in a panel's terms of reference must
be measures that are in existence at the time of the establishment of the panel." 3254 In EC – Selected
Customs Matters, the Appellate Body specified that there ar e two exceptions to this rule, but neither
of these apply in the present dispute. The measures at issue in this dispute did not arise after the
establishment of the Panel, nor does this dispute i nvolve subsidies whose legislative basis has expired
but whose effects continue to impair benefits accruing to the complainant. 3255 An interpretation of
Annex C(1)(a) that requires the complainant to ch allenge measures that have ceased to exist would
not accord with the DSU's objective to secure a positive solution to the dispute.3256
Australia
7.1434 Australia considers that New Zealand's arguments constitute an inadmissible attempt at curing
the fatal flaw in its panel request. 3257 Even at an advanced stage of the dispute, there remains
considerable confusion concerning what measures New Zealand is challenging with respect to its
undue delay claim.3258 In fact, New Zealand's undue delay clai m has constantly shifted in an attempt
to bring it within the Panel's terms of reference. 3259 At different points in the dispute, New Zealand
claimed that the measure at issue was the IRA pr ocess or Australia's general approval requirements
concerning the importation of fresh fruit or vege tables. New Zealand's panel request, however,
does not reference either the IRA process or Australia's general approval requirements.3260
7.1435 Australia contends that Annex C(1)(a) do es not refer to the "development" of SPS
measures.3261 New Zealand's reliance on Article 1.1 of the SPS Agreement in this regard is
misplaced.3262 In line with the customary rules of interp retation, an analysis of Annex C(1)(a) should
focus on the ordinary meaning of the terms used in that provision, in their context and in the light of
the object and purpose of the SPS Agreement. 3263 Annex C(1)(a) provides that "such procedures" are
to be "undertaken and completed without undue delay." "Such procedure" must be understood by
reference to the immediate context, found in the chapeau of Annex C(1): "procedures to check and

3251 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 127. See also New Zealand's reply to Panel ques tion 146 after the first substantive meeting, paras. 299-
306; and New Zealand's reply to Australia's question 18 after the second substantive meeting, paras. 43-47.
3252 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 132.
3253 New Zealand's reply to Australia's question 18 after the second substantive meeting, paras. 43-47.
3254 New Zealand's opening oral statement at the s econd substantive meeting of the Panel with the
Parties, para. 115.
3255 New Zealand's reply to Australia's question 17 after the second substantive meeting, paras. 40-42.
3256 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 133.
3257 Australia's intervention on New Zealand's oral statement in relation to Article 8 and Annex C(1)(a),
2 September 2008, p. 2. See also, Australia's reply to Panel question 144 after the first substantive meeting;
Australia's second written submission, paras. 186 and 212; and Australia's communication to the Panel,
14 April 2008, submission regarding Australia's request for a preliminary ruling, paras. 13-14.
3258 Australia's reply to Panel question 144 after the first substantive meeting.
3259 Australia's second written submission, para. 184.
3260 Australia's second written submission, paras. 214-216.
3261 Australia's reply to Panel question 128 after the second substantive meeting, paras. 538-545.
3262 Australia's reply to Panel question 144 after the first substantive meeting.
3263 Ibid. See also Australia's second written submission, para. 187.

ensure the fulfilment of SPS measures." If a pro cedure checks and ensures the fulfilment of a
measure, logically that measure must already ex ist. Thus a procedure within the scope of
Annex C(1)(a) must check and ensure the fulfil ment of pre-existing SPS measures. Therefore,
Annex C(1)(a) cannot be an obliga tion that relates directly to the development of SPS measures.
3264
If, as New Zealand argues, the IRA process is the re levant procedure in the context of Annex C(1),
and assuming that the 17 requirements are the "SPS me asures" referred to in Annex C(1)(a), the IRA
process must be checking and ensuring the fulfilmen t of the 17 SPS measures at issue. The IRA
process, however, took place before the 17 measures came into existence.3265 In fact, the 17 measures
identified in New Zealand's panel request were a dopted on the basis of the recommendations in the
IRA, which itself was a result of the IRA process.3266
7.1436 Australia concedes that New Zealand's altern ative formulation, according to which the
IRA process (as the relevant procedure) checks and ensures the fulfilment of Australia's quarantine
framework (as the relevant SPS measure), may fit bette r within the ordinary meaning of the text of
Annex C(1). The fundamental problem with that, however, is that similar to the IRA process,
Australia's quarantine framework is not id entified in New Zealand's panel request.
3267 Neither the
IRA process, nor Australia's quarantine framework are set out within the 17 specific measures at
issue.
7.1437 According to Australia, New Zealand's reliance on the panel report in EC – Approval and
Marketing of Biotech Products is misguided. In that dispute, Argentina and Canada clearly identified
the subject of their undue delay claim by referring, in their panel requests, to both the relevant
EC approval processes and the European Communiti es' failure to approve without undue delay,
applications for approval of specific products.3268
7.1438 Australia adds that it is not blurring the dis tinction between measures and claims. The IRA
process is clearly the measure that New Zealand seeks to challenge.3269 Only the IRA process, and not
the 17 requirements listed in New Zealand's pa nel request, could have caused a violation of
Annex C(1)(a).3270 Accordingly, New Zealand should have identified the "IRA process" in its panel
request as the measure at issue in the context of its undue delay claim. The IRA process clearly falls
within the broad definition of measures subject to WTO dispute settlement: "'any act or omission
attributable to a WTO Member' 3271".3272 In EC – Selected Customs Matters , the Appellate Body held
that "[t]he 'specific measure' to be identified in a panel request is the object of the challenge, namely,
the measure that is alleged to be causing the vi olation of an obligation contained in a covered
agreement. In other words, the measure at issue is what is being challenged by the complaining
Member.3273"3274

3264 Australia's reply to Panel question 144 after the first substantive meeting. See also Australia's
second written submission, paras. 189-192.
3265 Australia's second written submission, para. 196.
3266 Australia's second written submission, para. 209.
3267 Australia's second written submission, para. 197.
3268 Australia's second written submission, para. 206.
3269 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 225.
3270 Australia's reply to Panel question 128 after the second substantive meeting, para. 544.
3271 (footnote original) Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 81.
3272 Australia's reply to Panel question 128 after the second substantive meeting, paras. 538-545.
3273 ( footnote original ) Appellate Body Report, EC – Selected Customs Matters , para. 130
(original emphasis).
3274 Australia's second written submission, para. 199. See also, Australia's second written submission,
para. 201.

7.1439 In Australia's view, since New Zealand's clai m is that Australia failed to undertake and
complete the IRA process without undue delay, an ar gument in support of that claim would have been
that the IRA process was unduly delayed for specif ic reasons. However, Australia has never
suggested that New Zealand needed to provide such an argument in its panel request.3275
7.1440 Australia sees no problem with the fact that th e IRA process ceased to exist by the time the
Panel was established. The quote in the Appellate Body report on EC – Chicken Cuts is introduced
with the words "[a]s a general rule". Also, EC – Chicken Cuts addressed measures arising after the
panel request. 3276 Further, in EC – Selected Customs Matters the Appellate Body was not talking
about exceptions to the rule that a measure at issue must be identified in the panel request, but about
exceptions to the general rule that measures that have ceased to exist cannot be reviewed in WTO
dispute settlement.3277 Also, the Appellate Body referenced "at least two exceptions", implying that
the category of exceptions is not closed. Further, the Appellate Body appr oved the panel's statement
in that dispute that "a panel may also be competent to make findings and make recommendations on
measures that have expired
3278."3279
7.1441 Likewise, Australia does not consider that the Appellate Body report in US – Certain
EC Products supports New Zealand's arguments on the exclusion from WTO dispute settlement of
measures that ceased to exist before panel establishm ent. While in that dispute the Appellate Body
refrained from making recommendations pursuant to Article 19.1 of the DSU, it nonetheless made
findings despite the measure having ceased to exist. The Appellate Body followed a similar approach
in US – Upland Cotton.3280
7.1442 In any event, Australia argues, there was nothing to preclude New Zealand from making a
claim of undue delay in relation to the IRA pro cess prior to its conclu sion in November 2006. 3281
If, in the alternative, New Zealand considered that it could not challenge the IRA process because that
process had already expired, New Zealand should not have made an undue delay claim under
Article 8 and Annex C(1)(a) in this dispute.3282
2. The Panel's analysis
7.1443 The first and main question in regard to New Zealand's claims under Annex C(1)(a) and
Article 8 of the SPS Agreement is whether these cl aims, in particular the measures to which the
claims relate, are within the Panel's terms of reference.
7.1444 As indicated above3283, the Panel's terms of reference in this dispute are as follows:
"To examine, in the light of the relevant provisions of the covered agreements cited
by New Zealand in document WT/DS367/5, the matter referred to the DSB by

3275 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 226.
3276 Australia's reply to Panel question 129 after the second substantive meeting, paras. 546-550.
3277 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 221.
3278 ( footnote original ) Panel Report, EC – Selected Customs Matters, para. 7.36; Appellate Body
Report, EC – Selected Customs Matters, para. 184 (emphasis added).
3279 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 222.
3280 Australia's reply to Panel question 129 after the second substantive meeting, paras. 546-550.
3281 Ibid.
3282 Australia's comments on New Zealand's replies to Panel questions after the second substantive
meeting, para. 227.
3283 See para. 1.3 above.

