AB-2002-3
Report of the Appellate Body
(Continued)
B. Arguments of Peru - Appellee
1. Procedural Issues
57. Before addressing the merits of the appeal, Peru challenges the
admissibility of what it terms is a second appeal by the European
Communities-that is, the proceedings that began with the Notice of Appeal filed
by the European Communities on 28 June 2002, after withdrawing the Notice of
Appeal it had filed on 25 June 2002.
58. According to Peru, a notice of appeal cannot be withdrawn and resubmitted in
revised form without the consent of the appellee. It notes that there is nothing
in the Working Procedures that establishes the right to commence an appeal
twice. Peru asserts that, although Rule 30 of the Working Procedures makes clear
that an appeal can be withdrawn at any time-which the European Communities did
through its communication of 28 June 2002-nothing in that Rule permits the
appellant to attach conditions to the withdrawal. Peru submits that if an
appellant withdraws its appeal subject to conditions, the appeal must therefore
be deemed withdrawn, irrespective of whether or not the conditions are met.
59. Peru argues that unless the Working Procedures are strictly enforced to
prevent an appellant from commencing an appeal repeatedly or withdrawing an
appeal subject to unilaterally determined conditions, there is immense potential
for abuse and disorder in appellate review proceedings.
60. Peru also states that the facts of United States - Definitive Safeguard
Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea ("US
- Line Pipe ")19, which the European Communities cites as precedent, are
distinguishable from those involved in the present dispute. It explains that in
US - Line Pipe, as well as in United States - Tax Treatment for "Foreign Sales
Corporations" ("US - FSC ")20, the Notices of Appeal were withdrawn with the
agreement of the appellees, while in this case the European Communities adopted
a unilateral approach. Moreover, in the two previous cases, the appellants
resubmitted an identical Notice of Appeal, which is not the case in this appeal.
61. In Peru's view, the approach adopted by the European Communities in the
present appeal presupposes the existence of a fundamental procedural right that
neither the DSU nor the Working Procedures accords. Peru asserts that creating
procedural rights on an ad hoc basis to address problems caused by one WTO
Member in an individual case, rather than through generally applicable new
procedures of which all Members are informed in advance, calls into question the
principle of equal treatment of all WTO Members.
62. Peru further notes that, even though the Appellate Body has ruled that the
Working Procedures should be read so as to give full meaning and effect to the
right to appeal, this right is not deprived of meaning and effect just because
it can be exercised only once. Peru states, in addition, that when the Appellate
Body has addressed an issue that is not provided for in the Working Procedures ,
the Appellate Body has consulted the participants and third parties. Peru
asserts that, as the Appellate Body did not consult the parties at the time that
the second Notice of Appeal was filed, it cannot be concluded that the Appellate
Body has accepted the European Communities' second appeal. Otherwise, the
Appellate Body would have waived Peru's procedural rights, which the Appellate
Body has no authority to do under the DSU or under its Working Procedures .
63. Peru argues, moreover, that the circumstances of this case do not allow the
Appellate Body to rule that the procedure adopted by the European Communities
can be justified under Rule 16(1) of the Working Procedures , because that Rule
does not justify the creation of procedural rights that the DSU does not accord.
64. Peru requests, therefore, that the Appellate Body reject the European
Communities' second appeal.
65. Peru further objets to the acceptance and consideration of the amicus curiae
briefs submitted in this appeal. It states that, while it welcomes non-Member
submissions where they are attached to the submission of a WTO Member engaged in
dispute settlement proceedings, the DSU makes clear that only WTO Members can
make independent submissions to panels and to the Appellate Body. Peru argues
further that the DSU already provides conditions under which WTO Members can
participate as third parties in dispute settlement proceedings. According to
Peru, accepting amicus curiae briefs from WTO Members that did not notify their
third party interest to the DSB would
be allowing a WTO Member impermissibly to circumvent the DSU.
66. Peru thus requests that the Appellate Body reject the amicus curiae briefs
submitted in this appeal.
2. The Characterization of the EC Regulation as a "Technical Regulation"
67. Peru submits that, contrary to the European Communities' contention, the EC
Regulation is a "technical regulation" that applies to identifiable products and
lays down characteristics for products marketed as sardines. Peru explains that
Article 2 of the EC Regulation does not apply to any product, but to products
clearly identified as products marketed as preserved sardines. It further claims
that these clearly identified products must, according to Article 2 of the EC
Regulation, have a number of physical characteristics, including that of having
been prepared exclusively from fish of the species Sardina pilchardus . Peru
asserts, therefore, that the EC Regulation lays down product characteristics for
products that are clearly identified.
68. Peru rejects the European Communities' claim that a name applied to a
product is not itself a characteristic of that product. According to Peru, Annex
1.1 to the TBT Agreement provides that any document that lays down product
characteristics with which compliance is mandatory is a "technical regulation",
irrespective of the purpose for which the product characteristics are laid down.
In Peru's view, a regulation that prescribes the characteristics of products
marketed under a particular trade name is, therefore, clearly a document which
lays down product characteristics and hence a "technical regulation" as defined
in Annex 1.1 to the TBT Agreement .
69. According to Peru, the European Communities' argument on this issue is
irrelevant to this dispute. It explains that at issue in this dispute is not a
"technical regulation" prescribing a particular name for products made from
Sardinops sagax , but rather that part of the EC Regulation that requires any
product marketed as sardines to be made from Sardina pilchardus . Peru submits
that the European Communities would thus not have to prescribe a specific trade
name for products made from Sardinops sagax to resolve this dispute.
3. The Temporal Scope of Application of Article 2.4 of the TBT Agreement
70. Peru submits that the Panel correctly relied on Appellate Body rulings and
on Article 28 of the Vienna Convention in concluding that, unless a different
intention appears from the treaty or is otherwise established, its provisions do
not bind a party in relation to any act or fact which took place or any
situation which ceased to exist before the date of the entry into force of the
treaty with respect to that party. Peru claims that the EC Regulation is a
situation that has not ceased to exist and, therefore, Article 2.4 of the TBT
Agreement is applicable to the EC Regulation.
71. Peru disagrees with the European Communities' allegation that Article 2.4 of
the TBT Agreement applies only to the preparation and adoption of technical
regulations. According to Peru, this allegation is based on a distinction
between the adoption and maintenance of technical regulations that the text of
Article 2.4 does not make. Peru asserts that the obligation to use the existing
international standard as a basis for technical regulations arises according to
the terms of Article 2.4 "where technical regulations are required"-that is, in
situations in which the Member considered the adoption of a technical regulation
necessary-and not when Members consider they need to introduce technical
regulations, as the European Communities alleges. Peru contends, moreover, that
the terms "use" and "as a basis for" in Article 2.4 do not imply that the
obligation under that provision arises only when a new technical regulation is
drawn up, drafted or prepared.
72. Peru submits that the Panel correctly concluded that the references in other
Articles of the TBT Agreement to the application of technical regulations
confirm that this Agreement was meant to extend to existing technical
regulations.
4. The Characterization of Codex Stan 94 as a "Relevant International Standard"
73. Peru states that the Panel correctly concluded that the TBT Agreement covers
international standards that are not based on consensus. Peru notes, in this
regard, the last two sentences of the Explanatory note to the definition of the
term "standard" in Annex 1.2 to the TBT Agreement . It then asserts that the only
logical and reasonable conclusion that can be drawn from these last two
sentences is that the drafters wished to note the practice of consensus-based
decision-making of the international standardization bodies, but at the same
time clarify that consensus-based decision-making was not an absolute
requirement.
74. Peru maintains that, in any event, the Codex Commission observes the
principle of consensus and followed this principle in the adoption of the Codex
standard at issue in this dispute. According to Peru, the report of the Codex
Commission on the meeting at which the standard was adopted leaves no doubt that
it was adopted without a vote. Peru concludes, therefore, that by asking the
Appellate Body to rule that standards which have not been adopted by consensus
are not covered by the TBT Agreement , the European Communities is asking the
Appellate Body to make a ruling on an issue that need not be resolved to settle
the present dispute.
75. In respect of the European Communities' argument that the Panel incorrectly
interpreted Codex Stan 94, Peru asserts that the European Communities mistakenly
treats this alleged error as an error in interpretation, rather than a failure
to conduct an objective assessment of a fact. According to Peru, the Codex
standard is not a covered agreement within the meaning of Article 1.1 of the
DSU, nor is it a treaty or another source of international law. Peru thus
contends that, like municipal law, the Codex standard must be treated by an
international tribunal as a fact to be examined, not as law to be interpreted.
Peru then states that the European Communities does not claim-and therefore does
not attempt to demonstrate-that the Panel's determination that the meaning of
this standard is not ambiguous constitutes an error in the assessment of a fact.
76. Peru argues that, even if the Appellate Body were to conclude that its task
is to determine whether the Panel's interpretation of the standard is in error,
the European Communities' claim should be rejected. In Peru's view, section
6.1.1(ii) of Codex Stan 94 clearly states that the name of sardines other than
Sardina pilchardus shall be "X sardines" and, therefore, the text after "X
sardines" can only be interpreted as defining what is meant by "X". Peru states,
moreover, that whatever ambiguity may result from the use of the comma in the
English text of Codex Stan 94-to separate the phrase "or the common name of the
species in accordance with the law and custom of the country in which the
product is sold"-the French and Spanish versions of the standard, which are
equally authentic, leave no uncertainty on this point. Peru thus concludes that
the Panel was correct in refraining from basing its interpretation on the
standard's drafting history. In any event, Peru submits that the drafting
history does not support the European Communities' interpretation of Codex Stan
94.
5. Whether Codex Stan 94 was Used "As a Basis For" the EC Regulation
77. Peru states that the Panel correctly interpreted and applied the term "as a
basis for" in Article 2.4 of the TBT Agreement . It agrees with the Panel's
conclusion that "basis" means "the principal constituent of anything, the
fundamental principle or theory, as of a system of knowledge".
78. Peru submits that the European Communities does not explain according to
what interpretative principle the term "as a basis for" could be given the
meaning "having a substantive rational relationship". Peru asserts that the
ordinary meaning of this term is not "having a substantive rational
relationship" and it cannot be given that meaning in the light of its context
and the object and purpose of the TBT Agreement .
79. Peru contends, furthermore, that the EC Regulation would not meet the "as a
basis" test even if the terms were interpreted according to the definition
submitted by the European Communities. In Peru's view, the relevant part of
Codex Stan 94 is section 6.1.1(ii) and thus, according to the European
Communities' own argument, what would need to be established is a rational and
substantive relationship between section 6.1.1(ii) of Codex Stan 94 and the
European Communities' prohibition against using the term "sardines" in
combination with the name of a country or a geographical area or the species or
the common name. Peru asserts that there is no relationship between section
6.1.1(ii) and that prohibition that can be described as "substantive" or
"rational".
80. Peru rejects the European Communities' claim that, despite its finding that
the term "use as a basis" does not mean "conform to or comply with", the Panel
applied the "as a basis" test in this case in such a narrow and restrictive
manner as to make it, in practice, equivalent to the "conform to or comply with"
test. Peru states, in response, that there is not a single element of the
standard foreseen in section 6.1.1(ii) of Codex Stan 94 that is reflected in the
EC Regulation.
6. The Question of the "Ineffectiveness or Inappropriateness" of Codex Stan 94
81. Peru asserts that the Panel correctly articulated and applied the principle
on burden of proof in this dispute. Peru explains that the Panel applied the
principle enunciated by the Appellate Body, namely, that the party asserting the
affirmative of a particular claim or defence has the burden of proving its
claim. It further states that the question of the distribution of the
evidentiary burden should not be considered in the abstract, but in the context
of the provision at issue in the dispute.
82. According to Peru, Article 2.4 of the TBT Agreement is expressed in the form
of a positive requirement and an exception. It explains that the second part of
Article 2.4, which states "except when such international standards or relevant
parts would be an ineffective or inappropriate means for the fulfilment of the
legitimate objectives pursued", is not a positive requirement, but is rather
expressed in the form of an affirmative defence. This means, in Peru's view,
that a Member departing from a relevant international standard must show that
the relevant international standard is not applicable to its particular set of
circumstances.
83. Peru states, additionally, that the Panel correctly considered that the
second part of Article 2.4 addresses motives and facts that are privy to the
Member imposing a technical regulation. Peru argues that to accept the argument
of the European Communities would be to require a complaining party to explain
that the deviation from an international standard is not necessary to pursue a
"legitimate objective", which would mean requiring a complaining party to prove
a negative. Moreover, accepting the European Communities' argument would mean,
in Peru's view, that the complaining party would have to speculate on the
legitimacy of the objectives pursued by the responding party. Peru therefore
argues that it is only logical that the responding Member should carry the
burden of proving that its departure from the international standard is
necessary to pursue the "legitimate objectives".
84. Peru claims that, even if the Appellate Body were to find that the Panel
incorrectly allocated the burden of proof, Peru nevertheless adduced evidence
sufficient to show that Codex Stan 94 is not "ineffective or inappropriate" to
fulfil the "legitimate objectives" pursued by the European Communities through
the EC Regulation.
7. The Objectivity of the Assessment of Certain Facts by the Panel
85. Peru submits that the Panel made "an objective assessment of the matter
before it" consistently with its obligations under Article 11 of the DSU.
According to Peru, to succeed in this claim the European Communities must show,
as stated in EC - Hormones21, that the Panel was guilty of "deliberate disregard
of, or refusal to consider, the evidence", that there was "wilful distortion or
misrepresentation of the evidence", or that the Panel committed an "egregious
error that calls into question the good faith" of the Panel. Peru asserts that
the European Communities has not shown this.
86. Peru rejects the European Communities' claim that the Panel erred in
refraining from seeking the opinion of the Codex Commission. Peru argues that
Article 13.2 of the DSU leaves it to the discretion of panels to determine
whether or not to seek expert opinion in particular cases and that Article 14.2
of the TBT Agreement gives panels discretion in deciding whether or not to
establish a technical expert group. Peru further submits that, because the
English text, together with the French and Spanish texts, remove any ambiguity
or obscurity regarding the meaning of section 6.1.1(ii) of Codex Stan 94, there
was no reason for the Panel to have recourse to its drafting history or to
consult the Codex Commission on this issue.
87. Peru asserts that the Panel made proper use of dictionaries and that, in its
claim on appeal, the European Communities is mischaracterizing the Panel Report.
Peru explains that it referred to several technical dictionaries to support its
claim that the term "sardines" is a common term for Sardinops sagax in the
European Communities. The Panel referred to this evidence, as well as other
evidence presented by the parties, in determining whether Peru had met its
burden of proof. According to Peru, the purpose of the Panel's assessment was
not, as suggested by the European Communities, to arrive at a definitive
conclusion as to the common name for Sardinops sagax in each member State of the
European Communities, but to determine whether European consumers would be
misled if the trade description of products made from Sardinops sagax comprised
the word "sardines" and a geographical qualifier. Peru therefore submits that
the Panel used the dictionaries in an appropriate manner to make this
determination, consistent with its obligations under Article 11 of the DSU.
88. Peru argues that the Panel did not ignore the evidence submitted by the
European Communities concerning the actual names given to "sardine-type"
products in the European Communities. Peru states that it is clear from
paragraphs 7.125-7.129 of the Panel Report that the Panel looked at this
evidence, but disagreed with it.
89. Peru claims that the Panel properly took into account the evidence provided
by the United Kingdom Consumers' Association. Peru explains that the Association
arrived at the conclusion that European consumers would not be misled if
sardines from Europe and sardines from Peru were distinguished by the addition
of a geographical indication in the trade name and that the EC Regulation does
nothing to promote the interests of European consumers. Contrary to the
assertion of the European Communities, Peru argues that these are factual, not
legal, conclusions that the Panel could appropriately consider as part of the
wide range of evidence submitted to it on this question. Peru therefore
concludes that the European Communities has not shown that the Panel distorted
this evidence, or that it used this evidence in bad faith.
