Australia - Measures Affecting the Importation of Apples from New Zealand (DS367)
Panel established pursuant to Article 6 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes
Panel's First Substantive Meeting with the Parties: Opening Statement
Geneva, September 2, 2008
Thank you Mr Chairman and members of the Panel. Thank you
to my New Zealand colleague for its opening statement, which we
have listened to carefully. Australia welcomes the
opportunity to present this statement to you. Australia
recognises that you have taken on a demanding task and will do
all that it can to assist you in carrying out that task.
Mr Chairman, members of the Panel, this case is about the basic
right of all WTO Members to protect plant life and health
within their territory. It is about the level of risk
that Australia is prepared to tolerate and Australia's
particular quarantine circumstances. It is about serious
plant pests not present in Australia but endemic in New Zealand
– fire blight, European canker and apple leafcurling
midge. It is about the comprehensive and transparent
science-based risk assessment undertaken by the IRA Team and
set out in the Final IRA Report for New Zealand apples.
It is about Australia's reasonable quarantine measures,
necessary to mitigate the risk of serious plant pests entering
Australia. It is about the application of scientific and
technical judgment by the qualified and respected experts who
inform Australia's quarantine regulatory decisions.
It is about the extent to which a WTO panel is permitted to
intervene in such decisions. It is about the trade
liberalising reality of Australia having opened its market to
New Zealand apples in March 2007.
Mr Chairman, members of the Panel, Australia is free of many of
the world's major plant pests. Australia's
unique biodiversity and distinctive native flora and fauna are
of world renown. In addition, Australia's
favourable plant-health status is vital to its multi-billion
dollar agricultural sector. In order to protect these
significant assets, Australia invests heavily in
quarantine. As a result, Australia has one of the most
comprehensive and effective quarantine systems in the
As recognised in the SPS Agreement, Australia has the
right to maintain its favourable plant health status. In
this regard, Australia is not asking to be treated differently
to other WTO Members when it urges the Panel to pay close
attention to Australia's particular quarantine
circumstances. In order to maintain its favourable
plant-health status, Australia must be able to rely on
the WTO bargain that it signed up for – including the delicate and carefully negotiated balance of rights and
obligations set out in the SPS Agreement. In
undertaking its role in this dispute, the Panel should respect
this delicate balance.
New Zealand's statement this morning attempts a detailed
rebuttal of Australia's first written submission.
In this statement, Australia focuses on key issues that the
Panel needs to address. Australia will provide a detailed
rebuttal of the factual material in the New Zealand opening
statement in its second written submission.
Australia's appropriate level of protection in
Mr Chairman, members of the Panel, for the purposes of this
dispute, it is essential to bear in mind that the SPS
Agreement does not require international harmonisation of
Members' quarantine measures. In fact, the
determination of a Member's acceptable level of risk,
also known as the appropriate level of protection, is the
Member's sole prerogative. No-one may impinge on
that prerogative – not trading partners, not WTO panels,
not the Appellate Body. This position has been clearly
articulated by the Appellate Body, and is widely accepted by the WTO
membership. To deny a Member's sovereign right to
determine its own appropriate level of protection would
disregard the balance of rights and obligations set out in the SPS Agreement.
Whether other Members may be content to tolerate the risk of an
event occurring once in every five years, five hundred years or
five thousand years, is irrelevant. The SPS Agreement
does not require Members to accept the same level of risk or a
certain minimum level of risk. It is entirely up to
each Member to judge whether its national interest is best
served by a higher or lower appropriate level of
protection. What matters in the present case is the
risk that Australia is prepared to tolerate, not the risk
that New Zealand or any other Member is prepared to
The Australian community demands that its Government takes
responsible action to protect Australia's agricultural
sector and biodiversity from exotic pests, and
Australia's appropriate level of protection is set to
reflect this. Australia's appropriate level of
protection is explicitly and transparently expressed as
requiring quarantine risks to be managed to a very low level,
although not to zero.
The concept of appropriate level of protection cannot be seen
in isolation. The appropriate level of protection is an
integral part of each Member's quarantine system.
Members do not simply set and forget it. In fact, in
order to implement their appropriate level of protection,
Members have a basic right under the SPS Agreement to
take SPS measures for the protection of human, animal and plant
life or health. The appropriate level of protection is
the benchmark, and the SPS measures are the instrument used to
achieve that benchmark.
