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TEAM CODE :022 KSLMCS open challenge (9th September,2014) SEVENTH GNLUINTERNATIONAL LAW MOOT COURT COMPETITION 2015

IN THE WORLD TRADE ORGANIZATION PANEL

ASGARD: MEASURES AFFECTING THE IMPORTED PRODUCTSWT/DSxxx

AGATEA(complainant) v.ASGARD(Respondent)TABLE OF CONTENTS

LIST OF ABBREVIATIONS ...............................................................................................3

INDEX OF AUTHORITIES................................................................................................ 4

STATEMENT OF FACTS.................................................................................................. 9

MEASURE OF ISSUES....................................................................................................... 11

SUMMARY OF PLEADINGS ........................................................................................... 12

LEGAL PLEADINGS ...........................................................................................................13

I PaCE REGULATIONS REGARDING THE REPACKAGING OF PIF HAS NOT VIOLATED ARICLE 2.1 OF TECHNICAL BARRIER TO TRADE (TBT) ....13II THE ACT OF ASGARD DEPARTMENT OF HEALTH (ADOH) IN SEIZING THE PIFs OF ALL IMPORTED BRANDS DOES NOT VIOLATE ARTICLE 2.2 OF THE TBT AGREEMENT..14

III PaCE REGULATIONS DO NOT CONTRAVENE WITH ARTICLE III OF THE GENERAL AGREEEMENT OF TARRIFF AND TRADE ( GATT ) ..22

IV ASGARDs CLAIMS FOR JUSTIFICATION UNDER ARTICLE 20 OF GATT STANDS CORRECT25

REQUEST FOR FINDINGS.31

LIST OF ABBREVIATIONS

Art. ArticlePaCE Packaging of Commodities and its EnforcementGATT General Agreement on Tariff and TradeADOL Asgard Department of Law and JusticeADOH Asgard Department of HealthPIF Powered Infant ProductAPMA Agatean Processed Food Members AssociationWTO World Trade OrganisationCSCPHN Circle Sea on Public Health and NutritionNGO Non-governmental organizationTBT Technical Barriers to TradeDSU Dispute Settlement UnderstandingPPMs Product and Production MethodsEC European CommunitiesUS United StatesVol. VolumePg. PageNo. NumberWT World TradeUN United NationsVer. Version

INDEX OF AUTHORITIES

AGREEMENTS, TREATIES AND CONVENTIONS General Agreement on Tariffs and Trade Agreement on Technical Barriers to Trade Agreement on Sanitary and Phytosanitary MeasuresARTICLES, BOOKS AND JOURNALS Cottier, T. and Mavroidis, P. (eds.), Regulatory Barriers and thePrinciple of Non-Discrimination in World Trade Law (University of Michigan Press, 2000). The WTO Secretariat, Guide to the Uruguay Round Agreements,Kluwer Law International (The Hague 1999). Baldwin, R., Regulatory Protectionism, Developing Nations, and a Two-Tier World Trade System, Brookings Trade Forum 2000, 237-280. Dispute Settlement Reports 2006: Volume 6, Pages 2243-2766 George A. Bermann and Petros C. Mavroidis (Editor) Trade and Human Healtth and Safety. William J. Davei, Enforcing World Trade Rules: Essays on WTO Dispute Settlement and GATT obligations. The WTO Dispute Settlement System, 1995- 2003 Daniel Bethleham, Donald McRae, Rodney Neufeld, Isabelle Van Damme (Editors) The Oxford Hand Book of International Trade Law. Nathalie Bernasconi-Osterwalder, Environment and Trade: A guide to WTO jurisprudence Tracey Epps, Michal J. Trebilcock (Editors) , Reasearch Handbook on the WTO and Technical Barriers to Trade. Konard Von Moltke, Paper presented at the Chathham house conference Trade, Investment and the Environment, 29 & 30 October 1998, Reassessing Like Products Arthur E. Appleton, Micheal G.Plummer (Editors) , The World Trade Organisation: Legal, Economic and Political analysis Volume I Petros C.Mavroidas, World Trade Review Edward S. Tsai, Berkeley Journal of International Law Donald H.Regan, Article on Regulatory purpose and Like Products in Article III:4 of GATT (With additional remarks on Article II:2. John H. Jackson, The World Trading System(second edition) Autar Krishen Koul, Guide to the WTO and GATT , Economics,law and politics (third edition) Simon Lester and Bryan Mercorio with Arwel R. Davies and Kara Leitner, World Trade Law, Text, Materials and Commentary. Jason C.T. Chuah, Law of International Trade : Cross Border Commercial Transaction(fourth edition). Aspen, International Trade Regulations Peter Van Dan Bossche, Cambridge Publications World Trade Organisation, Oxford Publication PANEL AND APPELATE BODY REPORT Panel Report, European Communities Measures Affecting Asbestos and Asbestos-Containing Products (EC Asbestos ), WT/DS135/R and Add.1, adopted 5 April 2001, as modified by the Appellate Body Report, WT/DS135/AB/R. Appellate Body Report, European Communities Measures Affecting Asbestos and Asbestos-Containing Products (EC Asbestos ), WT/ DS135/AB/R, adopted 5 April 2001. Panel Report, European Communities Trade Description of Sardines (EC Sardines ), WT/DS231/R, adopted 23 October 2002, as modified by the Appellate Body Report, WT/DS231/AB/R. Appellate Body Report, European Communities Trade Description of Sardines (EC Sardines ), WT/DS231/AB/R. Appellate Body Report, Korea Various measures on Beef, WT/DS161/AB/R. Appellate Body Report, EC- Bananas III, WT/DS27/AB/R. Appellate Body Report, Japan- Alcoholic Beverages, WT/DS8/AB/R. Panel Report, US-Gasoline, WT/DS2/R. Panel Report, Thailand- Cigarettes, WT/DS371/R. Appellate Body Report, US- Shrimp Turtle, WT/DS58/AB/R. Panel Report and Appellate Body Report, EC-Hormones, WT/DS26/R; WT/DS320/AB/R; WT/DS48/AB/R. Appellate Body Report, Seal Products, WT/DS401/AB/R.