8. The References in the Panel Report to Trade-Restrictiveness
90. Peru explains that the Panel's statements on trade-restrictiveness should be
considered keeping in mind, as background, the fact that Peru requested the
Panel to exercise judicial economy with respect to its subsidiary claims,
including its claim under Article 2.2 of the TBT Agreement . Peru submits,
nonetheless, that the Panel's description of the EC Regulation as
trade-restrictive is entirely accurate.
91. Peru recognizes that these statements are not necessary to the Panel's
analysis under Article 2.4 of the TBT Agreement and, to the extent that the
Panel's finding on that Article is confirmed, requests that the Appellate Body
decline to address these statements or rule that they were not necessary or
pertinent to the disposition of the issues before the Panel. If the Appellate
Body does not confirm the finding that the EC Regulation is inconsistent with
Article 2.4, Peru requests that the Appellate Body complete the analysis with
respect to Articles 2.2 and 2.1 of the TBT Agreement and, in so doing, that it consider the Panel's statements on the
trade-restrictiveness of the EC Regulation.
9. Completing the Legal Analysis
92. Peru submits that, if the Appellate Body concludes that the EC Regulation is
consistent with Article 2.4, it would be appropriate in such circumstances for
the Appellate Body to complete the Panel's analysis and resolve the dispute by
making findings on those provisions of Article 2 of the TBT Agreement on which
the Panel did not make any findings. Peru explains that it asked the Panel to
exercise judicial economy in accordance with the guidance given by the Appellate
Body to panels to address only those claims on which a finding is necessary in
order to enable the DSB to make sufficiently precise recommendations and
rulings. Peru then points to several cases where, after reversing a panel's
finding, the Appellate Body completed the legal analysis of those claims where
the panel had exercised judicial economy.
93. Peru states that it requested the Panel to include in the Panel Report all
of the arguments and evidence submitted to it on the legal claims not addressed,
so as to provide the Appellate Body with the factual basis to rule on those
claims if this became necessary. Peru further asserts that the fundamental
rationale of Articles 2.1, 2.2, and 2.4 of the TBT Agreement is the same, so
that the facts required to rule on the consistency of a measure with Article 2.4
of the TBT Agreement include those required to rule on the consistency of that
measure with Articles 2.1 and 2.2 of that Agreement.
94. Peru therefore requests that, if the Appellate Body concludes that the EC
Regulation is consistent with Article 2.4, the Appellate Body complete the
Panel's analysis and find that the EC Regulation is inconsistent with Article
2.2. If the Appellate Body concludes that the EC Regulation is consistent with
Article 2.2, Peru requests the Appellate Body to complete the Panel's analysis
and find that the EC Regulation is inconsistent with Article 2.1 of the TBT
Agreement.
C. Arguments of the Third Participants
1. Canada
95. Canada agrees with the Panel's finding that the EC Regulation is a
"technical regulation" for the purposes of the TBT Agreement . It submits that
the Panel correctly applied the Appellate Body's reasoning in EC - Asbestos, by
finding that the EC Regulation identifies a product, namely
preserved sardines, lays down product characteristics in a negative form by
prohibiting fish of species other than Sardina pilchardus to be marketed as
preserved sardines, and is mandatory.
96. Canada further asserts that, pursuant to Article XVI:4 of the Marrakesh
Agreement Establishing the World Trade Organization, the European Communities
had an obligation on 1 January 1995 to ensure the conformity of its existing
technical regulations with its obligations under, inter alia , Article 2.4 of the
TBT Agreement . Canada adds that the European Communities failed to comply with
this obligation in respect of the EC Regulation.
97. Canada also claims that the Panel correctly found that Codex Stan 94 was not
used "as a basis for" the EC Regulation. According to Canada, the EC Regulation
is not "founded or built upon" or "supported by" Codex Stan 94, because the EC
Regulation prohibits preserved sardines of species other than Sardina pilchardus
from being marketed as "sardines", regardless of whether the term "sardine" is
used in conjunction with the country, geographical area, species, or common name
of the species.
