DISPUTE SETTLEMENT

DS: India — Measures Concerning the Importation of Certain Agricultural Products

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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Current status

 

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Key facts

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 14 October 2014
Appellate Body Report circulated: 4 June 2015

  

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Latest document

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the United States

On 6 March 2012, the United States requested consultations with India with respect to the prohibitions imposed by India on the importation of various agricultural products from the United States purportedly because of concerns related to Avian Influenza. 

The measures at issue are: the Indian Livestock Importation Act, 1898 (9 of 1898) ("Livestock Act"); a number of orders issued by India's Department of Animal Husbandry, Dairying, and Fisheries pursuant to the Livestock Act, most recently S.O. 1663(E); as well as any amendments, related measures, or implementing measures.

The United States claims that the measures appear to be inconsistent with:

  • Articles 2.2, 2.3, 3.1, 5.1, 5.2, 5.5, 5.6, 5.7, 6.1, 6.2, 7, and Annex B, paragraphs 2, 5 and 6 of the SPS Agreement; and
     
  • Articles I and XI of the GATT 1994.

The United States also claims that the measures appear to nullify or impair the benefits accruing to the United States directly or indirectly under the cited agreements.

On 15 March 2012, Colombia requested to join the consultations.

On 11 May 2012, the United States requested the establishment of a panel.  At its meeting on 24 May 2012, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 25 June 2012, the DSB established a panel.  China, Colombia, Ecuador, the European Union, Guatemala, Japan and Viet Nam reserved their third party rights.  Subsequently, Argentina, Australia and Brazil reserved their third-party rights. On 7 February 2013, the United States requested the Director-General to determine the composition of the panel.  On 18 February 2013, the Director-General composed the panel. On 5 August 2013, the Chair of the panel informed the DSB that the panel expects to issue its final report to the parties no sooner than June 2014, taking into account the scale and complexity of the dispute.

On 14 October 2014, the panel report was circulated to Members.

This dispute concerns India's import prohibition affecting certain agricultural products from countries reporting Notifiable Avian Influenza (NAI) to the World Organisation for Animal Health (OIE). This import prohibition is maintained through India's Avian Influenza (AI) measures, namely:

  • the Livestock Importation Act 1898 (9 of 1898) (Livestock Act) published on 12 August 1898, as amended by the Livestock Importation (Amendment) Act 2001 (No. 28 of 2001) (Livestock Amendment Act), and published in the Gazette of India on 29 August 2001; and
     
  • Statutory Order (S.O.) 1663(E) issued by India's Department of Animal Husbandry, Dairying, and Fisheries (DAHD) pursuant to the Livestock Act and published in the Gazette of India on 19 July 2011.

The United States complained that India's AI measures amounted to an import prohibition that was not based on the relevant international standard (the OIE Terrestrial Code) or on a scientific risk assessment. In particular, the United States requested the Panel to find that India's AI measures were inconsistent with a number of provisions of the Sanitary and Phytosanitary (SPS) Agreement: Article 2.2 (that SPS measures be applied only to the extent necessary to protect human, animal or plant life or health and the obligation to base these measures upon scientific principles), Article 2.3 (prohibition of arbitrary or unjustifiable discrimination), Article 3.1 (harmonization of SPS measures based on international standards), Articles 5.1 and 5.2 (risk assessment obligations), Article 5.5 (prohibition of arbitrary or unjustifiable distinctions in appropriate levels of protection (ALOPs)), Article 5.6 (obligation to ensure that SPS measures are not more trade-restrictive than required), Articles 6.1 and 6.2 (adaptation of measures to regional conditions), and Article 7, Annex B(2) and B(5)(a)-(d) (publication, notification and transparency requirements) of the SPS Agreement, as well as Article XI of the GATT 1994 (general elimination of quantitative restrictions).

