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Japan - Measures Affecting Agricultural Products

Report of the Panel

(Continued)


    4. Article 5.2

  1. Serving as a guideline for evaluation of risk, the United States pointed out that Article 5.2 suggested that Members take into consideration "available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases and pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions; and quarantine or other treatment". There was no evidence that Japan had complied with this obligation. Japan had not taken into consideration the relevant risk factors for contamination by the pest, which would necessarily include: an understanding of the growth patterns of the pest138, which products were considered to be preferred host of the pest, and what pre- and post-harvest techniques were implemented to reduce levels of infestation. 139 Although there was a significant body of published information on these topics, the United States maintained that Japan had not factored any of these considerations into their pest risk analysis. Neither had Japan given consideration to the intended use of the product - which in the case of exported fruit was for consumption and not for propagation.
  2. Furthermore, contrary to Article 5.2, Japan had not examined relevant process and production methods; prevalence of codling moth; or relevant environmental and ecological conditions as these factors related to US apples, cherries, walnuts, and nectarines. 140 Had Japan engaged in such an assessment of risk of introduction of codling moth to Japan, it might have examined the biology of the codling moth to discern what stage was most tolerant to MB fumigation, what stage of tolerance of the pest would be expected at harvest, and when if at all the codling moth would be most abundant on a particular fruit product. Such technical issues were of value in developing the appropriate quarantine treatment. 141
  3. An assessment of risk might also have examined, as required under Article 5.2, the prevalence of codling moth on US products. Codling moth was rarely found in exported US fruit mainly due to the combination of integrated pest management (IPM) and production and post-harvest practices. IPM practices included monitoring of moth activity to determine when generations appeared and in order to predict when egg laying would occur. Use of moth-trap catch data, combined with historical and environmental data, permitted relatively accurate predictions of moth activity. These predictions, plus field observations, dictated when and what type of control was necessary. 142 There were studies that demonstrated that the presence of codling moth on US apples 143 and on walnuts 144 was relatively limited; and that US cherries 145 and nectarines 146 were not preferred hosts of the codling moth. 147 Moreover, Japan had not taken into consideration the existence of uniform and effective US quarantine treatments for the pest in the relevant fruit product. 148
  4. The United States claimed, thus, that the document which Japan had asserted was its risk assessment did not take into account the factors listed in Article 5.2. It did not, and could not, demonstrate any objective or rational relationship between Japan's varietal testing requirement, on the one hand, and scientific evidence of a phytosanitary risk on the other.
  5. Japan noted that on this question of law, the United States seemed to argue that Japan's entire pest risk analysis had not taken into account the factors listed in Article 5.2. In respect of available scientific evidence, Japan claimed that the 1996 pest risk analysis had relied on the data set out under Article 2.2, as they were available in 1996. In respect of relevant process and production methods, Japan claimed that there were no known processes or methods of cultivation which could avoid codling moth completely. In respect of relevant inspection, sampling and testing methods, Japan noted that there were no known inspection, sampling and testing methods, either by exporting countries or by Japan, which would effectively detect and prevent introduction of the insect into Japan. Japan had taken into account