1.

DS367: Australia — Measures Affecting the Importation of Apples from

New Zealand

Case no : DS367
Complainant : New Zealand
Respondent : Australia
Third parties : Chile; European Communities; Japan; Pakistan; Chinese Taipei;
United States

Introduction:

Formally filed against Australia, the case is titled "Australia – Measures

Affecting the Importation of Apples from New Zealand" (DS367). New Zealand
started the lawsuit. It was filed on August 31, 2007, and it dealt with Australia's
strict phytosanitary laws, which essentially prevented apples from New Zealand
from being sold in Australia.The New Zealand fire blight case refers to a
long-standing dispute between New Zealand and Australia regarding the import
of New Zealand apples. Fire blight is a devastating bacterial disease that affects
apples, pears, and other members of the Rosaceae family. New Zealand has
been free of fire blight, but the disease was introduced in the early 20th century
through the import of apple or pear nursery trees from California. Australia, on
the other hand, is believed to be free of fire blight.
In 2007, New Zealand initiated a dispute settlement case against Australia at the
World Trade Organization (WTO), challenging Australia's phytosanitary
measures against fire blight. The WTO Appellate Body upheld the ruling that
Japanese rules on fire blight were not soundly based on scientific evidence and
were more trade-restrictive than necessary. This case reinforced the principles of
the SPS Agreement, particularly the necessity of basing phytosanitary measures
on robust scientific risk assessments and ensuring they are not excessively
trade-restrictive

Issue:

● Phytosanitary Measures: Fears of fire blight (Erwinia amylovora),

European canker (Nectria galligena), and apple leaf curling midge
 (Dasineura mali) led to Australia's import restrictions. The methods
included post-harvest treatments, particular packinghouse procedures, and
orchard inspections.

● Scientific Rationale: According to New Zealand, Australia's actions were

not supported by science, unduly restrictive of trade, and incompatible
with the WTO's Agreement on the Application of Sanitary and
Phytosanitary Measures (SPS Agreement).

● Risk Assessment: Whether Australia's risk assessment procedure

complied with the requirements outlined in the SPS Agreement was a
crucial point of contention. New Zealand argued that Australia's
precautions were unnecessary since there was no chance of disease spread
through its apples.

WTO Findings:

1. Inconsistency with SPS Agreement:

● The Panel determined that Australia's import restrictions on New
Zealand apples were inconsistent with several provisions of the
SPS Agreement. These measures, designed to mitigate the risk of
plant diseases like fire blight, European canker, and apple leaf
curling midge, were found to be problematic.
● Specifically, Australia's measures were not based on a proper risk
assessment, as required by the SPS Agreement. The lack of a
thorough risk assessment meant that Australia's restrictions were
not adequately tailored to the actual risks posed by the diseases.
2. Scientific Evidence:
● The Panel scrutinized the scientific evidence presented by both
parties. It concluded that the evidence did not support the stringent
measures imposed by Australia.
● Despite concerns over the transmission of diseases through
commercially traded apples, the Panel found that the actual risk
was very low. This undermined the rationale behind Australia's
restrictive measures, highlighting the disparity between the
perceived risk and the scientific evidence.
3. Proportionality and Necessity:
 ● The Panel emphasized the principles of proportionality and
necessity in imposing sanitary measures. It stressed that measures
should be proportionate to the actual risks posed by the diseases
and should not be more trade-restrictive than necessary to achieve
the desired level of sanitary protection.
● Australia's measures were deemed disproportionate and overly
restrictive. The Panel highlighted the need for measures that strike
a balance between safeguarding plant health and facilitating
international trade, ensuring that the measures are not overly
burdensome on trade partners.

These findings illuminated the importance of adhering to scientific principles

and conducting robust risk assessments in the formulation of sanitary measures.
Furthermore, they underscored the need for measures to be proportionate and
necessary, avoiding undue trade restrictions while still achieving the desired
level of sanitary protection. Overall, the Panel's ruling served as a critical
reminder of the principles enshrined in the SPS Agreement and their
significance in resolving trade disputes related to phytosanitary measures

Impact:

The resolution of trade disputes has a significant impact on global trade

relations, fostering economic integration and setting important precedents for
the application of international trade standards. The World Trade Organization
(WTO) plays a crucial role in resolving these disputes through its dispute
settlement mechanism, which has been successful in resolving over 600 disputes
since its inception. This mechanism provides a structured process for settling
disputes, including consultations, panel proceedings, and compliance
monitoring, ensuring a fair and timely resolution of trade disputes.
The impact of trade dispute resolution can be seen in various aspects:

Trade Relations
The resolution of trade disputes facilitates the resumption of trade between
countries, benefiting exporters and fostering greater economic integration. For
example, the resolution of a dispute between New Zealand and Australia
enabled the resumption of apple trade, benefiting New Zealand apple exporters
and promoting economic integration between the two countries.

WTO Jurisprudence
Trade disputes also contribute to the development of WTO jurisprudence,
reinforcing the principles of WTO agreements and setting important precedents
for future disputes. The resolution of a dispute involving phytosanitary
measures, for instance, reinforced the principles of the SPS Agreement,
emphasizing the need for scientific risk assessments and ensuring measures are
not excessively trade-restrictive.