98. Canada agrees with the Panel's finding that under Article 2.4 of the
TBT
Agreement, the burden rests with the European Communities, as the party
asserting the affirmative of a particular claim or defence, to demonstrate that
Codex Stan 94 is an "ineffective or inappropriate" means to fulfil the
"legitimate objectives" of the EC Regulation. It further notes that, even if
this were not the case, Peru provided sufficient evidence and legal arguments to
meet this burden.
99. According to Canada, the Panel made an "objective assessment of the matter
before it". Canada submits that in order to establish that the Panel acted
inconsistently with Article 11 of the DSU, the European Communities must do more
than merely contend that the Panel should have reached different factual
findings than those it reached.
100. Canada further submits that the Panel's interpretation of Codex Stan 94 is
correct and that it was within the Panel's discretion to decline to consult the
Codex Commission.
101. Canada disagrees with the Panel's comment that, under Article 2.5 of the
TBT Agreement , a regulation that is not in accordance with "relevant
international standards" creates an unnecessary obstacle to trade. Canada notes,
however, that the Panel's comment played no part in its determination that the
EC Regulation is inconsistent with Article 2.4 of the TBT Agreement .
102. Canada submits that, in the event that the Appellate Body finds the EC
Regulation to be consistent with Article 2.4 of the TBT Agreement , the Appellate
Body has an adequate basis to complete the legal analysis of the claims made by
Peru under Articles 2.2 and 2.1 of the TBT Agreement and Article III:4 of the
GATT 1994.
103. In referring to the amicus curiae briefs received in this appeal, Canada
notes that there is a lack of clear agreement among WTO Members as to the role
of amicus curiae briefs in dispute settlement. It also states that the DSU
provides WTO Members with the legal right to make submissions in a dispute, but
only if they reserve their third party rights at the outset of the dispute
settlement process. Canada finally asserts that, in any event, the amicus curiae
briefs should be rejected because they are not pertinent or useful.
2. Chile
104. Chile agrees with Peru's claim that the European Communities could not
conditionally withdraw its Notice of Appeal of 25 June 2002 and replace it with
a new Notice of Appeal.
105. Chile also agrees with the Panel's conclusion that the EC Regulation is a
"technical regulation" for purposes of the TBT Agreement .
106. Chile states that the Panel was correct in concluding that Article 2.4 of
the TBT Agreement applies to all technical regulations that existed prior to 1
January 1995. According to Chile, the commitment under the TBT Agreement not to
restrict trade more than necessary is a permanent and continuous one.
107. Chile rejects the European Communities' contention that Article 2.4 applies
only to the preparation and adoption of technical regulations. Chile states that
Article 2 of the TBT Agreement is entitled "Preparation, Adoption and
Application of Technical Regulations by Central Government Bodies". Given the
title of Article 2, Chile argues that if Article 2.4 were limited to the
preparation and adoption of technical regulations, its text would have indicated
this explicitly or the provision would have been included in a different
article.
108. Chile agrees with the Panel's conclusion that Codex Stan 94 is a "relevant
international standard". Chile, nevertheless, disagrees with the Panel's
interpretation of the Explanatory note to the definition of "standard" in Annex
1.2 to the TBT Agreement . According to Chile, the Explanatory note provides that
international standards must be based on consensus, and this was confirmed in
the Decision of the Committee on Principles for the Development of International
Standards, Guides and Recommendations with Relation to Articles 2, 5 and Annex 3
of the Agreement, adopted by the WTO Committee on Technical Barriers to Trade.22
Chile notes, however, that the European Communities has not provided any
evidence to demonstrate that Codex Stan 94 was not approved by consensus.
109. Chile submits that the Panel was correct in finding that Codex Stan 94 was
not used "as a basis for" the EC Regulation. Chile explains that the EC
Regulation monopolizes the term "sardines" for Sardina pilchardus in
circumstances where Codex Stan 94 provides otherwise. Chile then asserts that,
had the European Communities used Codex Stan 94 "as a basis", the European
Communities would have had to incorporate all relevant parts of it, and not only
section 6.1.1(i).
