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TEAM CODE :022


KSLMCS open challenge (9th September,2014)
SEVENTH GNLU
INTERNATIONAL LAW MOOT COURT COMPETITION 2015

IN THE WORLD TRADE ORGANIZATION PANEL

ASGARD: MEASURES AFFECTING THE IMPORTED PRODUCTS


WT/DSxxx

AGATEA
(complainant)
v.
ASGARD
(Respondent)

MEMORANDOM ON BEHALF OF THE 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

PaCE REGULATIONS REGARDING THE REPACKAGING OF PIF HAS NOT

VIOLATED ARICLE 2.1 OF TECHNICAL BARRIER TO TRADE (TBT) ....13


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 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

MEMORANDOM ON BEHALF OF THE RESPONDENT

Art.

Article

PaCE

Packaging of Commodities and its Enforcement

GATT

General Agreement on Tariff and Trade

ADOL

Asgard Department of Law and Justice

ADOH

Asgard Department of Health

PIF

Powered Infant Product

APMA

Agatean Processed Food Members Association

WTO

World Trade Organisation

CSCPHN

Circle Sea on Public Health and Nutrition

NGO

Non-governmental organization

TBT

Technical Barriers to Trade

DSU

Dispute Settlement Understanding

PPMs

Product and Production Methods

EC

European Communities

US

United States

Vol.

Volume

Pg.

Page

No.

Number

WT

World Trade

UN

United Nations

Ver.

Version

MEMORANDOM ON BEHALF OF THE RESPONDENT

INDEX OF AUTHORITIES

AGREEMENTS, TREATIES AND CONVENTIONS

General Agreement on Tariffs and Trade

Agreement on Technical Barriers to Trade

Agreement on Sanitary and Phytosanitary Measures

ARTICLES, BOOKS AND JOURNALS


Cottier, T. and Mavroidis, P. (eds.), Regulatory Barriers and thePrinciple of NonDiscrimination 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.

MEMORANDOM ON BEHALF OF THE RESPONDENT

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

MEMORANDOM ON BEHALF OF THE RESPONDENT

PANEL AND APPELATE BODY REPORT

Panel Report, European Communities Measures Affecting Asbestos and AsbestosContaining 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.

MEMORANDOM ON BEHALF OF THE RESPONDENT

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, <www.wto.org/english/tratop_e/tbt_ e/tbt_e.htm>


(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 ProductProcess Doctrine in the GATT/WTO Jurisprudence in Bronckers, Marco and Quick,

MEMORANDOM ON BEHALF OF THE RESPONDENT

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

MEMORANDOM ON BEHALF OF THE RESPONDENT

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

MEMORANDOM ON BEHALF OF THE RESPONDENT

10

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.

MEMORANDOM ON BEHALF OF THE RESPONDENT

11

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 PLEADINGS

Argument I
PaCE 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

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12

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 III
PaCE 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 IV
Asgard '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

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.1 Thus to prove that
Asgards act is in consonance with Article 2.1 of TBT, it must be established that:
Asgard accords no less favourable treatment than that provided for its respective
schedule.
1 Article 2.1, TBT Agreement

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13

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

(ii)

Powdered Infant Formula (PIF) for their children;


Doctors have increasingly recommended the usage of PIF due to its nutritional

(iii)

value;
At present, PIF sold under the names Rincewind, Linacre, Diamanda and Cementac

(iv)

are available in the market;


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

(v)

these products;
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 weight2.

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

2 ADOH- report concerning PIF.

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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 AGREEMENT
Article 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

ii.

PIF.
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

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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.

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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
TBT3.

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.4
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-safety5.
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 restrictive
solution 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.
3 Nathalie Bernasconi-Osterwalder - Environment and Trade, a guide to
Jurisprudence, page no 190
4 Jeff Colgan (2005). The Promise And Peril of International Trade.
5 Brian Loo - EEP 131 -Professor Larry Karp - Consumer Information, Consumer
Rights and WTO Trade Law.

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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.6
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.7
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 consensus8
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
6 Ladina Caduff (August 2002). Growth Hormones and Beyond. ETH Zentrum
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.

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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 offal9.
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.10
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.

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
9 Jeff Colgan (2005). The Promise And Peril of International Trade
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

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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 humans11.
11 DSB: EC-US Disputes Top Agenda. International Centre for Trade and Sustainable
Development. Bridges Weekly Trade News Digest.
<http://ictsd.org/i/news/bridgesweekly/7451/> Vol 7, No 38. 13 Nov 2003

MEMORANDOM ON BEHALF OF THE RESPONDENT

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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 protection12.
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

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

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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 infants13.

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 requirements
affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The
provisions of this paragraph shall not prevent the application of differential internal

13 K Sembulingum and Prema Sembulngium- essentials of medical psychology,


jaypee brothers- medical publisher pvt. Ltd.

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transportation charges which are based exclusively on the economic operation of the means of
transport and not on the nationality of the product14
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 marketplace15.
The question is to ask whether a measure regulates (or most directly affects) an act involving
products once they have been imported.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 event17.
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:418. The Appellate Body said that this was because the rules were intended to
14 Article III:4 of GATT.
15 GATT Panel Report, Italian Agricultural Machinery, L/833, adopted 23 October
1958.
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.
18 WTO Appellate Body Report, EC Bananas III, WT/DS27/AB/R, adopted 25
September 1997, para 211

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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.
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 products19. 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.
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

19 WTO Appellate Body Report, US FSC (Article 21.5 EC), WT/DS108/AB/RW,


adopted 29 January 2002, para 213.

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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 given20.
The broad and fundamental purpose of Article III is to avoid protectionism in the
application of internal tax and regulatory measures21. 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.
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.
20 GATT Panel Report, Italian Agricultural Machinery, para. 11
21 Appellate Body Report, Japan Alcoholic Beverages II, 109

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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 axis22.
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 health23;
"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 report24 and found out that :
(i)
Asgardians, in the preceding five years, have slowly shifted from breastfeeding to
(ii)

Powdered Infant Formula (PIF) for their children;


Doctors have increasingly recommended the usage of PIF due to its nutritional

(iii)

value;
At present, PIF sold under the names Rincewind, Linacre, Diamanda and

(iv)

Cementac are available in the market;


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;

22 Chapter IV and V Of Cambridge Publications By Peter Van Den Bossche


23 GATT Article III;wto.org
24 ADOH report ,june 2014

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(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)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".
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
25 GATT Panel Report, Thiland cigarettes,para 73

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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"26
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
26 Tuna Dolphin II

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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)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.
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
27 http://www.wto.org/english/tratop_e/envir_e/edis04_e.htm

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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 .
Asgard has not violated Article 2.2 of TBT by creating unnecessary obstacles to trade

and making a trade-restrictive environment


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.

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4

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

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