Australia emphasises that a Member's appropriate level of
protection fundamentally shapes its decision on SPS
measures. The first step is to determine the level of
unrestricted risk posed by the product at issue. If that
risk is higher than the Member's acceptable level of
risk, then the Member may adopt measures to achieve its
appropriate level of protection.
The Final IRA Report provides the basis for
Mr Chairman, members of the Panel, in the present case, the
relevant level of risk is that posed to Australia by the
importation of apples from New Zealand. That level of
risk was rigorously examined in the Final IRA
Report. This document provides the basis for the
SPS measures central to this dispute and cannot be
ignored. The risk assessment conducted by the IRA Team,
as set out in the Final IRA Report, is fully consistent with
the SPS Agreement and with internationally recognised
As you have just heard, New Zealand is critical of the Final
IRA Report. It disputes the quarantine measures applied
by Australia to New Zealand's apple exports. The
reasons for New Zealand's criticism flow from a broad
argument that there is a single correct view of science; that
for there to be two opposing views in any scientific
disagreement means that one of those views must necessarily be
wrong. This is simply not the case.
For the purposes of this dispute, New Zealand relies on the
superficially attractive notion of scientific
"certainty" around the transfer and spread of the
pests at issue. This conveniently ignores the range of
credible scientific views on these issues. The reality is
that there are different views on many scientific issues based
on the same set of facts. These views are often held by
equally qualified and respected scientists. Moreover, it
is widely accepted that the state of scientific knowledge is
limited and constantly evolving.
Mr Chairman and members of the Panel, in this dispute you are
faced with competing scientific opinion and evidence.
This is not surprising, but in considering this opinion and
evidence, Australia asks that you bear in mind the Appellate
Body's statement that responsible and representative
governments may act in good faith on the basis of so-called
"divergent" scientific opinion, coming from
qualified and respected sources. In other words, there is no
need for you to try to choose what you consider the
"correct" view to be, and to do so would constitute
an error of law.
The Final IRA Report takes into account some thousand
scientific references, including scientific references cited by
New Zealand in its written submission. However, this vast
amount of literature cannot be seen in a vacuum. It needs
to be interpreted in light of Australia's particular
circumstances. The IRA Team, a group of highly qualified
and respected scientists and technical experts, performed this
The IRA Team applied its expert judgment and elaborated its
reasoning at every step in the Final IRA Report. On the
basis of its detailed analysis of the level of risk associated
with the importation of New Zealand apples, the IRA Team
concluded that certain risk mitigation measures were required
in order to achieve Australia's appropriate level of
protection. New Zealand can export apples to
Australia, provided that it observes the reasonable measures
recommended in the Final IRA Report.
New Zealand offers what amounts to its own risk assessment,
using its own methodology, and taking into account its own
particular circumstances. However, in Australia's
view, New Zealand cannot expect the Panel to substitute this
for the Final IRA Report, which is the only risk assessment
relevant to this dispute.
Australia is the Member facing the risk. Australia is the
Member with the relevant appropriate level of protection, as
appropriate to its circumstances. Australia is the
Member that has conducted a risk assessment, as appropriate to its circumstances. Australia is the Member
entitled to choose its own risk methodology, as appropriate to its circumstances.
This dispute is not a re-run of Japan –
Mr Chairman, members of the Panel, it is clear from New
Zealand's first written submission and its statement this
morning, that it believes that this dispute is simply a re-run
of Japan – Apples. New Zealand continues to
treat Japan – Apples as some form of scientific
process, not a legal process. This is a major error by
New Zealand, a fact that third parties in this dispute have
recognised. Japan – Apples is not a risk assessment and
is not scientific evidence. Moreover, there are
significant differences between the two sets of circumstances,
including the pests at issue, appropriate level of protection,
climatic conditions, potential host plants, and the volume and
mode of trade.
The product and measures at issue must be identified
Mr Chairman, and members of the Panel, Australia emphasises the
need for the Panel to be clear from the outset as to the precise
product at issue in this dispute, and to ensure that throughout
the proceedings, all claims, counterclaims, arguments and
evidence relate to that product.
