The SPS agreement and its application in the WTO dispute settlement

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Note: Footnotes Omitted

Part IV. Conclusion And Recommendations

The three cases decided, especially the EC-hormones case, will doubtlessly have far-reaching impact on the dispute settlement and even legislation-making process in both international forum and domestic regime.  Nonetheless, there are still many questions left uncertain or unsolved satisfiedly, and the Appellate Body¡¯s opinions are not likely to resolve this dispute once and for all in any event.

The first question is the tension between trade and environment, trade and health.  Arguably, the Panel Report and the Appellate Report reflect what the Uruguay Round sought to accomplish with the SPS Agreement--to ensure that free  trade goes on in spite of differing opinions as to what is "healthy" or "safe."  Critics point to the EC-hormones Panel Report as a stark example of what they claim is the WTO's "trade at all costs" approach that allows the interests of large companies to threaten the environment.  These critics argue that the WTO has consistently undermined environmental protection laws.  They urge that the WTO's current approach is incompatible with adequate protection for the environment and consumers because of the constraints on trade.  The EC-hormone Appellate Report did give them some console, but it by no means completely satisfies those environment protection fans. 

The EC-hormones Appellate Body¡¯s holding on the relationship between Member state¡¯s rights to set policy and the pertinent international standards also incurred some critics.  The Appellate Body might read the ¡°based on¡± provision (Article 3.1) of the SPS Agreement too narrowly and thereby undermined the very goal of harmonization that Article 3 was designed to address.  From policy perspective, it should be realized that If a Member need only refer to international norms as guidelines, the Member will have little incentive to harmonize its SPS measure to the international recommendations where doing so does not serve its particular agenda.  As a general rule, it is argued that a Member should have to more than merely consider the international standards and recommendations ¨C it should be required to adhere to international norm unless extenuating circumstances demand an exception.  Furthermore, a Member's Article 3.3 right to set its own level of SPS protectionspecifically higher than that suggested by the international normsshould not be an "autonomous" right as suggested by the Appellate Body.  Rather, this right to set a higher level of SPS protection should be an exception from a general obligation of conformity under Article 3.1.

As to risk assessment, it is read that the Article 5.1 requirement that the SPS measure must be ¡°based on¡± a scientific risk assessment should require more a rational relation.  The rational relationship test requires only a tangential relationship between the SPS measure and the underlying science. At least an intermediate level of scrutiny should be applied, and the relationship should be substantial rather than rational.  It is important to consider a country¡¯s particular political or economic situation when evaluating its risk assessment, but at the same time coordination of international trade among the many nations of the world requires some level of uniformity in application.  So the development of a strong and universal standard should be encouraged by the WTO and SPS agreement.

Generally, the Panel and Appellate Body reports created a rough impression to many observers that the WTO does not provide a suitable forum for addressing global environmental issues.  The SPS Agreement lacks clear and workable reconciliation of environmental interests and trade concerns. Both the requirement for sufficient scientific evidence and the problems with the alternative "necessary" test are inadequate for resolving  this conflict.  Moreover, the Panel and Appellate Body do not have the competence or expertise to evaluate environmental threats or a Member's competing international environmental obligations, as can be seen from their examination of the underlying scientific evidence and their analysis of the precautionary principle.

I don¡¯t hold the belief that the WTO should not touch or solve environment related disputed before it.  Both the expertise and adequate knowledge problems presented in the proceeding paragraph are no more than technical problems.  Should the DSB reform or clarify its factfinding process, it will be equipped with perfect competence to solve disputes of this kind.   What is needed is a dispute settlement process organized so that a global consensus on the criteria for scientific plausibility can evolve.  Such a process would assist in the gradual replacement of scientific uncertainty with scientific knowledge, but it would not elevate one group of scientists over another or adopt particular science policies and impose them on individual members.  An approach that would promote a gradual development of consensus through the proper structuring of the WTO's factfinding process should be developed.  Arguably, under this approach, the WTO may create a balance between state sovereignty and the global need to protect health and environment, without harming or infringing the role of science and the role of other pertinent international organizations (such as WHO) in this field.

Notwithstanding the above-mentioned unsolved problems or even errors, the Appellate did frame a blueprint for structuring future cases under the SPS Agreement.   We may expect more instructive decisions in the future and the WTO become effectively a lawmaking body that represents the entire international and that can properly understand the relationship between, environmental and developmental goal of the global community.