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In this Chapter, we discuss the recent AB&P findings involving Article XX of the GATT, the SPS Agreement and the TBT Agreement. The purpose of this Chapter is to clarify how AB&P have invoked judicial tests such as the "least trade restrictive alternative test" and the "means and ends" test, how they have utilized the application/essence distinction, and how they have allocated the burden of proof.
Article XX of the GATT provides that:
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in the Agreement shall be construed to prevent the adoption or enforcement by any contracting parties of measures: ...
(b) necessary to protect human, animal, or plant life or health; ...
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption....
With regard to the relationship between the independent paragraphs and the `chapeau,' or the introductory clauses, of Article XX, the measures which can fall under the purview of one of the individual provisions also have to satisfy the requirement under the chapeau. The AB&P have strictly observed the analytical sequence of Article XX, first determining whether the measures can fall within the scope of individual paragraphs, then whether the measures can also satisfy the conditions set out in the chapeau.34 As a matter of fact, in Shrimp/Turtle, the Appellate Body characterized the order of this two-tier analysis as "not inadvertence or random choice, but rather [the reflection of] the fundamental structure and logic of Article XX",35 reversing the Panel's findings that "it seems equally appropriate to analyze first the introductory provision of Article XX".36 The Appellate Body stated that the chapeau analysis, which is to prevent the abuse of the specific exemptions provided for in Article XX, becomes almost impossible unless the interpreters identify the justifiabilities of the measures under one or another of the individual paragraphs.37
The AB&P have found that the measures have to be the least trade restrictive ones "among the measures reasonably available to [the measures-imposing countries]"38 so as to be deemed to be "necessary" to protect human health or life in the meaning of paragraph (b).39 Despite the very stringent appearance of this so-called "least trade restrictive alternative test" (the LTRA test), the manner in which AB&P apply this test has been relatively modest in the context of Article XX (b) of the GATT. This has come about because of the distinction between measures themselves and the application of measures. In Shrimp/Turtle, the Appellate Body enunciated that interpreters of the GATT have to examine measures as a whole in analyzing the compatibilities of the measures to the individual paragraphs, while they have to analyze whether the application of the measures can satisfy the conditions set out in the chapeau.40 As a result, the objects of Article XX (b) scrutiny are the measures as a whole, as opposed to the detailed components of the measures which parts are found to be inconsistent with the GATT obligations. In this regard, Trachtman noted:
A fundamental question in connection with the necessity analysis is the scope of the `measure' under review: is it the entire regulatory scheme or only the trade-restricting component?... Of course, if the necessity determination were required to be made only as to the regulatory scheme as a whole, it would be a much more deferential test.41
The Panel report in Argentina - Measure Affecting the Export of Bovine Hide and the Import of Finished Leather exemplifies the AB&P practice that the LTRA test in the context of GATT Article XX (b) is deferential to the measures in question.42 In this case, Argentina and the European Community disputed whether the Argentinean pre-payment system of income and value-added taxes, which resulted in imposing on importers heavier financial costs than on buyers of like domestic goods thereby violating GATT Article III:2, first sentence (non-discrimination between domestic and foreign like products on taxation), could be justified under the Article XX (d), which requires that the regulations be "necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement" (emphasis added). The Panel found that the pre-payment system in question, "in their general design and structure", was the least trade restrictive measure among reasonably available ones in order to secure compliance with Argentinean laws of income tax and value-added tax.43 However, the Panel found that the application of this contested measure resulted in "unjustified discriminations" because an alternative course of action in which the Argentinean government would reimburse importers for the additional interest forgone or paid would be available and administratively feasible.44 If the Panel had examined the extra tax burden, a detailed aspect of the Argentinean pre-payment tax system, instead of the pre-payment system as a whole in its analysis of Article XX (d), the measures in question would have not been able to pass the LTRA test.
Since the establishment of the WTO, the AB&P have had two opportunities to examine Article XX (g): Gasoline, and Shrimp/Turtle.
In Gasoline, Venezuela and Brazil complained that the U.S. was discriminating against foreign importers to the Unites States in setting the "baseline establishment" for gasoline, which was provided for in the U.S. 1990 Clean Air Act.45 The Act aimed at preventing the further deterioration of air pollution and the "baseline establishment rule" was designed for supervising the "non-deterioration" requirement in the Act. The U.S. set individual baselines for each of the most domestic refiners. However, the U.S. government applied statutory baselines for all foreign refiners, insisting that it was difficult to establish individual baselines for individual foreign refiners because of a paucity of information. These statutory baselines were much stricter than the average of the individual baselines. Venezuela and Brazil alleged that this discrimination between domestic and foreign refiners constituted a violation of Article III:4 (non-discrimination between domestic and foreign like products on regulation) of the GATT46. The Panel agreed.47 Then, with regard to the U.S. argument that the U.S. measure in question could be justified under Article XX (g), the Panel found that a measure has to be "primarily aimed at" the conservation of an exhaustible natural resource in order to be deemed to be "relating to" the conservation in the context of Article XX (g), referring to the Panel Report in Canada - Measures Affecting Exports of Unprocessed Herring and Salmon,48 in which the "primarily aimed at" test was first applied.49 The AB agreed that the "primarily aimed at" test should be applied to this particular case since all of the parties and the third participants in Gasoline agreed on the application of this test in the context of Article XX (g) of the GATT.50 Then the AB pointed out that without the baseline establishment rule the object of the Act, the prevention of further deterioration of air pollution, would have been "substantially frustrated". It therefore found that the baseline establishment rule was "primarily aimed at" the protection of atmosphere in the U.S.51
In Shrimp/Turtle, four Asian countries complained that the U.S. embargo of the importation of shrimp, based on Section 609 of Public Law 101-102 and its 1996 Guidelines, both of which aim at protecting turtles from incidental takings by shrimp trawling vessels, was inconsistent with the GATT. The AB seemed to refine the "primarily aimed at" test further. First, the AB stated that the purpose of protecting endangered sea turtles was genuine since the policy of protecting sea turtles was shared by all of the parties to this dispute.52 Then, the AB analyzed whether the relationship between the protection of sea turtles and the contents of Section 609 was "a close and genuine" one and made the following two points: two exemptions under Section 609 were directly related to the policy goal of sea turtle protection,53 and the requirements for granting certification of importation of shrimps were also directly connected to the policy of sea turtle conservation.54 Finally, the AB concluded that:
focusing on the design of the measure here at stake, it appears to us that Section 609... is not disproportionately wide in its scope and reach in relation to the policy objective of protection and conservation of sea turtle species.... The means and ends relationship between Section 609 and the legitimate policy of conserving an exhaustible, and, in fact, endangered species, is observably a close and real one.... In our view, therefore, Section 609 is a measure "relating to" the conservation of an exhaustible natural resources within the meaning of Article XX (g) of the GATT 1994.55 [emphasis added]
The AB seemed to clarify that the "means and ends" test, or the "primarily aimed at" test, consists of two parts: first, the interpreters should check whether the objects and purposes of measures are "genuine", then they should examine whether the relationships between the measures and their ends are "close and real" ones. Furthermore, it should be noted that the AB examined whether the scope of Section 609 was "disproportionately wide" in relation to the purpose of sea turtle protection. By so doing, the AB enunciated that not only the reduction of environmental harms but also harms on international trade derived from the measure are also to be taken into account in the analysis of the "means and ends" relationship. That is, the AB found that the deleterious effects on international trade could not be disproportionately large in comparison with the purpose of sea turtle protection, while, in Gasoline, the AB did not clarify whether trade harms could be taken into account in the analysis of the "primarily aimed at" test.