DOCUMENTS AND INFORMATION WTO, A Training Package, Module 3, Goods: Rules on NTMs (1998). WTO, First Triennial Review of the Operation and Implementation of the Agreement on Technical Barriers to Trade, G/TBT/5 (97-5092), (19 November 1997). WTO, Second Triennial Review of the Operation and Implementation of the Agreement on Technical Barriers to Trade, G/TBT/9 (00-4811), (13 November 2000). WTO, Technical Barriers to Trade, (visited 15 February 2002). (This is the WTOs access point for TBT-related information.) The WTO maintains an excellent website at www.wto.org. On this site one can find background information concerning the TBT Agreement, the complete text of the TBT Agreement, the results of the Annual and Triennial TBT 46 Dispute Settlement Committee Reviews, Member notifications, the WTOs TBT training guide, lists of national TBT Inquiry Points, Minutes of TBT Committee meetings, working documents of the TBT Committee, a list of Standardizing bodies that have accepted the Code of Good Practice, and many other TBT-related documents. International Trade Centre UNCTAD/WTO (ITC) and Commonwealth Secretariat, Business Guide to the World Trading System, 2nd ed., 1999. Hoda, Anwarul, Tariff Negotiations and Renegotiations under the GATT and the WTO (Cambridge University Press, 2001) 9, 11-18, 25-78, 83-110. Howse, Robert and Regan, Donald, The Product/Process Distinction An Illusory Basis for Disciplining Unilateralism in Trade Policy, European Journal of International Law, 2000, 249-289. Hudec, Robert E., Chapter 12: The Product-Process Doctrine in the GATT/WTO Jurisprudence in Bronckers, Marco and Quick, Reinhard (Eds.), New Directions in International Economic Law: Essays in Honour of John H. Jackson (Kluwer Law International, 2000) 187- 218. Jackson, John H., The Jurisprudence of GATT and the WTO (Cambridge University Press, 2000), 57-68. Jackson, John H., The World Trading System: Law and Policy of International Economic Relations, 2nd ed., The MIT Press, 1997. Josling, T. E. Developing Countries and the World Trade Organization. An Opportunity for Concerted Action, Stanford Journal of International Relations, 2001, 13. McRae, Donald M., GATT Article XX and the WTO Appellate Body in Bronckers, Marco and Quick, Reinhard (Eds.), New Directions in International Economic Law: Essays in Honour of John H. Jackson (Kluwer Law International, 2000) 249-289. Olivares, Gustavo, The Case for Giving Effectiveness to GATT/WTO Rules on Developing Countries and LDCs, Journal of World Trade, 2001, 545-551. Van den Bossche, Peter, The Law and Policy of the World Trade Organization: Text; Cases and Materials (Cambridge University Press, forthcoming). WTO Secretariat, Analytical Index: Guide

STATEMENT OF FACT

Agatea is a country located in the Indian sub-continent. It is world leader in dairy and health products controlling ninety percent of the world market of these products. PIF or Powered Infant Formula, is a food product in powered form used by infants that is capable of completely or partially substituting human milk. Asgard which was under the Agatean Empire until 1950, is a developing country, and is a part of Nine island in the Circle Sea now. It depends completely on imports of PIF and all its requirement are met by imports from Agatea. In early 2014, there was an alarming spike in Asgard of Type-1 diabetes among children below the age of 5, which caused widespread anxiety. The Asgard Department of Health (ADOH), observed that Asgardians, in the preceding five years, have slowly shifted from breastfeeding to Powdered Infant Formula (PIF) for their children, which contained high levels of corn syrup and sugar content. The packaging only mentioned the generic ingredients of PIF, such as derived from cow milk, soy-based, etc. without mentioning all the contents in terms of percentage or weight ADOH further believed that parents should know the exact ingredients and content in terms of percentage and weight in order to make an informed decision about using PIFs for their children. In July 2014, the Asgard Department of Law and Justice (ADOL) drafted and published Regulation No. 8/2014 Packaging of Commodities and its Enforcement (PaCE) inviting comments on the draft law from all stakeholders. Article 3 of the same talks about the retail packaging of all PIF products where Article 9 mentions that the requirements under the Regulation are to be met by 31st October 2014. Agatean Processed Food Members Association (APMA) made representations in person and in writing to ADOL on relaxing the timeline for compliance till at least March 2015 till which time all members would be able to arrive at an appropriate solution to comply with PaCE. Relicare, an industrial behemoth in Asgard, is a diversified group with presence in energy, petroleum, mining, processed food, retail and banking. Earlier in 2013, Relicare had announced in its annual general meeting about its intention to enter the growing market of infant food products. In June 2014, the ADOH approved Relicares application for introducing its PIF in Asgard market..Relicares chairman in the groups press release in July 2014 that its new PIF would be launched on the market by the end of October 2014. PaCE was tabled before Asgard Parliament on 28 August 2014. After two days of heated debates, the Parliament approved PaCE, which came into effect immediately. PaCE retained all provisions in the original draft regulation. On 1 November 2014, the ADOH officers seized PIFs of all imported brands. None of the seized brands had been able to meet the two-month compliance deadline. Relicares new product Likan, which was launched in the market on the same date. ADOH denied the labelling of all imported PIF products with stickers that mentioned all the ingredients in terms of percentage and weight on 8 November, 2014. In late December 2014, Agatea requested consultations with Asgard under WTO Dispute Settlement Understanding (DSU) and the consultations were unsuccessful. Due to unsuccessful consultation with Asgard, Agatea requested for the establishment of a WTO panel. The DSB established a panel in April, 2015 which was composed in May, 2015 by the Director general of WTO.

