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 Argentina.
On 30 August 2012, Argentina requested consultations with the United States concerning certain measures affecting the importation of animals, meat and other animal products from Argentina.
The specific measures challenged by Argentina are:
(i) the import prohibition of fresh (chilled or frozen) beef from Argentina embodied in the interim and final rule of the Animal and Plant Health Inspection Service (APHIS), which amend the regulations of the Code of Federal Regulations (CFR);
(ii) the failure to recognize certain areas of Argentina's territory as free of foot-and-mouth disease embodied in the APHIS Policy Regarding Importation of Animals and Animal Products; and
(iii) alleged undue delays in recognizing the animal health status of a region or in granting approval to export animals or animal products from that region with both types of delay occurring under procedures embodied in the US Code of Federal Regulations (CFR); and additional conditions on importation allegedly imposed by Section 737 of the Omnibus Act 2009.
Argentina claims that the challenged measures appear to be inconsistent with:
- Articles I:1, III:4 and XI:1 of the GATT 1994;
- Articles 1.1, 2.2, 2.3, 3.1, 3.3, 5.1, 5.2, 5.4, 5.6, 6.1, 6.2, 8 and Annex C.1, and Article 10.1 of the SPS Agreement; and
- Article XVI:4 of the WTO Agreement.
On 6 December 2012, Argentina requested the establishment of a panel. At its meeting on 17 December 2012, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
At its meeting on 28 January 2013, the DSB established a panel. Australia, China, the European Union, India and Korea reserved their third party rights. On 29 July 2013, Argentina requested the Director-General to compose the panel. On 8 August 2013, the Director-General composed the panel. On 7 March 2014, the Chair of the panel informed the DSB that, taking into account the scale and complexity of the dispute, the panel expects to issue its final report to the parties in early 2015.
On 24 July 2015, the panel report was circulated to Members.
Summary of key findings
This dispute concerns the United States' maintenance of an import prohibition on all Foot-and-Mouth disease (FMD) susceptible animals and animal products from Argentina imposed following an outbreak of FMD in Northern Argentina in 2001. The general ban is set forth in Section 94.1 of Title 9 of the United States' Code of Federal Regulations. Argentina requested re-authorization to import (i) fresh (chilled or frozen) beef from Northern Argentina and (ii) all FMD-susceptible animals and animal products from Patagonia in 2002.
Argentina claimed that the prohibition embodied in 9 CFR 94.1(b) is inconsistent with Articles 1.1 2.2, 2.3, 3.1, 3.3, 5.1, 5.2, 5.4, 5.6, 5.7, and 10.1 of the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) and Articles I:1 and XI:1 of the GATT 1994. With respect to the prohibition on all ruminant products from Patagonia, Argentina also claimed that the United States' measure was inconsistent with the regionalization provisions in Articles 6.1 and 6.2 of the SPS Agreement.
Argentina argued that the ban lacked scientific justification and was maintained contrary to international standards, without a valid risk assessment, and in a discriminatory manner that was more trade-restrictive than required to meet the US level of protection. Argentina also claimed that the United States had imposed an undue delay in the approval procedures on Argentina’s requests regarding authorization of imports of fresh beef and recognition of the Patagonia region as FMD-free. Argentina also argued that, with respect to products from Patagonia, the United States had not complied with its obligations to adapt its measures to pest- or disease-free areas and to recognize the concept that such areas exist. Finally, Argentina also made claims with respect to the way the United States determined its level of protection and whether the United States had properly accorded Argentina special and differential treatment as a developing country Member.
