B. Japan's Plant Protection Law and the Enforcement Regulation

1. General

18. The legislation relevant to this dispute is contained in the Japanese Plant Protection Law, enacted on 4 May 1950, as amended (the "Plant Protection Law"). ⁹ The applicable regulation is the Plant Protection Law Enforcement Regulation (the "Enforcement Regulation"), enacted 30 June 1950, as amended. ¹⁰
19. The stated objective of the Plant Protection Law is to ensure the "stabilization and development of agricultural production by inspecting export plants, imported plants and domestic plants, by controlling injurious animals and plants, and by preventing the outbreak or spreading thereof". ¹¹
20. The Plant Protection Law identifies as "quarantine pests" those pests whose existence has not been confirmed in Japan, or those which exist in part of the Japanese territory and are subject to official control (Article 5.2 of the Plant Protection Law). Subsequent to such identification, the Plant Protection Law establishes an inspection mechanism for imported plants and plant products:

(a) all imported plants and plant products have to be accompanied by a phytosanitary certificate, in principle, which states that the plants and plant products are considered free from the quarantine pests (Article 6, paragraph 1 of the Plant Protection Law);

(b) in certain cases, a growing-site inspection by the foreign authorities is mandatory (Article 6, paragraph 2). This mechanism was introduced by the 1996 amendment of the Plant Protection Law, and took effect April 1998;

(c) upon entering the Japanese territory, plants and plant products have to be inspected by plant quarantine officers at one of the 101 major ports (or airports) of entry designated by the Enforcement Regulation (Article 6, paragraph 3; Article 8, paragraph 1); and,

(d) certain plants may be subjected to post-entry inspection at a post-entry quarantine station for viruses and other pests which might not be detected by the visual inspection at the ports of entry (Article 8, paragraph 7).

21. If a plant or a plant product fails to pass the above inspection, it will either be destroyed or disinfected/disinfested under the Plant Protection Law. In order to counter the risk of inadvertent introduction of particularly harmful quarantine pests, the Plant Protection Law delegates to the Ministry of Agriculture, Forestry and Fisheries ("MAFF") the authority to prohibit importation of certain host plants from countries or areas infested by the pests (Article 7, paragraph 1, item 1). ¹² This authority is exercised in the form of a list of prohibited products, which is contained in a table annexed to the Enforcement Regulation. ¹³ This "Annexed Table" identifies the quarantine pest which constitutes the cause of the import prohibition, the countries or areas from which importation is prohibited, and the prohibited host plants and their specific parts.
22. In practice, the confirmation process for efficacy of disinfestation treatment consists of two parts: the process applicable to the initial lifting of the import prohibition and the test for the approval of additional varieties. These are contained in two sets of guidelines developed in 1987 and which have, to date, not been published � although they are available to interested parties. ¹⁴ The contents of these are summarized below.

2. Initial lifting of prohibition

23. The "Experimental Guideline for Lifting Import Ban - Fumigation" ("Guidelines for initial lifting") outline the procedure applicable to the initial lifting of the prohibition. The procedure includes the following:

Basic Tests (small-scale dose-mortality tests) ¹⁵

(a) Determination of the most resistant stage of insects to fumigation (a comparative test of susceptibility between development stages) estimated through small-scale dose-mortality tests.

(b) Estimation of treatment schedule achieving 100 per cent mortality.

Large-Scale Mortality Test

The efficacy of the chosen treatment is tested using 30,000 insects at the most resistant stage on the variety (the representative variety). Japan accepts the efficacy of the treatment if no insect survives, as an approximation of probit 9.

On-site confirmatory test

The results of the test are further confirmed on site by Japanese experts in the on-site test using 10,000 sample insects (on the representative variety).

3. Lifting of prohibition for additional varieties

24. The guidelines for the approval of additional varieties are set out in "Experimental Guide for Cultivar Comparison Test on Insect Mortality � Fumigation". These include:

Basic test (small-scale dose-mortality test)

As the most resistant development stage of the insect is identified when (part of) the species is approved for the first time, this test targets only the comparative efficacy between the approved varieties and the newly proposed varieties. Response of insects in additional varieties is tested for different levels of treatment (e.g., the amount of fumigant, the length of cold treatment). The results are typically analyzed by comparing LD₅₀ by probit analysis. If the new varieties are found to show equivalent or superior effectiveness compared to approved varieties, no large-scale mortality test is necessary. If the result is significantly less effective, however, a new treatment standard has to be developed and tested by a large-scale experiment.

