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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Complaint by Canada. (See also DS401)
On 2 November 2009, Canada requested consultations with the European Communities concerning Regulation (EC) No. 1007/2009 of the European Parliament and of the EC Council of 16 September 2009 on trade in seal products, and subsequent related measures. According to Canada, the regulation in question prohibits the importation and the placing on the EC market of all seal products.
Canada claims that the above measures are inconsistent with the obligations of the European Communities under Article 2.1 and 2.2 of the TBT Agreement; Articles I:1, III:4 and XI:1 of the GATT 1994 and Article 4.2 of the Agriculture Agreement.
On 16 November 2009, Iceland requested to join the consultations.
On 18 October 2010, Canada requested supplementary consultations with the European Union to take into account that, on 17 August 2010, the European Commission published Commission Regulation (EU) No. 737/2010, which lays down detailed rules for the implementation of Regulation (EC) No. 1007/2009 of the European Parliament and of the Council on trade in seal products (“implementing measure”). In addition, Canada further stated that it may also wish to consult further on matters pertaining to Regulation EC No. 1007/2009 that were previously raised at the consultations held on 15 December 2009 or that have since arisen as a result of the implementing measure or otherwise.
Canada claims that the “implementing measure”, either in itself or in combination with Regulation EC No. 1007/2009, is inconsistent with Articles 2.1, 2.2, 5.1, 5.2, 5.4, 5.6, 6.1, 6.2, 7.1, 7.2, 7.4, 7.5, 8.1 and 8.2 of the TBT Agreement; Articles I:1, III:4 and XI:1 of the GATT 1994 and Article 4.2 of the Agriculture Agreement.
On 29 October 2010, Norway requested to join the supplementary consultations.
On 11 February 2011, Canada requested the establishment of a panel. At its meeting on 24 February 2011, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
At its meeting on 25 March 2011, the DSB established a panel. China, Colombia, Iceland, Japan, Mexico, Norway and the United States reserved their third party rights. Subsequently, Argentina, Ecuador and the Russian Federation reserved their third party rights. At its meeting on 21 April 2011, the DSB established a panel in dispute DS401. As provided for in Article 9.1 of the DSU with regard to multiple complainants, it was agreed that that panel and the panel established on 25 March 2011 for dispute DS400 would be a single panel. On 24 September 2012, Canada and Norway requested the Director‑General to determine the composition of the panel. On 4 October 2012, the Director-General composed the panel. On 4 April 2013, the Chair of the Panel informed the DSB that the panel expects to issue its final report to the parties by October 2013, in accordance with the timetable adopted after consultation with the parties.
On 25 November 2013, the panel report was circulated to Members.
Summary of key findings
This dispute concerns regulations of the European Union (“EU Seal Regime”) that generally prohibit the import and placing on the market of seal products. The EU Seal Regime provides for various exceptions to the prohibition if certain conditions are met, including for seal products derived from hunts conducted by Inuit or indigenous communities (IC exception) and hunts conducted for marine resource management purposes (MRM exception).
The panel determined that the EU Seal Regime is a technical regulation and that the IC exception and the MRM exception under the EU Seal Regime violate Article 2.1 of the TBT Agreement because: (1) these exceptions accord imported seal products treatment less favourable than that accorded to like domestic and other foreign products; and (2) such less favourable treatment does not stem exclusively from legitimate regulatory distinctions. The panel found however that the EU Seal Regime does not violate Article 2.2 of the TBT Agreement because it fulfils the objective of addressing EU public moral concerns on seal welfare to a certain extent, and no alternative measure was demonstrated to make an equivalent or greater contribution to the fulfilment of the objective.
The panel concluded that the IC exception under the EU Seal Regime violates Article I:1 of the GATT 1994 because an advantage granted by the European Union to seal products originating in Greenland (specifically, its Inuit population) is not accorded immediately and unconditionally to the like products originating in Canada. With respect to the MRM exception, the panel found that it violates Article III:4 of the GATT 1994 because it accords imported seal products treatment less favourable than that accorded to like domestic seal products. The panel also found that the IC exception and the MRM exception are not justified under Article XX(a) of the GATT 1994 (“necessary to protect public morals”) because they fail to meet the requirements under the chapeau of Article XX (“not applied in a manner that would constitute arbitrary or unjustified discrimination where the same conditions prevail or a disguised restriction on international trade”). The panel additionally found that the European Union failed to make a prima facie case that the EU Seal Regime is justified under Article XX(b) of the GATT 1994 (“necessary to protect … animal … life or health”).