110. Chile asserts that the burden of proving that Codex Stan 94 is not
"ineffective or inappropriate" rests with the European Communities, because it
is impossible for the Panel or for the other Members to prove what are the true
"legitimate objectives" pursued by the Member adopting a technical regulation.
In Chile's view, the European Communities failed to meet this burden.
111. Chile requests, furthermore, that the Appellate Body reject the amicus
curiae briefs received in this appeal. Chile argues that accepting amicus curiae
briefs from WTO Members who have not notified the DSB of their interest as third
parties would mean that those Members would be accorded more favourable
treatment than those accorded passive observer status in an appeal.
3. Ecuador
112. Ecuador requests clarification of the issues raised by the European
Communities' conditional withdrawal of the original Notice of Appeal and the
submission of a second Notice of Appeal.
113. Ecuador submits that the EC Regulation is a "technical regulation" for
purposes of the TBT Agreement . It agrees with the Panel's finding that Codex
Stan 94 is a "relevant international standard" which must be used "as a basis
for" the adoption and maintenance of the EC Regulation.
114. According to Ecuador, the Panel correctly found that Codex Stan 94 allows
Members to provide a precise trade description for preserved sardines, thereby
promoting market transparency, consumer protection, and fair competition.
Ecuador further agrees with the Panel's finding that Peru presented sufficient
evidence to prove that Codex Stan 94 is neither "ineffective" nor
"inappropriate" to achieve the "legitimate objectives" pursued by the European
Communities through the EC Regulation.
115. Finally, Ecuador objects to the acceptance and consideration of the amicus
curiae briefs submitted in this appeal. According to Ecuador, this would accord
Morocco more favourable treatment than Colombia who was accorded passive
observer status in this appeal.
4. United States
116. According to the United States, the Panel correctly found, as a factual
matter, that the EC Regulation lays down product characteristics that must be
complied with in order for a product to be labelled and sold as preserved
sardines, and that one of those mandatory product characteristics is that the
fish must be of the species Sardina pilchardus . It further notes that the
European Communities has not contested that the EC Regulation is a "technical
regulation", but only that it is a "technical regulation" relating to
Sardinops
sagax.
117. The United States submits that, contrary to what the European Communities
claims, there is no need to prove that the EC Regulation is an explicit
"technical regulation" for Sardinops sagax . Although the EC Regulation mentions
only Sardina pilchardus by name, the United States asserts that this does not
mean that the EC Regulation cannot be challenged by another Member, especially
when that Member is precluded from labelling its sardine species as "sardines"
by that regulation.
118. The United States also rejects the European Communities' attempt to
distinguish between labels and names, and states that the Panel correctly noted
that both labelling and naming requirements are means of identifying a product.
119. The United States agrees with the Panel's conclusion that Article 2.4
applies to technical regulations that were in effect when the TBT Agreement came
into force. The United States submits that the Appellate Body's reasoning in EC
- Hormones23 regarding the temporal application of the SPS Agreement is also
relevant for interpreting Article 2.4 of the TBT Agreement .
120. The United States further asserts that the European Communities' allegation
that Article 2.4 applies only to the drafting, drawing up or preparation of
technical regulations is not supported by the text of that provision nor by its
context. In this regard, the United States argues that this provision "follows
fast" upon Article 2.3 of the TBT Agreement , which requires that technical
regulations not be maintained if they are no longer necessary or if the
objectives can be attained in a less trade-restrictive manner. This provides
contextual support, according to the United States, to the conclusion that the
phrase "where technical regulations are required" in Article 2.4 can refer to
existing technical regulations that are being maintained because they are still
required.
121. The United States submits that the Panel correctly found that Codex Stan 94
is a "relevant international standard". It further states that the Panel
properly rejected the European Communities'
allegations that the international standard at issue does not mean what it says,
or is invalid because of drafting changes made in the course of developing the
standard.