Like Article XX (b), the object of the Article XX (g) analysis is a measure as a whole. Therefore, the components of a measure which are found to be in violation of GATT obligations are not examined under an Article XX (g) analysis. Therefore, the "means and ends" test under Article XX (g) is deferential to measures in dispute. In Gasoline, the AB reversed the Panel's findings that the "less favorable treatment" of imported gasoline, the component of measure which the Panel found to be violation of GATT Article III:4, had to be "primarily aimed at" the conservation of air quality in order to fall within the range of Article XX (g). The AB noted that the object of the Article XX (g) analysis is a regulatory measure as a gestalt, i.e. the baseline establishment rule, not parts of it, i.e. discriminatory application of the baselines against foreign refiners.56 As a result, scrutiny under Article XX (g) has been relatively moderate.
The measures which fall into the scope of one or another of the individual paragraphs from (a) through (g) in Article XX also have to satisfy the requirement in the chapeau so as to be justified under the GATT.
Unlike the individual paragraphs, the objects of the chapeau analysis are the detailed components of a measure, as opposed to the measure as a whole. In this regard, in Shrimp/Turtle, the AB also said that:
the chapeau of Article XX... addresses not so much the questioned measure... as such, but rather the manner in which that measure is applied.... The general design of a measure, as distinguished from its application, is, however, to be examined in the course of determining whether that measure falls within one... of the paragraphs of Article XX.... 57
Consequently, the chapeau scrutiny is less deferential to a measure in question than the analysis under the individual paragraphs. As the AB admitted in Gasoline, the burden of proving that a measure is not applied in a manner resulting in the abuse of the exceptions in the individual paragraphs is "a heavier task than that involved in showing that" the measure can fall into the category of one of the individual paragraphs.58 The AB elucidated that the reason why a heavier task is imposed in the context of the chapeau analysis is that the function of the chapeau is to strike the balance between the right of invoking exceptions under the individual paragraphs of Article XX and the duties under other provisions in the GATT.59
In Gasoline, the AB struck down the baseline establishment rule, stating "there was more than one alternative course of action available to the United States" except for giving less favourable treatment to foreign refiners in accomplishing the purpose of the Clear Air Act.60 The AB enumerated the following three possible options the U.S. could have invoked: 1) the U.S. could have imposed statutory baselines without differentiation to both domestic and foreign refiners,61 if the application of the statutory baselines to domestic refiners were impossible because of the burdens imposed by compliance with statutory baselines, the U.S. should have taken the same considerations for foreign refiners,62 2) the U.S. could have made available individual baselines to foreign refiners by utilizing "established techniques for checking, verification, assessment and enforcement of data relating to imported goods"63 and 3) even if, as the U.S. argued, it was difficult to establish individual baselines for foreign refiners because of the lack of data, the U.S. could have pursued cooperation with the governments of Brazil and Venezuela for the purpose of establishing individual baselines for foreign refiners.64 As a result, the AB concluded that the baseline establishment rule, in its application, amounted to "unjustifiable discrimination" and a "disguised restriction on international trade."65
In Shrimp/Turtle, the AB found that the following factors should be regarded as "unjustifiable discrimination" "in their cumulative effect":66
1) In spite of the relatively flexible terms of Section 609, the U.S. government, in practice, required other countries to adopt the regulatory program of requiring the use of Turtle Excluder Devices (TEDs).67 "[I]t is not acceptable to require other Members to adopt essentially the same comprehensive program...without taking into consideration different conditions which may occur in the territories of those other members."68 [emphasis added]
2) The U.S. embargo covered shrimp caught by ships equipped with TEDs if the shrimp came from non-certified countries. That is, although the shrimp were caught by turtle-safe technology, they were excluded from importation into the U.S. This situation could not be reconciled with the declared policy objective of protecting and conserving sea turtles.69
3) The U.S. failed to approach the appellee nations in serious multilateral negotiations before enforcing the law against those countries, even though Section 609 required the Secretary of State to initiate such negotiations.70 Some international environmental agreements and resolutions recognized the needs and preferences for bilateral or multilateral negotiations.71 The U.S. should have conducted a serious attempt to negotiate with the complainants about sea turtle protection from incidental takings by shrimp trawling vessels.72 The unilateral character of the application of Section 609 underscored its unjustifiability.73
4) The application of Section 609 resulted in differential treatment among countries on three points. First, the U.S. negotiated with Caribbean/western Atlantic countries in the Inter-American Convention,74 but not with the appellees.75 Second, a three-year period for compliance with Section 609 was allowed to Caribbean/western Atlantic countries, but only four months were given to the appellees.76 Third, technology transfer efforts were made more aggressively for Caribbean/western Atlantic countries than for others.77
Furthermore, the Appellate Body held that the following facts constituted "arbitrary discrimination":
1) The U.S. government, in the application of Section 609, required other countries to adopt essentially the same regulatory program as the U.S. program. This inflexibility constitutes "arbitrary discrimination."78
2) The procedure for issuing the certification lacked procedural fairness. That is, "there was no formal opportunity for an applicant country to be heard or to respond to any argument that may be made against it, in the course of the certification process".79
Based on the above-mentioned reasons, the AB held that the U.S. embargo was applied in a manner which amounted not only to "justifiable discrimination" but also to "arbitrary discrimination" between countries where "the same conditions prevail". Thus, the AB concluded that the U.S. measure could not be justified under GATT XX.
