B. Questions to the Experts and their Compiled Responses (Summarized) (Cont.)

Question 16: Japan states in its second submission ²⁰⁹ that "it is true that existing treatment levels of host plants of codling moth have been found effective for additional varieties. However, as a matter of science, all this proves is the efficacy of the treatment on the tested varieties. It falls short of showing absence of varietal difference within a commodity altogether" [emphasis added] ²¹⁰. Japan also states that the United States cannot possibly provide any information of products yet to be developed which "may utilize rapidly advancing biotechnology"²¹¹. Yet, the United States considers that "testing by commodity is the only acceptable quarantine measure in the context of this dispute" and that after the first variety of a particular commodity has been tested according to current Japanese procedures, "no further testing is necessary for additional varieties"²¹². Is there a scientific basis for either of the parties views set out above?

104. Dr. Ducom stated that the arguments put forth by Japan for requiring varietal trials were not based on scientific data. They were supported by a few experimental data in which varietal difference existed, in terms of LD₅₀, among plenty of other data in which they did not. These observations had led Japan to suspect all existing varieties, as well as those of the future (where, in Japan's view, genetic engineering and biotechnology could create even greater differences). This was not based on any scientific data.
105. The arguments put forth by the United States were based on a large number of experiments, of which Japan had thoroughly made use. Varietal difference appeared several times, but each time the confirmatory test had revealed sufficient efficacy. Extrapolation to all available varieties was no more scientific than Japan's contrary assertion. This sort of extrapolation was something along the order of intuition. It was unfortunate that there had not been a research program on the subject in order to try to present some scientific proof.
106. Dr. Heather stated that the Japanese view on applicability of experimental results was technically correct but, in practice, the purpose of experimentation was to provide guidance for decisions on a broader basis. There was a strong case for flow-on where varietal differences were unlikely to impinge on fumigation efficacy. However, most countries would reserve their right to make exceptions if they foresaw a risk that efficacy might be compromised by varietal or other differences. The problem was more one of risk management as the scientifically definable differences would normally be small and difficult to determine due to variability.
107. Specification of a treatment as a CxT value for the pest instead of an initial fumigant amount and time could overcome this problem, but would require a level of monitoring which would need to be practicable. The United States used this approach to varying degrees in its methyl bromide quarantine treatments as mentioned in paragraph 6.85 encima.

Question 17: Could you describe the nature of the varietal differences between the varieties of the commodities listed in US Exhibit 1 (e.g., colour, taste, shape). Could the nature of these differences affect the efficacy of MB treatment?

108. Dr. Heather noted "Granny Smith" and "Delicious" apples differed in colour, shape, flavour and time of maturity. Dr. Heather was not aware of any major differences in susceptibility to codling moth other than those possibly phenology based. As confirmed by US large-scale trials, the required efficacy had been achieved for both of these varieties and, given the combined lethal potential and broad applicability of methyl bromide and cold treatment, it was highly unlikely that there would be any differences in efficacy between any common commercial apple varieties. One problem that might occur was susceptibility of some varieties to treatment injury.

Question 18: Is it scientifically correct to say that "peach" includes "nectarines"?

109. Dr. Ducom affirmed that "peach" indeed was the general term that referred to the species Prunus persica. The notion of species was well clarified; two individuals belonged to the same species if they were able to exchange genes to produce viable offspring. The peach species had undergone natural mutations. Some mutations concerned the shape; the flat peach variety, platicarpa. Another, of relevance to the question, caused the peach to shed its epidermal fuzz: this was the variety nucipersica, the nectarine.
110. Dr. Heather noted that Willis gave the systematic botanical (species) classification of peach as Prunus persica and categorized nectarine as a variety of peach. ²¹³ The US submission gave sub-species status to nectarine as P. p. nucipersica. ²¹⁴ Taxonomic status at this level tended to be subjective. Classification as a sub-species implied stable characteristics which could be recognized for descriptive purposes. If the species defined the commodity, nectarine would be a variety of peach.
111. Mr. Taylor affirmed that it was scientifically correct to say that "peach" included "nectarines" because a nectarine was a smooth-skinned mutant of peach. It was botanically classified as a variety of peach Prunus persica, nucipersica.

C. Additional written questions sent to the experts advising the Panel

1. Additional question on walnuts

112. On 25 June 1998, the Panel sent the following additional question to the experts advising the Panel:

"At the second substantive meeting of the Panel, on 24 June 1998, the United States submitted the attached publication (US Exhibit 40²¹⁵) with a cover letter by its author. The Panel would kindly ask for your views on the following:

On the basis of this publication, could you express your view on:

1. whether and to what extent the oil or fat content differs between varieties of walnuts because of varietal characteristics; and.
2. whether any such differences are significant enough to affect quarantine efficacy."