122. The United States disagrees, however, with the Panel's conclusion that
international standards do not have to be based on consensus. According to the
United States, this conclusion is contrary to the Explanatory note to the
definition of "standard" in Annex 1.2 to the TBT Agreement , which states that
international standards are based on consensus. It argues that the TBT Agreement
does not impose any obligations on an international body or system with respect
to the development of international standards. In the United States' view, the
obligations set out in the TBT Agreement apply only to WTO Members and thus do
not cover the international standards referred to
in Article 2.4. The last phrase of the Explanatory note, referring to the
application of the TBT Agreement to documents not adopted by consensus, would
cover instead those standards adopted by Members even if not adopted by
consensus.
123. The United States, therefore, urges the Appellate Body to modify this
aspect of the Panel Report, but clarifies that this would not invalidate the
Panel's conclusion that Codex Stan 94 is a "relevant international standard",
given the Panel's finding that there was no evidence that Codex Stan 94 was not
based on consensus.
124. The United Sates submits that the Panel was correct in finding that the
European Communities is not using Codex Stan 94 "as a basis for" the EC
Regulation. The United States asserts that the EC Regulation is directly
contrary to the international standard because Codex Stan 94 provides that a
number of sardine species can be marketed with the name "sardines",
appropriately qualified, while the EC Regulation explicitly forbids such
marketing.
125. The United States rejects the European Communities' allegation that the
Panel effectively required conformity or compliance with the international
standard. According to the United States, the Panel simply said that an
international standard could not have been used as a basis for a technical
regulation if the technical regulation directly contradicts the standard. The
United States further states that the EC Regulation would not meet the European
Communities' proposed definition for the term "as a basis", given that the only
rational relationship between the EC Regulation and Codex Stan 94
is that they contradict each other.
126. The United States also asserts that the European Communities is incorrect
to argue that it appropriately used relevant parts of Codex Stan 94 on the
grounds that the EC Regulation is based on that part of the standard that
permits Members to reserve the name "sardine", without a qualifier, for the
species Sardina pilchardus . The United States argues that, given that the EC
Regulation also forbids the name "X sardines" for other sardine species, that
part of Codex Stan 94 concerning "X sardines" is therefore plainly a relevant
part of the standard.
127. The United States claims that the Panel correctly concluded that Codex Stan
94 is not an "ineffective or inappropriate" means for pursuing the European
Communities' "legitimate objectives", identified as market transparency,
consumer protection, and fair competition, because, inter alia , this
international standard provides for conveying accurate information to the
consumer concerning the content of the product. The United States also agrees
with the Panel's finding that Peru met the burden of showing that Codex Stan 94
is not "ineffective or inappropriate".
128. The United States alleges, however, that the Panel erred in stating that
Peru was not required to meet this burden-even though it found that Peru had
done so. According to the United States, this reasoning is unnecessary to the
Panel's finding and legally erroneous. In the United States' view, it is the
complaining party, not the responding party, that has the burden of presenting
evidence and arguments sufficient to make a prima facie demonstration of each
claim that the measure is inconsistent with a provision of a covered agreement.
This includes the demonstration under Article 2.4 of the TBT Agreement that the
relevant international standards are not "ineffective or inappropriate". The
United States argues, moreover, that this burden does not shift to the
responding party because the obligation is characterized as an exception, or
because the responding party asserts that the international standard is
"ineffective or inappropriate", or because the responding party may have more
information at its disposal concerning the "legitimate objectives."
129. The United States, therefore, requests the Appellate Body to modify the
portion of the Panel's reasoning dealing with the allocation of the burden of
proving that relevant international standards are an "ineffective or
inappropriate means for the fulfilment of the legitimate objectives pursued"
through the technical regulation.
130. The United States submits that the Appellate Body has the discretion to
accept both amicus curiae briefs received in this appeal, but that it need not
do so because they are not pertinent or useful.
19 Appellate Body Report, WT/DS202/AB/R, adopted 8 March 2002.
20 Appellate Body Report, WT/DS108/AB/R, adopted 20 March 2000,
DSR 2000:III, 1619.
21 Appellate Body Report, supra, footnote 17.
22 G/TBT/9, Committee on Technical Barriers to Trade, Second
Triennial Review of the Operation and Implementation of the Agreement on
Technical Barriers to Trade, 13 November 2000, Annex 4.
23 Appellate Body Report, supra, footnote 17.