Oral Statement of Australia Before the Appellate Body

United States – Continued Suspension of Obligations in the EC – Hormones Dispute (DS320)
Canada – Continued Suspension of Obligations in the EC – Hormones Dispute (DS321)

28 July 2008

Members of the Division

1. These appeals relate to the complaints initiated by the European Communities against measures imposed by the United States and Canada.  In essence, these disputes concern the point at which a party’s right to suspend concessions and other obligations, previously authorised by the DSB, ceases where there is disagreement between the parties as to compliance – the so-called “post-retaliation” phase of dispute settlement.  As such, the disputes concern the interplay of some of the rules and procedures of the DSU. 

2. Australia is a third participant in these appeals because of our systemic interests in the proper functioning of the dispute settlement system.  Our views on some specific aspects have been set out in our written submission.  For now, I would like to add the following comments. 

3. In Australia’s view, it is important to distinguish these disputes, the United Statesand CanadaHormones (Continued Suspension) disputes, from the earlier European CommunitiesHormones disputes.  Although the factual circumstances are closely related and the current disputes form part of a continuum of events with earlier disputes, the terms of reference of the various disputes are separate and distinct.  In the disputes to which these hearings relate, the terms of reference are established by the measures and claims identified by the European Communities in its panel establishment requests. 

4. Australia is conscious that Article 3.3 of the DSU expressly establishes the prompt settlement of disputes as a fundamental principle of the DSU.  However, we think it important that the issues raised in the various disputes be properly considered within the framework of the terms of reference applicable to each of the disputes.  We also think it important the issues raised in various disputes be securely anchored within the legal framework of the text of the DSU, notwithstanding that it may not provide all of the answers sought by the parties to the disputes.  We are conscious too that Articles 3.3 and 19.2 of the DSU expressly provide that the recommendations and rulings of the DSB, and the findings and recommendations of panels and the Appellate Body, cannot add to or diminish the rights and obligations provided in the covered agreements. 

5. Nevertheless, Australia hopes that the findings of the Appellate Body in these current disputes will assist the parties in the earlier proceedings to find a way forward to resolve the earlier disputes.  In particular, we believe it is open to the Appellate Body to find, within the terms of reference of these current disputes, that the parties should have invoked Article 21.5 of the DSU to resolve the earlier EC – Hormones disputes. 

6. Finally, in relation to the review by the Panels of the European Communities’ Directive 2003/74/EC, Australia emphasises the importance of a panel applying the appropriate standard of review when it assesses the scientific basis of SPS measures that have been previously evaluated as part of the mandatory risk assessment process.  In Australia’s view, contrary to the approach of the principal parties, application of the appropriate standard of review by a panel in this context is a distinct legal issue from a panel’s discretion in relation to its appreciation of evidence as the trier of facts. 

7. The standard of review sets the parameters for a panel’s fact-finding role and, within those parameters, a panel may exercise its discretion as the trier of fact.  Accordingly, Australia considers that the Appellate Body is not constrained from intervening in a panel’s assessment where it has not applied the appropriate standard of review because it is not a question of the panel’s appreciation of evidence.

Thank you

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Last Updated: 9 January 2013