MEASURE OF ISSUES

PaCE REGULATIONS REGARDING THE REPACKAGING OF PIF HAS NOT VIOLATED ARICLE 2.1 OF TECHNICAL BARRIER TO TRADE (TBT) THE ACT OF ASGARD DEPARTMENT OF HEALTH (ADOH) IN SEIZING THE PIFs OF ALL IMPORTED BRANDS DOES NOT VIOLATE ARTICLE 2.2 OF THE TBT AGREEMENT. PaCE REGULATIONS DO NOT CONTRAVENE WITH ARTICLE III OF THE GENERAL AGREEEMENT OF TARRIFF AND TRADE ( GATT ) ASGARDs CLAIMS FOR JUSTIFICATION UNDER ARTICLE 20 OF GATT STANDS CORRECT.

SUMMARY OF PLEADINGSArgument IPaCE regulations regarding the repackaging of PIFs has not violated Article 2.1 of TBT. This can be substantiated from the following two reasons : Firstly, Asgard did not accord any less favourable treatment than that provided for its respective schedule. The stepping in of Liken in the market of infant products cannot be termed biased as it had announced its intention in early 2013. Secondly, the government passed a Regulation incorporating details of repackaging of the imported PIFs. Since, they believed that it was an emergency situation which was call for an action.Argument II Firstly, the act of seizing of all imported brands of PIFs by ADOH does not result in violation of the same Article. The sole criteria behind the act of seizing was the non compliance of the PaCE Regulation . In no sense it was arbitrary or unreasonable. Secondly, in this case the regulation regarding the timegiven to Agatea to change the packaging of imported PIFs is not more Trade-restrictive than necessary. As, the consumers ,should be aware what they are consuming. It is mandatory to mention all the contents of the product.Argument IIIPaCE regulations do not contravene with Article III:4 of GATT. This can be shown through the point : The broad and fundamental purpose of Article III is to avoid protectionism in the application of internal tax and regulatory measures since Relicare had declared its in 2013 to enter the growing market of infant food products ,its carrying on the business of PIFs cannot be inferred as any kind of protectionism on part of Asgard.Argument IVAsgard 's claim for justification under Article XX of GATT stands correct since it falls under clause (b) of this Article, which talks about the necessity to protect human, animal or plant life or health. Here, there was a necessity to protect the health of the infants of Asgard.

LEGAL PLEADINGS

I PaCE REGULATIONS REGARDING THE REPACKAGING OF PIF HAS NOT VIOLATED ARICLE 2.1 OF TBT(A) Asgard complies with Article 2.1 of TBT.The essence of Article 2.1 of TBT is that a member shall ensure that in respect of technical regulations, for the products imported by any other member and provide no less favorable treatment than that is accorded to like products of national origin.[footnoteRef:1] Thus to prove that Asgards act is in consonance with Article 2.1 of TBT, it must be established that: [1: Article 2.1, TBT Agreement]

Asgard accords no less favourable treatment than that provided for its respective schedule. Relicare had announced in its general meeting about its intention to enter the growing market of infant products way back in early 2013. It was found in the initial months of 2014 that there was an alarming spike in Asgard of type-1 diabetes among children below the age of fine. The regulation published by the ADOL after the severe pressure from the public of Asgard after reading the report made by a study conducted by ADOH. The study showed, after sampling and lab testing of supplements of imported PIFs , that;(i) Asgardians, in the preceding five years, have slowly shifted from breastfeeding to Powdered Infant Formula (PIF) for their children; (ii) Doctors have increasingly recommended the usage of PIF due to its nutritional value; (iii) At present, PIF sold under the names Rincewind, Linacre, Diamanda and Cementac are available in the market;(iv) Sampling and lab testing of the above supplements revealed that they contained high levels of corn syrup and sugar content, which was not specified on the packaging of these products;(v) Generally, the packaging only mentioned the generic ingredients of PIF, such as derived from cow milk, soy-based, etc. without mentioning all the contents in terms of percentage or weight[footnoteRef:2]. [2: ADOH- report concerning PIF. ]

The objective of PaCE is to let the parents know the exact ingredients and content in the terms of percentage and weight in order to make an informed decision about using PIF for their children. It is suggested that the government may introduce appropriate rules in this regard. The Government of Asgard believed that it was an emergency situation, which called for urgent action. The Government, therefore, has implemented a comprehensive set of reforms by adopting standards that would ensure that packaged food and food supplements exhibit their nutritional content in a manner that would let the public take an informed decision, taking into account their dietary and health concerns. This reform was necessary and the only way forward to safeguard the health and future of the young populace. In this regard, the Government promulgates this 30th day of August 2014, Regulation No. 8/2014, which may be called Packaging of Commodities and its Enforcement or PaCE.