that the host fruits were for consumption. In respect of the prevalence of specific diseases or pests, Japan had identified areas infested by pests, including the United States, by available literature and other surveys. In respect of existence of pest- or disease-free areas, Japan had not been able to obtain information regarding the presence of a pest-free area within a country or area infested by the moth. Furthermore, relevant ecological and environmental conditions � the biological characteristics of codling moth and the Japanese environmental conditions had been examined, and it had been found that the insect could be successfully introduced and established in Japan. Finally, in respect of quarantine treatment or other treatment, Japan recalled that codling moth eggs or young larvae which entered into the fruits at the calyx were very difficult to detect. Although no comprehensive quarantine treatment of host plants had been developed so far, effective treatments had been established for certain varieties of American cherries, nectarines, in-shell walnuts and apples, Canadian cherries, New Zealand cherries, nectarines and apples.
  6. Japan further rebutted the US claims set out in paragraph 4.171: (i) Japan had considered the biology of the codling moth in order to discern what stage was the most tolerant to MB fumigation � this factor constituted the core of the "basic test"; (ii) in respect of the stage of tolerance of the pest that could be expected at harvest, Japan noted that the test guidelines required exporting governments to investigate development stages of the insect which could be encountered at harvest, and that the most resistant of possible development stages found on harvested fruits be tested for a treatment; (iii) in respect of when the codling moth would be most abundant on a particular fruit product, Japan noted that as the harvest season would not vary for a variety, variation in the number of individuals would not affect the kinds of tests required.
  7. In respect of the US claim that Japan had not taken into account the fact that codling moth was rarely found in exported US fruit (paragraph 4.172), Japan noted that the concept of IPM was to manage the insect population so that harmful populations be diminished and maintained at a level lower than an economic injury level. By definition, it did not achieve the level of protection equivalent to import prohibition. This risk would not be eliminated by import procedures alone, for there was no inspection technique which would effectively discover the pest. Disinfestation had been chosen in light of these considerations, and not because pre- and post-harvest techniques were irrelevant. Furthermore, although the United States had pointed out that there were studies that demonstrated that the presence of codling moth on US apples and walnuts was relatively low; and that US cherries and nectarines were not preferred hosts to the codling moth (also in paragraph 4.172), Japan noted that available literature confirmed the presence of codling moth in apples, walnuts, cherries and nectarines. 149 In a previous case, dead larvae because of fumigation were found upon inspection of exported cherries. 150
  8. The United States noted that the approach taken by Japan was to evaluate each factor on its own to achieve Japan�s level of protection was a peculiar approach to risk assessment. The United States claimed factors such as the biology of the codling moth, the prevalence of codling moth on various US products, the scientific evidence and the empirical data, had to be viewed as complementary factors and cumulative in effect to assess the risk of codling moth from US products for export to Japan. This differed significantly from the position of Japan, which examined each aspect of risk as a "zero sum" matter. In other words, if, as they had asserted, there was no inspection process that completely accounted for the presence (or lack) of codling moth on exported products then there was risk irrespective of the fact that the United States engaged in rigorous pre- and post-harvest techniques to reduce the prevalence of codling moth in the first place.
  9. F. Article 5.6