These findings of the AB in Gasoline and Shrimp/Turtle are subject to many interpretations. Some argue that the AB actually applied the LTRA test in Gasoline and Shrimp/Turtle.80 On the other hand, one maintains that the AB utilized the LTRA test only in Gasoline, and, in fact, rejected the use of the LTRA test by utilizing a utilitarian-oriented balancing test in Shrimp/Turtle.81 Furthermore, others suggest that both Gasoline and Shrimp/Turtle abandoned the LTRA test.82 As these divergences of commentators' evaluations on these two AB findings shows, it is quite difficult to extract a simple coherent principle from the AB findings regarding the chapeau. To be sure, the AB pointed out the availability of an alternative course of action in both cases. However, it is also clear that the AB emphasized the availability of alternatives in Gasoline more than in Shrimp/Turtle. The only part in Shrimp/Turtle about which the AB underscored the availability of other means was when it pointed out that the U.S. had not seriously conducted negotiations to encourage cooperation with the complaining parties. Furthermore, it is also undeniable that the AB findings in Shrimp/Turtle put emphasis on the function of the chapeau as a device balancing the right of a Member to invoke exceptions under Article XX with trade interests of other Members, and seemed to try to scrutinize the relationship between the ends of sea turtle protection and the means taken. In sum, it can be said that the chapeau analysis in Gasoline was more LTRA-like and that in Shrimp/Turtle it was more like a "means and ends" balancing test. Therefore, as the AB noted in Shrimp/Turtle, the content of the chapeau analysis varies, depending on the kind of measure at stake.83
The AB&P have consistently held to their position that the countries which invoke Article XX have to bear the burden of proving that their measures can be justified under that provision. In this regard, in United States - Shirts and Blouses from India (hereinafter Shirts and Blouses), the AB elucidated this position:
We acknowledge that several GATT 1947 and WTO panels have required such proof of a party invoking a defence such as those found in Article XX... to a claim of violation of a GATT obligation, such as those found in Articles I:1, II:1, III or XI:1. Articles XX... are limited exceptions from obligations under certain other provisions of the GATT 1994, not positive rules establishing obligations in themselves. They are in the nature of affirmative defences. It is only reasonable that the burden of establishing such a defence should rest on the party asserting it. 84
The Panel Report in Asbestos spent a lot of space examining the allocation of burden of proof under Article XX. After referring to the above-mentioned AB findings in Shirts and Blouse, the Panel noted that a party invoking Article XX has to adduce sufficient evidence in order to establish a prima facie case that its measure is justified; then the burden of proof shifts to the complaining party which has to rebut the prima facie case with sufficient evidence.85
The Panel noted that, as to Article XX (b), the analysis consists of three parts:
(a) the existence of a risk for human health;
(b) the level of protection which the Member concerned wishes to achieve; and
(c) the existence of other measures consistent or less inconsistent with the GATT 1994 and enabling the same objective of protecting public health to be obtained.86
The Panel stated that, although countries have autonomy to decide the level of protection for their nationals, (b) in the above list, the analysis concerning (a) and (c) in the above list have to be based on scientific evidence.87 In this regard, the Panel noted that:
[The Panel's] role, taking into account the burden of proof, is to determine whether there is sufficient scientific evidence to conclude that there exists a risk for human life or health and that the measures taken by France are necessary in relation to the objectives pursued. The Panel therefore considers that it should base its conclusions with respect to the existence of a public health risk on the scientific evidence put forward by the parties and the comments of the experts consulted within the context of the present case... The same approach will be adopted with respect to the necessity of the measure concerned.88
The Panel asserted that countries cannot enact measures for protecting human health without sufficient scientific evidence regarding the harm to human health. The burden regarding scientific evidence under the Article XX (b) could be deemed to be more severe than that under the SPS Agreement since, under the SPS Agreement, complaining parties bear the burden of establishing a prima facie case that SPS measures imposed by defending countries are not based on sufficient scientific evidence, as discussed later.89
Even though the AB&P have maintained their position that parties invoking exceptional provisions bear the burden of proof, the AB&P have made small adjustments in the burden-of-proof rule when it is necessary. For example, in Canada -Patent Protection of Pharmaceutical Products, the Panel observed that:
The third condition of Article 30 [of the TRIPs Agreement] is the requirement that the proposed exception must not `unreasonably prejudice the legitimate interests of the patent owner.... Although Canada, as the party asserting the exception provided for in Article 30, bears the burden of proving compliance with the conditions of that exception, the order of proof is complicated by the fact that the condition involves proving a negative. One cannot demonstrate that no legitimate interest of the Patent owner has been prejudiced until one knows what clams of legitimate interest can be made.... Accordingly, without disturbing the ultimate burden of proof, the Panel chose to analyze the issues presented by the third condition of Article 30 according to the logical sequence in which those issues became defined.90
Similar thing can be said about the LTRA test and the chapeau test; due to the "logical sequence" in which these tests are defined; we need a small adjustment in the order of proof. Until complaining parties claim that certain less trade restrictive measures are available to the parties invoking Article XX (b), the defending countries cannot demonstrate that these alternatives are not reasonably available to them. By the same token, unless complainants argue that certain aspects of the application of ETMs result in "unjustifiable discrimination", "arbitrary discrimination", or "disguised restrictions on trade", the defending countries cannot prove that these aspects are not actually discriminatory or that alternatives are not reasonably available. It would be inefficient to require defending parties to anticipate and produce evidence contravening the indefinite number of possible claims in the context of the LTRA test and the chapeau test.91
In Asbestos, the Panel was probably aware of these "logical sequences" of the LTRA test and the chapeau test since the Panel implicitly made an adjustment in the allocation of the burden of proof in the Article XX (b) and chapeau analysis. As with the LTRA test, the Panel found that the European Community, the defending party, established a prima facie case by negating the reasonable availability of two possible policy options, controling the use of asbestos and allowing the use of chrysotile, which were suggested by Canada, the complainant.92 Strictly speaking, there are a lot of possible available policy options other than two claimed by Canada. Therefore, it would be also plausible that the European Union would not have been able to establish a prima facie case by refuting the availability of merely the two alternatives Canada claimed in the LTRA analysis. However, the Panel did not take this position. The Panel implicitly assumed that defending parties can establish prima facie cases of Article XX (b) justification merely by negating the options suggested by complaining parties. In other words, unless complaining parties claim the existence of measures that would be consistent or less consistent with GATT which can accomplish the same levels of protection as the ETMs the defending parties are invoking, the measures concerned are presumed to be the least trade restrictive one among reasonably available measures.
With regard to the chapeau analysis, the Panel found that the French measure in question was not discriminatory within the meaning of Article XX by stating that:
It should be borne in mind... that the introductory clause of Article XX concerns the application of the measure. It would therefore be possible for Canadian exports of chrysotile or products containing it to receive less favourable treatment than imports from other countries or French production with respect to the way in which the exceptions are administered by the French authorities.... However, we note that Canada has not argued that this was or had been the case. Canada merely recalls that it has demonstrated the existence of discrimination under Article III:4.93
Thus, the AB presumed that, unless complainants clarify the components of measures which might be discriminatory, the measures in question are presumed to be non-discriminatory. This presumption was a result of readjusting the order of proof because of the "logical consequence" of the chapeau test.
In this Chapter, we discuss the SPS Agreement.
The Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) was concluded as the result of the Uruguay Round Negotiation. The SPS Agreement applies to measures which protect human, animal, and plant life or health within the territory of a Member from risks such as those arising from the entry of diseases, pests, and disease-carrying animals, and those arising from additives and contaminants in food.94
As the Panel Report in EC Measures Concerning Meat and Meat
Products (hereinafter, Hormones) found,95 the compatibility of measures with the SPS
Agreement is examined first, prior to the scrutiny of the measures under the
GATT, as long as the measures are "sanitary and phytosanitary measures" within
the meaning of Paragraph 1 of Annex A of the SPS Agreement. Furthermore,
according to Article 2.4 of the SPS Agreement, the measures which are
consistent with the SPS Agreement "shall be presumed to be in accordance with
the obligations... under the provisions of GATT". The general objective of the
SPS Agreement is to minimize the negative trade effects of SPS measures, while
maintaining the Members' rights to enact SPS measures which are necessary to
assure the levels of sanitary protections which the Members are free to
decide.96
It is
normally said that the SPS Agreement is distinct from the GATT mainly in the
following two aspects: 1) under the SPS Agreement, SPS measures have to be
based on a scientific evaluation of risks in order that non-discriminatory
measures consistent with the GATT could be challenged under the SPS
Agreement;97 and 2)
international standards play significant roles in deciding whether sanitary
measures are legitimate under the SPS Agreement.98 It should be noted, however,
that there is "convergence" between the GATT and the SPS Agreement on the first
point so that "non-discriminatory" measures could be struck down if the
measures are not based on scientific evidence.
First, the AB&P have considered the concept of "likeness" under GATT Article III:4 as a relatively broad one. In Asbestos, the AB limited the consideration of risks involved in products only to the extent that the risks influence the competitive relationship between the products in question when it scrutinizes the "likeness" of the products.99 Thus, the AB implicitly refused to take into account either the purpose of the regulatory measures to reduce risks or the process of the production. As a result, relatively broad categories of goods, for example, genetically modified corn and normal corn, could be thought as "like" products under Article III:4 if consumers cannot appreciate the divergence of risks involved in the products and, as a result, the risks do not influence the competitive relationship between the products. Most of the distinctions made by regulatory measures are not specific to the country of origin. Rather, most of the regulatory measures are concerned about the risks derived from products and the risks do not always affect the competitive relationship between the products. In such cases, although the distinctions are made regardless of whether the products are domestic or imported, the regulatory measure would be regarded as "discriminatory" insofar as it accords "less favorable treatment" to one of the products in question. With regard to the concept of "less favorable treatment", the AB seems to interpret Article III:4 as requiring no distortion of the conditions of competition among all like products. In Korea - Measures Affecting Imports of Fresh, Chilled and Frozen Beef (Beef hereinafter), the AB noted that the foreign products are accorded less favorable treatment when the conditions of competition between domestic and foreign products are modified.100 Furthermore, in the context of Article III:2, second sentence, in Chile - Taxes on Alcoholic Beverages (Pisco hereinafter), the AB stated that Members have to provide "equality of competitive conditions of all directly competitive or substitutable imported products in relation to domestic products [emphasis in original]".101 When we take into account the similarities of the AB approaches in their interpretation of "so as to afford protection" under Article III:2 in Pisco with their interpretation of "less favorable treatment" under Article III:4 regarding the point that the AB focuses on the change of a competitive relationship occasioned by the regulation or taxation in question, it is clear that the distinctions made by origin-neutral regulatory measures could be found to be the violation of Article III:4. In this regard, the idea that "non-discriminatory" measures such as the general prohibitions of the use of growth hormones in beef in Hormones could not be challenged under the GATT102 is not accurate any more. Even if the U.S. had only alleged a violation of Article III:4 in Hormones, it would have been possible that he AB found the EC measure in violation. In other word, it would have been likely that the AB found that hormone-treated and non-hormone-treated beef were "like products" in the meaning of Article III:4, assuming that EC consumers did not differentiate them without the regulation, and the EC measure imposed disproportionate effects on foreign products.103
Second, in Asbestos, the Panel stated that the defending countries have to show there is sufficient scientific evidence proving the existence of risks and the necessity of measures, even under Article XX (b) scrutiny.104 Therefore, Members might not be able to take health-protecting measures if there is not sufficient scientific evidence regarding the risk and the relationship between the measures and the risk, even in the context of Article XX (b).
As a result of this analysis, we might be able to say that GATT obligations are converging with those of the SPS Agreement, diluting the distinct role of the SPS Agreement from the GATT to some extent.
In the following, we focus on Article 5.5 and 5.6 of the SPS Agreement since the contents of these provisions are comparable to those under Article XX (b) and the chapeau.
Article 5.5 of the SPS Agreement provides that:
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 health, each Member shall avoid arbitrary or unjustifiable distinctions in the levels it considers to be appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade....
Article 5.5 clearly stipulates an obligation which does not exist under the GATT. Members have to avoid making "arbitrary or unjustifiable distinctions" which constitute "discrimination or disguised restrictions on international trade" when they set the appropriate levels of protection "in different situations". Thus, as the AB noted in Hormones, three factors have to be shown: 1) appropriate levels of protection set by Members vary "in different situations", 2) the differences of the appropriate levels of protection are "arbitrary or unjustifiable", 3) the "arbitrary or unjustifiable" distinctions result in "discrimination or disguised restrictions on international trade".105
As to the first factor, it is unclear what constitutes "different situations". In Hormones, the AB stated:
The situations exhibiting differing levels 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 [emphasis in original].106
Even though this position regarding the meaning of "different situation" was also taken by the AB in Australia -Measures Affecting Importation of Salmon (hereinafter Salmon),107 it is unclear how much commonality is required so as to be considered as "comparable".108 Consequently, it is, for example, possible that an SPS measure regarding Product A and another SPS measure relating Product B can be regarded as comparable in the meaning of "different situations", even though A and B are neither actually nor potentially competitive with each other. Article 5.5, however, deals with the situations where the differences of SPS measure protection among products amount to "discrimination or disguised restrictions on international trade", as opposed to the situations where an SPS measure itself causes detrimental effects on international trade.109 When two products each of which is prescribed by a different SPS measure are not competitive, the distinction as such does not cause any trade detrimental effects regardless of how different the two SPS measures are. It is, therefore, reasonable to limit the scope of "different situations" to situations where competitive products are involved.
With regard to the second factor, "arbitral or unjustifiable distinctions", the AB&P seem to have suggested that distinctions are "arbitrary or unjustifiable" when products to which lower levels of health protection are afforded cause similar or higher risks than products to which higher levels of health protection are provided.110
As with the third factor, "discrimination or a disguised restriction on international trade", the criteria which are used for the evaluation of the discriminatory or trade-restrictive nature of measures remain unclear.