There is only one product at issue in this dispute. That
product, as set out in the Final IRA Report, is, I quote,
"mature apple fruit free of trash, either packed or
sorted and graded bulk fruit from New Zealand." Any attempt by
New Zealand to characterise the product at issue as
"mature symptom less apples" must be
dismissed. And in any event, symptom less apples are not
Like the product at issue, the measures at issue define the
scope of this dispute and warrant careful consideration by the
Panel. In the Panel's preliminary ruling of 6 June
Panel clearly limited its terms of reference to the 17 measures
specifically identified in New Zealand's panel
request. The onus is on New Zealand to establish that
each of these measures meets the definition of an "SPS
measure", as set out in Annex A(1) of the SPS
Agreement. In any event, as explained in
Australia's written submission, two of these 17 measures
are not live issues in this dispute. We welcome New
Zealand's decision not to pursue its claim regarding the
European canker pruning requirement, as set out in its
statement this morning.
Moreover, not all of the remaining measures can be challenged
individually, as several are ancillary measures which support,
verify and operationalise the principal risk reduction
measures. In Australia's view, the Panel should
only examine such ancillary measures when "taken as a
whole" with the principal risk reduction measures to
which they relate.
On this, Australia notes that New Zealand's challenge
does not cover the whole of the Final IRA Report. The
Final IRA Report covers pests and diseases which are not at
issue in this dispute, and this needs to be borne in mind,
particularly when examining the ancillary measures.
Australia also notes that New Zealand's challenge to the
methodology used by the IRA Team throughout the Final IRA
Report is therefore selective as New Zealand is prepared to
accept this methodology with respect to the pests and diseases
not at issue in this dispute.
New Zealand has not backed up its claims with evidence and
Mr Chairman and members of the Panel, Australia is entitled to
the presumption that its measures, and the Final IRA Report
that recommended those measures, are consistent with its WTO
New Zealand bears the burden of proof, as the complainant in
this dispute, of raising a prima facie case of
inconsistency in relation to each of the provisions it is
challenging under the SPS Agreement. To do this,
New Zealand must present sufficient evidence and legal
argument to support that prima facie case. Only if
New Zealand succeeds in doing so must Australia rebut the
alleged inconsistencies. Until that point, Australia is
entitled to the presumption of WTO-consistency.
Australia emphasises this point because it believes that the
assertions made by New Zealand in its first written submission
are simply not supported by legal argument or evidence.
Australia also notes that this is a dispute between two parties
– the complainant, New Zealand, and the respondent,
Australia. Neither the Panel, nor the third parties, are
permitted to "make the case" for New Zealand.
In other words, the gaps in New Zealand's thin wall
of evidence and argument cannot be filled by someone
The burden of proof permeates the entire fabric of the dispute,
affecting every argument woven by the parties. This means
that New Zealand is required to discharge its burden of proof
in relation to each of the measures at issue under each of the challenged provisions of the SPS
Agreement. It is one thing for New Zealand to make a
broad assertion; it is another thing altogether to be able to
back it up with sufficient evidence and legal argument.
Australia is firmly of the view that New Zealand's case
is fatally flawed as it has failed to meet its burden of
proof. Australia nonetheless demonstrates, through solid
scientific evidence and legal argument, that the measures at
issue in this dispute are fully consistent with the SPS
The Panel's role in this dispute is not
Mr Chairman, members of the Panel, there is another critical
threshold issue which is inextricably linked to burden of proof
– it relates to the role that you, the Panel, are
required to perform in this dispute. The Panel's
role is not unfettered. Rather, there are parameters
within which you must operate, which are imposed in the
standard of review to be applied by the Panel.
The Appellate Body has stated that a failure to apply the
proper standard of review constitutes a legal error. Australia
therefore considers it essential that the Panel apply the
appropriate standard of review throughout this
New Zealand's first written submission is completely
silent on the issue of standard of review. In contrast,
Australia has provided clear guidance on what it believes the
Panel's appropriate role to be.