India's main argument in response was that its AI measures “conform to” an international standard (OIE Terrestrial Code and, in particular, Chapter 10.4 of the Code), pursuant to Article 3.2 of the SPS Agreement, and that consequently, compliance with other provisions of the SPS Agreement (including those requiring that SPS measures have a scientific foundation) and the GATT 1994 must be presumed. Accordingly, India maintained that it was not under an obligation to provide to the Panel the scientific risk assessment conducted pursuant to Articles 5.1 and 5.2 for its AI measures, and that its AI measures were based on scientific principles and evidence in accordance with Article 2.2 of the SPS Agreement. India also submitted to the Panel two separate requests for a preliminary ruling concerning the consistency of the United States' panel request with Article 6.2 of the DSU (identify specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly).

As with the majority of SPS cases, the Panel decided to seek advice on certain aspects of the dispute from experts and international organizations. The Panel  consulted with the OIE on the interpretation of the OIE Terrestrial Code and with three individual experts on AI surveillance regimes with particular respect to India's domestic measures and its disease situation.

With respect to India's first request for a preliminary ruling, the Panel issued a preliminary ruling on 22 May 2013 that was circulated to Members on 28 June 2013 and was later incorporated by reference into the Panel's Report. The Panel found, inter alia, that:

  • The panel request was sufficiently precise in identifying the measure at issue as required by Article 6.2 of the DSU; and
     
  • The products listed in S.O. 1663(E) and the United States' panel request were within the scope of the dispute.

The Panel responded to India's second request for a preliminary ruling in its Report. The Panel found, inter alia, that:

  • Two of India's legal instruments that had not been explicitly mentioned in the United States' panel request were not measures at issue; and
     
  • The United States was under no obligation to identify in its panel request India's rules applicable to domestic products in order to be able to rely on them in support of its arguments under Article 2.3 of the SPS Agreement.

In respect of the United States' claims pursuant to the SPS Agreement, the Panel found as a preliminary matter that India's AI measures are SPS measures within the meaning of Annex A(1) of the SPS Agreement and are subject to the disciplines of the Agreement.

The Panel further found that:

  • India's AI measures are inconsistent with Article 3.1 of the SPS Agreement because they are not “based on” the relevant international standard (Chapter 10.4 of the OIE Terrestrial Code). Furthermore, India's AI measures do not “conform to” the relevant international standard (Chapter 10.4 of the OIE Terrestrial Code), within the meaning of Article 3.2 of the SPS Agreement;
     
  • India's AI measures are inconsistent with Articles 5.1, 5.2 and 2.2 of the SPS Agreement because they are not based on a risk assessment;
     
  • India's AI measures are inconsistent with Article 2.3 of the SPS Agreement because they arbitrarily and unjustifiably discriminate between Members where identical or similar conditions prevail and are applied in a manner which constitutes a disguised restriction on international trade;
     
  • India's AI measures are inconsistent with Articles 5.6 and 2.2 of the SPS Agreement because they are significantly more trade-restrictive than required to achieve India's appropriate level of protection (ALOP) with respect to the products covered by Chapter 10.4 of the OIE Terrestrial Code, and therefore are also applied beyond the extent necessary to protect human and animal life or health;
     
  • India's AI measures are inconsistent with Articles 6.2 and 6.1 of the SPS Agreement because they do not recognize the concept of disease-free areas and areas of low disease prevalence, and because they are not adapted to the SPS characteristics of these areas;
     
  • India acted inconsistently with Article 7, Annex B(2) and Annex B(5)(a), (b) and (d) of the SPS Agreement because it failed to comply with a number of notification and publication requirements therein.

Having found that India's AI measures are inconsistent with Article 2.3 of the SPS Agreement, the Panel found it unnecessary to rule on the United States' alternative claim under Article 5.5 of the SPS Agreement. The Panel also found that the United States failed to make a prima facie case of violation of Annex B(5)(c) of the SPS Agreement (provide upon request to other Members copies of proposed regulations).