In Hormones, the AB agreed with the Panel's findings that the difference in the levels of protection for the hormones concerned, on the one hand, and for carbadox and olaquindox, anti-microbial agents used as additives for feeds given to piglets, on the other hand, were unjustifiable.111 It was known that carbadox and olaquindox induce cancer.112 Nevertheless, the AB reversed the Panel's findings that this unjustifiable distinction resulted in "discrimination or a disguised restriction on international trade" because:
[t]he documentation [regarding the enactment of the prohibition of the use of hormones for growth promotion]... makes clear... [that the ban was a response to] the anxieties experienced within the European Communities concerning...the carcinogenicity of hormones...[and] the dangers of abuse...of hormones...used for growth promotion.... A major problem addressed in the legislative process of the European Communities [was]... to establish a common internal market in beef.... Reduction of any beef surplus [due to the ban]...is not only the interests of EC farmers, but also of non-hormone using farmers in exporting countries. We are unable to share the inference that the Panel apparently draws that the import ban on treated meat and the Community wide prohibition of the use of the hormones here in dispute for growth risk of cancer, but rather to keep out US and Canadian hormone-treated beef and thereby to protect the domestic beef producers in the European Communities.113
Thus, the AB emphasized the subjective intent of the EC regulations regarding the prohibitions of the use of hormones rather than the actual detrimental effects on trade derived from the distinctions between carbadox and the hormones in question. These subjective criteria present a contrast to the objective standards under the chapeau analysis of Article XX of the GATT, in which trade harms of the application of measures are scrutinized. It is mysterious why similar terms in Article 5.5 of the SPS Agreement and in the chapeau of GATT Article XX bring about completely opposite meanings. Furthermore, the AB seemed to focus on the harmful effects on trade derived from the EC import ban as such, while the real issue of the analysis should have been the baneful effects of the application of different measures between carbadox and the hormones in dispute.114 In Salmon, the AB found that the distinction in the levels of protection imposed by Australia between ocean-caught Pacific salmon and herring used as bait and live ornamental finfish resulted in discrimination or a disguised restriction on international trade based on the cumulative consideration of three "warning signals" and two "additional factors".115 According to the AB, the three "warning signals" are 1) the arbitrary character of the distinction,116 2) the rather substantial difference in the levels of protection between the import prohibition on salmon and the tolerance for the imports of herring,117 and 3) the inconsistency of the import prohibition of the salmon in dispute with Articles 5.1 and 5.2 of the SPS Agreement.118 The two "additional factors" are 1) an unexplained change between the conclusion of the Australian 1995 Draft Report, which recommended allowing the importation of ocean-caught Pacific salmons under certain condition, and the 1996 Final Report, which recommended the continuation of the import prohibition;119 and 2) the lack of controls on the internal movement of ocean-caught Pacific salmons.120 In this case, it should be noted that the AB focused on objective standards such as the design and structure of the measure concerned, as opposed to the subjective intentions of the Australian legislature. That is a big difference from the AB findings in Hormones.121 However, most of the factors which were pointed out by the AB were about the import prohibition of salmon as such rather than the modification of the competitive conditions between salmon and herring derived from the distinctions the Australian government made. Even the factors relating to the distinctions, the first and second "warning signals", are the same factors which are used for evaluating the second factor of Article 5.5, i.e., whether the distinctions are arbitrary or unjustifiable. As a result, these two "warning signals" have no independent values in the analysis of the third factor of Article 5.5, the discriminatory or trade-restrictive character of the distinctions. The discriminatory or trade-restrictive nature of measures themselves, as opposed to that of distinctions in the meanings of Article 5.5 of the SPS Agreement, should be prescribed under Article 2.3 of the SPS Agreement. The AB in Hormones and Salmons mixed Article 2.3 and Article 5.5. together.
Even though it is not clearly stated, the object of an Article 5.5 analysis seems to be a measure as a whole, as opposed to application of the measure. In Hormones, the AB emphasized the distinctiveness of Article 5.5 requirement from the GATT chapeau analysis.122 Furthermore, what the AB did in its Article 5.5 analysis in Hormones and in Salmon was a comparison between two measures in question, not a detailed scrutiny of the application of a single measure in issue. Thus, the AB implicitly regards the object of Article 5.5 analysis as measures as a whole. However, it is unclear how the essence/application dichotomy works in the context of Article 2.3 of the SPS Agreement since there have been no cases in which the violation of Article 2.3 is found independently from the violation of Article 5.5.
Article 5.6 of the SPS Agreement provides that:
...when establishing or maintaining sanitary or phytosanitary measures to achieve the appropriate level of sanitary or phytosanitary protection, Members shall ensure that such measures are not more trade-restrictive than required to achieve their adequate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility.
The footnote to this provision reads as follows:
For purpose 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 less restrictive to trade.
Thus, Article 5.6 adopts the LTRA test. Like the same test under Article XX (b) of the GATT, the less trade restrictive alternatives are regarded as reasonably available only when they are economically feasible and can accomplish the same levels of protection which the measures invoked by defending parties can achieve. In Salmon and Japan - Measures Affecting Agricultural Products (hereinafter Apple), the AB found that all of the following three factors have to be shown in order to establish a violation of Article 5.6: 1) there is at least one alternative which is reasonably available, taking into account technical and economic feasibility; 2) the alternatives can achieve the Member's appropriate level of protection; and 3) the alternative is significantly less restrictive to trade than the SPS measure in dispute.123
It is not clearly stated whether the object of the Article 5.6 LTRA test is the "entire regulatory scheme or only the trade-restricting component".124 In Salmon and Apple, the AB, however, implicitly targeted the contested measures as a whole regardless of whether the AB was actually aware of the application/essence dichotomy. By so doing, the AB did not scrutinize the detailed components of the measures in the Article 5.6 analysis. Hence, the issue of Article 5.6 is whether less trade restrictive alternative measures are reasonably available, as opposed to whether the measure actually taken could be applied in a less trade restrictive manner. For example, negligence in negotiating for cooperation with other Members prior to the invocation to ETMs, which is a common factor to be found to be unjustifiable under the chapeau of the GATT Article XX, has never come out as an issue in the context of an Article 5.6 analysis. In both of these particular cases, the AB compared the measures themselves with other possible policy options. For example, in Salmon, the Panel stated that the possible alternatives which would be compared with the import ban of the raw salmon concerned were the five measures which were identified in the Australian 1996 Final Report.125 In Apple, the Japanese varietal testing requirement was compared with "testing by product", which was suggested as a less trade restrictive alternative by the U.S.126 As a result, the LTRA analysis under Article 5.6 of the SPS Agreement has been a relatively moderate one, compared with that of Article XX (b) of the GATT. As a matter of fact, there have been no cases in which SPS measures have been struck down as violations of Article 5.6 of the SPS Agreement.
The issue of burden of proof in the SPS Agreement presents a curious contrast to that in Article XX of the GATT. As we discussed above, defending countries which invoke Article. XX bear the burden of proving that their behavior could be justified. Although the SPS Agreement and Article. XX of the GATT could preside over very similar situations, the AB&P have adopted a different approach in the context of the SPS Agreement; complaining parties bear the burden to establish prima facie cases that defending parties violate the SPS Agreement.