  10. The United States argued that the Japanese varietal testing requirement was inconsistent with Article 5.6 in that it was significantly more trade-restrictive than required to achieve the appropriate level of phytosanitary protection. Article 5.6 required that:
  11. "Without prejudice to paragraph 2 of Article 3, when establishing or maintaining sanitary or phytosanitary measures to achieve the appropriate level of sanitary or phytosanitary protection, Members shall ensure that such measures are not more trade-restrictive than required to achieve their appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility." 151

  12. The United States noted that the "appropriate level of sanitary or phytosanitary protection" was defined in paragraph 5 of Annex A of the SPS Agreement as: "The level of protection deemed appropriate by the Member establishing a sanitary or phytosanitary measure to protect human, animal or plant life or health within its territory." For the purpose of the dispute at issue, the level of protection could be achieved by a certain rate of mortality of the pest (probit 9 level of mortality).
  13. The United States noted that in order to fulfil the requirements of Japan, the United States had conducted the testing procedure on seven varieties of apples, nine varieties of cherries, ten varieties of nectarines, and four varieties of walnuts. The efficacy of the quarantine treatment had always been shown in the confirmatory tests, in which the exact same treatment for the product uniformly achieved Japan's level of quarantine protection irrespective of variety. The United States had never had to modify a quarantine treatment for codling moth for varieties of the same product. Hence, according to the United States, these results conclusively demonstrated that Japan's varietal testing requirements had no value in providing additional quarantine protection.
  14. The United States further claimed that the uniform experience of efficacy of treatment for varieties against codling moth was not limited to the United States. Japan had yet to identify any instance where a quarantine treatment developed by any country (New Zealand, Australia, Chile, South Africa, Spain, Israel, and others) for codling moth on fruit to be imported into Japan had been changed for subsequent varieties. The United States maintained that no other country had ever had to modify a treatment among varieties to achieve Japan's level of protection for codling moth. Additionally, the accepted international practice in the area of pest quarantine treatment by virtually every other country in the world was to require testing by product, not by variety. In this respect, the United States noted that as an example, with respect to quarantine practices for all arthropods (pests), the United States had for decades cleared fruit by pest and plant species, not by variety. In the operation of these quarantine approvals by species, there had never been any indication of varietal differences that required modification of the established treatment for the product. Therefore, it was evident that testing by product (in which a treatment was established with one variety, or group of varieties, and then applied to all other varieties of that product subsequently sought for export), provided an equal level of quarantine protection and was significantly less trade restrictive.
  15. Article 5.6 was violated if there was a reasonably available alternative, taking into account technical and economic feasibility, which achieved Japan's level of quarantine protection and was significantly less trade restrictive. Because there were no varietal differences that affected the efficacy of quarantine treatment, the same established treatment would achieve the appropriate level of protection for all varieties of a product. The United States noted that testing by variety took a minimum of 2-4 years to complete per variety, was resource intensive and costly to perform, and, furthermore, seriously delayed market access of US products. On the other hand, testing by product was significantly less trade restrictive. The Japanese requirement of varietal testing was significantly more trade-restrictive than required, and testing by product was a reasonably available alternative which achieved Japan's level of phytosanitary protection.
  16. Japan stated that its lifting of import prohibition was indeed a result of the discharge of its obligation under Article 5.6. Whenever Japan found a measure which achieved the appropriate level of protection and was significantly less restrictive, the import prohibition was replaced with such a measure. In this particular case, however, Japan had found data which suggested presence of varietal differences in efficacy of MB fumigation, and a hypothesis which explained such a variation.
  17. The United States had challenged Japan under the assumption that "[b]ecause there are no varietal differences that affect the efficacy of quarantine treatment, the same established treatment will achieve for all varieties of a product the appropriate level of protection". However, the US evidence did not support their position; the United States had simply submitted a hypothesis which not only cast doubt on laboratory results but on large-scale tests as well. Japan claimed that prior to the lifting of the import prohibition on certain products subject to implementation of an alternative measure, efficacy of the measure had to be demonstrated by the exporting government, and this was a reasonable requirement in light of the asymmetric presence of information on exotic pests and goods. As the United States had not proven species-wide efficacy, Japan was not obliged to accept their alternative at this stage.
  18. Japan pointed out that it had nevertheless made efforts to alleviate the burden of exporting governments. Japan had accepted the concept of a representative variety. This was why there was no requirement of a full-scale testing of each variety. In additions, for approval of additional varieties, the size of samples in large-scale demonstrations had been reduced from 30,000 to 10,000 insects.
  19. The United States noted that other than recognition of pest-free zones or eradication of a pest from a region or country, Japan had never accepted an alternative to its varietal testing regime with respect to codling moth or other pests of similar significance to Japan. The United States stressed that it considered testing by product as the only acceptable quarantine measure in the context of the dispute at issue. It was acceptable that the first variety of a particular product from any source should be subject to the full range of testing. Japan's required procedures for the development of a quarantine treatment included a large-scale test with sufficient numbers of insects to validate that treatment for the product. After such validation, no further testing was necessary for additional varieties. The United States claimed that to be required to treat 10,000 insects and to use the necessary quantity of fruit for each additional variety would be virtually as time-consuming and burdensome as the current requirement to do dose-mortality tests for each variety and confirmatory testing on representative varieties. Hence, to accept the requirement of confirmatory tests on each subsequent variety would be tantamount to acknowledging that varieties made a difference in the ultimate efficacy of MB quarantine treatment for codling moth, a notion unsupported by scientific evidence, data, or principle.
  20. G. Article 5.7