In response, the United States noted that FMD is considered to be one of the most infectious and economically devastating livestock diseases. The United States also explained that it had not had a case of FMD for more than 80 years and that livestock in the United States are not vaccinated against FMD. Thus an outbreak would be particularly devastating to the US economy. The United States asserted that the review by the Animal and Plant Health Inspection Service (APHIS) — the relevant agency of the Department of Agriculture — of Argentina’s applications for authorisation to import had been undertaken without undue delay in light of the need for new and updated information on the situation in Argentina. In that same vein, the United States argued that its measures were covered under the exemption in Article 5.7 of the SPS Agreement, which allows for measures to be adopted in cases where relevant scientific evidence is insufficient. The United States contended that, as the measures were covered by the exemption in Article 5.7, there could be no inconsistency with Articles 2.2, 5.1, 5.6 and 6.1 of the SPS Agreement.
The United States argued that its measures were based on the standards of the World Animal Health Organization (OIE) because APHIS's procedures follow the same approach as those embodied in the OIE Terrestrial Animal Health Code, in that they require an application from an exporting area and a review of that area's FMD status. However, the United States also argued that, in connection with the claim regarding Northern Argentina, the provisions of the Terrestrial Animal Health Code that call for permitting beef imports from countries that are FMD-free where vaccination is practised are not sufficient to achieve the United States' appropriate level of protection. The United States' position is that systematic vaccination introduces risks related to the immunological response within the vaccinated herd and thus an area or region that vaccinates cannot be considered FMD-free.
As in nearly all disputes brought under the SPS Agreement, the Panel consulted with scientific experts to assist it in evaluating the scientific evidence. In particular, experts were engaged in the areas of risk assessment techniques, veterinary practices, and surveillance in the context of foot-and-mouth disease. The Panel also consulted with the OIE concerning the operation and interpretation of its Terrestrial Animal Health Code.
The Panel found that:
- The United States' measures are inconsistent with Article 3.1 of the SPS Agreement (harmonization) because they are not based on the OIE Terrestrial Code, which is the relevant international standard;
- The United States did not undertake and complete the evaluation of Argentina's requests without undue delay as required by Article 8 and Annex C(1)(a) of the SPS Agreement;
- The United States' measures are inconsistent with Article 8 and Annex C(1)(b) of the SPS Agreement because the United States failed to inform Argentina, upon request, of the stage of its review procedures or to explain the delays incurred;
- The United States' measures do not fall within the scope of the exemption in Article 5.7 of the SPS Agreement because the United States did not seek to obtain additional information or review the measures within a reasonable period of time;
- The United States' measures were not maintained based on a risk assessment and thus are inconsistent with Articles 5.1 and 2.2 of the SPS Agreement.
- There is no positive obligation in Article 5.4 of the SPS Agreement (objective of minimizing negative trade effects when determining the appropriate level of protection) and thus no violation;
- The United States' measures are inconsistent with Article 5.6 (not more trade-restrictive than required to achieve the United States' appropriate level of protection (ALOP)), because alternative measures exist that achieve the ALOP, are significantly less trade restrictive, and are technically and economically feasible;
- The United States' measures are inconsistent with Article 2.3 of the SPS Agreement (non-discrimination) because they arbitrarily and unjustifiably discriminate between Members where identical or similar conditions prevail (Northern Argentina and Uruguay on the one hand and Patagonia and Santa Catarina (Brazil) on the other) and are applied in a manner which constitutes a disguised restriction on international trade;
- The United States' measures as applied to Patagonia are inconsistent with Article 6.1 of the SPS Agreement because they are not adapted to the SPS characteristics of the Patagonia region;
- Argentina did not make a prima facie case that the United States' measures are inconsistent with Article 10.1 of the SPS Agreement requiring that the United States take account of Argentina's special needs as a developing country member;
- In light of the above, the United States' measures are consequentially inconsistent with Articles 1 and 3.3 of the SPS Agreement;
Having found that the United States' measures are inconsistent with the above provisions of the SPS Agreement, the Panel exercised judicial economy on Argentina's claims under Articles I:1 (MFN) and XI:1 of the GATT 1994 (Quantitative Restrictions) as well as the United States' defence under Article XX(b) (necessary to protect animal life or health) of the GATT 1994.
At its meeting on 31 August 2015, the DSB adopted the panel report.
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