In Hormones, the Panel found that a defending party has to bear the burden of establishing a prima facie case that they are obeying their obligations under the SPS Agreement if they set a higher SPS standard than relevant international standards. The Panel noted that Articles. 3.1 and 3.2 of the SPS Agreement encourage all Members to adopt international standards; Article 3.1 imposes an obligation on Members to base their SPS measures on international standards except as otherwise provided for in the SPS Agreement; and Article 3.2 assigns to the complainant the burden of proving that a defendant's measure is inconsistent with the SPS Agreement if the measure concerned conforms to relevant international standards.127 Consequently, according to the Panel, Article. 3.3, which permits Members to adopt an SPS measure which results in a higher level of SPS protection than that would be achieved by a measure based on the relevant international standards insofar as Members follow the obligations under Article 5 of the SPS Agreement, constitutes an "exception" from the obligations under Article 3.1.128 Then, the Panel found that, due to this exceptional character of Article. 3.3, the countries which set higher standards than relevant international standards have to bear the burden of proving that their SPS measures can be "justified".129
The AB reversed this part of the Panel's findings by stating that the Panel misconceived the relationship between Article 3.1 and 3.2 on the one hand and Article 3.3 on the other.130 The AB noted that Article 3.1 merely excludes the situations which are covered by Article. 3.3 from its purview.131 According to the AB, the general rule in the WTO dispute settlement process requiring a complainant to establish a prima facie case of inconsistency with relevant WTO Agreements before shifting the burden of showing consistency with the relevant provisions cannot be avoided by characterizing Article. 3.3 as an "exception".132 Hence, the AB concluded that the Panel erred in relieving the U.S. and Canada from the burden of establishing a prima facie case showing that the EC measure in dispute was inconsistent with Article 3.3, Article 5.1, Article 5.5, and Article 5.6 of the SPS Agreement.133
However, it is not evident how the AB findings regarding the allocation of the burden of proof were reflected in the AB analysis of individual paragraphs such as Article 5.1 and Article 5.5 of the SPS Agreement.134 For example, the AB found that the distinction in the appropriate levels of protection between the hormones in dispute and carbadox was unjustifiable in the meaning of Article. 5.5.135 The AB found on this point merely by referring to the Panel's discussion negating the EC's arguments.136 It is evident that the Panel made this findings based on the assumption that the EC had the burden of proving that the measure in question was consistent with Article, 5.5 of the SPS Agreement. Therefore, strictly speaking, the AB should have not endorsed the Panel's findings merely by referring to the Panel's discussion since it was the U.S. and Canada which had to prove that the distinction the EC made between carbadox and the hormones in issue was unjustifiable. In this regard, the AB analysis regarding Article 5.5 contradicted the AB's approach to the allocation of the burden of proof.
On the other hand, in Apple, the AB consciously connected the general policy regarding the allocation of burden of proof with the independent examination of each provision. This was exemplified by the AB analysis regarding Article. 5.6. The Panel was not convinced by the U.S. argument that "testing by product" was the less trade restrictive measure in the meaning of Article. 5.6 since the U.S. could not supply sufficient evidence that the Japanese appropriate levels of protection could have been achieved by "testing by product".137 Nevertheless, the Panel turned its attention to "determination of sorption levels", which was an alternative suggested by the experts advising the Panel. Then the Panel found that Japan could have accomplished its appropriate levels of protection by adopting "determination of sorption levels" instead of the more trade restrictive "vertical testing requirement", thereby violating Article. 5.6 of the SPS Agreement.138 In finding this point, the Panel explicitly noted that the U.S. did not specifically argue that the "determination of sorption levels" could be a less trade restrictive alternative in the meaning of Article. 5.6.139 The AB reversed this Panel's finding by stating that:
...we consider that it was for the United States 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. Since the United States did not even claim before the Panel that the "determination of sorption levels" is an alternative measure which meets the three elements under Article 5.6, we are of the opinion that the United States did not establish a prima facie case that the "determination of sorption levels" is an alternative measure within the meaning of Article 5.6.140
By so finding, the AB enunciated the principle that complaining parties bear the burden of proving that the SPS measures of defending parties are inconsistent with provisions of the SPS Agreement.
Another point which should be noted in the AB findings in Apple was that the AB clarified the threshold of shifting the burden of proof in relation to Article. 2.2 of the SPS Agreement, which requires that Members not maintain SPS measures without sufficient scientific evidence. Before the AB, the U.S. argued that allocating the initial burden of proof of inconsistency with Article. 2.2 to a complaining party means that it would be required, based on affirmative evidence, to prove a negative that there is no scientific evidence supporting the measure in dispute.141 The U.S. maintained that satisfying this requirement would be almost impossible.142 In rejecting this U.S. argument, the AB elucidated that a complaining party is merely required to raise a presumption that there are no relevant studies or reports in order to shift the burden of proof to the defending party in the context of Article. 2.2.143 According to the AB, this task is not impossible to accomplish because the complaining country can request the defending country, pursuant to Article 5.8 of the SPS Agreement, to provide "an explanation of the reasons" for the adoption of the measure concerned and the defending country is obliged to provide such explanation.144 Moreover, the AB pointed out that, if the defendant fails to offer any scientific study or report in support of the measure in issue, it would be strong evidence in establishing an assumption that there are no relevant scientific studies or reports.145 The AB clarified that the threshold of the burden shifting in the context of Article. 2.2 is so low that a complaining party can achieve it merely based on the information obtained from the defending party, pursuant to Article. 5.8 of the SPS Agreement. The same threshold would be applicable to Article. 5.1 of the SPS Agreement, which requires an SPS measure to be based on risk assessment, because both Article. 5.1 and Article. 2.2 require that there is a rational or objective relationship between an SPS measure and relevant scientific evidence.
The TBT Agreement establishes obligations to ensure that Members' "technical regulations" are not prepared, adopted, or applied with the view or effect of creating unnecessary obstacles to international trade. The Annex 1 of the TBT Agreement defines "technical regulations" as:
Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking, or labeling requirements as they apply to a product, process or production method.
This definition of "technical regulations", which is critically important in deciding the scope of the TBT Agreement, is subject to various interpretations. In Asbestos, a French regulation prohibited the marketing of asbestos and asbestos-containing products and its exceptions permitted the use of chrysotile fiber under certain conditions. The Panel found that the part containing the prohibition of asbestos was not a "technical regulation" under the TBT Agreement, while the exceptions are considered to be "technical regulations".146 The AB reversed this finding of the Panel, stating that "the proper legal character" of the French measure in question could not be determined without examining the measure as a whole.147 The AB pointed out that the real nature of the measure was not a total prohibition of the use of asbestos, but a measure permitting the use of asbestos in certain conditions.148 Then, underscoring the point that "technical regulations" have to "lay down" "product characteristics", the AB noted that the object of a regulation has to be identifiable in order to be regarded as a "technical regulation".149 The AB found that the products covered by the measure are identifiable since the measure concerned provided that all products must not contain asbestos fibers.150 Furthermore, the AB pointed out that the regulation set out the "applicable administrative provisions" with which the compliance was "mandatory".151 Therefore, the AB held that the French measure concerned was a "technical regulation" under the TBT Agreement. In sum, the AB made clear that the scope of the TBT Agreement is very broad.
There have been no precedents which analyze substantial provisions of the TBT Agreement so far, even though the importance of the TBT Agreement in the issue of "trade of environment" is recognized.
In order to avoid unnecessary obstacles to international trade, the TBT Agreement specifies that Members should choose a least trade restrictive method of achieving a certain policy objective. In this regard, Article 2.2 of the TBT Agreement provides that:
Members shall ensure that technical regulations are not prepared, adopted, or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfillment would create....
