SPS Agreement

International Trade Law

Prof. Sangseok Ha
 What is SPS measure?
• More specifically, Annex A of the SPS Agreement defines ‘Sanitary or
phytosanitary measure’ as any measure applied
• (a) to protect animal or plant life or health within the territory of the Member from
risks arising from the entry, establishment or spread of pests, diseases, disease-
carrying organisms or disease-causing organisms;
• (b) to protect human or animal life or health within the territory of the Member from
risks arising from additives, contaminants, toxins or disease-causing organisms in
foods, beverages or feedstuffs;
• (c) to protect human life or health within the territory of the Member from risks
arising from diseases carried by animals, plants or products thereof, or from the entry,
establishment or spread of pests; or
• (d) to prevent or limit other damage within the territory of the Member from the
entry, establishment or spread of pests.
Scope of SPS Agreement
- Art. 1.1 & Art. 2.1

• Article 1.1 of the SPS Agreement (Scope of Application)

• This Agreement applies to all sanitary and phytosanitary measures which
may, directly or indirectly, affect international trade.
• Article 2.1 (Principle of Autonomy)
• Members have the right to take sanitary and phytosanitary measures
necessary for the protection of human, animal or plant life or health,
provided that such measures are not inconsistent with the provisions of this
Agreement.
• In truth, the SPS Agreement is no different from other WTO agreements, in
that Members must act consistently with the obligations stated therein, as
the latter part of the provision makes clear.
Criteria for implementing SPS measures
• Article 2.2 (Support by Scientific evidence)
• Members shall ensure that SPS measures are ‘applied only to the extent
necessary to protect human, animal or plant life or health’ and that they are
‘based on scientific principles’ and ‘not maintained without sufficient
scientific evidence’
• Necessary requirement
• Difference between Article XX(b) of GATT & Article 2.2 of SPS
• Article XX(b) is a defence that can be invoked in order to justify a measure
that would otherwise violate GATT rules, such as non-discrimination.
• By contrast, Article 2.2 is a general obligation that applies to all SPS
measures, regardless of their impact on trade.
 Criteria for implementing SPS measures
• Requirement of ‘scientific principles’ and ‘sufficient scientific evidence’
• The obligation in Article 2.2 not to maintain an SPS measure without
‘sufficient scientific evidence’ requires that ‘there be a rational or objective
relationship between the SPS measure and the scientific evidence’.
• Whether there is a rational relationship ‘is to be determined on a case-by-
case basis and will depend upon the particular circumstances of the case,
including the characteristics of the measure at issue and the quality and
quantity of the scientific evidence’.
 Criteria for implementing SPS measures
• Article 2.3 (Non-discrimination)
• Members ‘ensure’ that their SPS 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’
• SPS measures ‘shall not be applied in a manner which would constitute a disguised
restriction on international trade’.
• This provision reads more like a traditional trade obligation like both MFN and
National Treatment-type discrimination as well as more general trade
‘restrictions’ that do not necessarily involve discrimination.
• In fact, it is very similar to the language of the chapeau of Article XX of the GATT
• Article 2.3 has been the subject of only limited interpretation through dispute
settlement.
Relationship between SPS measure and
GATT
• Article 2.4 (Presumption of Compliance with GATT Art. XX(b))
• ‘Sanitary or phytosanitary measures which conform to the relevant
provisions of this Agreement shall be presumed to be in accordance
with the obligations of the Members under the provisions of GATT
1994 which relate to the use of sanitary or phytosanitary measures, in
particular the provisions of Article XX(b) of GATT’. (rebuttable)
• This provision illustrates that the SPS Agreement is in some ways an
elaboration of the Article XX(b) exception.
• Compliance with the SPS Agreement can also be used to justify
measures as an exception to GATT obligations.
Harmonization with international standards
• Article 3.1 (Duty to Comply with International Standard)
• Members ‘shall base their sanitary or phytosanitary measures on
international standards, guidelines or recommendations, where they exist,
except as otherwise provided for in this Agreement, and in particular in
paragraph 3’.
• Article 3.2 (Presumption of Necessity of Protection & Consistency)
• SPS measures which ‘conform to’ international standards are presumed to be
consistent with the SPS Agreement and the GATT 1994. (rebuttable)
• Such measures ‘shall be deemed to be necessary to protect human,
animal or plant life or health, and presumed to be consistent with the
relevant provisions on the SPS and GATT’.
 Harmonization with international standards
• Article 3.3 (Exception to be Higher Level based on Scientific Justification)
• Members may introduce or maintain SPS measures ‘which result in a higher level of
sanitary or phytosanitary protection than would be achieved by measures based on
the relevant international standards, guidelines or recommendations, if there is a
scientific justification, or as a consequence of the level of sanitary or phytosanitary
protection a Member determines to be appropriate in accordance with the relevant
provisions of paragraphs 1 through 8 of Article 5’.
• Members may, under certain circumstances, provide more protection than
international standards, guidelines or recommendations offer.
• The term ‘based on’ is a looser standard than ‘conform to’. In EC-Hormones
Provisions of Harmonisation
• The harmonisation provisions of Art. 3 encourage all Members to
adopt the same or similar measures:
• by requiring Members to base their measures on international standards,
guidelines or recommendations;
• by giving a presumption of consistency to those measures that conform
thereto; and
• forcing Members to justify measures that provide for a higher level of
protection.
 Article 4, Equivalence to Other Member’s
• By contrast to harmonization provisions of Article 3, Article 4 requires Members
to recognize other Members’ measures that accomplish the same goals they are
trying to promote and to treat them as if they were the same as their own.
• Article 4 (Recognition Duty to Accept Other’s Equivalent Measure)
• Members shall accept the sanitary or phytosanitary measures of other Members as
equivalent, even if these measures differ from their own or from those used by
other Members trading in the same product, if the exporting Member objectively
demonstrates to the importing Member that its measures achieve the importing
Member’s appropriate level of sanitary or phytosanitary protection. For this
purpose, reasonable access shall be given, upon request, to the importing Member
for inspection, testing and other relevant procedures.
 Risk assessment
• Article 5.1 requires that all SPS measures be ‘based on’ a ‘risk assessment’.
• ‘Members shall ensure that their sanitary or phytosanitary measures are based on an
assessment, as appropriate to the circumstances, of the risks to human, animal or
plant life or health, taking into account risk assessment techniques developed by the
relevant international organizations’.
• Definition of Risk Assessment under Paragraph 4 of Annex A
• ‘Risk Assessment’ is the evaluation of the likelihood of entry, establishment or spread
of “a pest” or disease within the territory of an importing Member according to the
sanitary or phytosanitary measures which might be applied, and of the associated
potential ‘biological’ and ‘economic’ consequences;
• Or ‘Risk Assessment’ is the evaluation of the potential for adverse effects on “human
or animal health” arising from the presence of additives, contaminants, toxins or
disease-causing organisms in food, beverages or feedstuffs.
Risk assessment
• The risk assessment requirement under Art. 5.1 is a more specific
formulation of the ‘sound science’ requirement in Article 2.2.
• A risk assessment is a scientific evaluation that must be undertaken, which is
then used as the basis for the measures.
• A general discussion of the disease does not constitute risk assessment. It
has to be specific in nature to qualify as risk assessment
• Article 5.1 requires that there be a ‘rational relationship’ between the
measure at issue and the risk assessment.
• If a proper scientific evaluation is carried out as the basis for the measure,
there is arguably a high probability that the measure is ‘based on scientific
principles’ and ‘not maintained without sufficient scientific evidence’
Factors to be considered in Risk assessment
• Article 5.2
• In the assessment of risks, Members shall take into account
• available scientific evidence;
• relevant processes and production methods;
• relevant inspection, sampling and testing methods;
• prevalence of specific diseases or pests;
• existence of pest- or disease-free areas;
• relevant ecological and environmental conditions; and
• quarantine or other treatment’.
Risk assessment
• Regarding whether factors are enough considered AB in Australia – Salmon
• Whether a risk assessor has taken into account the available scientific
evidence in accordance with Article 5.2 of the SPS Agreement and
whether its risk assessment is a proper risk assessment … must be
determined by assessing the relationship between the conclusions of
the risk assessor and the relevant available scientific evidence.
Risk assessment
• Regarding whether SPS measure is based on Risk Assessment
• There must be a ‘rational relationship’ between the measure and the
risk assessment, and the risk assessment must ‘reasonably support’
the measure.
• The scientific basis need not reflect the majority view within the
scientific community but may reflect divergent or minority views, and
clarified the nature of the divergent or minority view on which an SPS
can be based.
• The views must be considered to be legitimate science according to
the standards of the relevant scientific community.
Provisional measures where Scientific Evidence is
Insufficient
• A lack of reliable information justifies some degree of regulation even in the
absence of evidence of harm. (Incorporated Precautionary Principle)
• Article 5.7
• ‘In cases where relevant scientific evidence is insufficient, a Member may
provisionally adopt sanitary or phytosanitary measures on the basis of
available pertinent information, including that from the relevant
international organisations as well as from sanitary or phytosanitary
measures applied by other Members.
• ‘In such circumstances, Members shall seek to obtain the additional
information necessary for a more objective assessment of risk and review
the sanitary or phytosanitary measure accordingly within a reasonable
period of time’.
Four requirements for Article 5.7
• Four requirements for Article 5.7 in Japan – Agricultural products II
• (i) the measure is imposed in respect of a situation where "relevant
scientific evidence is insufficient";
• (ii) the measure is adopted "on the basis of available pertinent
information";
• (iii) the Member which adopted the measure "seek[s] to obtain the
additional information necessary for a more objective assessment of
risk"; and
• (iv) the Member which adopted the measure "review[s] the ...
measure accordingly within a reasonable period of time".
Japan—Measures Affecting the Importation of Apples
• Under these measures, apples could be imported in Japan, but only if
the following conditions were met
• (1) apple fruit must be produced in ‘designated fire blight-free orchards’, with
the designation made by the US Department of Agriculture (in practice, only
orchards in the states of Oregon and Washington have been designated as such);
• (2) the fire blight-free orchard must be surrounded by a 500-metre fire blight-
free ‘buffer zone’;
• (3) the orchard and buffer zone must be inspected at least three times annually,
with additional inspections following any strong storm;
• (4) harvested apples must be treated by surface disinfection by soaking in
sodium hypochlorite solution for one minute or longer; and
• (5) fruit destined for Japan must be kept separated post-harvest from other fruit.
Japan—Measures Affecting the Importation of Apples
• The phytosanitary question at issue was the risk of transmission of fire
blight through apple fruit.
• Japan’s phytosanitary measure addressed risk arising from both “mature,
symptomless” apples that develop and spread fire blight, but also from the
accidental introduction of infected or infested apples within a shipment of
what are thought to be mature, symptomless apples destined for Japan.
• United States argued that exporting only mature or symptomless apples could not
transmit the disease to Japanese apple orchards.
• Japan argued in its defence that, due to the insufficiency of existing scientific
evidence, it was permitted to adopt the measures at issue as ‘provisional’ measures
under Article 5.7.
• The panel rejected Japan’s arguments, and Japan appealed.
 Appellate Body Report in Japan - Apples
• Regarding Art. 2.2
• The Appellate Body upheld that the measure was maintained “without sufficient
scientific evidence” inconsistently with Art. 2.2, as there was a clear disproportion
(and thus no rational or objective relationship) between Japan's measure and the
“negligible risk” identified on the basis of the scientific evidence.
• Regarding Art. 5.7
• The measure was not a provisional measure justified within the meaning of Art. 5.7, as
the measure was not imposed in respect of a situation “where relevant scientific
evidence is insufficient”.
• Scientific studies as well as practical experience have accumulated for the past 200
years. This was considered to be important amount of relevant evidence.
• A large quantity of high quality scientific evidence on the risk of transmission of fire blight through
apple fruit had been produced over the years, and noted that the experts had expressed strong and
increasing confidence in this evidence.
Appellate Body Report in Japan - Apples
• Regarding Art. 5.1
• Japan did not engage in risk assessment about spreading fire blight
through apple fruit. The assessment was on a general understanding of
how fire blight spreads.
• The pest risk analysis relied on by Japan (i.e. “1999 PRA”) failed to evaluate
• (i) the likelihood of entry, establishment or spread of fire blight
specifically through apple fruit; and
• (ii) the likelihood of entry “according to the SPS measures that might
be applied”.
• An evaluation of the risk must connect the possibility of adverse effects with
an antecedent or cause (i.e. in this case, transmission of fire blight “through
apple fruit”).
EC—Measures Concerning Meat and Meat Products (Hormones)

• Measures taken by the EC under the ‘Council Directive Prohibiting the

Use in Livestock Farming of Certain Substances Having a Hormonal
Action’ restrict or prohibit the placing on the market and imports of
meat and meat products treated with certain hormones.
• Exception: hormones for therapeutic or zootechnical purposes and
administered by a vet or under a vet’s responsibility; and those
hormones allowed under EEC’s regulations until a detailed examination
of the effects of these substances could be carried out.
• US argued the measures are apparently inconsistent with Articles III or
XI of the GATT 1994, Articles 2, 3 and 5 of the SPS Agreement, Article 2
of the TBT Agreement and Article 4 of the Agreement on Agriculture.
Panel Decision in EC-Hormones
• The panel found that the EC ban on imports of meat and meat
products from cattle treated with any of six specific hormones for
growth promotion purposes was inconsistent with Articles 3.1, 5.1
and 5.5 of the SPS Agreement.
• Article 3.1 requires Members to base their sanitary measures on
international standards, guidelines or recommendations except as
otherwise provided for in the SPS Agreement, in particular in Article
3.3.
• We note, therefore, that even if international standards may not be
binding on Members, Article 3.1 requires Members to base their
sanitary measures on these standards.
Panel Decision in EC-Hormones
• The panel concluded that the EC measure violated Art. 5.1 (and thus
Art. 3.3) because the measure was not based on a risk assessment.
Nowhere within the EC first submission in this case, had it claimed that
they had undertaken a risk assessment process which could be
considered to have met the requirements of Articles 5.1 and 5.2 of the
SPS Agreement.
• The EC measure, through arbitrary or unjustifiable distinctions, resulted in
“discrimination or a disguised restriction of international trade” in violation of
Art. 5.5
 The Appellate Body Decision
• The Appellate Body upheld the panel’s finding that the EC import prohibition
was inconsistent with Article 5.1 of the SPS Agreement, but reversed the panel’s
finding that the EC import prohibition was inconsistent with Articles 3.1 and 5.5
of the SPS Agreement.
• The requirement that SPS measures be “based on” international standards, guidelines
or recommendations under Art. 3.1 does not mean that SPS measures must “conform
to” such standards.
• The Appellate Body rejected the Panel's interpretation that Art. 3.3 is the exception to
Arts. 3.1 and 3.2 assimilated together and found that Arts. 3.1, 3.2 and 3.3 apply
together, each addressing a separate situation.
• Accordingly, it reversed the Panel's finding that the burden of proof for the violation
under Art. 3.3, as a provision providing the exception, shifts to the responding party.
The Appellate Body Decision
• The Appellate Body reversed the Panel's finding about Art. 5.5, noting
that
• (i) the evidence showed that there were genuine anxieties concerning the
safety of the hormones;
• (ii) the necessity for harmonizing measures was part of the effort to
establish a common internal market for beef; and
• (iii) the Panel's finding was not supported by the “architecture and
structure” of the measures.
 Precautionary Principle (Art. 5.7) vs.
Provisional measure
• The European Communities also invokes the precautionary principle
as a customary international rule in support of its claim that its
measures in dispute are based on a risk assessment.
• To the extent that this principle could be considered as part of customary
international law and be used to interpret Articles 5.1 and 5.2 on the
assessment of risks as a customary rule of interpretation of public
international law (as that phrase is used in Article 3.2 of the DSU), we
consider that this principle as a customary international rule would not
override the explicit wording of Articles 5.1 and 5.2 outlined above, in
particular since the precautionary principle has been incorporated and given
a specific meaning in Article 5.7 of the SPS Agreement under the condition
of sufficient application of art. 5.1 and 2.
 EC – APPROVAL AND MARKETING OF
BIOTECH PRODUCTS (GMO)
• EC legislation governing "the deliberate release into the environment of
genetically modified organisms" and Regulation 258/97 regulating "novel
foods and novel food ingredients”, under certain conditions, permited EC
member States to adopt "safeguard" measures in respect of biotech
products that have obtained approval for EC-wide marketing.
• More particularly, individual EC member States may provisionally restrict or
prohibit the use and/or sale of an approved biotech product in their own
territory if these member States have detailed grounds for considering,
based on new or additional information or scientific knowledge, that the
particular product poses a risk to human health or the environment.
EC – APPROVAL AND MARKETING OF BIOTECH
PRODUCTS (GMO)
• Measure at issue:
• 1) operation and application by the EC of its regime for approval of biotech
products; and
• 2) certain measures adopted and maintained by EC member states prohibiting
or restricting the marketing of biotech products.
• By its regime affecting the approval of specific biotech products, the EC
placed general moratorium on approvals of biotech products.
• Also, EC member State through the safeguard measures prohibited the
import/marketing of specific biotech products within the territories of
these member States.
Panel Decision Regarding General EC
moratorium
• The Panel found
• Through the moratorium, approvals were prevented through
actions/omissions by a group of five EC member States and/or the
European Commission.
• The moratorium was general in that it applied to all applications for
approval pending on the date of panel establishment under the
relevant EC legislation, and de facto because it had not been formally
adopted.
Panel Decision Regarding General EC
moratorium
• The Panel found that the EC decision to apply a general moratorium was
a decision concerning the application/operation of approval
procedures, i.e., a procedural decision to delay final substantive
approval decisions.
• It was not applied for achieving the EC level of sanitary or phytosanitary
protection and, hence, was not an “SPS measure” subject to Arts. 5.1 or
2.2.
• Therefore, the panel depended on SPS Agreement Annex C titled with
Control, Inspection, and Approval Procedure, by which it found the
general moratorium led to undue delay in the completion of the EC
approval procedure, which is inconsistent with Annex C.1(a) of SPS
Agreement.
Panel Decision on EC member State safeguard measures

• According to the Panel, the record did not indicate that there was
insufficient scientific evidence to conduct a risk assessment within the
meaning of Art. 5.1 and Annex A(4) for the biotech products subject
to safeguard measures.
• As a result, Arts. 5.1 and 2.2 were applicable.
• In this regard, the Panel found that none of the safeguard measures at
issue were based on a risk assessment as required under Art. 5.1 and
defined in Annex A(4).
• By maintaining measures contrary to Art. 5.1, the European
Communities had also acted inconsistently with Art. 2.2.