  21. Japan claimed that varietal testing could be considered a provisional measure. The rationale of the present policy to require efficacy confirmation on a variety basis was that available evidence suggested a possible presence of varietal differences in the efficacy of disinfestation treatment. This policy was based on a scientific hypothesis, it did not presume, a priori, varietal differences in all circumstances. Import prohibition could be lifted on a product basis subject to sufficient demonstration. As an example, in respect of fruits whose varietal difference was attributed to bud mutation (e.g., lemons), and no major differences were anticipated, a single treatment would ensure an appropriate level of protection for all varieties of the product.
  22. Once the import prohibition had been lifted on a particular variety subject to a disinfestation treatment, new data would be accumulated on the effects of a treatment or on the characteristics of prohibited items, and it would then be possible to reach a level of confidence on broader applicability of the existing treatment. This was a reasonable assumption; however, until that had been achieved, Japan insisted on its right to maintain the prohibition, on a provisional basis, on importation of the other varieties. Japan based its measure on available pertinent information as set out in its risk assessment and recognized that the importing government was required to "seek to obtain the additional information necessary for a more objective assessment of risk and review the ¼ phytosanitary measure accordingly within a reasonable period of time" (Article 5.7).
  23. The United States noted that it had been engaged in detailed negotiations with Japan for over two decades. Although Japan had chosen to present a risk assessment on an undisputed matter, Japan was intimately aware of the evidence that had been discussed in the US submissions and what the evidence signified. That evidence was relevant and sufficient, and specifically addressed the specific mortality level of codling moth required by Japan. The United States had firmly established that efficacy of treatment by product achieved Japan�s required level of mortality. The varietal testing requirement could not be characterized as a provisional measure - invocation of Article 5.7 was not a supportable claim.
  24. The United States pointed out that although Japan claimed it believed it had presented sufficient scientific evidence to meet the obligations of Articles 2.2 and 5.1, Japan also claimed that the measure nonetheless was a provisional measure. These two positions were diametrically opposed. Indeed, Article 2.2 listed Article 5.7 as an exception to its requirements, because it was considered that Article 5.7 would permit a measure to be applied even where the "sufficient scientific evidence" requirement of Article 2.2 was not met. Similarly, Article 5.7 applied only where the relevant scientific evidence was insufficient to permit a risk assessment. Consequently, the United States argued that Japan�s claim that it had enough evidence to satisfy the requirements of Articles 2.2 and 5.1 with respect to its ban meant that Japan�s ban failed to meet the threshold requirement of Article 5.7. Moreover, the United States claimed that this was not a situation in which there was insufficient scientific evidence, because there was no evidence supporting Japan's claim that variety mattered, and because all evidence in the case at issue, including the success of uniform treatments of different varieties exported to Japan and the absence of failures by product-based testing regimes in other countries, indicated that varietal differences did not affect treatment efficacy.
  25. The United States noted that the measure had gone into effect 48 years ago. Therefore, the measure could hardly be called "provisional". Moreover, there was no evidence that Japan had undertaken a process to yield "within a reasonable period of time" a more objective assessment of risk so that it could review whether the "provisional measure" should be continued. Japan had therefore failed to meet the requirement of Article 5.7 that an objective risk assessment be done within a reasonable time.
  26. H. Article 7 (Annex B)