New Zealand in that document, and to ma ke such findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in those
agreements."
3284
7.1445 Under Article 7 of the DSU, and according to established jurisprudence, a panel's terms of
reference are usually determined by the compla inant's request for establishing the panel. In EC –
Bananas III, the Appellate Body explained that "[i]t is important that a panel request be sufficiently
precise for two reasons: first, it often forms the basi s of the terms of reference of the panel pursuant
to Article 7 of the DSU; and, second, it informs the defending party and the third parties of the legal
basis of the complaint."3285
7.1446 In the present dispute, New Zealand's panel request provides in relevant part:
"On 27 March 2007, the Australian Director of Animal and Plant Quarantine
determined a policy for the importation of apples from New Zealand: 'Importation of
apples can be permitted subject to the Quarantine Act 1908 , and the application of
phytosanitary measures as specified in the Final import risk analysis report for
apples from New Zealand, November 2006'.3286
New Zealand considers that the measures specified in and required by Australia
pursuant to the Final import risk analysis report for apples from New Zealand are
inconsistent with the obligations of Australia under the Agreement on the Application
of Sanitary and Phytosanitary Measures ('SPS Agreement').
In particular, New Zealand considers that the following measures are, both
individually and as a whole, inconsistent w ith the obligations of Australia under the
SPS Agreement:
[bullet point list of 17 specific requirements spelt out in the IRA]
New Zealand considers that the above measur es are inconsistent with the obligations
of Australia under Article[] ... 8 (in relati on to Annex C) and Annex C(1)(a) of the
SPS Agreement."
3287
7.1447 In EC – Bananas III, the Appellate Body prescribed a clo se scrutiny of panel requests. "As a
panel request is normally not subjected to detaile d scrutiny by the DSB, it is incumbent upon a panel
to examine the request for the estab lishment of the panel very carefully to ensure its compliance with
both the letter and the spirit of Article 6.2 of the DSU."3288
7.1448 In US – Carbon Steel , the Appellate Body held that the actual wording of panel requests is
key for this kind of analysis. "[C]ompliance w ith the requirements of Article 6.2 must be
demonstrated on the face of the request for the establishment of a panel. Defects in the request for the
establishment of a panel cannot be 'cured' by subse quent submissions of the parties during the panel
proceedings."3289

3284 Australia – Apples, Constitution of the Panel Established at the Request of New Zealand: Note by
the Secretariat (WT/DS367/6), 13 March 2008, p. 2.
3285 Appellate Body Report on EC – Bananas III, para. 142.
3286 (footnote original) Biosecurity Australia Policy Memorandum 2007/07, 27 March 2007.
3287 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, attached as Annex A-1 to this report, pp. 1-3.
3288 Appellate Body Report on EC – Bananas III, para. 142.
3289 Appellate Body Report on US – Carbon Steel, para. 126.

7.1449 As explained above, upon Australia's request, in its preliminary ruling the Panel clarified its
terms of reference in regard to the measures at issue as follows:
"Looking at the text of New Zealand's panel request, the Panel finds that, with respect
to the 17 items identified by New Zealand through 17 separate bullet points,
the request is sufficiently precise in identif ying the specific measures at issue with
respect to those 17 items, pursuant to Article 6.2 of the DSU.
On the other hand, given the length and complexity of Australia's FIRA, the Panel
finds that the broad reference in New Z ealand's panel request to the 'measures
specified in and required by Australia pursuant to the [ FIRA]' fails to satisfy the
requirement of sufficient clarity in the iden tification of the specific measures at issue
set forth in Article 6.2 of the DSU. Accordingly, the Panel finds that its terms of
reference are limited to the 17 measures speci fically identified by New Zealand in its
panel request and do not encompass other measures that may be contained in
Australia's FIRA, but which were not identified with sufficient precision in the panel
request."
3290
7.1450 The Panel's preliminary ruling concluded that:
"(a) With respect to the 17 items contained in Australia's Final import risk
analysis report for apples from New Zealand (FIRA) and identified by bullet
points in New Zealand's request for the establishment of this Panel, dated
7 December 2007, the specific measures at issue have been properly
identified;
(b) New Zealand's panel request does not identify with sufficient precision any
measures contained in Australia's FIRA, other than the 17 specific items
identified through bullet points. Accordingly, any such other measures are
not part of this Panel's terms of reference; and,
(c) New Zealand's panel request contains sufficient information regarding the
legal basis of the complaint to present th e problem clearly with respect to the
17 identified items."
3291
7.1451 It is clear from the preliminary ruling that the Panel effectively limited the measures at issue
in this dispute to the 17 specific requirements in the IRA identified in the 17 bullet point items
contained in New Zealand's panel request. The preliminary ruling explicitly excluded from the
Panel's terms of reference any ot her requirements contained in the IRA that New Zealand had not
identified in the 17 bullet points. Consequently, Au stralia is correct in arguing that the IRA as a
whole cannot constitute a measure at issue in this dispute.
7.1452 In any event, even absent the clarification of the Panel's terms of reference resulting from the
Panel's preliminary ruling, the IRA as a whole would not be within this Panel' s terms of reference.
New Zealand's panel request does not identify the IRA as a whole as a measure at issue in this
dispute. It refers to "the measures specified in and required by Australia pursuant to [the IRA]", and it
identifies 17 specific requirements. The IRA is a long, complex document that specifies a large
number of requirements in relation to many different pests. For this reason, the Panel held in its

3290 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, p. 3, paras. 8-9.
3291 Australia – Apples , Communication From the Chairman of the Panel: Preliminary Ruling by the
Panel (WT/DS367/7), 23 June 2008, attached as Annex A-2 to this report, p. 4, para. 13.

preliminary ruling that the broad reference to the "measures specified in a nd required by Australia
pursuant to [the IRA]" was not sufficiently precise in identifying the measures at issue. However,
even if this portion of the panel request remained part of the Panel's terms of reference, it does not
identify the IRA itself as a measure at issue and, as such, the IRA taken as a whole would not form
part of this Panel's terms of reference.
7.1453 Accordingly, only the requirements described in the 17 bullet points in New Zealand's panel
request identify the measures at issu e with sufficient precision. The question before the Panel is then
whether the 17 specific requirements at issue can violate Annex C(1)(a) of the SPS Agreement, or
alternatively, whether the measure that could allege dly infringe Annex C(1)(a) is different from these
17 specific requirements, and hence not properly identified in New Zealand's panel request. This calls
for a closer look at Annex C(1)(a).
7.1454 Annex C(1)(a) of the SPS Agreement provides in relevant part:
"1. Members shall ensure, with respect to any procedure to check and ensure the
fulfilment of sanitary and phytosanitary measures, that:
(a) such procedures are undertaken and completed without undue delay
..."
7.1455 As Australia suggests
3292, an ordinary reading of this provision – according to its structure and
wording, in particular the use of the word "s uch" – allows it to be rephrased as follows: Members
shall ensure that any procedure to check and en sure the fulfilment of sanitary and phytosanitary
measures is undertaken and completed without undue delay.
7.1456 All obligations in the WTO covered agreements re late to measures. In fact, only one or more
measures, i.e. an "act or omission attributable to a WTO Member" 3293, can be said to violate an
obligation contained in a covered agreement. This applies also to Annex C(1)(a) of the
SPS Agreement.
7.1457 To bring a specific measure within the scope of WTO dispute settlement, the complainant
needs to identify it in the panel request. Article 6. 2 of the DSU provides that "[t]he request for the
establishment of a panel ... shall ... identify the specific measures at issue and provide a brief summary
of the legal basis of the complaint sufficient to present the problem clearly." As Australia points
out3294, in EC – Selected Customs Matters the Appellate Body held on the first of these requirements
under Article 6.2 that "[t]he 'specific measure' to be identified in a panel request is the object of the
challenge, namely, the measure that is alleged to be causing the violation of an obligation contained in
a covered agreement. In other words, the measure at issue is what is being challenged by the
complaining Member."3295
7.1458 The Appellate Body continued, distinguishing the other requirement under Article 6.2 of the
DSU as follows:
"In contrast, the legal basis of the compla int, namely, the 'claim' pertains to the
specific provision of the covered agreement th at contains the obligation alleged to be
violated. A brief summary of the legal basi s of the complaint required by Article 6.2

3292 Australia's reply to Panel question 144 after the first substantive meeting and Australia's second
written submission, para. 191.
3293 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 81.
3294 Australia's second written submission, para. 199. See also, Australia's second written submission,
para. 201.
3295 Appellate Body Report on EC – Selected Customs Matters, para. 130 (original emphasis).

of the DSU aims to explain succinctly how or why the measure at issue is considered
by the complaining Member to be violating the WTO obligation in question.
This brief summary must be sufficient to present the problem clearly. Taken
together, these different aspects of a panel request serve not only to define the scope
of a dispute, but also to meet the due process requirements."
3296
7.1459 As to the specific measure that New Zealand was supposed to identify in its panel request,
what does New Zealand challenge under Annex C(1)(a)? What, according to New Zealand, causes
the violation of Annex C(1)(a)? In New Zealand' s own words, that "the 17 measures ... at issue ...
were not developed and adopt ed without undue delay." 3297 In other words, New Zealand contests
what it sees as the unjustifiably delayed development and adoption of the 17 SPS measures at issue.
In order to cover that, Annex C(1)(a) needs to relate to the developm ent and approval of SPS
measures. Invoking Article 1.1 of the SPS Agreement, New Zealand argues that that is the case.3298
7.1460 In the part of the SPS Agreement entitled "General Provisions", Article 1.1 provides that:
"This Agreement applies to all sanitary and phytosanitary measures which may,
directly or indirectly, affect internationa l trade. Such measures shall be developed
and applied in accordance with the provisions of this Agreement."
7.1461 Based on the second sentence of Article 1.1, undoubtedly, the SPS Agreement establishes
obligations regarding the developm ent and application of SPS measur es that may affect international
trade. Based on the same sentence, however, the SPS Agreement covers the development and
application of SPS measures "in accordance with [its] provisions", i.e. only to the extent that the
specific provisions of the Agreement relate to the development or application of SPS measures.
7.1462 Therefore, the question is whether Annex C(1)(a ) of the SPS Agreement can be interpreted as
applying to the development of SPS measures – in particular, the development of the 17 measures at
issue in this dispute. Australia disagrees, arguing that Annex C(1)(a) applies to "procedures to check
and ensure the fulfilment of SPS measures", and that such procedures can n ecessarily only follow in
time the SPS measures that they check and ensure.3299
7.1463 The Panel has a more nuanced reading of Annex C(1)(a) of the SPS Agreement in that regard.
The text of Annex C(1)(a) relates to "procedures to check and ensure the fulfilment of SPS measures",
not to develop SPS measures (emphasis added). However, unde r the definition of Annex A(1) of the
SPS Agreement, SPS measures include both substantive requirements and procedures. Therefore, the
"SPS measure" referenced in the language of A nnex C(1)(a) may be a requirement to conduct an
import risk assessment prior to allowing for the importation of goods that might pose sanitary or
phytosanitary risks. In that case, the actual import risk assessment conducted for a specific good
might constitute the procedure to check and ensure the fulfilment of this "SPS measure".
7.1464 Indeed, in EC – Approval and Marketing of Biotech Products the panel found that:
"[T]he term 'requirements' as it appears in the second paragraph of Annex A(1) is
unqualified and thus is applicable both to requirements which are generally applicable

3296 Appellate Body Report on EC – Selected Customs Matters, para. 130 (original emphasis).
3297 New Zealand's reply to Panel question 143 after the first substantive meeting, para. 298.
3298 New Zealand's opening oral statement at the first substantive meeting of the Panel with the Parties,
para. 130.
3299 Australia's reply to Panel question 144 after the first substantive meeting and Australia's second
written submission, paras 195-196.

and to requirements which have been imposed on specific products.
3300 In our view,
the application of a generally applicable SPS 'requirement' (e.g., a pre-marketing
approval requirement for biotech products) to a specific product may result in a
different, product-specific SPS 'requirement ' (e.g., a ban on the marketing of a
specific biotech product). In other words, there may be cases where the application
of an SPS 'requirement' and, hence, of an SPS measure, may give rise to a new SPS
requirement and, hence, a new SPS measure."
3301
7.1465 In other words, if unduly delayed, an SPS approval procedure like the IRA process might
infringe Annex C(1)(a) of the SPS Agreement. The Panel finds support for this interpretation in the
context of Annex C(1)(a). As indicated in its title, Annex C applies to "[c]ontrol, inspection and
approval procedures". Also, Article 8 prescribes Members' compliance with Annex C "in the
operation of control, inspection and approval procedures, including national systems for approving the
use of additives or for establishing tolerances for c ontaminants in foods, beverages or feedstuffs."
In EC – Approval and Marketing of Biotech Products the panel interpreted the language "procedures
to check and ensure the fulfilment of [SPS] m easures" in Annex C(1)(a) to apply to approval
procedures, by interpreting the first clause of Annex C(1)(a) "essentially as a good faith obligation
requiring Members to proceed with their approval procedures as promptly as possible, taking account
of the need to check and ensure the fulfilment of their relevant SPS requirements."3302
7.1466 Finding that under specific circumstances Annex C(1)(a) of the SPS Agreement might apply
to an approval process leading to the development of substantive SPS measures is only half of the
analysis the Panel needs to conduct here. The othe r half is whether New Zealand has properly called
this into question in this dispute. The answer to this latter question turns on whether in this case
New Zealand should have identified in its panel request an additional measure separate from the
17 specific requirements.
7.1467 The Panel recalls the words of the Appellate Body in EC – Selected Customs Matters ,
according to which "[t]he 'specific measure' to be identified in a panel request is the object of the
challenge, namely, the measure that is alleged to be causing the violation of an obligation contained in
a covered agreement. In other words, the measure at issue is what is being challenged by the
complaining Member."3303
7.1468 Reading this and keeping the specific context of the present dispute in mind, it is clear that
under its Annex C(1)(a) claim New Zealand is not challenging the content of the 17 requirements as
such. Rather, it is the procedur e leading to the adoption of these 17 requirements, and more precisely
the alleged delay in this procedure that in New Zealand's view violates Annex C(1)(a). Or, in
New Zealand's words, the "development" of these 17 measures.
7.1469 As noted above, the development of the 17 measu res, and particularly any alleged delays
involved, might be covered by Annex C(1)(a) of the SPS Agreement. From the viewpoint of
identifying the measure that infringes that provision, however, the 17 requirements and their
development are separate measures. Accordingly, in the context of its Article 8 and Annex C(1)(a)
claim, New Zealand should have done more in its panel request than merely identify the
17 requirements set out in the IRA.

3300 ( footnote original ) We note in this respect that the fo otnote to Annex B(1) defines "[SPS]
regulations" as "[SPS] measures ... which ar e applicable generally". It follows, a contrario, that there can be
SPS measures which are not applicable generally.
3301 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1336.
3302 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1498.
3303 Appellate Body Report on EC – Selected Customs Matters, para. 130 (original emphasis).

7.1470 Annex C(1)(a) applies to procedures. This is clear from both subparagraph (a)
("such procedures") and from the chapeau of Annex C(1) ("procedures to check and ensure ...").
Further, as mentioned above, Annex C and Article 8 also apply to procedures, namely "control,
inspection and approval procedures". These procedures might be measures in their own right;
they may even qualify as SPS measures. Indeed, the definition of SPS measures in Annex A(1) of the
SPS Agreement provides that "[s]anitary or phytosanitary measures include all relevant ... procedures,
including inter alia ... testing, inspection, certification a nd approval procedures, [and] sampling
procedures." Likewise, the footnote to the title of Annex C provides that "[c]ontrol inspection and
approval procedures include, inter alia , procedures for sampling, testing and certification." As the
panel in EC – Approval and Marketing of Biotech Products held, "Annex C(1)(a), first clause,
establishes disciplines concerning the 'enfor cement' of SPS measures, namely, approval
procedures."
3304
7.1471 As the Panel recognized above, each of the 16 measures at issue in this dispute might also
involve a procedure. 3305 New Zealand, however, does not argue that these procedures infringe
Annex C(1)(a) or Article 8. Rather, New Zealand contests the way in which the 17 requirements were
developed.
7.1472 It is perfectly plausible that an unduly dela yed specific approval process is found inconsistent
with Annex C(1)(a) (and consequently Article 8) of the SPS Agreement, even if that process does not
lead to the adoption of substantive SPS requirements. To a certain extent, this is what happened in the
EC – Approval and Marketing of Biotech Products dispute. As Australia points out 3306, the IRA
process was not necessarily supposed to lead to subs tantive SPS requirements concerning the pests at
issue in the current dispute, and it would not have been appropriate for Australia to conduct its IRA
process with preconceived measures in mind. Accordingly, the Panel can imagine situations where an
approval process simply takes too long for the compla inant, especially if the complainant is prevented
from exporting the goods in question during that period. In such circumstances, it would be
inappropriate if the complainant were prevente d from initiating a WTO dispute merely because the
lengthy approval process did not lead to substan tive SPS requirements. A different interpretation
would empty out the procedural requirement containe d in the first clause of Annex C(1)(a) of the
SPS Agreement.
7.1473 In its preliminary ruling, the Panel limited this dispute to the 17 specific requirements
identified in bullet points in New Zealand's panel requ est. Subsequently, in an earlier section of this
report, the Panel has found that each of the 16 ou t of the 17 requirements that remain within the
purview of this dispute following the Parties' ag reed understanding on Measure 12 not being imposed
by Australia, constitutes an SPS measure on its own.
3307 In the light of the text of New Zealand's
panel request, however, these findings are necessarily limited to the requirements in question as they
are contained in the IRA. The findings do not cover the separate issue of the procedure through which
the requirements were developed in the IRA process.
7.1474 Accordingly, the Panel agrees with Australia that New Zealand has not properly identified the
measure at issue in its panel request in the context of its Annex C(1)(a) and Article 8 claim. In fact, in
its panel request New Zealand identified the 17 s ubstantive requirements contained in the IRA.
New Zealand did not identify any aspects of what exactly might have caused the infringement of
Annex C(1)(a) (and consequently Article 8), nor did it provide a brief summary of why and how these
provisions could be infringed by the 17 specific requirements at issue.

3304 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1499.
3305 See para. 7.163 above.
3306 Australia's second written submission, para. 209.
3307 See para. 7.172 above.

7.1475 It is difficult to tell in the abstract what ki nd of precise language would have been appropriate
for New Zealand to use. The Panel sees various possible approaches, although in the absence of
specific language it is difficult to say with certa inty whether these would eventually satisfy the
requirements of Article 6.2 of the DSU. Indeed, th e sufficiency of a panel request in the context of
Article 6.2 requires a case-by-case analysis, "consider [ing] the panel request as a whole, and in the
light of attendant circumstances."
3308 In any event, in general the Panel could have imagined
New Zealand's panel request adopting one of the following alternative approaches. New Zealand
could have referred to the development of the 17 m easures (the IRA process) and could have claimed
that that process violated Annex C(1)(a) and Ar ticle 8 because of undue delays. Or New Zealand
could have referred to the delays in the IRA process claiming that th ese have violated Annex C(1)(a)
and Article 8. Or, to use the language of Annex C(1)(a), New Zealand could have claimed that undue
delays in completing the IRA process infringed A nnex C(1)(a) and Article 8. Alternatively,
New Zealand could have identified specific acts or om issions attributable to Australia that resulted in
undue delay in the IRA process, and claim that the se acts or omissions violated Annex C(1)(a) and
Article 8.
7.1476 New Zealand's panel request offered none of these explanations. As Australia points out 3309,
this is in stark contrast with the panel requests in the EC – Approval and Marketing of Biotech
Products dispute, which explicitly referenced the legisl ative instruments containing the EC's general
approval regime, and identified as the measures at issu e (i) the suspension of the consideration of, and
the failure to consider or appr ove, various applications for appr oval of agricultural biotechnology
products; and (ii) the general suspension of such c onsiderations or undue delays in finalizing such
considerations under the EC's general approval regime.3310
7.1477 In the light of the above, New Zealand's Anne x C(1)(a) claim and its consequential claim
under Article 8 of the SPS Agreement are outside of th e Panel's terms of reference in this dispute.
The Panel will therefore refrain from assessing the substance of New Zealand's claims under these
provisions.
7.1478 Before concluding its analysis under these provi sions, the Panel will address the issue of
whether New Zealand could have challenged the IR A process, and the delays in that process,
following the completion of the IRA process, i.e. even if that process had ceased to exist before the
Panel's establishment. Both Parties have raised th is issue. It is important to address it because the
Panel's consideration of the arguments relating to Annex C(1)(a) and Article 8 is predicated on the
view that this would have been possible – for the following reasons.
7.1479 The first clause of Annex C(1)(a) provides that "such procedures are undertaken and
completed without undue delay" (emphasis added). In EC – Approval and Marketing of Biotech
Products the panel attached equal importance to both the words "undertaken" and "completed" within
that phrase:
"The verb 'undertake' makes clear that Me mbers are required to begin, or start,
approval procedures after receiving an application for approval. 3311 T h e v e r b

3308 Appellate Body Report on US – Carbon Steel, para. 127.
3309 Australia's second written submission, para. 206.
3310 See, EC – Approval and Marketing of Biotech Products , Request for the Establishment of a Panel
by the United States (WT/DS291/23), 8 August 2003; EC – Approval and Marketing of Biotech Products ,
Request for the Establishment of a Panel by Canada, (WT/DS292/17), 8 August 2003; EC – Approval and
Marketing of Biotech Products , Request for the Establishment of a Panel by Argentina (WT/DS293/17),
8 August 2003.
3311 ( footnote original ) The dictionary meanings of the verb "undertake" include "[t]ake on
(an obligation, duty, task, etc.); commit oneself to pe rform; begin (an undertaking, enterprise, etc.)". The New
Shorter Oxford English Dictionary , L. Brown (ed.) (Clarendon Press, 1993), Vol. II, p. 3476. The French and