Finally, having found that India's AI measures are inconsistent with the provisions of the SPS Agreement as described above, the Panel found it unnecessary to rule on the United States' claim under Article XI of the GATT 1994 (general elimination of quantitative restrictions).

On 6 November 2014, India and the United States requested the DSB to adopt a draft decision extending the 60-day time period stipulated in Article 16.4 of the DSU, to 26 January 2015. At its meeting on 18 November 2014, the DSB agreed that, upon a request by India or the United States, the DSB, shall no later than 26 January 2015, adopt the panel report, unless the DSB decides by consensus not to do so or India or the United States notifies the DSB of its decision to appeal pursuant to Article 16.4 of the DSU.

On 26 January 2015, India filed an appeal challenging several key findings of the Panel. On 4 June 2015, the Appellate Body issued its Report in this dispute.

Articles 2.2, 5.1, and 5.2 of the SPS Agreement. The Appellate Body agreed with the Panel that its finding, that India's AI measures are inconsistent with Articles 5.1 and 5.2 because they are not based on a risk assessment, raised a presumption that those measures are also inconsistent with Article 2.2. However, the Appellate Body found that, by failing to consider whether such presumption had been rebutted by arguments and evidence presented by India to establish a scientific basis for its import prohibitions on fresh poultry meat and eggs from countries reporting low pathogenicity AI (LPNAI), the Panel erred in its application of Article 2.2. The Appellate Body thus reversed, in part, the Panel's findings that India's AI measures are inconsistent with Article 2.2 insofar as those findings concern India's import prohibitions on fresh poultry meat and eggs from countries reporting LPNAI. The Appellate Body was unable to complete the legal analysis under Article 2.2. The Appellate Body also upheld the Panel's findings that India's AI measures are inconsistent with Articles 5.1 and 5.2.

Articles 3.1 and 3.2 of the SPS Agreement. The Appellate Body found that the Panel did not, as India contended, act inconsistently with Article 11.2 of the SPS Agreement or Article 13.2 of the DSU in consulting with the OIE regarding the meaning of the OIE Terrestrial Code. After also rejecting claims raised by India under Article 11 of the DSU, the Appellate Body upheld the Panel's findings under Articles 3.1 and 3.2 that India's AI measures are neither “based on”, nor “conform to”, the relevant international standard (i.e., Chapter 10.4 of the OIE Terrestrial Code).

Article 6 of the SPS Agreement. The Appellate Body found that the Panel did not, as contended by India, err in interpreting the relationship between Article 6.1 and Article 6.3. The Appellate Body also found that, in applying Article 6.2 to determine whether India's AI measures recognize the concepts of disease-free areas and areas of low disease prevalence in respect of AI, the Panel did not err in taking account of both the instruments through which India maintains its import prohibitions (the Livestock Act, as amended, and S.O. 1663(E)), rather than relying on the parent legislation (the Livestock Act, as amended) alone. The Appellate Body endorsed the Panel's finding that India's AI measures violate Article 6 because they require the prohibition of all imports from any country that has notified AI to the OIE, and thus foreclose the possibility of allowing imports from AI-free areas within such countries. For these reasons, and after also rejecting claims raised by India under Article 11 of the DSU, the Appellate Body upheld the Panel's findings that India's AI measures are inconsistent with Articles 6.1 and 6.2.

Article 5.6 and Article 2.2 of the SPS Agreement. In addressing India's claim that the Panel erred in its application of Article 5.6 to India's AI measures, the Appellate Body found that the Panel did not err in finding that the United States had identified alternative measures that would achieve India's appropriate level of protection, and that the Panel did not fail to identify the alternative measures with precision. After also rejecting claims raised by India under Article 11 of the DSU, the Appellate Body upheld the Panel's findings that India's AI measures are inconsistent with Article 5.6 because they are significantly more trade-restrictive than required to achieve India's appropriate level of protection with respect to the products covered by Chapter 10.4 of the OIE Terrestrial Code, and found it unnecessary to address the Panel's finding under Article 2.2.

Article 2.3 of the SPS Agreement. The Appellate Body found that India had not established that the Panel acted inconsistently with Article 11 of the DSU in its consultations with the individual experts regarding the issue of whether LPNAI is exotic to India, or by requiring India to prove that LPNAI is exotic to India. The Appellate Body therefore upheld the Panel's finding that India's AI measures are inconsistent with the first sentence of Article 2.3 because they arbitrarily and unjustifiably discriminate between Members where identical or similar conditions prevail.

At its meeting on 19 June 2015, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body report.

 

Reasonable period of time

On 13 July 2015, India informed the DSB that it intended to implement the DSB's recommendations and rulings in a manner that respects its WTO obligations. India added that it would need a reasonable period of time to do so.

On 8 December 2015, India and the United States informed the DSB that they had agreed that the reasonable period of time for India to implement the DSB recommendations and rulings shall be 12 months from the date of adoption of the Appellate Body and panel reports. Accordingly, the reasonable period of time was set to expire on 19 June 2016.

 

Proceedings under Article 22 of the DSU (remedies)

On 7 July 2016, the United States requested the authorization of the DSB to suspend concessions or other obligations pursuant to Article 22.2 of the DSU because India has failed to comply with the recommendations and rulings of the DSB in this dispute within the reasonable period of time for India to do so. On 18 July 2016, India objected to the level of suspension of concessions or other obligations and referred the matter to arbitration pursuant to Article 22.6 of the DSU. At the DSB meeting on 19 July 2016, it was agreed that the matter was referred to arbitration pursuant to Article 22.6 of the DSU.

The Arbitrator was composed by the original panel panelists.

 

Implementation of adopted reports

On 18 July 2016, besides objecting to the level of suspension of concessions or other obligations claimed by the United States in the above request under Article 22.2 of the DSU, India informed the DSB that it had adopted the necessary measures to comply with the recommendations and rulings in this dispute. In particular, India informed the DSB that it had issued a notification that came into effect on 8 July 2016, allowing the importation of poultry and poultry products from countries, zones/compartments free from avian influenza virus, and providing for the process for recognition of such areas. On 22 September 2016, India informed the DSB that it had adopted additional measures to address concerns bilaterally expressed by the United States in respect of the measures notified on 18 July 2016. India considered that through these measures it had complied with the recommendations of the DSB by bringing its measures into conformity with its WTO obligations. India thus urged the United States to terminate the Article 22.6 proceedings in this dispute. In addition, India noted that it had unsuccessfully attempted to reach a sequencing agreement with the United States.

On 2 March 2017, India informed the DSB that, in February 2017, it made subsequent amendments to the measures it adopted to comply with the DBS's rulings and recommendations in this dispute and that it had made all efforts to bilaterally resolve this dispute. India thus urged the United States to terminate the Article 22.6 proceedings in this dispute. India also noted that it had not yet reached a sequencing agreement with the United States.

 

Compliance proceedings (recourse by India)

On 6 April 2017, India requested the establishment of a compliance panel. India maintained that it had complied with the DSB's rulings and recommendations by adopting measures for this purpose that are consistent with its WTO obligations. At its meeting on 19 April 2017, the DSB deferred the establishment of a compliance panel.

At its meeting on 22 May 2017, the DSB agreed, pursuant to Article 21.5 of the DSU, to refer to the original panel, if possible, the matter raised by India. Australia, Brazil, Canada, China, the European Union, Guatemala, Japan, Kazakhstan, Korea, the Russian Federation, Singapore and Viet Nam reserved their third-party rights.

The compliance panel was composed by the original panelists. On 23 November 2017, the Chair of the compliance panel informed the DSB that, due to the complexity of the issues in dispute, the compliance panel expected to issue its final report to the parties by the end of May 2018. In its communication, the Chair also informed the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation.

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