Contrary to what New Zealand has suggested in its cursory
treatment of standard of review in its opening statement today,
the final word on standard of review is not Article 11 of the
Dispute Settlement Understanding. While the
"objective assessment" standard under Article 11 is
certainly the starting point for the Panel's standard of
review, it nevertheless provides limited guidance on the
precise nature and intensity of the review required by panels
in their fact-finding role. Accordingly, as indicated by
the Appellate Body, the appropriate standard of review must
also be informed by the particular covered agreement and,
within that agreement, the particular obligation at
Upon signing up to the WTO bargain, Members consciously
conceded their jurisdiction on certain issues to the WTO,
effectively nominating the WTO as arbiter of those
issues. However, on other issues, Members'
jurisdictional competences were deliberately retained.
The effect of this delicate and carefully negotiated balance is
that there is a line that traces its way through the SPS
Agreement – on one side lies the areas of
jurisdictional competence that Members conceded, on the other
side, the areas they did not.
The Panel should observe that line. In the context of the SPS Agreement, the Appellate Body has explicitly stated
that the standard of review must, I quote, "reflect the
balance established in that Agreement between the
jurisdictional competences conceded by the Members to the WTO
and the jurisdictional competences retained by the Members for
The standard of review has important implications for this
dispute. It means that the Panel should not conduct its
own risk assessment for Australia. It is not called upon
to settle scientific debate. This is significant because,
as mentioned, there is often more than one credible scientific
explanation for a particular phenomenon. In such
circumstances, a WTO panel should not attempt to choose its
preferred view of the science and thereby substitute its
judgment for that of the risk assessor – in this case,
the IRA Team.
In making these points, Australia is not suggesting that your
role in this dispute is marginal. You have the centrally
important role of determining whether Australia's
measures are based on a valid risk assessment in accordance
with the relevant provisions of the SPS Agreement; of
determining whether that risk assessment is objective and
In carrying out its role, Australia submits that the Panel
should be guided by the approach taken by the compliance panel
in the Australia – Salmon dispute. The Panel
must be satisfied that it has reasonable confidence in the risk
assessment, and only if New Zealand establishes flaws in the
Final IRA Report which are so serious that they would
prevent the Panel from having that confidence, should the Panel
be required to intervene in the findings or conclusions of the
Final IRA Report.
Australia notes that the European Communities "largely
agrees" with Australia's position on standard of
review. In particular, the European Communities
endorses Australia's reliance on Australia –
Salmon as setting out the appropriate standard of review
for a risk assessment.
New Zealand disregards the special relationship between
Articles 5.1 & 2.2
Mr Chairman and members of the Panel, a further important issue
in this dispute is the nature of the relationship between
Articles5.1 & 2.2 of the SPS Agreement.
Australia believes that New Zealand's approach to these
provisions is confused and incorrect.
According to the Appellate Body, Articles 5.1 & 2.2 should
"constantly be read together", as the elements of
each provision inform and impart meaning to the other. In fact, the
Appellate Body has indicated that Article 5.1 is a specific
application of Article 2.2, meaning that Article 5.1, and its associated
provisions, elaborate specific conditions which, if met, will
establish the consistency of the relevant measures with Article
Australia's view of the relationship between Articles 5.1
& 2.2 is firmly grounded in the text of the SPS
Agreement. Both Articles are concerned with whether
the available evidence demonstrates the existence of risk. That risk provides the basis for the
adoption of SPS measures.
New Zealand has effectively ignored the clear and consistent
guidance of the Appellate Body by treating Articles 5.1 &
2.2 in virtual isolation from each other. New Zealand has
neglected to illuminate how it considers the two provisions
relate to each other. This separation ignores the
contextual relationship between them, which must be understood
as a whole.
Risk assessments involve the expert evaluation of scientific
evidence and technical and economic factors, in accordance with
an appropriate methodology. They must also be appropriate
to the circumstances. Accordingly, if measures are based
on a valid risk assessment under Article5.1, the Article
2.2 requirement that measures not be maintained without
sufficient scientific evidence is satisfied. As
acknowledged by the Appellate Body, Article 5.1 marks out and
elaborates a particular route leading to the same destination
set out in Article2.2.
I would just like to add that New Zealand provided only a
partial quote from EC - Hormones in its statement
regarding the relationship between Articles 2.2 and 5.1.
Had New Zealand given the fuller quote, it would have informed
the Panel that the Appellate Body expressed the view that a
"fuller analysis of the relationship between Articles 2.2
and 5.1 should await another case".