II THE ACT OF ASGARD DEPARTMENT OF HEALTH (ADOH) IN SEIZING THE PIFs OF ALL IMPORTED BRANDS DOES NOT VIOLATE ARTICLE 2.2 OF THE TBT AGREEMENTArticle 2.2 of TBT agreement says that members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products.Thus, to prove that, Article 2.2 of TBT has not been violated in this case , it has to be established that, i. The regulation does not create any unnecessary obstacle to trade for Agate to import PIF.ii. The regulations is not more trade-restrictive than necessary to fulfil a legitimate objective.

i. The regulation does not create any unnecessary obstacle to trade for Agate to import PIF.As it is clear by the name of the regulation itself , Packaging of Commodities and its Enforcement which lays down provisions regarding retail packaging of all powdered infant formula. Nowhere in the regulation, provisions regarding the trade of export or import of PIF is mentioned. Thus, there is no obstacle to international trade in this case.Article 3 specifically innumerates the following regarding the retail packaging of all powdered infant formula products may comply with the following:(a) The outer surface to mention all ingredients of the product in print;(b) The outer surface to mention all the contents of the product in terms of weight in grams or milligrams per 100 grams of the serving in print;(c) The outer surface to mention all the contents of the product in terms of their percentage of the overall weight of the product in print.(2) The minimum font size for requirements under clause (1) is 8 of any font preferred by a brand;(3) The contents under clause (1) shall be placed, preferably, inside a text box with an outer border in RED colour having a minimum line weight of 2.

Agatea in its representation through their association APMA, requested for relaxation in the timeline for complying with PaCE.

ii. The regulation is not more trade-restrictive than necessary to fulfil a legitimate objective.

In this case, the regulation regarding the time given to Agatea to change the packaging of the imported PIF is not more trade- restrictive than necessary. As the consumers should know what they are consuming, it is necessary to mention all the contents of the product on the packaging of it.

The use of international standards as the basis for the technical regulation and there is no ineffective or inappropriate means for the fulfilment of the legitimate objective pursued. In this case, The legitimate objective is transparency and consumer protection even though none of these two policy objectives are explicitly mentioned in the indicative list of Article 2.2 of TBT[footnoteRef:3]. [3: Nathalie Bernasconi-Osterwalder - Environment and Trade, a guide to Jurisprudence, page no 190]

In Beef Hormone Trade Dispute, In the 1990s, in the midst of the mad cow disease crisis, the European Union banned the import of meat that contained artificial beef hormones. WTO rules permit such bans, but only where a signatory presents valid scientific evidence that the ban is a health and safety measure. Canada and the United States opposed this ban, taking the EU to the WTO Dispute Settlement Body. In 1997, the WTO ruled against the EU. The EU appealed the ruling.[footnoteRef:4] [4: Jeff Colgan (2005). The Promise And Peril of International Trade.]

Focusing on the viability of a labeling solution in response to European consumers demand for food-safety and United States interest groups demand for European compliance with World Trade Organization trade law. It concludes that WTO trade law poses a significant barrier to such a solution and to consumers right to information and food-safety[footnoteRef:5]. [5: Brian Loo - EEP 131 -Professor Larry Karp - Consumer Information, Consumer Rights and WTO Trade Law.]

Unlike most other trade disputes, which arise due to disguised producer protectionism, the Beef Hormone case has been brought about by European consumers unusually high risk aversion in matters of food safety. Thus one possible less trade restrictivesolution is to label the beef differently and allow consumers to choose. EU eco-labeling uses non-product related Product and Production Methods (hereafter, simply PPMs) as product criteria, making their program highly contentious legality under WTO trade law, which does not recognize PPMs as a legitimate difference in otherwise like products.

The hormones banned by the EU in cattle farming were estradiol, progesterone, testosterone, melengesterol acetate, trenbolone acetate, and zeranol. Of these, the first three are artificial versions of endogenous hormones that are naturally produced in humans and animals, and also occurs in a wide range of foods, whereas the second three are exogenous hormones, that are synthetic and not naturally occurring, that mimic the behaviour of endogenous hormones. The EU did not impose an absolute ban. Under veterinary supervision, cattle farmers were permitted to administer the synthetic versions of natural hormones for cost-reduction and possibly therapeutic purposes, such as synchronising the oestrus cycles of dairy cows. All of these six hormones were licensed for use in the US and in Canada.[footnoteRef:6] [6: Ladina Caduff (August 2002). Growth Hormones and Beyond. ETH Zentrum]

Under the Agreement on the Application of Sanitary and Phytosanitary Measures, signatories are permitted to impose restrictions on health and safety grounds subject to scientific analysis. The heart of the Beef Hormone Dispute was the fact that all risk analysis is statistical in nature, and thus unable to determine with certainty the absence of health risks, and consequent disagreement between the US and Canada beef producers on the one hand, who believed that a broad scientific consensus existed that beef produced with the use of hormones was safe, and the EU on the other, which asserted that it was not safe.[footnoteRef:7] [7: William A. Kerr and Jill E. Hobbs (2005). "9. Consumers, Cows and Carousels: Why the Dispute over Beef Hormones is Far More Important than its Commercial Value". In Nicholas Perdikis and Robert Read. The WTO and the Regulation of International Trade. Edward Elgar Publishing. pp. 191214. ISBN 1-84376-200-5.]

The use of these hormones in cattle farming, had been studied scientifically in North America for 50 years prior to the ban, and there had been widespread long-term use in over 20 countries. The assertion of Canada and the United States was that this provided empirical evidence both of long-term safety and of scientific consensus[footnoteRef:8] [8: William A. Kerr and Jill E. Hobbs (2005). "9. Consumers, Cows and Carousels: Why the Dispute over Beef Hormones is Far More Important than its Commercial Value". In Nicholas Perdikis and Robert Read. The WTO and the Regulation of International Trade. Edward Elgar Publishing. pp. 191214. ISBN 1-84376-200-5]

The EU measures may not have been wholly motivated by scientific analysis. The E.U. was at the time under pressure from its citizens, who, in the light of the mad cow disease crisis, were reluctant to accept the word of scientific authorities on the matter of food safety, in particular where it related to cattle products. However, the EU ban was not, as it was portrayed to rural constituencies in the US and Canada, protectionism. The EU had already had other measures that effectively restricted the import of North American beef. In the main, the North American product that the new ban affected, that existing barriers did not, was edible offal[footnoteRef:9]. [9: Jeff Colgan (2005). The Promise And Peril of International Trade]

It was not producers asking for protectionist measures that were pressuring the E.U., but consumers, expressing concerns over the safety of hormone use. There were a series of widely publicized "hormone scandals" in Italy in the late 1970s and early 1980s. The first, in 1977, was signs of the premature onset of puberty in northern Italian schoolchildren, where investigators had cast suspicion in the direction of school lunches that had used meat farmed with the (illegal) use of growth hormones. No concrete evidence linking premature puberty to growth hormones was found, in part because no samples of the suspect meals were available for analysis. But public anger arose at the use of such meat production techniques, to be further fanned by the discovery in 1980 of the (again illegal) presence of diethylstilbestrol (DES), another synthetic hormone, in veal-based baby foods.[footnoteRef:10] [10: Renu Gandhi and Suzanne M. Snedeker (June 2000). "Consumer Concerns About Hormones in Food". Program on Breast Cancer and Environmental Risk Factors. Cornell University]

The European Consumers' Organisation (BEUC) lobbied for a total ban upon growth hormones, opposed, with only partial success, by the pharmaceutical industry, which was not well organized at the time. (It was not until 1987, at the instigation of US firms, that the European Federation of Animal Health, FEDESA, was formed to represent at EU level the companies that, amongst other things, manufactured growth hormones.) Neither European farmers nor the meat processing industry took any stance on the matter.

The imposition of a general ban was encouraged by the European Parliament, with a 1981 resolution passing by a majority of 177:1 in favour of a general ban. MEPs, having been directly elected for the first time in 1979, were taking the opportunity to flex their political muscles, and were in part using the public attention on the issue to strengthen the Parliament's rle. The Council of Ministers was divided along lines that directly matched each country's domestic stance on growth hormone regulation, with France, Ireland, the U.K., Belgium, Luxembourg, and Germany all opposing a general ban. The European Commission, leery of a veto by the Council and tightly linked to both pharmaceutical and (via Directorate VI) agricultural interests, presented factual arguments and emphasized the problem of trade barriers.

The appellate body noted; The absence of such risk assessment, when considered in conjunction with the conclusion actually reached by most, if not all, of the scientific studies relating to the other aspects of risk noted earlier, leads us to the conclusion that no risk assessment that reasonably supports or warrants the import prohibition embodied in the EC Directives was furnished to the Panel.

New evidence was released by the EC in 2003 about beef hormones. The EC made the scientific claim that the hormones used in treating cattle remain in the tissue, specifically the hormone, 17-beta estradiol.[8] However, despite this evidence the EC declared there was no clear quantifiable link to health risks in humans. The EC has also found high amounts of hormones in areas where there are dense cattle lots. This increase in hormones in the water has affected waterways and nearby wild fish.[8] Contamination of North American waterways by hormones would not, however, have any direct impact on European consumers or their health.

This evidence was introduced. The WTO upheld the earlier decision as The evidence in the dispute was from the US Food and Drug Administration, in which they declared that the level of hormones used in was not high enough to be unsafe to humans[footnoteRef:11]. [11: DSB: EC-US Disputes Top Agenda. International Centre for Trade and Sustainable Development. Bridges Weekly Trade News Digest. Vol 7, No 38. 13 Nov 2003]

An importing country must accept an SPS measure which differs from its own as equivalent if the exporting countrys measure provides the same level of health or environmental protection[footnoteRef:12]. [12: Roberts, Donna. Agriculture in the WTO/WRS 98-44. Economic Research Service/USDA. Implementation of the WTO Agreement on the Application of the Sanitary and Phytosanitary Measures. < http://www.ers.usda.gov/publications/wrs984/wrs984d.pdf.> December 1998 ]

It is evident from the facts of the case that the government of Asgard did not impose a complete ban on the sale of the imported PIFs, rather through a regulation notified the PIF producers of Agatea to incorporate all the ingredients in the pakaging. From the debate going on the Fall session of the Parliament 2014, we can gather that the research on the exact cause of diebities and the detrimental effect on the infants have on the solely directed towards the imported PIFs. Hence Agatea alleging that less favoirable treatment or unnecessary obstacle to trade has been adopted by our government.. We have made sure that we maintain complate transperency since, this matter not only being an issue of international trade it is also a concern of the degrading health of the infants of our country.