'complete', on the other hand, indicates that approval procedures are not only to be
undertaken, but are also to be finished, or concluded. 3312 Thus, in our view, the
phrase 'undertake and complete' covers all stages of approval procedures and should
be taken as meaning that, once an applicati on has been received, approval procedures
must be started and then carried out from beginning to end."3313
7.1480 Australia argues3314, and New Zealand does not contest, that the IRA process could have been
challenged under Annex C(1)(a) and Artic le 8 before it was concluded. The Panel agrees with that in
principle. A relevant measure that is in force at the time of panel establis hment might be challenged
in WTO dispute settlement. As the EC – Approval and Marketing of Biotech Products dispute
showed, an ongoing – although delayed, because suspended – SPS approval process is no exception.
7.1481 But, as the panel in the same dispute explaine d, Annex C(1)(a) applies to all stages of an
approval process, from beginning to end. In part icular, Annex C(1)(a) applies not only to the
"undertak[ing]" but also to the "complet[ion]" of approval processes.
7.1482 Common sense dictates that the completion of an approval process shall be open to challenge
under WTO dispute settlement after the completion has taken place. In fact, a potential complainant
might have indications of an approval process not being undertaken without undue delay already in
the course of the approval process. However, th e full picture on the approval process not being
completed without undue delay becomes clear for th e complainant only after the approval process has
been effectively completed.
7.1483 Not allowing completion of an approval pr ocess to be challenged under Annex C(1)(a)
precisely because the process has "ce ased to exist" when it was co mpleted would read the term
"complete" out of Annex C(1)(a). Also, it would defeat basic objectives of WTO dispute settlement
under the DSU: the preservation of the rights and obligations of Members under the covered
agreements
3315, and the effective resolution of disputes.3316
7.1484 This applies in particular when a potential complainant considers challenging not only the
approval process but also any substantive SPS require ments resulting from such process. Of course,
a Member could initiate two disputes: one agai nst the approval process during the course of that
process, and another one against the resulting SPS re quirements. Alternatively, a complainant may
raise these matters in one single dispute. This is the case in particular when the complainant has a
potentially more pressing concern with the SPS requi rements resulting from the approval process than
with the undue delay in the approval process. By definition, such a dis pute can be launched only
when the resulting SPS requirements are in plac e, and the approval process leading to those
requirements has been already completed.

Spanish versions of Annex C(1)(a), first clause, also support this reading. The French version uses the verb
"engager", the Spanish version the verb "iniciar". We also note that Annex C(1)(b) requires Members to ensure,
inter alia, that "when receiving an application, the competen t body promptly examines the completeness of the
documentation and informs the applicant in a precise and complete manner of all deficiencies". Thus, it is clear
that approval procedures are "undertaken" upon receipt of an application from an applicant.
3312 ( footnote original ) The dictionary meanings of the verb "complete" include "[b]ring to an end,
finish, conclude". The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I,
p. 460. The French and Spanish versions of Annex C(1)(a ), first clause, also support this reading. The French
version uses the verb "achever", the Spanish version the verb "ultimar".
3313 Panel Report on EC – Approval and Marketing of Biotech Products, para. 7.1494.
3314 Australia's reply to Panel question 129 after the second substantive meeting, paras. 546-550.
3315 See Article 3.2 of the DSU.
3316 See Article 21.1 of the DSU.

7.1485 The Panel finds support in previous jurispruden ce for the possibility of a complainant filing a
single complaint. In general, a WTO dispute settleme nt procedure starts with the complainant filing a
request for consultations. The Appellate Body held in US – Upland Cotton that consultations "must
pertain to 'measures affecting the ope ration of any covered agreement'"
3317, i.e. measures "whose
effects are alleged to be impairing the benefits accruing to the requesting Member under a covered
agreement"3318 at present. The Appellate Body explicitly found that "[w]hether or not a measure is
still in force is not dispositive of whether that measure is currently affecting the operation of any
covered agreement."3319
7.1486 Using the same logic, an alleged undue dela y in a completed approval process that might
continue to impair benefits accruing to the comp lainant under Annex C(1)(a) of the SPS Agreement
should not be excluded from WTO dispute settlement merely because the process has been completed.
This is particularly the case when the complainan t was prevented from exporting the goods subject to
the approval process during that time, and the compla inant continues to feel jeopardized from starting
its exports in the light of the SPS requirements resulting from the approval process.
7.1487 The Panel notes that in US – Upland Cotton the Appellate Body found contextual support in
Article 3.3 of the DSU for its above-cited arguments:
"Article 3.3 focuses not upon 'existing' measu res, or measures that are 'currently in
force' but, rather, upon 'measures taken' by a Member, which includes measures taken
in the past. We also observe that Arti cle 3.3 envisages that disputes arise when a
Member 'considers' that benefits accruing to it are being impaired by measures taken
by another Member. By using the word 'considers', Article 3.3 focuses on the
perception or understanding of an aggrieve d Member. This does not exclude the
possibility that a Member requesting consulta tions may have reason to believe that a
measure is still impairing benefits even though its legislative basis has expired."3320
7.1488 The Panel is cognizant that in EC – Chicken Cuts the Appellate Body found in regard to
requests for panel establishment that "[t]he term 's pecific measures at issue' in Article 6.2 suggests
that, as a general rule, the measures included in a panel's terms of reference must be measures that are
in existence at the time of the establishment of the panel. 3321"3322 As Australia argues 3323, however,
the Appellate Body introduced its statement with th e words "as a general rule", suggesting that there
might be exceptions to this general rule. Subsequently, in EC – Selected Customs Matters the
Appellate Body interpreted its statement in EC – Chicken Cuts as a "general rule ... qualified by
at least two exceptions." 3324 This not only confirmed that ther e are exceptions to the general rule,
but implied that the exceptions are not necessarily li mited to the two identified by the Appellate Body
in its earlier jurisprudence. In fact, in the same paragraph of its report in EC – Selected Customs
Matters3325 the Appellate Body also upheld the following finding by the panel:

3317 Appellate Body Report on US – Upland Cotton, para. 260.
3318 Appellate Body Report on US – Upland Cotton, para. 263.
3319 Appellate Body Report on US – Upland Cotton, para. 262.
3320 Appellate Body Report on US – Upland Cotton, para. 264.
3321 (footnote original) These measures should also have been the subject of consultations prior to the
establishment of the panel, although the Appellate Body has held that there is no need for a " precise and exact
identity" between the measures addressed in consultations and the measures identified in the panel request.
(Appellate Body Report, Brazil – Aircraft, para. 132) (original emphasis)
3322 Appellate Body Report on EC – Chicken Cuts, para. 156.
3323 Australia's reply to Panel question 129 after the second substantive meeting, paras. 546-550.
3324 Appellate Body Report on EC – Selected Customs Matters, para. 184 (emphasis added).
3325 Ibid.

"We understand that, as a general principle, a panel is competent to make findings
and recommendations on measures in existence at the time of establishment of the
panel, assuming that the request for establishment of a panel covers those measures.
Nevertheless, a panel may also be co mpetent to make findings and make
recommendations on measures that have expired or are not yet in existence at the
time of establishment, assuming again that the request covers those measures.
More specifically, we understand that, to the extent that expired measures affect the
operation of a covered agreement at the time of establishment of a panel, they may
properly be the subject of findings and reco mmendations by a panel, particularly if
such findings and recommendations are n ecessary to secure a positive solution to the
dispute.
3326"3327
7.1489 Accordingly, the Panel concludes that in the cu rrent dispute, in principle, New Zealand could
have challenged the IRA process, and the alleged undue delays in that process, even though that
process had already been completed by the time the Panel was established.
7.1490 However, this remains a mere possibility in this dispute. As explained above, since
New Zealand has not effectively identified the meas ure at issue in the context of its Annex C(1)(a)
and Article 8 claims, these measures and the claims to which they relate are outside the scope of this
dispute. As the Appellate Body noted in Dominican Republic – Import and Sale of Cigarettes , "[t]he
Appellate Body has consistently maintained that, where a panel request fails to identify adequately
particular measures or fails to specify a particular claim, then such measures or claims will not form
part of the matter covered by the panel's terms of reference."3328
VIII. CONCLUSIONS AND RECOMMENDATION
8.1 For the reasons indicated in this report, the Panel has found that:
(a) There is no evidence that the process of selection and consultation of experts was
conducted improperly, that due process in the expert consultation phase of these
proceedings was compromised, nor that Australia's procedural rights were in any
manner negatively affected in this regard;
(b) The 16 measures at issue in the current dispute, both as a whole and individually,
constitute SPS measures within the meaning of Annex A(1) and are covered by the
SPS Agreement;
(c) Australia's measures at issue regarding fi re blight, European canker and ALCM, as
well as the requirements identified by New Zealand as "general" measures that are
linked to all three pests at issue in the present dispute, are inconsistent with
Articles 5.1 and 5.2 of the SPS Agreement and, by implication, these requirements
are also inconsistent with Article 2.2 of the SPS Agreement;
(d) New Zealand has failed to demonstrate that the measures at issue in the current
dispute are inconsistent with Article 5.5 of the SPS Agreement and, consequentially,
has also failed to demonstrate that these meas ures are inconsistent with Article 2.3 of
the SPS Agreement;

3326 (footnote original) See, Appellate Body Report, US – Upland Cotton , para. 261; Appellate Body
Report, Chile – Price Band System, paras. 126-144; Appellate Body Report, EC – Chicken Cuts, para. 156.
3327 Panel Report on EC – Selected Customs Matters, para. 7.36.
3328 Appellate Body Report on Dominican Republic – Import and Sale of Cigarettes, para. 120.

(e) Australia's measures at issue regarding fi re blight, European canker and ALCM, are
inconsistent with Article 5.6 of the S PS Agreement; New Zealand has failed to
demonstrate, however, that the requirements identified by New Zealand as "general"
measures that are linked to all three pests at issue in the present dispute, are
inconsistent with Article 5.6 of the SPS Agreement; and,
(f) New Zealand's claim under Annex C(1)(a) cl aim and its consequential claim under
Article 8 of the SPS Agreement are outside of the Panel's terms of reference in this
dispute.
8.2 Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. The Panel concludes that , to the extent that Australia's measures at issue
regarding fire blight, European canker and ALCM, as well as the requirements identified by
New Zealand as "general" measures that are linked to all three pests at issue in the present dispute, are
inconsistent with the SPS Agreement, they have nullified or impaired benefits accruing to
New Zealand under the WTO Agreements.
8.3 The Panel recommends that the Dispute Settleme nt Body request Australia to bring the
inconsistent measures as listed above into conformity with its obligations under the SPS Agreement.