Australia notes that the European Communities agrees that the
question of whether Australia has maintained measures
"without sufficient scientific evidence" under
Article 2.2 can only be answered by considering whether
Australia's measures are based on a valid risk assessment
under Article 5.1.
In light of the special legal relationship between Articles 5.1
& 2.2, Australia strongly urges the Panel to commence its
assessment of New Zealand's technical and scientific
arguments under Article5.1 in this dispute.
Contrary to what New Zealand has suggested in its opening
statement, Australia is not suggesting that this is the
"single correct" order of analysis, but that it
would make the most sense in this dispute, given the primacy of
the Final IRA Report in this dispute.
Consequences are an integral part of risk
Mr Chairman, members of the Panel, an accurate understanding of
the concept of "risk" is vital to this
dispute. New Zealand wrongly implies that the notion of
"risk" should be confined to the likelihood of
entry, establishment or spread. However, pursuant to the
relevant provisions of the SPS Agreement, a valid
assessment of phytosanitary risk must evaluate both likelihood, as well as the associated potential
biological and economic consequences.
New Zealand cannot paper over the inconvenient truth that the
pests at issue in this dispute – fire blight, European
canker and apple leafcurling midge – all have serious
biological and economic consequences. Australia
underlines that the assessment of risk must comprise both
likelihood and consequences.
Australia's measures address real
Mr Chairman, members of the Panel, New Zealand also confuses
the notion of mere "possibility" or
"theoretical risk" with events that have a very
small or "negligible" probability of
occurring. This effectively amounts to an assertion that
risk assessments are required to identify a minimum magnitude
of risk – a proposition which has been expressly rejected
by the Appellate Body.
The careful use of statistical distributions by the IRA Team in
estimating probability reflects the range and variability of
available scientific evidence, accommodating small but
significant probabilities as well as uncertainties, consistent
with the relevant international standard for pest risk
analysis, the International Standard for Phytosanitary Measures
New Zealand's and the United States' scientific
and technical arguments lack merit
Australia's first written submission comprehensively
rebuts New Zealand's scientific and technical arguments
and clearly demonstrates that the Final IRA Report is a valid
risk assessment under Article 5.1. As such,
Australia's measures are consistent with Article 5.1,
and, accordingly with Article 2.2 of the SPS
Australia notes that in its opening statement, New Zealand
engages in a detailed exploration of scientific and technical
issues. Australia does not consider such issues amenable to
adequate consideration in an opening statement and will rebut
New Zealand's assertions in its rebuttal submission.
For the record, Australia notes that the United States has
lodged a lengthy submission with a heavy focus on scientific
and technical evidence in relation to fire blight and European
canker. Australia will not take up the Panel's time
by addressing the serious flaws in the arguments raised by the
United States in this statement, but will rather do so
vigorously and comprehensively in subsequent stages of these
proceedings, including in its rebuttal submission.
New Zealand's secondary claims are flawed
In addition to its primary claims under Articles 5.1 & 2.2,
Mr Chairman, members of the Panel, New Zealand's first
written submission sets out a number of secondary claims
relating to Articles 2.3, 5.2, 5.5 and 5.6 of the SPS
Agreement. Australia has already comprehensively
addressed these claims in its written submission and will not
deal with them in its opening statement, except to note that a
number of the third parties also question the validity of New
New Zealand's undue delay claim is outside the scope
of this dispute
The Panel has asked the parties to address Australia's
request for a ruling in relation to New Zealand's claim
of undue delay under Article 8 and Annex C(1)(a) of the SPS
Agreement. Australia notes that New Zealand has put
forward a number of detailed points in its opening statement,
which we would like the opportunity to consider further and
present our views later in the proceedings.
For the moment, Australia's position is clear.
The Panel issued a preliminary ruling in this dispute on 6 June
2008, in which it made it very clear that New Zealand's
panel request is limited to the items specified by bullet point
in that panel request. All other matters are therefore outside the
scope of this dispute.
Despite the Panel's preliminary ruling, New Zealand has
proceeded with a claim that the IRA process was subject
to undue delay. Australia considers that this is legally
untenable. It is clear from New Zealand's panel
request, and the Panel's preliminary ruling, that the IRA
process is not a measure at issue in this dispute; the
IRA process is not one of the items specified by bullet
point in New Zealand's panel request.