The panel found that the European Union had acted inconsistently with its obligations under Article 5.1.2 of the TBT Agreement because the conformity assessment procedures under the EU Seal Regime were incapable of enabling trade in qualifying products to take place as from the date of entry into force of the EU Seal Regime. With respect to the claims under Article 5.2.1 of the TBT Agreement, the panel concluded that the complainants had not demonstrated that the European Union acted inconsistently with its obligations to undertake and complete conformity assessment procedures as expeditiously as possible.
The panel rejected the claims under Article XI:1 of the GATT 1994, and, in light of the above findings of violation, did not consider it necessary to rule on the non-violation claims under Article XXIII:1(b) of the GATT 1994.
On 24 January 2014, Canada notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations developed by the panel. On 29 January 2014, the European Union notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations developed by the panel. On 24 March 2014, the Chair of the Appellate Body informed the DSB that the Appellate Body would not be able to circulate its report within 60 days nor within the 90-day time-frame provided for in Article 17.5 of the DSU due to the size of the appeals, and the number and complexity of issues raised. The Appellate Body estimated that the report would be circulated no later than 20 May 2014. On 16 May 2014, the Chair of the Appellate Body informed the DSB that due to the time required for translation and the caseload that the Appellate Body is currently facing, it would not be possible to circulate its report by 20 May 2014. The Appellate Body report would be circulated on 22 May 2014.
On 22 May 2014, the Appellate Body report was circulated to Members.
Summary of key findings
Canada and Norway each filed a Notice of Appeal on 24 January 2014. The European Union filed a Notice of Other Appeal on 29 January 2014.
The Appellate Body reversed the Panel's finding that the EU Seal Regime is a “technical regulation” within the meaning of Annex 1.1 to the TBT Agreement, and consequently declared moot and of no legal effect the Panel's conclusions under Articles 2.1, 2.2, 5.1.2, and 5.2.1 of the TBT Agreement. Specifically, the Appellate Body reversed the Panel's finding that the EU Seal Regime lays down “product characteristics” within the meaning of Annex 1.1. The Appellate Body declined to complete the legal analysis and thus did not rule on whether the EU Seal Regime lays down “related processes and production methods” within the meaning of Annex 1.1, given that this question had not been sufficiently explored by the Panel and the participants.
The Appellate Body upheld the Panel's finding that the legal standard for the non-discrimination obligations under Article 2.1 of the TBT Agreement does not apply equally to claims under Article I:1 and III:4 of the GATT 1994. Given that the European Union's appeal of the Panel's finding of inconsistency under Article I:1 of the GATT 1994 was based entirely on the alleged errors in the interpretation of that provision developed by the Panel, the Appellate Body also upheld the Panel's conclusion that the EU Seal Regime is inconsistent with Article I:1 because it does not “immediately and unconditionally” extend the same market access advantage to Canadian and Norwegian seal products that it accords to seal products originating from Greenland.
The Appellate Body upheld the Panel's finding that the EU Seal Regime is “necessary to protect public morals” within the meaning of Article XX(a) of the GATT 1994. As regards the chapeau of Article XX of the GATT 1994, the Appellate Body found that the Panel erred in applying the same legal test to the chapeau of Article XX as it applied to Article 2.1 of the TBT Agreement, instead of conducting an independent analysis of the consistency of the EU Seal Regime with the specific terms and requirements of the chapeau. The Appellate Body therefore reversed the Panel's findings under the chapeau, and consequently found that it did not need to address the participants' claims on appeal in relation to those findings. However, the Appellate Body completed the analysis and ultimately found, as did the Panel, that the European Union had not demonstrated that the EU Seal Regime meets the requirements of the chapeau of Article XX. Therefore, the Appellate Body concluded that the European Union had not justified the EU Seal Regime under Article XX of the GATT 1994.
At its meeting on 18 June 2014, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body report.
Reasonable period of time
At the DSB meeting on 10 July 2014, the European Union informed the DSB that it intended to implement the DSB recommendations and rulings in a manner that respected its WTO obligations and that it would need a reasonable period of time to do so. On 5 September 2014, Canada and the European Union informed the DSB that they had agreed that the reasonable period of time for the European Union to implement the DSB recommendations and rulings shall be 16 months from the date of adoption of the panel report. Accordingly, the reasonable period of time expires on 18 October 2015.
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