ANNEX A

CONTENTS Page
Annex A-1 Request for the Establis hment of a Panel (WT/DS367/5) A-2
Annex A-2 Communication from the Chairman of the Panel: Preliminary Ruling
by the Panel (WT/DS367/7)
A-5
Annex A-3 Working Procedures for the Panel, adopted on 26 March 2008 A-9
Annex A-4 Procedures for the Panel's fi rst substantive meeting, adopted on
4 August 2008
A-13
Annex A-5 Procedures for the Panel's meeti ng with the experts and Parties and the
Panel's second substantive meeting, adopted on 11 June 2009
A-17

ANNEX A-1

7 December 2007

 (07-5456)
 Original: English

Request for the Establishment of a Panel by New Zealand

 The following communication, dated 6 Decemb er 2007, from the delegation of New Zealand
to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 27 March 2007, the Australian Director of Animal and Plant Quarantine determined a
policy for the importation of apples from New Zeal and: "Importation of apples can be permitted
subject to the Quarantine Act 1908, and the application of phytosanitary measures as specified in the
Final import risk analysis report for apples from New Zealand, November 2006".
1

 New Zealand considers that the measures specifi ed in and required by Australia pursuant to
the Final import risk analysis report for apples from New Zealand are inconsistent with the
obligations of Australia under the Agreement on the Application of Sanitary and Phytosanitary
Measures ("SPS Agreement").

 In particular, New Zealand considers that the following measures are, both individually and as
a whole, inconsistent with the obligations of Australia under the SPS Agreement:

Fire blight

• The requirement that apples be sourced from areas free from fire blight disease
symptoms.
• The requirement that orchards/blocks be inspected for fire blight disease symptoms,
including that they be inspected at an inspection intensity that would, at a 95%
confidence level, detect visual symptoms if shown by 1% of the trees, and that such
inspections take place between 4 to 7 weeks after flowering.
• The requirement that an orchard/block inspection methodology be developed and
approved that addresses issues such as visibility of symptoms in the tops of trees, the

1 Biosecurity Australia Policy Memorandum 2007/07, 27 March 2007.

inspection time needed and the number of trees to be inspected to meet the efficacy level,
and training and certification of inspectors.
• The requirement that an orchard/block be suspended for the season on the basis that any
evidence of pruning or other activities carried out before the inspection could constitute
an attempt to remove or hide symptoms of fire blight.
• The requirement that an orchard/block be suspended for the season on the basis of
detection of any visual symptoms of fire blight.
• The requirement that apples be subject to disinfection treatment in the packing house.
• The requirement that all grading and packing equipment that comes in direct contact with
apples be cleaned and disinfected (using an approved disinfectant) immediately before
each Australian packing run.
• The requirement that packing houses registered for export of apples process only fruit
sourced from registered orchards.
European canker

• The requirement that apples be sourced fro m export orchards/blocks free of European
canker (pest free places of production).
• The requirement that all trees in export orch ards/blocks be inspected for symptoms of
European canker, including that orchards/b locks in areas less conducive for disease are
inspected for symptoms by walking down ever y row and visually examining all trees on
both sides of each row, and that areas more conducive to the disease are inspected using
the same procedure combined with inspection of the upper limbs of each tree using
ladders (if needed), and that such inspections take place after leaf fall and before winter
pruning.
• The requirement that all new planting stock be intensively examined and treated for
European canker.
• The requirement that an orchard/block be suspended for the season on the basis that any
evidence of pruning or other activities carried out before the inspection could constitute
an attempt to remove or hide symptoms of European canker.
• The requirement that exports from an orch ard/block be suspended for the coming season
on the basis of detection of European ca nker and that reinstatement would require
eradication of the disease, confirmed by inspection.
Apple leafcurling midge

• The requirements of inspection and treatment for apple leafcurling midge, including:
the option of inspection of each lot on the b asis of a 3000 unit sample selected at random
across the whole lot for apple leafcurling midge, symptoms of quarantineable diseases,
quarantineable pests, arthropods, trash and weed seeds, with detection of any live
quarantineable arthropod resulting in appropriate treatment or rejection for export;

the option of inspection of each lot on the basis of a 600 unit sample selected at random
across the whole lot for symptoms of quarantin eable diseases, trash and weed seeds, plus
mandatory appropriate treatment of all lots.
General

• The requirement that Australian Quarantine and Inspection Service officers be involved
in orchard inspections for European canker a nd fire blight, in direct verification of
packing house procedures, and in fruit inspection and treatment.
• The requirement that New Zealand ensure th at all orchards registered for export to
Australia operate under standard commercial practices.
• The requirement that packing houses provide details of the layout of premises.
 New Zealand considers that the above measure s are inconsistent with the obligations of
Australia under Articles 2.2, 2.3 (both sentences), 5.1, 5.2, 5.5 (first sentence), 5.6 and 8 (in relation to
Annex C) and Annex C(1)(a) of the SPS Agreement.

 On 31 August 2007, New Zealand requested cons ultations with Australia regarding the above
measures pursuant to Article XXII of the General Agreement on Tariffs and Trade 1994 , Article 4 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), and
Article 11 of the SPS Agreement. In accordance with Article 4 of the DSU the request was notified to
the Dispute Settlement Body ("DSB"), the Counc il for Trade in Goods, and the Committee on
Sanitary and Phytosanitary Measures. The request was circulated to members of the World Trade
Organization on 4 September 2007 (WT/DS367/1). Australia accepted New Zealand's request and
consultations were held on 4 Oc tober 2007 in Geneva. However, th e consultations have failed to
resolve the matter.

 Accordingly, New Zealand respectfully requ ests the DSB to establish a panel pursuant to
Article 6 of the DSU, with standard terms of reference as set out in Article 7.1 of the DSU.

 I would be grateful if you would place this item on the agenda for the next DSB meeting on
17 December 2007 and circulate this request to Members.

ANNEX A-2

23 June 2008

 (08-2984)
 Original: English

Communication from the Chairman of the Panel

Preliminary Ruling by the Panel

 The following communication, dated 19 June 2008, from the Chairman of the Panel to the
Chairman of the Dispute Settlement Body, is circulated to Members for their information.

 On 13 March 2008, Australia, the respondent in the above-mentioned dispute, raised a
preliminary procedural question concerning the consistency of New Zealand's request for the
establishment of the Panel (WT/DS367/5) with Article 6.2 of the Dispute Settlement Understanding.

 Over the past months, the Panel has received written submissions on this preliminary issue
from both parties as well as from two third parties. On 6 June 2008, the Panel issued the enclosed
preliminary ruling on the procedural question raised by Australia, reserving its right to further develop
the reasons for its preliminary ruling later in the proceedings or to include them in its report, as
appropriate.

 After having consulted the parties to the disput e, the Panel has decided to inform the Dispute
Settlement Body of the content of its preliminary ru ling. Therefore, I would be grateful if you could
circulate the body of this letter and the enclosed preliminary ruling as a WT/DS367 document in all
three official languages of the WTO at the same time.

 Circulation of the preliminary ruling as a sep arate document in the WT/DS series was decided
because of the specific circumstances of the case before this Panel and in the light of the outcome of
the preliminary ruling. Accordingly, it should not be seen as establishing a practice or setting a
precedent for the circulation of preliminary rulings in any other dispute.

PRELIMINARY RULING OF THE PANEL

6 June 2008

I. INTRODUCTION
1. On 13 March 2008, Australia filed a request be fore this Panel for a preliminary procedural
ruling. Australia asserted that New Zealand's re quest for the establishment of this Panel, dated
7 December 2007, is inconsistent with Article 6.2 of the Disput e Settlement Understanding (DSU),
because the panel request fails to identify the specific measures at issue and fails to provide a brief
summary of the legal basis of New Zealand's complaint sufficient to present the problem clearly.
Australia asked the Panel to find that New Zealand' s panel request fails to fulfil the requirements of
Article 6.2 of the DSU, and therefore to refrain from considering the substance of New Zealand's
claims in this dispute.
1

2. The Panel has examined Australia's prelim inary request, as well as the arguments presented
subsequently by Australia and New Zealand, a nd by Chile and the European Communities as third
parties to the dispute. In considering Australia 's request, the Panel has looked at New Zealand's
request for the establishment of the Panel as a w hole and on its face, as well as the attendant
circumstances of the present case. The Panel assessed the sufficiency of this panel request in the light
of the terms used in Article 6.2 of the DSU in th eir context and in the light of the object and purpose
of this provision.

3. In the interest of due process, and especia lly in order to allow parties and third parties
sufficient time to prepare their first written submis sions, the Panel has decided to issue an early
preliminary ruling. This is consistent with Aust ralia's request that the Panel issue its preliminary
ruling prior to the due dates of the parties' first written submissions.
2 The Panel reserves its right to
further develop the reasons for its ruling later in the proceedings, or to include them in its report.

4. The Panel begins by recalling the requirements contained in Article 6.2 of the DSU. These
requirements are as follows:

"The request for the establishment of a pane l shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly. In case the applicant re quests the establishment of a panel with
other than standard terms of reference, th e written request shall include the proposed
text of special terms of reference."
5. The Panel notes that New Zealand's panel request clearly satisfies the first two requirements
contained in Article 6.2 of the DSU. In this regard, the panel request was made in writing and
indicates that "consultations [between the parties] were held on 4 October 2007 in Geneva ... [but
they] failed to resolve the matter".
3 Indeed, neither Australia nor the third parties have raised any
issue with regard to these particular two require ments. The Panel will now turn to whether New
Zealand's panel request satisfies the other requirements of Article 6.2.

1 Australia's letter dated 13 March 2008.
2 Australia's letter dated 17 March 2008.
3Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, p. 3.

II. ON THE IDENTIFICATION OF THE SPECIFIC MEASURES AT ISSUE
6. As to whether New Zealand's panel request identifies the specific me asures at issue in a
manner consistent with the requirements of Artic le 6.2 of the DSU, the Panel has reached the
conclusions set forth below.

7. In its panel request, New Zealand has referred to both "measures specified in and required by
Australia pursuant to the Final import risk analysis report for apples from New Zealand " (FIRA) and,
"in particular" to a list of 17 requirements spelt out in the FIRA and identified in the panel request
through bullet points.

8. Looking at the text of New Zealand's panel re quest, the Panel finds that, with respect to the 17
items identified by New Zealand through 17 separate bullet points, the request is sufficiently precise
in identifying the specific measures at issue with respect to those 17 items, pursuant to Article 6.2 of
the DSU.