  27. The United States argued that the Japanese measure lacked transparency, and was thus inconsistent with Article 7. Article 7 and Annex B set out a number of requirements that Members had to follow in regard to transparency of an SPS measure. Specifically, Annex B, paragraph 1 required that "Members shall ensure that all sanitary and phytosanitary regulations which have been adopted are published promptly in such a manner as to enable interested Members to become acquainted with them". The United States had made a specific request to the Enquiry Point for Japan which had admitted that there was no published source for varietal testing. 152 The measure had been developed over time through a series of protocols and practice.
  28. The United States noted that the lack of transparency was made more evident by the lack of a risk assessment on the varietal testing measure. Had the measure been based on scientific principles, maintained with sufficient scientific evidence, based on an assessment of the risks, and not significantly more trade-restrictive than required to achieve the appropriate level of protection, it would have been possible to justify in a transparent fashion the legitimacy of the measure. As the requirement of varietal testing could not fulfil any of these WTO requirements, it was not surprising to find that the measure lacked transparency.
  29. Japan noted that the claim of the United States related to the guidelines developed by the MAFF concerning confirmation of efficacy of disinfestation treatment. 153 These had been distributed to foreign plant quarantine authorities for the purpose of transparency. The contents of the guidelines were not mandatory and exporting governments could choose to demonstrate efficacy of treatment by other means. Consequently, these guidelines did not fall under the concept of "regulations" under paragraph 1 of Annex B. In other words, they did not constitute enforceable regulations covered by Article 7. Nevertheless, these guidelines were available to any interested foreign government through Japan's Enquiry Point, consistent with paragraph 3(b) of Annex B.
  30. The Annexed Table to the Enforcement Regulation identified the quarantine pest which constituted the cause of the import prohibition, the countries or areas from which importation was prohibited, and the prohibited host plants and their specific parts. Japan pointed out that this allowed any exporter of agricultural products to know in advance which items were prohibited, as well as the quarantine pests concerned. In contrast, other countries, including the United States, generally prohibited importation of all plants and chose a quarantine measure on the basis of a risk analysis only after the filing of an import permit. Under such a mechanism, a foreign exporter was not able to know in advance whether or not the products were exportable, and which quarantine pests had to be guarded against. In this sense, Japan claimed that its regulations were characterized by a greater degree of transparency.
  31. The United States claimed that the assertion by Japan that these were simply "guidelines" and not "regulations" was a novel claim, and one that departed from the issue at hand. In consultations Japan had indicated that while the varietal testing requirement was not published, the lifting of an import ban was based on specific legislation. Irrespective of the informal process by which US scientists, in consultation with Japan, had devised procedures to test by variety 154 the fact remained that the requirement itself - that which linked the import prohibition with the requirement that it could only be lifted by variety - had to be published.
  32. The United States argued that the issue of transparency was indicative of a much larger problem. The requirement at issue arose from specific legislation and regulations and yet there was no published source that explained what procedures were necessary to have a product removed from the import prohibition list. The United States, the European Community and numerous other exporting countries had no access to phytosanitary protocols in which Japan had already negotiated and approved treatment for a particular product. 155 In short, without publication of this information, an exporter had no way to discern what was necessary to move a product from the prohibited list to a list approved by Japan for entry. The purpose of transparency was to ensure that Members were carrying out their obligations under the SPS Agreement. An absence of transparency contributed to the overall impression that this measure was far from being consistent with those obligations.
  33. In respect of transparency, Japan noted that anyone who wished to be informed about approved phytosanitary protocols for approved items could refer to MAFF notifications, published in the Government Gazette. If these were difficult to locate, the MAFF could be contacted directly.

To continue with Article 8 (Annex C)


138 US Exhibit 29.

139 US Exhibit 30.

140 Article 5.2 of the SPS Agreement indicated that when carrying out a risk assessment, "Members shall take into account available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions; and quarantine or other treatment".

141 US Exhibit 29.

142 Jang and Moffitt, "Systems Approaches to Achieving Quarantine Security" in Sharp and Hallman, Quarantine Treatments for Pests of Food Plants, West View Press, Boulder, San Francisco, Oxford, 1994, pp.225-237. (US Exhibit 7)

143 Moffitt, "A Systems Approach to Meeting Quarantine Requirements for Insect Pests of Deciduous Fruits," 85 Proceedings, Washington State Hortic. Association, 1989. pp.223-225. (US Exhibit 8)

144 Vail, Tebbets, Mackey and Curtis, "Quarantine Treatments: A Biological Approach to Decision-Making for Selected Hosts of Codling Moth (Lepidoptera: Tortricidae)", 86(1) J. Econ. Entomol, 1993, pp.70-75, 72. (US Exhibit 9)

145 Ibid. (US Exhibit 9)

146 Curtis, Clark and Tebbets, "Incidence of Codling Moth (Lepidoptera: Torticidae) in Packed Nectarines," 84(6) J. Econ. Entomol., 1991, pp.1686-1690. (US Exhibit 10)

147 US Exhibit 30.

148 US Exhibit 2.

149 Chapman, P.J. & S.E. Lienk, 1971. (Japan, Exhibit 25)

150 Japan noted that during the export inspection of 1997 cherries, four dead larvae had been found. Because the sampling was conducted only on 1 per cent and it was difficult to fully discover the pest by inspection, Japan had assumed that a fair number of fruits were infested.

151 The footnote to Article 5.6 of the SPS Agreement reads: "For purposes of paragraph 6 of Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary or phytosanitary protection and is significantly less restrictive to trade".

152 Japan's response to Question 2 of US Consultation Questions. (US Exhibit 3)

153 Contained in Japan, Exhibit 10.

154 The United States noted that these had been printed for the first time in a hand-out in Japan's Exhibit 10.

155 Third Party Oral Statement by the European Community, paragraph 8.