Brendan McGivern Partner White & Case LLP May 20, 2009 US – Continued Suspension and the Deference Standard BIICL - Ninth Annual WTO Conference Panel 4: View from the Bench and Bar: A Year in Review

WHITE & CASE 1 U.S. – Continued Suspension – Appellate Body decision Overview Key ruling on standard to be applied by WTO Panels when reviewing the SPS measures of WTO Members Appellate Body decision accords significant deference to national authorities on scientific issues Decision was made under SPS Agreement, but principles enunciated by the Appellate Body could readily apply under other agreements TBT Agreement GATT Article XX(b)

WHITE & CASE 2 U.S. – Continued Suspension – Background Ruling arose in the context of the EC – Hormones dispute 1996: EC Directive banned importation of hormone-treated beef 1997: Ban found to violate the SPS Agreement 1999: U.S. and Canada impose retaliatory sanctions

WHITE & CASE 3 U.S. – Continued Suspension – Background 2003: EC claims compliance EC argued that its new risk assessment provided adequate scientific justification for the ban U.S. and Canada reject recourse to compliance panel proceedings EC challenges the continued retaliation

WHITE & CASE 4 U.S. – Continued Suspension – Background SPS Article 5.1 requires that SPS measure must be based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health…. EC argued that its ban was now based on a risk assessment new Directive followed completion of scientific studies and research projects

WHITE & CASE 5 U.S. – Continued Suspension – Panel Report Panel referred to the clear and consistent answers of the experts it consulted, as well as the plain language of the EC studies concluded that the EC had not satisfied the requirements of the definition of a risk assessment EC implementing measure found to be not compatible with Article 5.1.

WHITE & CASE 6 U.S. – Continued Suspension – Appellate Body Report Standard of review: limited role of Panels Appellate Body found that the Panel applied an incorrect standard of review Panel has limited mandate to review the risk assessment performed by Member

WHITE & CASE 7 U.S. – Continued Suspension – Appellate Body Report Standard of review – limited role of Panels Panel going beyond limited mandate would: act as a risk assessor; substitute its own scientific judgment for that of the risk assessor; and make a de novo review. This would exceed the functions of a panel under DSU Article 11

WHITE & CASE 8 U.S. – Continued Suspension – Appellate Body Report Standard of review – role of panels in assessing SPS measure Appellate Body: …the review power of a panel is not to determine whether the risk assessment undertaken by a WTO Member is correct, but rather to determine whether that risk assessment is supported by coherent reasoning and respectable scientific evidence and is, in this sense, objectively justifiable.

WHITE & CASE 9 U.S. – Continued Suspension – Appellate Body Report Standard of review – role of panels in assessing SPS measure Appellate Body stated that role of Panel was to: a) identify the scientific basis and evidence relied upon in the risk assessment; b) verify that the scientific evidence comes from respected and qualified sources; and c) determine whether the reasoning articulated by the Member on the basis of the scientific evidence is objective and coherent.

WHITE & CASE 10 U.S. – Continued Suspension – Appellate Body Report Standard of review – SPS measure may be based on minority scientific views Scientific basis need not reflect the majority view may reflect divergent or minority views provided that it comes from a respected and qualified source and has the necessary scientific and methodological rigour to be considered reputable science. Views need not have been accepted by the broader scientific community, although they must be considered to be legitimate science according to the standards of the relevant scientific community.

WHITE & CASE 11 U.S. – Continued Suspension – Appellate Body Report Standard of review – SPS measure must be based on objective and coherent reasoning Review whether the particular conclusions drawn by the Member assessing the risk find sufficient support in the scientific evidence relied upon and whether the results of the risk assessment sufficiently warrant the SPS measure.

WHITE & CASE 12 U.S. – Continued Suspension – Appellate Body Report Standard of review – use of experts Panels may and should rely on the advice of experts But experts cannot be used by the Panel to go beyond its limited mandate Consultations with experts should not seek to test whether the experts would have done a risk assessment in the same way and would have reached the same conclusion as the risk assessor. Assistance of experts is thus constrained by the kind of review that the panel is required to undertake.

WHITE & CASE 13 U.S. – Continued Suspension – Appellate Body Report Standard of review – Panel errors Panel conducted a survey of the advice presented by the scientific experts Under the applicable standard of review, neither the Panel nor the experts it consulted were called upon to evaluate the correctness of the European Communities' risk assessment.

WHITE & CASE 14 U.S. – Continued Suspension – Appellate Body Report Standard of review – Panel errors Panel somewhat peremptorily decided what it considered to be the best science, rather than following the more limited exercise that its mandate required. It stressed that it was not the Panel's task to determine whether there is an appreciable risk of cancer arising from the consumption of meat treated with hormones. [emphasis added]

WHITE & CASE 15 U.S. – Continued Suspension – Appellate Body Report Standard of review – Panel errors Panel found to have failed to conduct an objective assessment of the facts of the case under DSU Article 11 Appellate Body reversed the Panel's finding that the 2003 Directive was not based on a risk assessment within the meaning of Article 5.1. but it could not complete the analysis and make a ruling itself under Article 5.1

WHITE & CASE 16 U.S. – Continued Suspension – Appellate Body Report Standard of review – applicability to other agreements TBT Agreement e.g. Articles 2.2, 5.4: measures to protect human health or safety GATT Article XX(b) measures to protect human life or health

WHITE & CASE 17 U.S. – Continued Suspension – Appellate Body Report Standard of review – implications Tests may be difficult to apply in practice What constitutes respected or qualified scientific evidence? Respected or qualified by what standard? When will reasoning of Member not be found to be objective or coherent? Deference likely in future cases

WHITE & CASE 18 U.S. – Continued Suspension – Appellate Body Report Standard of review – implications Future cases will determine how broadly this decision will be applied But potentially it is one of the most important decisions the Appellate Body has ever made

WHITE & CASE 19 Worldwide. For Our Clients. In this document, White & Case means the international legal practice comprising White & Case LLP; a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, corporations and undertakings.