Whether Australias Measures Are Likely to Satisfy the Requirements of the GATT and SPS Agreements - Assignment Example

WTO, GATT and SPS Agreements Name: Lecturer: Course: Date: Introduction Based on scientific findings by the Department of Agriculture on some consignments of fish farmed in Vietnam, Australian government establishes intolerable residues of antibiotics in the fish. Vietnamese government seeks to make WTO complaint. This paper examines whether Australia’s measures are likely to satisfy the requirements of the SPS and GATT agreements. Central issue The central legal issue is: Can the ban on imports of fish from Vietnam by Australia satisfy the requirements of the SPS and GATT agreements? Legal Issues and Arguments Problem Solving of underlying issue Australia needs to ensure that the sanitary and phytosanitary measure to restrict importation of Vietnamese fish fall within the SPS agreement and international standards. Still, if the measures do not fall within the international standards, then they should fall within the requirements of scientific evidence1. And, if the sanitary and phytosanitary measures are not based on scientific principles, then they should be based on precautionary principles. Trade barriers seeking protection of animal and plant life are protected by the SPS (Sanitary and Phytosanitary) Agreement within “Annex 1a of the WTO Agreement”. The objective of the agreement is summarised by paragraph one in the preface of the Agreement, which reaffirms that no Member should be restricted from implementing or imposing measures requisite for protection of animal, human, health, and plant life, conditional on the prerequisite that such measures are applied in a way that does not amount to a means of unjustifiable or uninformed discrimination between the Member states, where the similar conditions exist2. Hence, the objective of the Australian government should be seen to be aimed to protect animal, plant and human health and life. At the same time, the measures to restrict fish from Vietnam should be viewed to maintain the protection should not be arbitrary or unjustifiable. Article 1 of the SPS Agreement compounds “all measures” concerned with SPS that impact international trade, either “directly or indirectly” inside the acceptable range of the agreement’s application. In the case study, Australia’s sanitary and phytosanitary measures fall within the scope of SPS agreement. SPS Article 2:1further sets out that the member states can create barriers to trade on the authority of SPS, provided that they conform to the agreement’s requirements. SPS Article 2:2 further sets out that such barriers can be imposed, only as required and in respect to sufficient scientific evidence except for when the precautionary principle are applicable3. Hence, Australia’s sanitary and phytosanitary measures must be based on scientific evidence. Further, SPS Article 2:3 provides that the barriers placed by member states against other member states should not be “arbitrarily or unjustifiably discriminate.” They should also not be imposed in a way that is a “disguised restriction on international trade.” It is on Australia’s burden of proof to bring evidence showing that the sanitary and phytosanitary measures do not “arbitrarily or unjustifiably discriminate.” Further, the member states should take into consideration the “Economic effects” and make efforts to reduce the possibilities of their measures causing “Negative Trade Effects” (SPS Art. 5:3, 5:4, 5:6). Australia needs to take into consideration the economic risks of its measures. Overall, it should be examined whether the sanitary and phytosanitary measures Australia applies are only to a degree necessary that protects plant, animal or human life and health. It should also be based on scientific principles4. As well, Australia should not impose the measures without adequate scientific evidence, with the exception of the relevance of paragraph 7 of Article 5. Hence, Australia should make sure that that its sanitary and phytosanitary measures to restrict importation of Vietnamese fish do not arbitrarily or unjustifiably discriminate between the member states where such conditions exist, including within own territory as well as the territory of other Members5. Whether Australia’s measures are “above and beyond” international standards While the SPS measures in international standards are considered to be consistent, Australia’s measures will only be valid despite being” above and beyond” international standards as required by Art 3:3 of the SPS6. Hence, Australia has to prove that relevant scientific information exists that supports its decision to restrict Vietnamese fish imports. Australia bases its decision on scientific findings by Department of Agriculture, which found that Vietnamese fish contain intolerable residues of antibiotics. Australia should also prove that the measures it imposes are necessary7. Indeed, the measures are necessary as consuming the intolerable amounts of antibiotics in shrimps and basa catfish will undermine human resistance to super bugs. Since Australia can satisfy the requirements of Article 3:3, there will be no change in the burden of proof. This means that Vietnam, which is the complaining party, will still have the burden of proof. Whether Australia’s measures satisfy provisions for scientific evidence Even though Australia claims that its measure is intended to protect “human, plant or animal life or health,” the protection for its ban of Vietnamese fish imports is not protected automatically. For this to happen, however, the measures should satisfy Article 2:2 of the SPS, which require that such measures ought be sufficiently backed by scientific evidence8. In the case, Australia’s claims rely on the results from tests by the Department of Agriculture, which established that many consignments of fish (shrimps and basa catfish) farmed in Vietnam had