On-site confirmatory test

This test is performed on one representative variety. Japanese experts are sent to confirm the on-site test.

Table 1 Test Schedule for Initial and Additional Lifting
Tests (purpose)			Initial lifting of prohibition	Lifting of prohibition for additional varieties
	Test insects	Subject varieties
Dose-response (1) identification of the most resistant development stage of the pest; and (2) identification of the representative variety16	2,000 in total (200 per one dose bracket times five dose brackets in two replicates)	ALL	YES (for (1) and (2))	YES (for (2))
Large-Scale Confirmation of efficacy	30,000 (10,000 each in three replicates)	ONE	YES	NO*
On-Site Confirmatory Final confirmation	10,000	ONE	YES	YES
* This assumes that the existing treatment would be found by basic tests to be adequate for new varieties. If not, a new treatment would have to be established and confirmed by large-scale tests.

C. Relevant International Standards, Guidelines and recommendations - the IPPC

1. General

25. The SPS Agreement makes reference, in a number of provisions, to the "relevant international standards, guidelines and recommendations". Annex A:3(c) of the SPS Agreement states that the international standards, guidelines and recommendations relevant for plant health are those developed under the auspices of the Secretariat of the International Plant Protection Convention ("IPPC" or "the Convention") in cooperation with regional organizations operating within the framework of the IPPC.
26. The IPPC is an international treaty deposited and administered by the Food and Agriculture Organization of the United Nations (FAO) but implemented through the cooperation of member governments and Regional Plant Protection Organizations. The IPPC currently has 106 contracting parties.
27. The purpose of the Convention is to secure common and effective action to prevent the spread and introduction of pests of plants and plant products, and to promote appropriate measures for their control. An important role of the IPPC is that of standard-setting.
28. The first text of the international convention was drafted in 1929 and came into force in 1952, adopted by the FAO Conference one year prior to that. Amendments were adopted by the FAO in 1979 and the revised text came into force in 1991. In response to the role of the IPPC in the context of the Uruguay Round and the negotiation of the SPS Agreement, the FAO established a Secretariat for the IPPC in 1992, followed by the formation of the Committee of Experts on Phytosanitary Measures (CEPM) in 1993. Negotiations for amendments to the Convention, in order to reflect contemporary changes, particularly in light of the SPS Agreement, started in 1995 and were finalized in 1997 when the FAO Conference adopted the New Revised Text of the IPPC. The New Revised Text makes provision for the formation of a Commission on Phytosanitary Measures. The amended IPPC will come into force upon ratification by two-thirds of its contracting parties.

2. Guidelines for Pest Risk Analysis

29. Generally, IPPC standards have their origin in national or regional initiatives, and/or are drafted by expert groups organized by the IPPC Secretariat. The topics and priorities for draft standards are determined by the Secretariat in consultation with Regional Plant Protection Organizations and their members. IPPC standards fall within two categories: reference standards and other standards.
30. Among the IPPC's completed standards is the Guidelines for Pest Risk Analysis ("PRA Guidelines"), adopted in 1995. ¹⁷ The IPPC describes the PRA Guidelines as consisting of three stages. Stage one involves (a) the identification of a pathway, usually an imported product, that may allow the introduction and/or spread of quarantine pests, and (b) the identification of a pest that may qualify as a quarantine pest. Stage two considers the identified pests individually and examines, for each one, whether the criteria for quarantine pest status are satisfied, that is, that the pest is of "potential economic importance to the area endangered thereby and not yet present there, or present but not widely distributed and being officially controlled". Finally, based on the information gathered under Stages one and two, Stage three determines the appropriate phytosanitary measure(s) to be adopted. This pest risk management to protect the endangered areas should be proportional to the risk identified in the pest risk assessment. The three stages are summarized in the PRA Guidelines as: "initiating the process for analysing risk", "assessing pest risk" and "managing pest risk", respectively.
31. Pest risk management options include¹⁸:

1. inclusion in list of prohibited pests;
2. phytosanitary inspection and certification prior to export;
3. definition of requirements to be satisfied before export (e.g. treatment, origin from pest-free area, growing season inspection, certification scheme);
4. inspection at entry;
5. treatment at point of entry, inspection station or, if appropriate, at place of destination;
6. detention in post-entry quarantine;
7. post-entry measures (restrictions on use of product, control measures); and,
8. prohibition of entry of specific products from specific origins.
32. Pest risk management options may also concern ways of reducing risk of damage. The PRA Guidelines state that the efficacy and impact of the various options in reducing risk to an acceptable level should be evaluated in terms of the following factors¹⁹:

1. biological effectiveness;
2. cost/benefit of implementation;
3. impact on existing regulations;
4. commercial impact;
5. social impact;
6. phytosanitary policy considerations;
7. time to implement a new regulation;
8. efficacy of option against other quarantine pests; and,
9. environmental impact.
33. In sum, the PRA Guidelines define a procedure by which a pest risk analysis should be performed, and lay down relevant factors which should be taken into account by the authorities in the process.

III. Claims of the Parties

1. The United States claimed that Japan's varietal testing requirement as it applied to quarantine treatments for codling moth was an unjustified barrier to trade and was inconsistent with the SPS Agreement. As a result of Japan's measure, maintained ostensibly for plant health ("phytosanitary") reasons, Japan effectively blocked access to its market for US varieties that competed with a number of Japanese produced varieties of the same product. The United States claimed that Japan's varietal testing measure had failed each of the following obligations under the SPS Agreement in that it:

1. was maintained without sufficient scientific evidence (Article 2.2);
2. was not based on scientific principles (Article 2.2);
3. was not based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health (Article 5.1);
4. had not taken into account available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific pests; relevant ecological and environmental conditions; and quarantine or other treatment (Article 5.2);
5. was more trade-restrictive than required to achieve the appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility (Article 5.6);
6. was not transparent in that one Enquiry Point was not responsible for the provision of answers to all reasonable questions from interested Members regarding the measure and there was furthermore no published source for the measure itself (Article 7); and,
7. it was reliant upon control and inspection procedures, and applied to a modified product (i.e. a different variety of a product), was not limited in its information requirements to what was necessary for appropriate control and inspection procedures, and was not limited to what was necessary to determine whether adequate confidence existed that the product still met the regulations concerned (Article 8 and Annex C).
2. In its request for consultations, the United States claimed that the fact that Japan's varietal testing requirement was not a legitimate phytosanitary measure meant that it was also inconsistent with Article XI of GATT 1994 and Article 4 of the Agreement on Agriculture. However, the United States did not pursue these claims in its submissions or in its oral statements to the Panel, nor did it request findings with respect to these claims.
3. Japan claimed that its policy was fully consistent with the relevant articles of the SPS Agreement, Article XI of GATT 1994 and Article 4 of the Agreement on Agriculture. In particular, Japan emphasized that the measure was entirely based on phytosanitary considerations and that the suggestion by the United States to the contrary was false.

To continue with Arguments of the Parties

⁹ Law No. 151 of 1950; most recently amended in 1996. (Japan, Exhibit 6)

¹⁰ MAFF Ordinance No.73 of 1950. (Japan, Exhibit 7)

¹¹ The Plant Protection Law, Article 1.

¹² In addition, the Plant Protection Law prohibits the importation of quarantine pests, soil or plants contaminated by soil and packages containing these articles (Article 7, paragraph 1, items 2 to 4).

¹³ List of the Plants Subject to Import Prohibition, Plant Protection Law Enforcement Regulation Annexed Table 2. (Japan, Exhibit 8)

¹⁴ Contained in Japan, Exhibit 10.

¹⁵ A glossary of technical and scientific terms is contained in paragraphs 2.11 to 2.17.

¹⁶ See paragraph 2.23 (under Large-Scale Mortality Test).

¹⁷ International Standards for Phytosanitary Measures, Guidelines for Pest Risk Analysis, FAO Publication No.2. (US Exhibit 5)

¹⁸ PRA Guidelines, p.20.

¹⁹ PRA Guidelines, p.20.