113. Dr. Heather noted that his interpretation of the paper by L. Carl Greve et al., was that it examined the genotype � environment relationships affecting the percentage of polyunsaturated fatty acids in oil of walnuts. Dr. Heather did not find any information on total oil content as a varietal characteristic. Therefore, the paper, in his view, did not provide any further clarification on the extent to which the oil content of walnuts could affect quarantine treatment efficacy and, consequently, quarantine security. The paper did, however, provide additional insight into the complexity of the relationship between inherent varietal characteristics and the environment.
114. Dr. Ducom noted that differences between varieties in walnut commodities, if any, could easily be shown by way of the oil content. Methyl Bromide was soluble in oil or fat and the decrease in gas concentration in the fumigation chamber resulting from this sorption was measurable in sorption trials. If one variety had a difference in oil content large enough to modify the sorption pattern and consequently the CxT value, then the efficacy of the quarantine treatment could be affected. On the basis of the publication in question (US Exhibit 40), variety was one of the different factors which could affect the oil content of the fruits. However, the authors had shown that its influence was less important than the environmental conditions (location, light, irrigation, etc.). In Dr. Ducom's view, differences such as those presented in the publication appeared not to be large enough to have any noticeable influence on the sorption and thus the CxT value and efficacy. Only trials designed for the purpose of answering that specific question could give an adequate response.
115. Mr. Taylor noted that he agreed with the conclusions of L Carl Greve that environment, genotype, nut maturity and interaction of these factors appeared to be the most important parameters determining the fatty acid content in walnuts. The greater differences in fatty acid content composition found from year to year within the same variety than between varieties in a single year was also very important evidence demonstrating that varietal differences were unlikely to be the most important factor affecting sorption of methyl bromide and, therefore, the efficacy of methyl bromide fumigations.

2. Confirmation of the Panel's understanding of scientific evidence and opinions

116. On 28 July 1998, the Panel sent 10 pages of its draft findings (in this report: paragraphs 8.73 to 8.101) to the experts advising the Panel to confirm that the scientific evidence referred to therein had been correctly reflected and, in particular, to ascertain that the references to the experts' opinions had � from a technical and scientific point of view � been accurately reflected. The answers by the experts (summarized in the following three paragraphs), together with the Panel's draft findings as sent to the experts, were provided to the Parties at the time the Panel submitted its interim report to the Parties.
117. Dr. Heather stated that the Panel's interpretation of his submissions had been correct with one exception. This exception was with respect to the use of the term probit 9. In the view of Dr. Heather, if the term probit 9 � or any other probit value, or their equivalent mortality percentages � were used in a definitive sense, it was important to give them in conjunction with a confidence (or precision) level. Thus, in order to avoid the need to specify the precision of the probit 9 level of protection, Dr Heather suggested that that level of protection was better stated as "no survivors from tests on a minimum of 30,000 individuals", instead of stating that Japan's level of protection was "probit 9", or "99.9969 per cent mortality".
118. Dr. Ducom noted, in general, that the Panel had understood what had been explained and that the text was logical. In particular, Dr. Ducom drew the Panel's attention to the fact that the two treatments for apples (cold treatment and MB fumigation) were independent from one another. While the cold treatment killed the egg stage of codling moth, the MB fumigation killed the fifth larval stage (5^th instar). ²¹⁶ In his view, the sorption problems were the same for apples as for other fruits but did not affect the efficacy of cold treatment.
119. Mr. Taylor stated that the draft findings accurately reflected his scientific and technical opinion.

VII. Interim Review²¹⁷

1. On 1 September 1998, the United States and Japan requested the Panel to review, in accordance with Article 15.2 of the DSU, precise aspects of the interim report that had been issued to them on 6 August 1998. Japan also requested the Panel to hold a further meeting with the parties on the issues identified in its comments on the interim report. We met, accordingly, with the parties on 21 September 1998.

A. Comments by the United States

2. Following comments from the United States we redrafted paragraphs 8.77, 8.93 and 8.96 in order to clarify that, according to the experts advising the Panel, varietal differences � and the resulting difference in sorption levels between varieties � need to be significant to affect the efficacy of the already approved MB treatment.
3. With respect to paragraphs 8.82 and 8.99, the United States reiterated its view that � although no disagreement exists as to the level of mortality Japan requires � Japan never defined its appropriate level of protection. We redrafted these paragraphs to take account of this point of view. We also noted Japan's view that its level of protection is that achieved by the import prohibition and that the level of mortality it requires for lifting the import prohibition is one of the technical requirements to ensure efficacy of an alternative measure.
4. As a result of a US comment, we added paragraph 8.102 in order to make clear that our findings under Article 5.6 would stand even if the measure in dispute were not in violation of Article 2.2. Doing so, we agree with Japan that our finding under Article 5.6 is not an alternative finding stricto sensu, in the sense that it only stands if we would have decided that Article 2.2 is not violated. What we wanted to clarify is that our Article 5.6 finding stands irrespective of our finding under Article 2.2.
5. As a result of other comments from the United States, we also slightly redrafted certain other paragraphs of the findings section of our report.