Global Trade Standards

The resolution of trade disputes involving phytosanitary concerns sets a
precedent for other countries and disputes, highlighting the importance of using
scientific evidence in the formulation of trade-related sanitary measures. This
reinforces the need for countries to base their trade policies on scientific
evidence, promoting a more predictable and stable global trading environment.
In summary, the resolution of trade disputes has a significant impact on global
trade relations, WTO jurisprudence, and global trade standards. It facilitates the
resumption of trade, reinforces WTO principles, and sets important precedents
for the application of international trade standards.

Articles:

1. Article 2.2: This article requires that sanitary and phytosanitary measures
be based on scientific principles and evidence. It prohibits measures that
are not maintained based on sufficient scientific evidence. In this case,
New Zealand argued that Australia's import restrictions lacked adequate
scientific justification, violating Article 2.2.
2. Article 5.1: This article mandates that members must conduct risk
assessments when implementing sanitary and phytosanitary measures.
These assessments should be based on available scientific evidence and
relevant processes. New Zealand contended that Australia's risk
 assessments did not meet the requirements of Article 5.1, as they were not
properly conducted or based on sound scientific principles.
3. Article 5.6: This article requires that sanitary and phytosanitary measures
be applied only to the extent necessary to protect human, animal, or plant
life or health. Measures should not be more trade-restrictive than
necessary. New Zealand argued that Australia's import restrictions were
overly restrictive and not proportionate to the actual risk posed by fire
blight, violating Article 5.6.
4. Article 5.5: This article prohibits members from making arbitrary or
unjustifiable distinctions in the levels of protection they consider
appropriate in different situations. New Zealand raised concerns that
Australia's measures might have been applied inconsistently or
discriminately against New Zealand apples, breaching Article 5.5 of the
SPS Agreement.

These articles provided the legal framework for evaluating the conformity of

Australia's import restrictions with WTO rules and formed the basis for New

Zealand's arguments in the dispute. Each article addresses specific aspects of the

SPS Agreement related to scientific justification, risk assessment,

proportionality, and non-discrimination, which were central to the case.

2. DS135: European Communities — Measures Affecting Asbestos and

Products Containing Asbestos (EC Asbestos)

Case no : DS135
Complainant :Canada
Respondent :European Communities
Third parties :Brazil; Zimbabwe; United States

Introduction:
The DS (Dispute Settlement) Asbestos case refers to the dispute between
Canada and the European Communities (EC) regarding measures affecting
asbestos and products containing asbestos. Canada alleged that the measures
imposed by France, particularly the Decree of 24 December 1996, violated
various agreements, including the SPS Agreement, TBT Agreement, and GATT
1994. The dispute involved the prohibition of asbestos and asbestos-containing
products, including a ban on imports of such goods. The Panel and Appellate
Body proceedings found that the French Decree prohibiting asbestos had not
been shown to be inconsistent with the EC's obligations under the WTO
agreements. The Appellate Body reversed some of the Panel's findings, ruling
on issues related to the TBT Agreement, likeness of products under Article III:4
of the GATT 1994, and the health exemption in Article XX(b) of the GATT.
Ultimately, the Appellate Body upheld the Panel's conclusion that the French
Decree was necessary to protect human life or health.

Issues

1. Public Health vs. Trade Liberalization:

● Public Health Concerns: Asbestos is a well-documented carcinogen
linked to diseases such as mesothelioma, lung cancer, and
asbestosis. France's ban aimed to protect public health by
preventing exposure to these harmful substances.
● Trade Restrictions: Canada claimed that the ban was a disguised
restriction on international trade and that alternative, safer uses of
asbestos should be considered.
2. Technical Barriers to Trade:
● The case involved the interpretation of the Agreement on Technical
Barriers to Trade (TBT Agreement), particularly whether the
French ban constituted an unnecessary obstacle to international
trade.
3. General Agreement on Tariffs and Trade (GATT):
● Canada argued that the French measures violated several
provisions of the GATT 1994, including Article XI (prohibition of
quantitative restrictions) and Article III (national treatment).

Framework

1. Agreement on Technical Barriers to Trade (TBT Agreement):

● Article 2.2: This article mandates that technical regulations should
not be more trade-restrictive than necessary to achieve a legitimate
 objective, which in this case included the protection of human
health.
2. General Agreement on Tariffs and Trade (GATT 1994):
● Article XX(b): Allows exceptions to trade obligations for measures
necessary to protect human, animal, or plant life or health.
● Article III: Addresses national treatment, requiring that imported
products be treated no less favorably than like domestic products.
● Article XI: Prohibits quantitative restrictions on imports or exports.

Panel and Appellate Body Findings

1. Panel Report:
● The WTO panel concluded that asbestos and asbestos-containing
products were dangerous and that France’s ban fell within the
exceptions allowed under Article XX(b) of GATT 1994.
2. Appellate Body Report:
● The Appellate Body upheld the panel’s findings, emphasizing the
right of WTO members to determine the level of protection for
human health they deem appropriate. It recognized that the
measures were justified under Article XX(b), as they were
necessary to protect human health and life from the risks associated
with asbestos.

Impacts

1. Health and Safety:

● The ruling affirmed the importance of public health measures and
provided WTO members with the reassurance that they could
implement protective regulations even if these measures had
trade-restrictive effects.
2. Trade Policy:
● The decision highlighted the balance between upholding trade
liberalization principles and recognizing the legitimacy of health
and safety regulations, thereby influencing future disputes
involving health and environmental standards.
3. Precedent for Future Cases:
● The case set a precedent for how the WTO would handle conflicts
between trade obligations and public health measures. It reinforced
the idea that trade regulations must be balanced with the sovereign
right of countries to protect their citizens from serious health risks.