intolerable residues of antibiotics administered to the fish. The measures should also satisfy Article 5:1 of the SPS, which requires that measures have to be backed by proper risk assessment. This is consistent with a judgement on Australia Apples and New Zealand apples case, where Australia lost the case, since the measures it took to restrict New Zeeland apples were based on improper risk assessment as demanded for by Article 5.1 of the SPS9. In the current case, Australia’s measures are backed by appropriate health risk concerns. However, it has not established the economic risks. Still, Australia does not intend to stop Vietnam from importing fish as it still permits the importation if the the Vietanamese importer can show that they are free of antibiotics residue. The Government is concerned is that consuming the intolerable amounts of antibiotics in shrimps and basa catfish will undermine human resistance to super bugs. Further, the measures should also satisfy Article 3:3 of the SPS, which requires that measures that go above international standards have to be backed by scientific evidence. Hence, Australia’s measures satisfy the three requirements. Whether Australia’s measures satisfy precautionary principle Article 5:7 of SPS requires that even though the precautionary principle may exist, it still has some strict limitations. There may not yet be an existence of sufficient scientific evidence, as established in the case law of EC – Hormones10 and Apples-Japan case11. Hence, Australia does not have to necessarily rely on evidence by Agriculture Department, although adoption of SPS measures is still okay at this stage. The underlying argument Australia may use is that it has to adopt precautionary principles while still pursuing research on the health risks of Vietnamese fish12. Harmonisation of Australia’s measures with GATT The SPS Agreement is consistent with the, GATT agreements of 1947. Article 2 of the SPS Agreement specifies two pertinent “basic rights and obligations.” Hence, the SPS agreements and consistency with GATT agreements have to be reviewed13. Article 3 of the SPS Agreement also makes it necessary for the WTO member states to harmonize the processes of their phytosanitary measures as extensively as possible to conform to the international standards14. Essentially therefore, because Article 20:b of the GATT Article 20:b already tackles the issue f its sanitary and phytosanitary measures to restrict imports by member states, there is a potential for the issue to be divergent from the international law. Still, as the SPS agreement is essentially a modernisation of Article 20:b of GATT, and was created in a way to tackle the potential of such dilemma, it is curtailed as indicated: Artilce 20:b of is referenced in the preface, intending to specify the rules for applying the provisions of 1994 GATT provisions that are consistent with imposing sanitary or phytosanitary measures. To be specific, such provisions are stated in Article XX(b)115. Chapeaux of the article are also stated. Hence, from the outset, such an agreement is intended to clarify Article 20 of GATT, and not to contradict it. At the same time, the “lex specialis nature: of the accord is clarified Art. 2:4 of the SPS Agreement, which provides that the sanitary or phytosanitary measures that are consistent with the relevant requirements of the Agreement should be assumed to be in conformity with the Member states’ obligations as needed by the requirements of the GATT 1994 that are related to using sanitary or phytosanitary measures, particularly the requirements of Article XX(b). The rationale for harmonisation is that through harmonisation, the SPS agreement potentially creates a barrier to trade involuntarily. This is since Vietnam has to make sure that Australia’s measures band together with the SPS provisions. Therefore, SPS Agreement serves to clarify the significance of Vietnam conforming to international standards16. In the same way the international standards are crucial for the present case scenario, transparency is also crucial on the part of Australia and is a requirement, as set out by Article 7 of the SPS. In this case, in the event that international standards are proved to exist, the SPS provisions should be rooted in them – as required by Article 3:1 of the SPS. Since in the present case, the SPS requirement is international standards, it is deemed both necessary, and consistent with both SPS and GATT17. Essentially therefore, if Australia’s sanitary and phytosanitary measures to restrict importation of Vietnamese fish satisfy the requirements of the SPS Agreement, then it should be held that it also satisfies the exception in Article 20 of the GATT. Concerning SPS and TBT, when the measures do not fall in SPS, the agreement will be viewed as not violating the rights provided for by the TBT agreement as stated by Artilce 1:4 of the SPS18. Conclusion To conclude, Australia’s ban on imports of fish from Vietnam satisfies the requirements of the SPS and GATT agreements. TheAustralia’s measures are “above and beyond” international standards as relevant scientific information exists that supports its decision to restrict Vietnamese fish imports. The measures are also necessary as consuming the intolerable amounts of antibiotics in shrimps and basa catfish will undermine human resistance to super bugs (Art 3:3 of the SPS) Australia’s measures also satisfy provisions for scientific evidence. Australia’s claims rely on the results from tests by the Department of Agriculture (Article 2:2 of the SPS). Australia’s measures also satisfy precautionary principle (Article 5:7 of SPS) Therefore, if Australia’s sanitary and phytosanitary measures to restrict importation of Vietnamese fish satisfy the requirements of the SPS Agreement, then it should be held that it also satisfies the exception in Article 20 of the GATT. 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