B. Comments by Japan

6. Japan, in turn, provided editorial suggestions to the descriptive part. Where the additions requested had been referred to earlier during the proceedings, we incorporated them in the final report.
7. As a result of comments by Japan, a question arose as to the product scope of our finding in paragraph 8.42. Japan submitted that nowhere in the report did it find a prima facie case of an Article 2.2 violation established by the United States for the products other than apples, cherries, nectarines and walnuts. Japan argued that the United States did not submit any evidence in respect of these other products and that the Panel made an error in substituting the absent evidence, which parties must submit, with the experts' answer to a Panel question. On that ground, Japan requested us to exclude products other than apples, cherries, nectarines and walnuts from the scope of our Article 2.2 finding in paragraph 8.42. The United States responded that for the other four products in dispute (apricots, pears, plums and quince), the presumption of an Article 2.2 violation was established as a result of the fact that Japan did not submit any scientific evidence for these products. According to the United States, the SPS Agreement makes it clear that the burden has never been on it to present scientific evidence that varietal testing is not required. Instead, the United States argued, Japan has an obligation under Article 2.2 to base its varietal testing requirement for all products covered by this case on sufficient scientific evidence.
8. In paragraphs 8.44 and 8.45 we specify that the scope of our finding that Japan maintains the varietal testing requirement without sufficient scientific evidence extends to four of the eight products at issue (apples, cherries, nectarines and walnuts). When addressing the product coverage of our report, we have distinguished two issues. First, the product coverage of our terms of reference. In paragraph 8.6 we find that the Panel was given the task to examine the measure in dispute as it applies to eight products. This is not what Japan contested in its comments on the interim report. Second, the product coverage of our finding that Japan maintains the varietal testing requirement without sufficient scientific evidence. This is the issue raised by Japan in its comments on the interim report and dealt with in paragraphs 8.44 and 8.45.
9. In our view, Japan is correct when it states that it is for the United States to establish a presumption that there is not sufficient scientific evidence in support of the measure in dispute. It is also true, in our opinion, that the United States has to do so for each of the eight products which fall within our terms of reference. However, we do not agree that, in assessing whether such presumption was established, we cannot take into account both the evidence submitted by the United States and the opinions we received from the experts in accordance with Article 13 of the DSU. ²¹⁸
10. In our view, the prima facie case to be established in a WTO dispute settlement proceeding relates to the substantive issue of what a party invoking a fact or claim needs to prove for that fact or claim to be accepted by a panel; that is, evidence (1) which is sufficient to raise a presumption that the alleged fact or claim is correct and (2) that has not been sufficiently rebutted by the opposing party. In deciding whether a fact or claim can thus be accepted, we consider that we are called upon to examine and weigh all the evidence validly submitted to us, including the opinions we received from the experts advising the Panel in accordance with Article 13 of the DSU.
11. With respect to paragraphs 8.38 and 8.39, Japan submitted that the only evidence in support of the Panel's reasoning is a quote from Dr. Heather with respect to only one study before the Panel. We recall, however, that a whole series of other evidence is referred to in paragraph 8.40 and footnotes to .
12. In response to Japan's comment that there is no support for the statement in paragraph 8.42 that "not a single instance has occurred � where the treatment approved for one variety of a product has had to be modified to ensure an effective treatment for another variety of the same product", we clarified and expanded this paragraph. In so doing, we also addressed Japan's claim that the United States did not submit a prima facie case.
13. Following a comment by Japan on paragraph 8.46, relating to the quarantine efficacy of the treatment required for apples, we also redrafted that paragraph. We further modified paragraph 8.84 to avoid the possible US misunderstanding that our finding in paragraph 8.84 does not apply to apples.
14. With respect to paragraph 8.84, Japan requested the Panel to find that the United States did not establish a prima facie case that testing by product would meet Japan's level of protection. In reply we specify in that paragraph that the finding we make is arrived at after a careful examination and weighing of all the evidence before us.
15. Japan's comments on other parts of our findings also prompted us to slightly redraft certain other paragraphs of our findings.

To continue with Findings

²⁰⁹ Japan's second submission, paragraphs 45-48.

²¹⁰ Japan's second submission, paragraph 45.

²¹¹ Japan's second submission, paragraph 48.

²¹² US answer to the Panel's Question No. 4 (addressed to the United States), 21 April 1998.

²¹³ Dr. Heather referred to Willis, A Dictionary of the Flowering Plants and Ferns, Cambridge University Press, (1960).

²¹⁴ Dr. Heather referred to US Exhibit 15, p.2.

²¹⁵ Variation in Polyunsaturated Fatty Acids Composition of Persian Walnut, L. Carl Greve, et. al., J. Amer. Soc. Hort. Sci. 117 (3), pp. 518-522, 1992.

²¹⁶ See paragraph 2.2 for the codling moth larval stages.

²¹⁷ According to Article 15.3 of the DSU, "the findings of the final report shall include a discussion of the arguments made at the interim review stage". The following section entitled "Interim Review" is therefore part of the findings of our report.

²¹⁸ Article 13 of the DSU provides, in its first paragraph: "Each panel shall have the right to seek information and technical advice from any individual or body which it deems appropriate"; and, in its second paragraph: "Panels may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter".