This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.
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The summary below was up-to-date at
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Peru.
On 20 March 2001, Peru requested consultations
with the EC concerning Regulation (EEC) 2136/89 which, according to
Peru, prevents Peruvian exporters to continue to use the trade
description “sardines” for their products.
Peru submitted that, according to the relevant
Codex Alimentarius standards (STAN 94-181 rev. 1995), the species “sardinops
sagax sagax” are listed among those species which can be traded
as “sardines”. Peru, therefore, considered that the above
Regulation constitutes an unjustifiable barrier to trade, and, hence, in
breach of Articles 2 and 12 of the TBT Agreement and Article XI:1 of
GATT 1994. In addition, Peru argues that the Regulation is inconsistent
with the principle of non-discrimination, and, hence, in breach of
Articles I and III of GATT 1994.
Panel and Appellate Body proceedings
Further to Peru’s request, the DSB established
a Panel at its meeting on 24 July 2001. Canada, Chile, Colombia,
Ecuador, Venezuela and the US reserved their third-party rights. On 31
August 2001, Peru requested the Director-General to determine the
composition of the Panel. On 11 September 2001, the Panel was composed.
On 11 March 2002, the Panel informed the DSB that it would not be able
to issue its report within 6 months, due to the complexity of the matter
and scheduling constraints. The Panel expects to complete its work by
end of April 2002. On 3 May 2002, the parties to the dispute requested
the Panel to suspend its proceedings, pursuant to Article 12.12 of the
DSU, until 21 May 2002. On 6 May 2002, the Panel agreed to this request.
The Panel Report was circulated to Members on
29 May 2002. The Panel concluded that the EC Regulation was inconsistent
with Article 2.4 of the TBT Agreement.
On 28 June 2002, the EC notified its decision
to appeal to the Appellate Body certain issues of law covered in the in
the Panel report and certain legal interpretations developed by the
Panel.
On 26 September 2002 the report of the
Appellate Body was circulated. The Appellate Body:
- found that the condition attached to the withdrawal of the Notice
of Appeal of 25 June 2002 was permissible, and that the appeal of the
EC, commenced by the Notice of Appeal of 28 June 2002, was admissible;
- found that the amicus curiae briefs submitted were
admissible but their contents did not assist in deciding the appeal;
- upheld the Panel’s finding, in paragraph 7.35 of the Panel
Report, that the EC Regulation is a “technical regulation”
under the TBT Agreement;
- upheld the Panel’s findings, in paragraph 7.60 of the Panel
Report, that Article 2.4 of the TBT Agreement applies to measures that
were adopted before 1 January 1995 but which have not “ceased to
exist”, and, in paragraph 7.83 of the Panel Report, that Article
2.4 of the TBT Agreement applies to existing technical regulations,
including the EC Regulation;
- upheld the Panel’s finding, in paragraph 7.70 of the Panel
Report, that Codex Stan 94 is a “relevant international
standard” under Article 2.4 of the TBT Agreement;
- upheld the Panel’s finding, in paragraph 7.112 of the Panel
Report, that Codex Stan 94 was not used “as a basis for” the
EC Regulation within the meaning of Article 2.4 of the TBT Agreement;
- reversed the Panel’s finding, in paragraph 7.52 of the Panel
Report, that, under the second part of Article 2.4 of the TBT
Agreement, the burden of proof rested with the EC to demonstrate that
Codex Stan 94 is an “ineffective or inappropriate means for the
fulfilment of the legitimate objectives pursued” by the EC
through the EC Regulation, and found, instead, that the burden of
proof rested with Peru to demonstrate that Codex Stan 94 is an
effective and appropriate means to fulfil those “legitimate
objectives”, and, upheld the Panel’s finding, in paragraph 7.138
of the Panel Report, that Peru has adduced sufficient evidence and
legal arguments to demonstrate that Codex Stan 94 is not “ineffective or inappropriate” to fulfil the
“legitimate objectives” of the EC Regulation;
- rejected the claim of the EC that the Panel did not conduct “an objective assessment of the facts of the case”, as
required by Article 11 of the DSU;
- rejected the claim of the EC that the Panel made a
determination, in paragraph 7.127 of the Panel Report, that the EC
Regulation is trade-restrictive, and, declared moot and without legal
effect the two statements, in paragraph 6.11 and in footnote 35 of the
Panel Report, on the trade-restrictive character of the EC Regulation;
and
- found it unnecessary to complete the analysis under Article 2.2
of the TBT Agreement, Article 2.1 of the TBT Agreement, or Article
III:4 of the GATT 1994.
Therefore, the Appellate Body upheld the
Panel’s finding, in paragraph 8.1 of the Panel Report, that the EC
Regulation is inconsistent with Article 2.4 of the TBT Agreement.
The Appellate Body recommended that the DSB
request the EC to bring the EC Regulation, as found in its and in the
Panel Report, as modified by its Report, to be inconsistent with Article
2.4 of the TBT Agreement, into conformity with EC’s obligations under
that Agreement.
On 23 October 2002, the DSB adopted the
Appellate Body Report and the Panel Report, as modified by the Appellate
Body Report.
Implementation of adopted reports
At the DSB meeting of 11 November 2002, the EC
stated that it was working towards implementing the rulings and
recommendations of the DSB in a manner consistent with its obligations
under WTO rules, in particular, Article 2.4 of the TBT Agreement.
However, the EC stated that in order to be able to achieve this it would
need a reasonable period in which to bring its measures into conformity
with its obligations under the TBT Agreement, especially given that
implementation would entail the repeal of a statutory measure. To that
end, the EC was willing to consult with Peru, pursuant to Article 21.3
of the DSU, in order to achieve agreement on the reasonable period of
time needed for implementation of the DSB’s rulings and
recommendations.
On 19 December 2002, Peru and the EC informed
the DSB that they had agreed that the reasonable period of time for the
EC to implement the recommendations and rulings of the DSB, will expire
on 23 April 2003. On 14 April 2003, the parties informed the DSB that
they had reached an agreement to extend the reasonable period of time
until 1 July 2003.
Mutually agreed solution
On 25 July 2003, the European Communities and
Peru informed the DSB that they had reached a mutually agreed solution
pursuant to Article 3.6 of the DSU.
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