Type-1 diabetes develops rapidly and progresses at a rapid phase which is a serious concern which has to be eradicated.

Diabetes mellitus is a metabolic disorder characterised by HIGH BLOOD GLUCOSE LEVEL ,associated with manifestations. "Diabetes" means 'polyuria' and 'mellitus' means 'honey'. The term Diabetes Mellitus was coined by Thomas Willis, who discovered sweetness of urine from diabetics in 1675.in most of the cases, diabetes mellitus develops due to deficiency of insulin.TYPE-1 DIABETES MELLITUS:It is due to deficiency of insulin because of destruction of beta cells in islets of Langerhans. It may occur at any age of life, and the persons affected by it require insulin injection. So, it is also called IDDM(insulin-dependent diabetes mellitus).When it is developed in infancy or childhood it is called Juvinile diabetes.Type-1 diabetes develops rapidly and progresses at a rapid phase , It is not associated with obesity but may be associates with acidosis and ketosis.SIGNS AND SYMPTOMS OF DIABETES MELLITUS: Increased blood glucose level due to reduced utilisation by tissues Mobilisation of fats from adipose tissue for energy purpose, leading to elevated fatty acid content in blood Depletion of proteins from the tissues.

COMPLICATIONS OF DIABETES MELLITUS: Cardiovascular complications like- (i)Hypertension (ii) Myocardial infraction Degenerative changes in ratina called Diabetic ratinopathy Degenerative changes in kidney known as Diabetic nephropathy Degeneration of autonomic and peripheral nerves called diabetic neuropathy.

DIAGNOSTIC TESTS FOR DIABETES MELLITUS: Fasting blood glucose Postprandial blood glucose Glucose tolerance test(GTT) Glycosylated hemaglobin..

Therefore, it is humbly submitted that the regulation is not more trade-restrictive than necessary to fulfil a legitimate objective which is eradication of type-1 diabetes among the infants[footnoteRef:13]. [13: K Sembulingum and Prema Sembulngium- essentials of medical psychology, jaypee brothers- medical publisher pvt. Ltd.]

III. PaCE REGULATIONS DO NOT CONTRAVENE WITH ARTICLE III:4 OF THE GATT

Article III:4 lays down;The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirementsaffecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product[footnoteRef:14] [14: Article III:4 of GATT. ]

III:4 GATT is a non-discrimination provision guaranteeing that imported products are accorded no less favourable treatment than like domestic products. It applies to measures affecting the internal sale, offering for sale, purchase, transportation, distribution or use. It has long been understood that the word affecting means that Article III:4 applies to measures affecting conditions of competition for imported products in the marketplace[footnoteRef:15]. [15: GATT Panel Report, Italian Agricultural Machinery, L/833, adopted 23 October 1958.]

The question is to ask whether a measure regulates (or most directly affects) an act involving products once they have been imported.[footnoteRef:16] First, it respects the wording of Article III:4, which refers to measures affecting internal acts. Second, it parallels the Appellate Bodys test for taxes and charges, which are subject to Article III:2 only when they accrue on the basis of an internal condition or event[footnoteRef:17]. [16: Robert Howse and Don Regan, The Product/Process Distinction An Illusory Basis for Disciplining Unilateralism in Trade Policy (2000) 11 EJIL 249, 254-5, argue that all process-based measures fall under Article III:4 because they affect the sale of products the view rejected here. They dismiss a reading of Article III:4 that focuses on the acts specifically mentioned in this provision, on the grounds that this would exclude regulations affecting internal acts not listed there, such as possession, storage, advertising, and so on. The interpretation suggested here would cover measures affecting these acts.] [17: WTO Appellate Body Report, China Auto Parts, WT/DS339/AB/R, adopted 12 January 2009, paras 161-162. ]

There are two Appellate Body Reports of importance. At first, EC Bananas III, the Appellate Body decided that a measure allocating import licences to domestic distributors is to be assessed under Article III:4[footnoteRef:18]. The Appellate Body said that this was because the rules were intended to have an effect on the sales of competing domestic products. But this is not convincing. As already noted, the same can be said of any quantitative restriction. [18: WTO Appellate Body Report, EC Bananas III, WT/DS27/AB/R, adopted 25 September 1997, para 211 ]

The better explanation is that the measure directly regulated an act (distribution) that was only relevant to imported products. The second, US FSC (Article 21.5 EC) involved a tax rebate contingent on the use (ie purchase) of domestic products. The Appellate Body decided that this was an internal measure because it affected the internal ... use of imported products, within the meaning of Article III:4 of the GATT 1994, as compared with like domestic products[footnoteRef:19]. For the reasons given, it is suggested that the first part of this sentence is correct; the second - for these characterisation purposes - of secondary importance. [19: WTO Appellate Body Report, US FSC (Article 21.5 EC), WT/DS108/AB/RW, adopted 29 January 2002, para 213.]

The PaCE does not contravene with the said Article because it has been applied in a reasonable, objective and impartial manner. Article III:4 of GATT read as the products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use.

Hence, to prove this, we need to establish the following:(i) The products of Agatea, has been not accorded treatment less favourably than that of the product of national origin.(ii) The Regulation does not affect the internal sale of the imported brands of PIFs.

(i) The products of Agatea, have been not accorded treatment less favourably than that of the products of national origin.