It is unclear whether the LTRA test under Article 2.2 is the same as one under Article 5.6 of the SPS Agreement or under GATT Article XX (b). Article 2.2 does not mention whether a reasonable availability of options should be taken into account. We will have to wait for future WTO cases in order to figure out how the AB&P applies the LTRA test under Article 2.2. Also subject to future interpretation is whether the essence/application dichotomy works under the TBT Agreement.
A big difference between the SPS Agreement and the TBT Agreement is the "legitimate objectives" under both agreements. Under the SPS Agreement, only the protection of human or animal life or health can be a "legitimate objective" when enacting SPS measures. On the other hand, under the TBT Agreement, Article 2.2 asserts that legitimate objectives under the TBT Agreement are not only environmental protection or the protection of human health but also other policy objectives such as national security or the prevention of deceptive practices.
34 See Gasoline AB Report, supra note 14, at 22.
35 See Shrimp/Turtle AB Report, supra note 15, at para. 119.
36 See WTO Report of the Panel: United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/R (May 15, 1998), reprinted in 37 I.L.M. 832, para 7.28 [hereinafter Shrimp/Turtle Panel Report].
37 See Shrimp/Turtle AB Report, supra note 15, at para. 120.
38 GATT Dispute Settlement Report: United States - Section 337 of the Tariff Act of 1930 (adopted on 7 November 1989) BISD (39th Supp.) 345, para. 5.26.
39 With regard to the objection to this interpretation of "necessary" by the AB&P, see Thomas J. Schoenbaum, International Trade and Protection of the Environment: the Continuing Search for Reconciliation, 91 Am. J. Int'l L. 268, 276-278 (1997).
40 See Shrimp/Turtle AB Report, supra note 15, at para. 115-116.
41 Joel P. Trachtman, Trade and ... Problems, Cost-benefit Analysis and Subsidiarity, 9 Eur. J. Int'l L. 32, 69 (1998) [hereinafter Trachtman Cost-Benefit Analysis].
42 See WTO Report of the Panel: Argentina - Measure Affecting the Export of Bovine Hide and the Import of Finished Leather, WT/DS155/R (Dec. 19, 2000), available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Bovine Hide].
43 See id. at para. 11.299-11.308.
44 See id. at para. 11.316-11.328.
45 See Clean Air Act Amendments of 1990 (Pub.L. 101-549, Nov. 15, 1990, 104 Stat. 2399).
46 See WTO Report of the Panel: United States - Standards for Reformulated and Conventional Gasoline, WT/DS2/R (Jan. 29, 1996) para. 3.11-16, 23-29,33, available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Gasoline Panel Report].
47 See id. at para.6.5-16.
48 See GATT Dispute Settlement Panel Report: Canada - Measures Affecting Exports of Unprocessed Herring and Salmon (adopted on 22 March 1988), BISD (35th Supp.) 98, para. 4.6.
49 See Gasoline Panel Report, supra note 46, at 6.39.
50 See Gasoline AB Report, supra note 14, at 17.
51 See id. at 18-19.
52 See Shrimp/Turtle AB Report, supra note 15, at para. 135.
53 See id. at para. 138.
54 See id. at para. 139-40.
55 Id. at para. 141.
56 See Gasoline AB Report, supra note 14, at 15 (stating that "one problem with the reasoning [of the Panel analysis regarding Article XX (g)]... is that the Panel asked itself whether the `less favourable treatment' of imported gasoline was `primarily aimed at' the conservation of natural resources, rather than whether the `measure', i.e. the baseline establishment rules, were `primarily aimed at' conservation of clean air. In our view, the Panel here was in error in referring to its legal conclusion on Article III:4 instead of the measure in issue.... The chapeau of Article XX makes it clear that it is the `measures' which are to be examined under Article XX(g), and not the legal finding of `less favourable treatment').
57 Shrimp/Turtle AB Report, supra note 15, at para. 115-6.
58 See Gasoline AB Report, supra note 14 at 20.
59 See id. at 22.
60 See id.
61 See id. at 22,25,26.
62 See id. at 26.
63 See id. at 26.
64 See id.
65 See id. at 27.
66 See Shrimp/Turtle AB Report, supra note 15, at para. 176.
67 See id. at para. 161-163.
68 See id. at para. 164.
69 See id. at para. 165.
70 See id. at para. 166-167.
71 See id. at para. 168.
72 See id. at para. 171.
73 See id. at para. 172.
74 The Inter-American Convention, 37 I.L.M. 1246 (opened for signature Dec 1. 1996).
75 See Shrimp/Turtle AB Report, supra note 15, at para. 173.
76 See id. at para. 174.
77 See id. at para. 175.
78 See id. at para. 177.
79 See id. at para. 180.
80 With regard to the Gasoline case, see e.g. Ernst-Ulrich Petersmann, The GATT/WTO Dispute Settlement System: International Law, International Organizations and Dispute Settlement 115-16 (1997); Sungjoon Cho, Gasoline: United States - Standards for Reformulated and Conventional Gasoline 9 Eur. J. Int'l Law 192 (1998), available at <http://www.ejil.org/journal/Vol9/No1/sr1a.html> (visited Mar. 14,2001); Jeffery Waincymer, Reformulated Gasoline under Reformulated WTO Dispute Settlement Procedures: Pulling Pandora out of a Chapeau, 18 Mich. J. Int'l L. 141,175 (1996); with regard to the Shrimp/Turtle case, see. e.g. Joel P. Trachtman, United States - Import Prohibition of Certain Shrimp and Shrimp Products, 6 November 1998, 10 Eur. J. Int'l Law 192 (1999), available at <http://www.ejil.org/journal/Vol10/No1/sr4.html> (visited Mar. 14, 2001).
81 See McLaughlin, supra note 13, at 885-6.
82 See, Note, Carry Wofford, a Greener Future at the WTO: the Refinement of WTO Jurisprudence on Environmental Exceptions to GATT, 24 Harv. Envtl. L. Rev. 563, 576-7 (maintaining that the analysis of "other options" in Gasoline was quite different from LTRA test).
83 See Shrimp/Turtle AB Report, supra note 15, at para. 120.
84 WTO Report of the Appellate Body: United States - Shirts and Blouses from India, WT/DS33/AB/R (Apr. 25, 1997) 15-16, available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Shirts and Blouses AB Report].
85 See Asbestos Panel Report, supra note 28, at para. 177-8.
86 Id. at para. 179.
87 See id.
88 Id. at para. 182.
89 Even though in the appeal Canada argued that the application of LTRA test by the Panel was inappropriate, it did not appeal the Panel's findings regarding the allocation of the burden of proof in the Article XX (b) analysis. See Asbestos AB Report supra note 28, at para. 165.
90 WTO Report of the Panel: Canada - Patent Protection of Pharmaceutical Products, WT/DS114/R (Mar. 17, 2000) para. 7.60, available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Pharmaceutical Products].
91 See Richard A. Posner, An Economic Approach to the Law of Evidence, 51 Stan. L. Rev. 1477, 1503 (1999). See also Thomas R. Lee, Pleading and Proof: the Economics of Legal Burdens, 1997 B.Y.U. L. Rev. 1,6-11, 28-30 (1997) (pointing out that it would be economically justifiable that the party who bears the burden of pleading (complaining parties in the LTRA and chapeau tests) is different from the party who bears the burden of proof (defending parties in the LTRA and chapeau tests)).
92 See Asbestos Panel Report, supra note 28, at para.8.204-8.222.
93 Id. at para.8.228.
94 See the SPS Agreement, supra note 30, at Paragraph 1 of Annex A.
95 See WTO Report of the Panel: EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/R/USA (Aug. 18, 1997) para. 8.42, available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Hormones Panel Report].
96 See the SPS Agreement, supra note 30 at Preamble, Article 1, and Article 2.
97 See e.g. Gary R. Sampson, Trade, Environment, and the WTO: the Post-Seattle Agenda 69 (2000); Charnovitz, supra note 20, at 171.
98 See e.g. Terence P. Stewart & David S. Johanson, The SPS Agreement of the World Trade Organization and International Organizations: The Roles of the Codex Alimentarius Commission, the International Plant Protection Convention, and the International Office of Epizootics, 26 Syracuse J. Int'l L. & Com. 29 (1998). However, Victor maintains that international standards have little impact on the contents of obligations under the SPS Agreement. See David G. Victor, The Sanitary and Phytosanitary Agreement of the World Trade Organization: An Assessment After Five Years, 32 N.Y.U. J. Int'l L. & Pol. 865, 869.872,926-29 (2000).
99 See Asbestos AB Report, supra note 28, at para.98,99,113.
100 See WTO Report of the Appellate Body: Korea - Measures Affecting Imports of Fresh, Chilled, and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R (Dec. 11, 2000) para. 141-8, available at <http://www.wto.org> (last visited Mar. 15, 2001).
101 See WTO Report of the Appellate Body: Chile - Taxes on Alcohol Beverages, WT/DS/87/AB/R, WT/DS/110/AB/R (Dec. 13, 1999) para. 67, available at <http://www.wto.org> (last visited Mar. 15, 2001).
102 See Steve Charnovitz, The World Trade Organization, Meat Hormones and Food Safety, 14 Int'l Trade Rep. (BNA), No. 41, at 1781-87 (Oct. 15, 1997).
103 In Asbestos, the AB stated that "a Member may draw distinctions between products which have been found to be `like', without, for this reason alone, according to the group of `like' imported products `less favourable treatment' than that accorded to the group of `like' domestic products"[emphasis added]. See Asbestos AB Report, supra note 28, at para. 100. The use of the words, "the group", may imply that an examiner should compare the entire group of like domestic products with that of like foreign products when examining a regulatory measure affords like foreign products "less favourable treatment" than like domestic products. That is, the mere fact that a foreign product, for example an imported genetically-modified soybean, is less favorably treated than a domestic product, for example a domestic conventional soybean, does not constitute "less favourable treatment". The examiner should scrutinize whether the regulatory measure as a whole have disparate impact on foreign products.
104 See Asbestos Panel Report, supra note 28, at para.8.179.
105 See WTO Report of the Appellate Body: EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R (Jan. 16, 1998) para.214, available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Hormones AB Report].
106 Id. at para. 217.
107 See WTO Report of the Appellate Body: Australia - Measure Affecting Importation of Salmon, WT/DS18/AB/R (Oct. 20, 1998) available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Salmon AB Report].
108 See Victor, supra note 98, at 916-7.
109 The situation in which an SPS measure itself amounts to arbitrary or unjustifiable discrimination or disguised restriction on trade would be in violation of Article 2.3 of the SPS Agreement, which constitutes one of the basic obligations under the SPS Agreement. Article 5.5 elaborates a part of the obligations under Article 2.3. Article 2.3 of the SPS Agreement states that "Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own 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." See Hormone AB Report, supra note 105, para. 212. Violation of Article 5.5 becomes automatically a violation of Article 2.3. See Salmon AB Report, supra note 107, para. 217.
110 See Salmon AB Report, supra note 107, at para. 146, 151-7.
111 See Hormones AB Report, supra note 105, at para. 235.
112 See id. at para. 226.
113 Id. at para. 245.
114 See Victor, supra note 98, at 917 (noting that the AB's intent in Hormones is that, only when trade harms derived from the difference in SPS protection levels are clear and severe, the distinction amounts to "discrimination disguised restrictions on international trade").
115 See Salmon AB Report, supra note 107, at para. 177-8.
116 See id. at 161-2.
117 See id. at 163-4.
118 See id. at 165-6.
119 See id. at 170-3.
120 See id. at 174-6.
121 See Reinhard Quick and Andreas Bluthner, Has the Appellate Body Erred? An Appraisal and Criticism of the Ruling in the WTO Hormones Case, 2 J. Int'l Econ. L. 603, 622 (1999) (pointing out that the AB in Hormones took into account various criteria without clearly defining "discrimination or a disguised restriction on international trade", whereas the AB in Salmon did not seem to have taken those various criteria into consideration).
122 See Hormones AB Report, supra note 105, at para. 239.
123 See Salmon AB Report, supra note 107, at para. 192; WTO Report of the Appellate Body: Japan - Measures Affecting Agricultural Products, WT/DS76/AB/R (Feb. 22, 1999) available at <http://www.wto.org> (last visited Mar. 15, 2001) para. 95 [hereinafter Apple AB Report].
124 See Trachtman, Cost-Benefit Analysis, supra note 41, at 69.
125 See WTO Report of the Panel: Australia - Measure Affecting Importation of Salmon, WT/DS18/R (Jun. 12, 1998) available at <http://www.wto.org> (last visited Mar. 15, 2001) para. 8.168 [hereinafter Salmon Panel Report].
126 See Apple AB Report, supra note 123, at para.96.
127 See Hormones Panel Report, supra note 95 at para.79-89.
128 See id. at para.86.
129 See id.
130 See Hormones AB Report, supra note 105, at para. 104.
131 See id.
132 See id.
133 See id. at para. 108.
134 See Steve Charnovitz, Environment and Health under WTO Dispute Settlement, 32 Int'l Law. 901 (1998), 914-5.
135 See Hormones AB Report, supra note 105, at para. 235.
136 See id. at para. 228-34.
137 See WTO Report of the Panel: Japan - Measures Affecting Agricultural Products, WT/DS76/R (Oct. 27, 1998) para. 8.84, available at <http://www.wto.org> (last visited Mar. 15, 2001) [hereinafter Apple Panel Report].
138 See id. at para. 8.91, 95 and, 98.
139 See id. footnotes 328, 332 and 333.
140 See Apple AB Report, supra note 123, para.126.
141 See id. at para. 133.
142 See id.
143 See id. at para. 137.
144 See id.
145 See id.
146 See Asbestos Panel Report, supra note 28, at para. 8.72.
147 See Asbestos AB Report, supra note 28, at para. 64.
148 See id.
149 See id. at para. 70.
150 See id. at para. 72.
151 See id at para. 74.