9. On the other hand, given the length and complexity of Australia's FIRA, the Panel finds that
the broad reference in New Zealand's panel request to the "measures specified in and required by
Australia pursuant to the [ FIRA]" fails to satisfy the requirement of sufficient clarity in the
identification of the specific measur es at issue set forth in Article 6.2 of the DSU. Accordingly, the
Panel finds that its terms of reference are limite d to the 17 measures specifically identified by New
Zealand in its panel request and do not encompass other measures that may be contained in Australia's
FIRA, but which were not identified with sufficient precision in the panel request.

III. THE SUMMARY OF THE LEGAL BASIS OF THE COMPLAINT
10. In its panel request, New Zealand has lis ted a number of provisi ons of the covered
agreements, which it alleges are breached by the measures adopted by Australia. New Zealand has
not drawn an explicit and detailed connection be tween the specific measures challenged and the
provisions invoked. New Zealand has only stated in general terms that "the above measures are
inconsistent with the obligations of Australia under [nine provisions of the Agreement on the
Application of Sanitary and Phyto sanitary Measures, (SPS Agreement)]".
4 Having carefully
considered the language used in the panel request and the specific content of the provisions of the SPS
Agreement cited therein, the Panel understands that New Zealand has claimed that "every measure ...
[identified] in its panel request is inconsistent w ith each of the [nine] provisions referred to [in the
panel request]."5 In the Panel's view, this satisfies the re quirement that the panel request lays out a
connection between the various measures challenged and the specific provisions invoked.6

11. The Panel now turns to the issue of whethe r New Zealand's panel request provides a brief
summary of the legal basis of the complaint, whic h is sufficient to present the problem clearly, as
required by Article 6.2 of the DSU. The Pane l would ideally have preferred a more explicit
explanation of how or why the measures at issue are considered by New Zealand to be violating the
identified provisions of the SPS Agreement. Howe ver, considering the language used in the panel
request and the specific content of the provision s of the SPS Agreement cited therein, the Panel
concludes that New Zealand's panel request contai ns enough information to adequately inform the

4 Australia – Apples , Request for the Establishment of a Panel by New Zealand (WT/DS367/5),
7 December 2007, p. 3.
5 Australia – Apples , Written Submission by New Zealand on Australia's Request for a Preliminary
Procedural Ruling in Relation to the Consistency of New Zealand's Panel Request with Article 6.2 of the DSU,
7 April 2008, para. 2.51.
6 See Appellate Body Report on US – Oil Country Tubular Goods Sunset Review, para. 162.

responding party and other WTO Members on the nature of the complaint
7 and to allow the
responding party to begin preparing its defence.8 The Panel recalls in this regard that the complaining
party is under no obligation to develop its arguments in its panel request. 9 Furthermore, the Panel's
conclusion in this case is supported by practice fo llowed by WTO Members in some previous panel
requests (including that of New Zealand and Australia ), as well as by rulings such as that adopted by
the panel in EC – Approval and Marketing of Biotech Products . Finally, the Panel notes that it is not
convinced by Australia's arguments that the lack of a more detailed explanation as to how or why the
17 specifically listed measures at issue are considered by New Zealand to be violating the provisions
invoked has prejudiced or will prejudice Australia's ab ility to defend itself in the course of the Panel's
proceedings.

12. Accordingly, the Panel finds that New Zeala nd's panel request does not fail to provide a brief
summary of the legal basis of its complaint, wh ich is sufficient to present the problem clearly, as
required by Article 6.2 of the DSU.

IV. CONCLUSION
13. In light of the foregoing, the Panel finds:

(a) With respect to the 17 items contained in Australia's Final import risk analysis report
for apples from New Zealand (FIRA) and identified by bullet points in New Zealand's
request for the establishment of this Pa nel, dated 7 December 2007, the specific
measures at issue have been properly identified;
(b) New Zealand's panel request does not identify with sufficient precision any measures
contained in Australia's FIRA, other than the 17 specific items identified through
bullet points. Accordingly, any such other measures are not part of this Panel's terms
of reference; and,
(c) New Zealand's panel request contains suffici ent information regarding the legal basis
of the complaint to present the problem clearly with respect to the 17 identified items.
14. In light of the findings above, the Panel will a llow this proceeding to continue with respect to
the 17 measures specifically identified in New Zealand's panel request and to the alleged
inconsistency of such measures with the provisions of the SPS Agreement cited therein.

ANNEX A-3

(WT/DS367)

Working Procedures for the Panel

1. In its proceedings the Panel shall follow th e relevant provisions of the Dispute Settlement
Understanding (DSU). In addition, the following Working Procedures shall apply.

2. The Panel will provide the Parties
1 and Third Parties 2 with a timetable for its proceedings.
The timetable may be modified by the Panel as appropriate, after having consulted the Parties.

3. The Panel shall conduct its intern al deliberations in closed session. The Parties and interested
Third Parties shall be present at the meetings only wh en invited by the Panel to appear before it. The
Panel may open its substantive meeting with th e Parties to the public, subject to appropriate
procedures to be adopted by the Panel after consulting the Parties.

4. The deliberations of the Panel and the documen ts submitted to it shall be kept confidential.
Nothing in the DSU, nor in these Working Pro cedures, precludes a Party or a Third Party from
disclosing statements of its own positions to the public. Members shall treat as confidential
information submitted by any other Member to th e Panel which that Member has designated as
confidential. As provided in Article 18.2 of th e DSU, where a Party or a Third Party submits a
confidential version of its written submissions to th e Panel, it shall also, upon request of any other
Party or Third Party, provide a non-confidentia l summary of the information contained in its
submissions that could be disclosed to the public. Non-confidential summaries
 shall be normally
submitted no later than one week after the written submission is presented to the Panel, unless a different
deadline is granted by the Panel upon a showing of good cause.

5. Before the substantive meeting of the Panel with the Parties, and in accordance with the
timetable approved by the Panel, the Parties shall transmit to the Panel written submissions and
subsequently written rebuttals in which they presen t the facts of the case, their arguments and their
counter-arguments, respectively. Third Parties may transmit to the Panel written submissions after the
first submissions of the parties have been filed, and in accordance with the timetable approved by the
Panel.

6. At its first substantive meeting with the Par ties, the Panel shall ask New Zealand to present its
case first. Subsequently, and still at the same mee ting, Australia will be asked to present its point of
view. Parties will then be allo wed an opportunity for final statements, with New Zealand presenting
its statement first.

7. Third Parties shall be invited to present th eir views during a separate session of the first
substantive meeting of the Panel set aside for that purpose. Third Parties may be present during the
entirety of this session.

1 Throughout this document, the term "Party" refers to either New Zealand or Australia, as appropriate.
The term "Parties" refers to both New Zealand and Australia.
2 Throughout the document, the term "Third Parties" refers to Chile, the European Communities, Japan,
Pakistan, Chinese Taipei and the United States.

8. Formal rebuttals shall be made at a second substantive meeting of the Panel. At this meeting,
Australia shall have the right to take the floor fi rst to be followed by New Zealand. Parties shall
submit, prior to that meeting, and in accordance with the timetable approved by the Panel, written
rebuttals to the Panel.

9. The Panel may at any time put questions to th e Parties and to the Third Parties and ask them
for explanations either in the course of the substant ive meetings or in writing. Replies to questions
shall be submitted in writing by the date specified by the Panel. In additio n, the Parties shall be
permitted to ask questions to each ot her and to Third Parties. Repli es of the Parties and Third Parties
to questions, and Parties' comments on each other's re plies to questions, will not be attached to the
Panel report as annexes. They will be reflected in the findings section of the Panel report where
relevant.

10. Each Party shall make available to the Panel a nd to the other Party a written version of its oral
statements, preferably at the end of the meeting wi th the Panel, and in any event no later than the
working day following the presentation. Any Third Party that wishes to present its views shall
similarly make available to the Panel and to the Pa rties and other Third Parties a written version of its
oral statements, preferably at the end of the meeti ng with the Panel, and in any event no later than the
working day following the presentation. Parties and Third Parties shall provide the Panel and other
participants at the respective session with a provision al written version of their oral statements before
these statements are made.

11. In the interest of full transparency, oral presentations shall be made in the presence of the
Parties. Moreover, each Party's written submissions, including replies to questions put by the Panel,
shall be made available to the other Party. Thir d Parties shall receive copies of the Parties' first
written submissions and rebuttals. Parties shall su bmit all factual evidence to the Panel as early as
possible and no later than during the first substan tive meeting, except with respect to evidence
necessary for purposes of rebuttals or answers to qu estions. Exceptions may be granted by the Panel
upon a showing of good cause. In such cases, the othe r Party shall be accorded a period of time for
commenting, as appropriate.

12. Within seven (7) calendar days followi ng the submission of a written submission or
presentation of an oral statement to the Panel, each Party and Third Party shall provide the Panel with
an executive summary of the respective submission or statement. These executive summaries will be
used by the Panel only for the purpose of drafting a concise factual and arguments section of the Panel
report so as to facilitate timely translation and circulation of the Panel report to the Members.
Executive summaries shall not serve in any way as a substitute for the submissions of the Parties.
Executive summaries to be provided by Parties shall each not exceed ten (10) pages in length. Third
Parties' executive summaries shall not exceed three (3) pages in length. The Panel may, in light of
further developments, allow the Parties and Third Parties to submit longer summaries.

13. To facilitate the maintenance of the record of the dispute, and to maximize the clarity of
submissions, in particular the refe rences to exhibits submitted by Pa rties, Parties shall sequentially
number their exhibits throughout the course of the di spute. For example, exhibits submitted by New
Zealand should be numbered NZ-1, NZ-2, etc. If the last exhibit in connection with the first
submission was numbered NZ-5, the first exhibit of the next submission thus would be numbered NZ-
6. Exhibits submitted by Australia should be numbered AUS-1, AUS-2, etc.

14. Following the issuance of the interim report, Parties shall have two weeks to submit written
requests to review precise aspects of the interim report. Following receipt of any written requests for
review, and unless any Party requests the Panel to hol d an interim review meeting with the Parties,
each Party shall have one week to submit written comments on the other Party's written request for

review. Comments shall be strictly limited to commenting on the other Party's written request for
review.

15. The Parties and Third Parties have the right to determine the composition of their own
delegations. Delegations may include, as represe ntatives of the government concerned, private
counsel and advisers. The Parties and Third Parti es shall have responsibility for all members of their
delegations and shall ensure that all members of their delegations, as well as any other advisors
consulted by a Party or Third Party, act in acco rdance with the rules of the DSU and the Working
Procedures of this Panel, particularly in regard to confidentiality of the proceedings. Parties shall
provide a list of the participants of their delegation to the Secretary of the Panel and to each other no
later than 5.00 pm, local Geneva time, the working day before any meeting with the Panel.