Article III of the GATT 1994 prohibits discrimination against imported products. Generally speaking, it prohibits members from treating imported products less favourably than like domestic products once the imported product has entered the domestic market. In 1958, in Italy Agricultural Machinery, a dispute concerning an Italian law providing special conditions for the purchase on credit of Italian produced agricultural machinery, the Panel stated with regard to Article III: that the intention of the drafters of the Agreement was clearly to treat the imported products in the same way as the like domestic products once they have been cleared through customs. Otherwise indirect protection could be given[footnoteRef:20]. [20: GATT Panel Report, Italian Agricultural Machinery, para. 11]

The broad and fundamental purpose of Article III is to avoid protectionism in the application of internal tax and regulatory measures[footnoteRef:21]. In early 2013, Relicare had announced in this general meetings about its intention to enter the growing market of infant food products. Their stepping into the market later, thus , cannot be understood as any kind of protectionism in internal market of Asgard. [21: Appellate Body Report, Japan Alcoholic Beverages II, 109]

It was the result of Agateas non-compliance with the PaCE regulation, that Likan although being a new product registered brisk sales. It cannot be inferred that Asgard had a hand in the happening of such events.

ii The Regulation does not affect the internal sale of the imported brands of PIFs: PaCE made regulations regarding the packaging of the product and not regarding the internal sale. Article 3 specifically innumerate the following regarding the retail packaging of all powdered infant formula products may comply with. IV ASGARDs CLAIMS FOR JUSTIFICATION UNDER ARTICLE XX OF GATT STANDS CORRECT.

Article XX of the GATT lays down ; Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures.

At a general level ,trade generates the degree of economic activity and economic welfare indispensible for the effective promotion and promotion of societal values and interests in order to promote and protect the above , however, governments also frequently adopt legislation or take measures that inadvertently or deliberately constitute barriers to trade . The members are often politically and / or economically ' compelled to adopt legislation or measures which are in consistent with the rules of WTO Law in particular with the principles of non- discrimination and the rules of market axis[footnoteRef:22]. [22: Chapter IV and V Of Cambridge Publications By Peter Van Den Bossche]

The wide ranging exceptions to basic WTO rules allows members to adopt trade -restrictive legislation and measures that pursue these societal values and interests .In this instant case the applicability of Article XX (b) is evident. Article XX(b) says ; (b) measures necessary to protect human, animal or plant life or health[footnoteRef:23]; [23: GATT Article III;wto.org]

"Necessity";This concept is found in the provisions applicable to regulations, standards and conformity assessment procedures. In our case the immediate necessity raised In early 2014, when there was an alarming spike in Asgard of Type-1 diabetes among children below the age of 5, which caused widespread anxiety all over Asgard, many infant lives had fallen a victim to diabetes, the ADOH conducted a study to understand the reason behind the sudden increase in diabetes and released a report[footnoteRef:24] and found out that : [24: ADOH report ,june 2014]

(i) Asgardians, in the preceding five years, have slowly shifted from breastfeeding to Powdered Infant Formula (PIF) for their children;(ii) Doctors have increasingly recommended the usage of PIF due to its nutritional value;(iii) At present, PIF sold under the names Rincewind, Linacre, Diamanda and Cementac are available in the market; (iv) Sampling and lab testing of the above supplements revealed that they contained high levels of corn syrup and sugar content, which was not specified on the packaging of these products;(v) Generally, the packaging only mentioned the generic ingredients of PIF, such as derived from cow milk, soy-based, etc. without mentioning all the contents in terms of percentage or weight.The above report clearly depicts why Asgard had to take intiative and hence ADOL drafted and published No. 8/2014 Packaging of Commodities and its Enforcement (PaCE) inviting comments on the draft law from all stakeholders in July 2014 ; as a result of the call for immidiate action by the parents of affected infants. On a humanitarian ground; the life of actual human beings is of far more importance than business of some companies.

In the terms of GATT-inconsistant measures to be provisionally justified under Article XX(b): the policy objective pursued by the measure must be the protection of life or health of humans, animals or plants the measures must be necessary to fulfill that policy objective.

The first element of this test under Article XX(b)is relatively easy to apply and has not given rise to major interpretative problems. In Thailand- Cigarettes,the Panel accepted that smokingconstituted a serious risk to human health and that consequently measures designed to reduce the composition of cigerettes fell within the scope of Article XX(b)[footnoteRef:25] It is a known fact that cigarettes are injurious to health, introduction of different flavours of cigarettes like strawberry, cherry etc ;these attract customers and indirectly promote the usage of cigarettes among people which may lead to health complications. The panel examined that the prohibition on import of cigarettes means that this provision clearly allowed contracting parties to give priority to human health over trade liberalization; however, for a measure to be covered by Article XX(b)it had to be "necessary". [25: GATT Panel Report, Thiland cigarettes,para 73]

The similar logic is to be applied in Asgard's case,to ensure the quality of PIFs, Regulation No.8/2014 i.e. the PaCE, was brought into force, with an objective to protect the Asgardians from harmful ingredients in the imported products that might have been the cause of Type-1 diabetes. This was the reason why Asgard's concerns could be met with measures consistant, or less inconsistant, with the General Agreement; this is why strict Non-Discriminatory labelling and ingredient disclosure regulations which alllowed governments to control the trade and at the same timewould keep the public informed of the contents of the PIFs. A non-discriminatory regulation implimented on National treatment basis, which required complete disclosure regulations.

