Relationship between Article 5.1 and Article 5.7 of the SPS

The Panel relied on the three elements established by the Appellate Body in EC–Tariff Preference as a ground to examine the relationship between Article 5.1 and

Article 5.7 of the SPS Agreement.⁹⁷ The Panel stated that it could characterize Article 5.7 as a right in relation to Article 5.1 if firstly the relationship between these two provisions is one “where one provision permits, in certain circumstances, behavior that would otherwise be inconsistent with an obligation in another provision;

secondly one of the two provisions refers to the other provision; lastly where one of the provisions suggests that the obligation is not applicable to the said measure.”⁹⁸

With respect to the first element, the Panel recalled the previous Appellate Body ruling, which stated that “relevant scientific evidence will be ‘insufficient’ within the meaning of Article 5.7 if the body of available scientific evidence does not allow, in quantitative or qualitative terms, the performance of an adequate assessment of risks

97 In spite of the Panel’s fitfulness to previous WTO ruling, there is critique regarding the consistency and appropriateness of the current WTO jurisprudence on “rules” and “exceptions. See Simon Lester, WTO—Sanitary and Phytosanitary Measures Agreement—rules/exception—international Law as interpretive tool, 101 AM.J.INT’L L. 453, 458 (2007).

98 EC–Tariff Preferences, supra note 80, para. 88.

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as required under Article 5.1.”⁹⁹ In effect, the Panel correctly found that any kind of risk assessment taken under Article 5.7 would not need to meet the requirement set by Article 5.1 and as defined in Annex A(4).¹⁰⁰ Therefore, Article 5.7 satisfies the first criterion given that Article 5.7 permits Members to do what would be prohibited under Article 5.1.

On the second element, although Article 5.7 or Article 5.1 does not refer to each other explicitly, it was observed by the Panel that Article 5.7 contains an implicit reference to Article 5.1.¹⁰¹ The phrase “a more objective risk assessment” specified in the second sentence of Article 5.7 was considered to refer to a risk assessment required by Article 5.1 as defined in Annex A(4).¹⁰² Furthermore, it was recalled that the Appellate Body in Japan-Apples has made the ruling that the insufficiency of relevant scientific evidence embodied in the first sentence of Article 5.7 does not allow the fulfillment of an assessment of risks as required under Article 5.1.¹⁰³ Based on these two reasons, the Panel thus found the existence in Article 5.7 of an

99 It seems that the Panel made a mistake here. In footnote 1848 of this Panel Report, it referred to paragraph 92 of Japan–Agriculture II when quoting this statement. However, there is no correspondent part in that AB report. That statement shall be found in paragraph 179 of the AB report in Japan–Apples.

100 See EC–Biotech Products, supra note 10, paras. 7.2991 & 7.2992.

101 Id. para. 7.2994.

102 Id.

103 Id.

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implicit reference to Article 5.1. Therefore, the second requirement is fulfilled.¹⁰⁴ Thirdly, by looking at the opening phrase of Article 5.7 which provides that “in case where relevant scientific evidence is insufficient,” it was found that the obligation in Articles 5.1 that requires Members to conduct an alleged risk assessment is not applicable to measures permissible under Article 5.7.¹⁰⁵ Furthermore, the Panel also secured the support from the analysis given in EC-Hormones where the Appellate Body affirmed the finding of the Panel that Article 5.1 may be viewed as a specific application of the obligations provided for in Article 2.2.¹⁰⁶ Noting that Article 5.7 may literally exempt from Article 2.2’s application and by classifying Articles 2.2 and 5.1 as same footing rule help to imply that Article 5.1 is not applicable in situations covered by Article 5.7. Hence, the third requirement is also met.

Since the test set forth in EC-Tariff Preference can be applied to the relationship between Article 5.1 and Article 5.7, the Panel reached the conclusion that Article 5.7

104 Id.

105 Id. para. 7.2995.

106 The Appellate Body has agreed that Article 5.1 may be viewed as a specific application of the basic obligation contained in Article 2.2. Therefore, the Panel found that “[s]ince Article 5.1 is not applicable in situation where Article 2.2 is not applicable, the clause ‘except as provided for in paragraph 7 of Article 5’ in Article 2.2 necessarily implies that Article 5.1 cannot be applicable in situations covered by Article 5.7.

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shall be construed as a right, instead of an exception to Article 5.1 and shall operate as a qualified exemption from the obligation under Article 5.1.¹⁰⁷ In effect, if a measure cannot satisfy the four cumulative requirements of Article 5.7, the obligation of Article 5.1 shall be applicable to the measure at issue, provided that there are no other elements which render Article 5.1 inapplicable.¹⁰⁸

The Panel, in view of the specific circumstances in this case,¹⁰⁹ following the order of analysis used by the Panels in Japan – Agricultural Products II and Japan –Apples in dealing with the consistency of the challenged measures with

Articles 2.2 and 5.7, decided to begin its analysis from Article 5.1.¹¹⁰ Under this approach, if the challenged measure is found consistent with Article 5.1, there is no need to further examine its consistency with Article 5.7. If the measure is found inconsistent with Article 5.1, then the Panel shall examine its consistency with Article 5.7. If the measure is found consistent with Article 5.7, then Article 5.1 is not applicable, and the Panel would consequently need to conclude that the measure is not inconsistent with Article 5.1. On the contrary, if the safeguard measure were inconsistent with Article 5.7, then Article 5.1 would be applicable. The final

107 EC–Biotech Products, supra note 10, para. 7.2997.

108 Id. para. 7.2998.

109 From the view of Panel, the critical legal issue in this case is whether the measure is consistent with Article 5.1, instead of Article 5.7. See id. para. 7.3006.

110 See id. para. 7.3006.

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conclusion can be reached that the challenged measure is inconsistent with Article 5.1.¹¹¹ The application sequence can be illustrated as the following chart:

Chart II: Application Sequence of Articles 5.1 and 5.7 of SPS

Agreement