Australia therefore wrote to the Panel on 22August 2008
asking it to apply its preliminary ruling of 6 June by making a
further ruling explicitly stating that New Zealand's
undue delay claim is outside the scope of these
Australia notes that paragraph 16 of the Panel's Working
Procedures clearly allows for a jurisdictional ruling at any
stage of the proceedings upon the showing of good cause.
Australia believes that there is very good cause for a
ruling at this stage of proceedings, as the respondent should
not be required to defend claims which the Panel has indicated
are not within its jurisdiction. In any event,
Australia is not seeking a ruling on a new issue; Australia is
merely asking the Panel to apply its preliminary ruling of 6
Mr Chairman, members of the Panel, this is a complex dispute
involving detailed legal argument and voluminous scientific and
technical evidence. It concerns three pests - bacterial,
fungal and insect – each with quite different
biology. The Panel, the Parties and the Secretariat all
have limited resources, and there is no need to expend those
limited resources on a moot point. Australia believes
that a ruling at this stage would help secure a positive
solution to the dispute.
The Panel may take into account amicus curiae submissions
The Panel has asked the parties for their views as to how
amicus curiae submissions should be treated by the Panel in
these proceedings. In Australia's view, there is
well-established past practice on this issue.
Australia does not see amicus curiae submissions as having the
same status as party or third party submissions. However,
they may provide a useful perspective on issues under
consideration in this dispute. Accordingly, the Panel
should accept amicus curiae submissions into the record.
Beyond that, it is up to the Panel whether or not to take such
submissions into account in resolving the issues raised in this
Australia is ready to provide its views on the role of
Finally, Mr Chairman, members of the Panel, Australia notes
that the Panel may decide to consult experts in relation to
scientific and technical issues in this dispute. If the Panel
chooses to do so, Australia emphasises that, in its view, the
selection of such experts requires careful deliberation, and
their role requires demarcation from the outset.
Australia is ready to elaborate on its views regarding experts
at this meeting.
To conclude, Mr Chairman and members of the Panel, I have just
highlighted Australia's view of the key issues in this
Australia is an active Member which takes its WTO obligations
seriously. Australia is not seeking to resile from the
disciplines contained in the SPS Agreement. On the
contrary, Australia has opened its market to New Zealand apples
subject to reasonable risk mitigation measures set out in the
science-based Final IRA Report. These measures are
directed at protecting plant life and health within Australia
from serious pests not present in Australia but endemic in New
Zealand. Mr Chairman, members of the Panel, the measures
are fully WTO-consistent and are required to achieve
Australia's appropriate level of protection.
Naturally, Australia welcomes any questions that the Panel may
Thank you very much.
 Australia – Salmon, para. 199.
 See for
example: TPKM's Third Party Submission, para. 20;
Chile's Third Party Submission, para. 8; EC's
Third Party Submission, paras. 31 & 61; and US'
Third Party Submission, paras. 78-79.
– Hormones, para. 194.
 Chile's Third Party Submission, paras. 11-13;
Japan's Third Party Submission para. 2; EC's
Third Party Submission para. 47; US' Third Party
Submission para. 11.
IRA Report, Part B, p. 9.
 WT/DS367/7, para. 13(b).
 Appellate Body Report, US – Countervailing Duty
Investigation on DRAMS, para. 187.
Appellate Body Report, US –
Softwood Lumber VI (Article 21.5 Canada), para. 92.
 Appellate Body Report, EC – Hormones para.
Report, Australia – Salmon (Article 21.5 –
Canada), para. 7.57.
 EC's Third Party Submission, para. 84.
 EC's Third Party Submission, paras. 28-30.
 Appellate Body Report, EC – Hormones, para. 180;
Appellate Body Report, Australia – Salmon, para.
130; Appellate Body Report, Japan – Agricultural
Products II, para. 82.
 Appellate Body Report, EC – Hormones, para.
 Appellate Body Report, Australia – Salmon, paras
 EC's Third Party Submission para. 13.
 WT/DS367/7, para. 13(b).
 Article 11.2 of the SPS Agreement and Article 13.2 of