In EC-Asbestos case,the appellate body in this case fashioned a new approach to consider the GATT- compatibility of health measures " necessary to protect human , animal , health or plant life under article XX(b). In the EC- Asbestos Case a Canadian complaint against the French regulation that prohibits manufactures, sale ,and imports of all Asbestos products, subjected to limited exceptions where no substitute product existed . The appellate body upheld the ban , and pointed to two separate ways such national health environmentally protective measures can be proved under GATT 1994.First, when considering whether the banned product or substance is a "like products" to permissible products for purpose of applying national treatment standard of GATT III:4 . The appellate body stated that crucial factor is evident that customers behaviour is influenced by the health or environmental risks associated with the products. Thus ,this justifies when a product entails health and environmental risks the differential treatment is justified between similar products. This is what happened in our case, the products were not banned but since, healthy diet of infants was curbed ,there were health risks included and that is why there were scientific studies carried out .Second, the appellate body in the EC- Asbestos Case provided a new interpretation of GATT article XX(b) that provides more flexibility to national governments in enacting measures to protect health and environment. Asgard acted with a view of safeguard of its citizens, and that is why the PaCE regulation came into picture and it was not specifically for Agatea but was for all the stakeholders who were in business with Asgard.

Article XX (b) has two requirements : showing that a measure is intended to protect human , animal , plant life or health proof that measure "necessity"[footnoteRef:26] [26: Tuna Dolphin II]

In Tuna-Dolphin case, Mexico claimed that the import prohibition on yellow fin tuna and tuna products was inconsistent with Articles XI, XIII and III of GATT. The US requested the Panel to find that the direct embargo was consistent with Article III and, in the alternative, was covered by Articles XX(b) and XX(g). The US also argued that the intermediary nation embargo was consistent with Article III and, in the alternative, was justified by Article XX, paragraphs (b), (d) and (g).The Panel found that the import prohibition under the direct and the intermediary embargoes did not constitute internal regulations within the meaning of Article III, was inconsistent with Article XI:1 and was not justified by Article XX paragraphs (b) and (g). Moreover, the intermediary embargo was not justified under Article XX(d)[footnoteRef:27]. In this case the protection of animal life was a necessity and it was instructed that there shall be labelling "dolphin-safe" zone, the mere objective was protection which lead to restriction . Asgard also complying with Article XX(b) of GATT, the measure of PaCE regulation was intended towards protection of Infants from falling into the category of Diabetic patients. [27: http://www.wto.org/english/tratop_e/envir_e/edis04_e.htm]

In US- GAsoline ,the Panel made an important clarification as to the requirement of 'necessity' under Article XX(b) : It is not the necessity of the policy objective but the necessity of the disputed measure to achieve that objective which is at issue. Panel stated : It was not the necessity of the policy goal that was to be examined ,but whether or not it was necessary that imported Gasoline be effectively prevented from benefiting from as favourable sales conditions as were afforded by an individual baseline tied to the producer of a product. It was the task of the Panel to address whether these inconsistent measures were necessary to achieve the policy goal under Article XX(b). In this case, the Panel examined whether measures existed that were ' consistant or less-inconsistant' with the GATT 1994 and 'reasonably available' to the US to further its policy objectives of protecting, human, animal and plant life or health. In the case of US-Shrimp, The panel had rejected a US defence under GATT Article XX, but Appellate Body reserved the Panels reasoning, and conducted its own Article XX analysis. After finding that the measure fell within Article XX(g) , the Body then examined whether the measure satisfied. Malaysia, one of the four original complainants in this case , complained in Article 21.5 proceeding that the measure still did not satisfy the Article XX exceptions . Article XX has been one of the more controversial aspects of WTO/GATT rules. In particular, there are two main areas of contention. First, there has been criticism by many environmental and other NGOS that the rules have not been interpreted flexibly enough to allow for appropriate use of non-trade policies. For many years it was pointed out that no measure had been found to be justified under an ARTICLE XX exception. While this is the case, there is still concern that the trade specialists who adjudicate on WTO disputes do not give enough credence to arguments that a measure serves an important non-trade goal. Secondly, a number of developing countries have complained about the use of unilateral environmental and health policies , particularly by United States , as a means of disguised protectionism , and they have argued that Article XX should not be interpreted so as to allow these measures. Their concerns relate to both internal measures that set high standards which are difficult for developing country exporters to meet, as well as measures that try to coerce foreign governments to adopt particular policies. Because much of the language of Art. XX is somewhat broad and vague, Panels and the Appellate Body have a good deal of discretion in interpreting the provisions in relation to these issues. Thus, depending on the interpretation the rules could favor different side.

It is humbly submitted that, Asgards decisions regarding the imposition of regulation on imported PIF is justifiable under article XX of GATT.

REQUEST FOR FINDINGS:Wherefore for the foregoing reasons, Agatea respectfully requests the Panel to adjudge and declare: 1. Asgard by imposing restrictions in the form of PaCE regulation has not violated Article 2.1 of TBT by imposing treatment less favorable than that accorded to like products of national origin .1. Asgard has not violated Article 2.2 of TBT by creating unnecessary obstacles to trade and making a trade-restrictive environment1. Asgard through Regulation No. 8/2014 of PaCE does not violate Article III:4 of GATT 1994, as it affects internal sales of the imported PIFs.1. Asgard can claim justification of its measures either under Article XX and Article XXI of TBT.

Respectfully Submitted, X Agents on behalf of the Respondent

MEMORANDOM ON BEHALF OF THE RESPONDENT