16. Any request for a preliminary ruling (including rulings on jurisdictional issues) to be made by
the Panel shall be submitted no later than in a Pa rty's first written submission. Unless provided
otherwise by the Panel, if New Zealand requests any such ruling, Australia shall submit its response to
such a request in its first written submission. Likewise, and unless provided otherwise by the Panel, if
Australia requests any such ruling, New Zealand sh all submit its response to such a request in its
rebuttal submission. Exceptions to this proce dure may be granted by the Panel upon a showing of
good cause. The Panel shall inform the Parties promptly of any preliminary rulings it might make in
the course of the proceedings. In addition, the Panel may also choose to inform Third
Parties of such preliminary rulings, if appropriate.

17. In the course of the proceedings, the Panel will determine if there is the need to seek expert
advice. In such case, the following procedures shall apply:

(a) The Panel may seek expert advice from i ndividual experts and from international
organizations, as appropriate.
(b) The Panel may ask the Secretariat of the International Plant Protection Convention
(IPPC), as well as the Parties, for suggestions of possible experts. Parties shall not
engage in direct contacts with individuals suggested.
(c) The Panel will provide the Parties with a list of possible experts, including
information from their curricula vitae and declarations of potential conflicts of
interest. Parties will have the opportunity to comment and to make known any
compelling objections to any particular expert.
(d) The Panel will select the experts on the basis of their qualifications and the need for
specialized scientific expertise. The Pane l will decide the number of experts in light
of the number and type of issues on wh ich advice will be sought, as well as of the
different areas on which each expert can provide expertise.
(e) The Panel will inform the Parties of the experts it has selected. Individual experts
shall act in their personal capacities and not as representatives of any entity. They
shall be subject to the DSB's Rules of Conduct for the Understanding on Rules and
Procedures Governing the Settlement of Disputes (WT/DSB/RC/1).
(f) The Panel will prepare written questions fo r the experts. Parties will have the
opportunity to comment on the proposed ques tions, or suggest additional ones, before
the Panel decides on the final questions to be sent to the experts. The Panel may
provide the experts, on a confidential basis, with relevant parts of the Parties'
submissions, including exhibits, as well as with any additional information deemed
necessary.

(g) Experts will be requested to provide responses in writing within a time-period
specified by the Panel. Copies of the r esponses will be provided by the Panel to the
Parties. The Parties will have the opportunity to comment in writing on the responses
from the experts.
(h) The Panel may schedule a meeting with e xperts, prior to the second substantive
meeting with the Parties. Prior to said m eeting, the Panel will ensure that: (i) the
Parties' comments on the experts' responses are provided to the experts; (ii) the
experts are individually provided with th e other experts' responses to the Panel's
questions. During the meeting, experts will be invited to present their responses to
questions and to complement these res ponses as necessary, and to respond to
additional questions from the Panel and the Parties. The Panel may schedule
additional meetings with experts if its deems it appropriate. The Secretariat will
prepare a summary of the experts' written replies to questions, as well as a transcript
of the meeting with the experts, for inclus ion in the Panel's report. The experts will
be given an opportunity to comment on the drafts of these texts before they are
finalized.
18. The following procedures regarding service of documents shall apply:

(a) Each Party shall serve its submissions directly on the other Party. Each Party shall, in
addition, serve its first written submission on Third Parties. Each Third Party shall
serve its submissions on the Parties and othe r Third Parties. Each Party and Third
Party shall confirm in writing, at the time it provides the submission to the
Secretariat, that copies have been served as required.
(b) The Parties and Third Parties shall provid e their written submissions to the Panel,
through the Secretariat, by 5:00 p.m., local Geneva time, on the deadlines established
by the Panel.
(c) The Parties and Third Parties shall provide the Secretariat with seven (7) paper copies
of all their submissions as well as an electronic copy on a CD-ROM, diskette or as an
e-mail attachment, in a format compatible with the Secretariat's software. Paper
copies shall be delivered to the Disp ute Settlement Registrar, Mr. ***** *****
(Room 2150). Electronic copies should be sent by e-mail to Mr. ***** at
DSregistry@wto.org
; Ms. ***** ***** at *****.*****@wto.org; Mr. ***** *****
at *****.*****@wto.org; and, Mr. ***** ***** at *****.*****@wto.org.
(d) Parties and Third Parties shall provide the Secretariat with written copies of their oral
statements no later than close of busin ess on the day following the date of the
presentation. Written replies to questions sh all be submitted at the date decided by
the Panel.
(e) The Panel will provide Parties with an electronic version of the descriptive sections of
its draft report, the interim report and the final report, as well as of other documents,
as appropriate. When the Panel transmits to the Parties or Third Parties both paper
and electronic versions of a document, the paper version shall constitute the official
version for the purposes of the record of the dispute.
19. These Working Procedures may be modified by the Panel as appropriate, after having
consulted the Parties.

ANNEX A-4

(WT/DS367)

Procedures for the Panel's First Substantive Meeting

2-3 September 2008

I. OPEN HEARINGS
1. As set out in the timetable for this dispute, the Panel will hold its first substantive meeting on
Tuesday 2 and Wednesday 3 September 2008. Furt her to the parties' request, and after having
consulted the Parties
1 and Third Parties2 on possible options, the first substantive meeting will be held
through open hearings according to the procedures set out below.

2. To respect the rules of confidentiality, in particular as regards the Exhibit identified by
New Zealand as business confidential, no information designated as confidential by a party or a third
party shall be addressed during these open hearings. The Panel reserves the right to call for a closed
confidential session of the substantive meeting, if n ecessary, in order to address issues related to any
confidential information. The Panel also reserves th e right to suspend the open hearings at any time,
on its own initiative or at the request of either Party, if there is any risk of breach of confidentiality or
of disruption of the meeting. If the open heari ngs are suspended by the Panel for any reason, the
Panel may decide to resume the meeting in a closed confidential session.

3. At the open hearings, the Panel will ask New Z ealand and Australia, in that order, to make
their respective opening statements. After Parties have made these opening statements, New Zealand
and Australia will be given the opportunity to ma ke comments on each other's statements and to pose
questions. The Panel may also pose questions to the Parties. In a separate session of the open
hearings, Third Parties will be given the opportunity to make their own statements, if they so wish.

4. Registered delegates of WTO Members and othe r registered individuals will be able to follow
the open hearings by means of simultaneous broadcas ting of the proceedings to a separate room. If,
for logistical reasons, simultaneous broadcasting of the proceedings should turn out to be not feasible
or convenient, registered persons may be invited to follow the open hearings by seating in the gallery
of the room where the meeting is being held.

5. The proceedings of the substantive meeting, including those of the closed confidential
session, may be tape-recorded by the Secretariat. Tape recordings of the meeting will be for the
exclusive use of the Panel and of the WTO Secretar iat staff assisting the Panel, and will be kept
confidential.

1 Throughout this document, the term "Party" refers to either New Zealand or Australia, as appropriate.
The term "Parties" refers to both New Zealand and Australia.
2 Throughout this document, the term "Third Parties" refers to Chile, the European Communities,
Japan, Pakistan, Chinese Taipei and the United States.

II. THIRD PARTY SESSION
6. Unless otherwise provided by the Panel, the first substantive meeti ng will be reconvened on
Wednesday, 3 September 2008, at 10 a.m., in the Ce ntre William Rappard, for a Third Party session,
at which Third Parties will be given the opportunity to make their statements, if they so wish.

7. After Third Parties have made their statemen ts, New Zealand and Australia will be given the
opportunity to pose questions to any Third Party or to make comments on the statements of Third
Parties. The Panel may also pose questions to the Third Parties.

III. CLOSED CONFIDENTIAL SESSION
8. After having heard the statements of Parties and Third Parties, the Panel may decide to call
for a closed confidential session of the substantive meeting, if necessary.

9. In the light of the nature of the information to be discussed and the content of the statements
made by Parties and Third Parties, the Panel will decide whether Third Parties will be invited to
participate in the closed confidential session.

10. At the closed confidential session, the Panel may invite New Zealand and Australia, as well as
Third Parties if it were the case, to make further statements. The Panel may also pose questions to
Parties and, if it were the case, to Third Parties.

IV. FURTHER RULES
11. After having consulted the Parties, the Panel may amend the procedures for the first
substantive meeting or complement them with additional rules, as appropriate.

ANNEX 1 (TENTATIVE ORDER OF PROCEEDINGS)1

Tuesday, 2 September 2008

10:00 – 13:00 Statements of Parties.

13:00 – 15:00 Break.

15:00 – 18:00 Statements of Parties (cont'd.). Questions and answers.

Wednesday, 3 September 2008

10:00 – 13:00 Statements of Third Parties. Questions and Answers.

13:00 – 15:00 Break.

15:00 – 16:00 Closed confidential session (if necessary).

16:00 – 18:00 Concluding statements of Parties.

ANNEX 2 (IMPORTANT DATES)
1

Wednesday, 23 July
: Panel sends proposed procedures for substantive meeting to Parties for
comments.

Tuesday, 29 July: Parties send comments on proposed procedures for substantive meeting to Panel.

Tuesday, 5 August
: Panel sends approved procedures for s ubstantive meeting to Parties and Third
Parties.

Thursday, 7 August: Members are informed of open hearings for substantive meeting.

Monday, 11 August
: Notice of open hearings for substa ntive meeting is published on the WTO
website. Registration begins.

Friday, 29 August: End of registration for outside individua ls (non delegates) wishing to attend open
hearings for substantive meeting.

ANNEX A-5

(WT/DS367)

Procedures for the Panel's Meeting with the Experts and Parties

and the Panel's Second Substantive Meeting

30 June 2009 and 1-2 July 2009

The current procedures shall apply to the meetin g of the Panel with the designated experts and
Parties
1, scheduled to take place on Tuesday 30 June 2009, as well as to the Panel's second substantive
meeting with the Parties, scheduled to take place on Wednesday 1 and Thursday 2 July 2009. In case
of any conflict, the current procedures take precedence over any conflicting provisions in the Working
Procedures for the Panel adopted on 26 March 2008.

V. PANEL'S MEETING WITH THE EXPERTS AND PARTIES (30 JUNE 2009 AND, IF
NECESSARY, 1 JULY)
1. As set out in the timetable for this dispute, the Panel will hold a meeting with the designated
experts on Tuesday 30 June 2009. The Panel may decide to continue the meeting into the morning of
Wednesday 1 July 2009, if necessary and after having consulted the Parties. Further to the Parties'
request, and after having consulted the Parties on possible options, the meeting of the Panel with the
designated experts will be held through an open session according to the procedures set out below.
The meeting will be conducted in English only, without simultaneous interpretation.

2. To respect the rules of confidentiality, in par ticular as regards exhibits identified by any of the
Parties as confidential, no information designated as confidential by a Party shall be addressed during
this open session. The Panel reserves the right to call for a closed confidential session of the meeting
with the designated experts, if necessary, in or der to address issues related to any confidential
information. The Panel also reserves the right to suspend the open session at any time, on its own
initiative or at the request of either Party, if th ere is any risk of breach of confidentiality or of
disruption of the meeting. If the open session is suspended by the Panel for any reason, the Panel may
decide to resume the meeting in a closed confidential session.

3. The purpose of the Panel's meeting with th e experts is for the Panel to obtain further
clarification of some of the factual issues relevant for this case. In particular, the meeting should
allow the experts to elaborate and clarify the written responses submitted to the questions that were
posed by the Panel, and to respond to the comments made to those responses by the Parties, as well as
allow the Panel and the Parties to pose questions to the experts in order to seek any elaboration or
clarification on issues that are relevant to the case.

4. At the meeting, the Panel will introduce the e xperts. Subsequently, experts will be allowed
the opportunity to make brief general comments on their responses, in light of the written comments
made by the Parties. The Panel will then pose qu estions to the experts and allow New Zealand and
Australia the opportunity to pose their own questions to experts. Parties shall pose direct factual
questions and refrain from making statements, and argum entative or leading questions to the experts.

1 Throughout this document, the term "Party" refers to either New Zealand or Australia, as appropriate.
The term "Parties" refers to both New Zealand and Australia.

Experts should answer only those questions that th ey feel competent to answer. If necessary, and
after having heard the Parties' opinions, the Panel will decide on the appropriateness of any question
being posed to the experts. Parties will not pose questions to each other, except with the Panel's
authorization. In the course of the Panel's se cond substantive meeting, Parties will have ample
opportunities to develop their respective arguments in cluding, if they so wish, to develop arguments
on the experts' responses.

5. The focus of the meeting will be the science relied upon by Australia in its IRA regarding fire
blight, European canker and apple leafcurling midge , as well as the risk assessment techniques used
by Australia in its IRA. The Panel intends to group the discussion into six subject areas and to
organize the discussion accordingly. The subject ar eas will be as follows: (a) General terms and
definitions; (b) Risk assessment techniques; (c) Fire blight; (d) European canker; (e) Apple
leafcurling midge; and, (f) Other. For each of these subject areas, the Panel will organize the
discussion so that both Parties and the Panel have the opportunity to pose questions on the various
issues. The Panel will normally allow New Zealand the opportunity to pose questions to the experts
first, to be followed by Australia. Throughout the discussion of each issue, the Panel may pose
questions before, during or after the Parties are gi ven the opportunity to pose their own questions.
The Panel may also allow the opportunity to Parti es to come back with new questions or follow-up
questions. Once the Panel has decided that a particul ar issue has been sufficiently explored, the Panel
may invite the experts to make some concluding re marks on the specific issue, if they so wish.
Throughout the meeting with the experts, the Panel will endeavour to ensure that sufficient time is
devoted to the discussion of the different relevant issu es. In order to achieve this objective, the Panel
may decide at any point that there is a need to move on to a different issue. Experts will be asked to
provide their responses individually and shall refrain from conferring during the course of the
meeting.

6. Parties shall refrain from submitting any new f actual evidence to the Panel in the course of
the meeting with the experts. Upon a showing of good cause, the Panel may exceptionally allow the
introduction of new evidence in the course of the mee ting with the experts at the request of a Party,
and after having heard the other Party, if such new evidence is necessary for the purpose of posing a
question to an expert. The Panel may allow the subm ission by any expert of background material that
is necessary to respond to a written comment made by any of the Parties or to respond to a question
posed by the Panel or by any of the Parties.

7. Persons in possession of a valid WTO badge and individuals registered through the WTO
Secretariat will be able to follow the open session of the Panel's meeting with the experts by means of
simultaneous broadcasting of the proceedings to a separate room. If, for logistical reasons,
simultaneous broadcasting of the proceedings shoul d turn out to be infeasible or inconvenient,
interested persons may be invited to follow the ope n hearings by seating in the gallery of the room
where the meeting is being held.

8. The proceedings of the Panel's meeting with the experts, including those of the closed
confidential session if such a session were to ta ke place, will be tape-recorded by the WTO
Secretariat. Tape recordings of the meeting will be for the exclusive use of the Panel and of the
Secretariat staff assisting the Panel, and will be kept confidential. No recording or filming of the
proceedings other than by the WTO Secretariat will be allowed.

9. The WTO Secretariat shall prepare a transcript of the proceedings of the Panel's meeting with
the experts. For the purpose of reviewing the tran script's accuracy, the Panel will send a copy of the
transcript to the experts and to the Parties. The tr anscript of the proceedings of the Panel's meeting
with the experts and the compilations of written rep lies of the experts shall be referenced in the
Panel's report. The Panel may quote from that tran script and from the compilation in the relevant
sections of the Panel's report. Such transcript a nd compilation, however, will not be appended in full

to the Panel's report. In the interest of transp arency, the Panel shall ask the Secretariat to make
available the transcript of the pro ceedings of the Panel's meeting with the experts and the compilation
of the experts' written replies on the WTO's website, in the section of that website that is related to the
current dispute.

VI. PANEL'S SECOND SUBSTANTIVE MEETING (1-2 JULY 2009)
A. O
PEN HEARINGS
10. As set out in the timetable for this dispute, the Panel will hold its s econd substantive meeting
with the Parties on Wednesday 1 and Thursday 2 July 2009. Further to the Parties' request, and after
having consulted the Parties on possible options, th e second substantive meeting will be held through
open hearings according to the procedures set out below. The meeting will be conducted in English
only, without simultaneous interpretation.

11. To respect the rules of confidentiality, in par ticular as regards exhibits identified by any of the
Parties as confidential, no information designated as confidential by a Party shall be addressed during
these open hearings. The Panel reserves the right to call for a closed confidential session of the
substantive meeting, if necessary, in order to addr ess issues related to any confidential information.
The Panel also reserves the right to suspend the ope n hearings at any time, on its own initiative or at
the request of either Party, if there is any risk of breach of confidentiality or of disruption of the
meeting. If the open hearings are suspended by th e Panel for any reason, the Panel may decide to
resume the meeting in a closed confidential session.

12 At the open hearings, the Panel will ask Austra lia and New Zealand, in that order, to make
their respective opening statements. After Parties ha ve made these opening statements, the Panel will
grant Parties the opportunity to pose questions a nd to make comments on each other's statements.
After Parties have made their opening statements , and throughout the meeting, the Panel may pose
questions to the Parties. In order to facilitate the exchange of views and information, Parties are
encouraged to provide preliminary oral replies to the que stions posed by the other Party and by the
Panel. At the end of the meeting, the Panel will ask New Zealand and Australia, in that order, to make
their respective concluding statements.

13. Persons in possession of a valid WTO badge and individuals registered through the WTO
Secretariat will be able to follow the open heari ngs by means of simultaneous broadcasting of the
proceedings to a separate room. If, for logistical reasons, simultaneous broadcasting of the
proceedings is infeasible or inconvenient, inter ested persons may be invited to follow the open
hearings by seating in the gallery of the room where the meeting is being held.

14. The proceedings of the substantive meeting, including those of the closed confidential
session, may be tape-recorded by the Secretariat. Tape recordings of the meeting will be for the
exclusive use of the Panel and of the WTO Secretar iat staff assisting the Panel, and will be kept
confidential. No recording or filming of the pro ceedings other than by the WTO Secretariat will be
allowed. There will be no transcript of the subs tantive meeting and only written versions of oral
statements as well as written responses to questions will become part of the record.

B. C
LOSED CONFIDENTIAL SESSION
15. After having heard the statements of the Par ties, the Panel may decide to call for a closed
confidential session of the substantive meeting, if necessary.

16. At the closed confidential session, the Panel may invite the Parties to make further statements.
The Panel may also pose questions to the Parties.

VII. FURTHER RULES
17. After having consulted the Parties, the Pane l may amend the procedures for the substantive
meeting or for the Panel's meeting with the experts, or complement them with additional rules, as
appropriate.

ANNEX
(IMPORTANT UPCOMING DATES)1

Wednesday, 3 June
: Panel sends proposed procedures for second substantive meeting and for the
Panel's meeting with the experts to Parties for their comments.

Tuesday, 9 June
: Parties send comments on proposed procedures for substantive meeting and for the
meeting with the experts to Panel.

By Friday, 12 June
: Panel sends approved procedures for second substantive meeting and for the
Panel's meeting with the experts, to Parties and experts.

Monday, 15 June
: Members are informed of open hearings for substantive meeting.

By Thursday, 18 June : Notice of open hearings for substa ntive meeting is published on the WTO
website. Registration begins.

Thursday, 25 June
: End of registration for outside indivi duals (persons not in possession of a valid
WTO badge) wishing to attend substantive meeting or meeting of the Panel with the experts.

Thursday, 25 June: Parties provide a list of their respective delegations to the Secretary of the Panel
and to each other.

Monday, 29 June
: Secretary of the Panel provides Parties with a list of the individuals registered
through the WTO Secretariat.

Tuesday, 30 June: Panel's meeting with the designated experts and the Parties.

Wednesday and Thursday, 1-2 July 2009
: Panel's second substantive meeting with the Parties.

By Friday, 10 July
: Panel sends written questions to Parties. Parties send written questions to each
other, copying the Panel.

By Friday, 24 July
: Parties submit replies to questions.

By Friday, 31 July
: Parties may submit comments on each other's replies to questions.

ANNEX B

CONTENTS Page
Annex B-1 List of replies from the scientific experts to questions posed by the
Panel
B-2
Annex B-2 Transcript of the Panel's m eeting with the scientific experts B-2

ANNEX B-1

The List of replies from the scientific expert s to questions posed by the Panel (document
WT/DS367/11) will only be available electronically on the WTO website.

ANNEX B-2

The Transcript of the Panel's meeting with the scientific experts (document WT/DS367/12) will only
be available electronically on the WTO website.