Sweden’s Request to Ban American Lobster in the EU Risks Violating the Rules of the WTO

King & Spalding

On February 29, 2016, the Swedish Government requested that the European Union impose a ban on imports of U.S./Canadian live lobster (Homarus americanus). Sweden argued that Homarus americanus is an “alien invasive species” to the EU because it is not native to the EU, because it poses serious risks to European lobsters through the spreading of disease, and because once the American lobster is established, it will be impossible to eradicate.

The European Union is expected to act quickly, and if the proposed ban is approved, it would immediately affect all imports of Homarus americanus to the EU. Sweden has conducted a risk assessment and concluded that this assessment supports the ban. Norway, which is not an EU member state, already decided to ban the importation of American lobster on much the same basis. However, others have expressed the view that the real “problem” consists of relatively few American lobsters escaping into the wild as a result of inadvertent behavior of individuals handling these lobsters. They argue there is no risk of an invasion of American lobsters, meaning that the problem is not a sanitary problem inherent in the importation or sale of these lobsters, but rather a simple transportation/enforcement problem. It is argued that the proposed import ban may well be driven in reality by concern over the commercial success of the slightly larger Homarus americanus lobster, leading to a loss of market share for the local lobster producers.

The U.S. Congressional delegation of Massachusetts has written a letter to the Office of the United States Trade Representative (“USTR”) for the benefit of its lobster industry, asking the U.S. government to intervene to stop this unnecessary and measure from being adopted for the entire EU, which is an increasingly important market.

As members of the World Trade Organization (“WTO”), Sweden/the EU are prevented from imposing measures to protect animal life or health that are not based on scientific principles, that are maintained without sufficient scientific evidence, that are based on an inappropriate assessment of the risks to animal life or health, or that are more trade restrictive than necessary to achieve the appropriate level of protection. In the event that the EU decides to adopt the ban, arguments will likely be made that the EU’s ban of Homarus americanus lacks a sufficient scientific basis, that it is not apparent that live lobster from the U.S./Canada is a risk to EU biodiversity, and that the proposed ban would be completely disproportionate. The EU will likely seek refuge behind the risk that exists and the uncertainty about the potential effect of further invasion of this species of lobster.

A somewhat similar issue is currently being litigated before the WTO. In the dispute Korea – Import Bans, and Testing and Certification Requirements for Radionuclides (DS495), Japan’s challenge mainly concerns Korea’s import ban on certain food products and its additional testing and certification requirements regarding the presence of certain radionuclides. Korea’s measures were adopted subsequent to the accident at the Fukushima Daiichi nuclear power plant in March 2011. Korea is expected to argue that the risk of higher levels of radioactive substances in Japanese food products allows it to maintain these measures, at least as a temporary precautionary measure, while Japan will likely argue that this measure lacks any scientific basis. The Panel, which was formed on February 8, 2016, is expected to issue its ruling early next year. Among other things, it will have to take a position on the important precautionary principle and determine to what extent the risk of adverse sanitary or health effects justifies giving greater deference to regulators.

The precautionary principle is reflected in, among others, Article 5.7 of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (“SPS Agreement”). It was recognized by the Appellate Body in the 1998 dispute EC – Hormones1 to find expression throughout the SPS Agreement, and in particular in Article 5.7, which allows members to take provisional SPS measures “where relevant scientific evidence is insufficient.” The Appellate Body further found that the principle is reflected in the preamble and in Article 3.3 of the SPS Agreement with respect to a member’s right to set its own appropriate level of protection (“ALOP”) for sanitary measures, even when that level is higher or more cautious than implied by existing standards and guidelines.

While the Appellate Body in EC – Hormones found that the precautionary principle does not itself override the provisions of Article 5 of the SPS Agreement, the Appellate Body has more recently emphasized the following from the finding:

…a panel charged with determining, for instance, whether “sufficient scientific evidence” exists to warrant the maintenance by a member of a particular SPS measure may, of course, and should, bear in mind that responsible, representative governments commonly act from the perspectives of prudence and precaution where risks of irreversible, e.g. life-terminating, damage to human health are concerned.2

The Appellate Body3 and WTO panels4 have recognized that the precautionary principle is an evolving concept in international law, and so the status of that principle as a general principle of law or customary international law may have further “crystallized”5 since the first and most extensive review of the principle by the Appellate Body in 1998.

It is doubtful, however, that Sweden/the EU could successfully rely on this principle. Sweden/the EU do not seem to propose a temporary ban while more evidence is being gathered. Rather, Sweden/the EU suggest that sufficient scientific evidence exists of the risk posed by the presence of American lobsters in the territorial waters of the European Atlantic coast. In such a situation, the precautionary principle seems less relevant and it must be examined whether the measure is indeed supported by sufficient scientific evidence and whether an objective risk assessment has been conducted that supports the particular measure. The basic principle of WTO law is that each member can set its ALOP at the level it wishes6 and thus even a zero-risk level is possible.

As was made clear by the Appellate Body in Japan – Agricultural Products II, however, even if a member is free to set its own level of risk, that does not mean that measures are allowed to be disproportionate to the risk in question. Thus a measure maintained without sufficient scientific evidence violates Article 2.2 of the SPS Agreement if it is completely disproportionate to the risk identified by the scientific evidence in question. For example, in Japan – Apples, the Panel found that “such clear disproportion” implies that a “rational or objective relationship” does not exist between the measure and the relevant scientific evidence and, therefore, the measure is maintained “without sufficient scientific evidence” within the meaning of Article 2.2 of the SPS Agreement.7 The Swedish/EU ban on American lobster based on the risk allegedly posed by 32 lobsters that escaped during transportation would seem to require the WTO to look very carefully at the proportionality of the measure to determine whether it is maintained without sufficient scientific evidence, in addition to examining the necessity of the measure in light of alternative measures related to stricter controls on the transportation of live lobsters and more effective enforcement of the relevant laws and regulations.

1 See Appellate Body Report, EC – Hormones, paras. 123-124.
2 Appellate Body Report, US/Canada – Continued Suspension, para. 680 (quoting Appellate Body Report, EC – Hormones, para. 124) (emphasis added).
3 See, e.g. Appellate Body Report, EC – Hormones, para. 123.
4 See, e.g. Panel Report, EC – Biotech Products, paras. 7.88-7.89.
5 Appellate Body Report, EC – Hormones, para. 123.
6 Appellate Body Report, Australia – Salmon, para. 199.
7 Panel Report, Japan – Apples, para. 8.199.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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