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Japan - Measures Affecting Agricultural Products

Report of the Panel

(Continued)


    VIII. Findings

    A. Claims of the parties

  1. The United States challenges the way Japan lifts its import ban on products that may carry the pest known as codling moth. Japan requires testing and demonstration of quarantine efficacy for each variety of a product that may carry codling moth. Only once this is done will the import ban be lifted and this only for the particular variety or varieties tested. Hereafter we refer to the contested measure as Japan's "varietal testing requirement". The United States claims that this measure is inconsistent with Articles 2, 5, 7 and 8 of the SPS Agreement. Japan requests the Panel to find that its measure is fully consistent with the SPS Agreement.
  2. B. Japan's plant protection regime

  3. On 4 May 1950, Japan enacted the Plant Protection Law. Article 7 (paragraph 1, item 1) of that Law provides that plants designated by Ministerial Ordinance, which have been shipped from or passed through districts designated by that Ordinance, are prohibited for import into Japan. By Ministerial Ordinance of 30 June 1950 (Plant Protection Law Enforcement Regulations) eight products originating from, inter alia, the United States (excluding the Hawaiian Islands) were listed as prohibited plants. These products are: apricot, cherry, plum, pear, quince, peach, apple and walnuts, imported as fresh fruit. 219 They are prohibited for importation on the ground that they are potential hosts of codling moth. The Ministerial Ordinance of 30 June 1950 also lists other products as prohibited for import because they are hosts of other pests. However, there is a possibility to obtain exemptions from the import ban. Such exemptions are granted on a variety-by-variety basis. Since 1969 a series of varieties of certain products, originating from specific areas, have been exempted from the import ban. Moreover, since 1978 the import ban has been lifted for certain varieties of the US products at issue.
  4. In order to obtain an exemption from the import prohibition, Japan imposes the following procedure. The exporting country has to propose an alternative measure which would achieve a level of protection which is equivalent to that met by the import prohibition. The exporting country bears the burden of proving that the proposed alternative would reach the appropriate level of protection. Japan submits that this procedure is a "fundamental policy orientation". It has not been published as a document. In practice, the alternative measure proposed is disinfestation. With respect to hosts of codling moth, disinfestation consists of fumigation with methyl bromide ("MB") or a combination of MB fumigation and cold storage (as required in the treatment approved by Japan for apples). As a model test procedure for confirmation of the efficacy of this quarantine treatment, the Ministry of Agriculture, Forestry and Fisheries of Japan ("MAFF") developed two guidelines: (1) the "Experimental Guideline for Lifting Import Ban � Fumigation" and (2) the "Experimental Guide for Cultivar Comparison Test on Insect Mortality � Fumigation". These guidelines were introduced in 1987 and have, according to Japan, not "generally been published". They are summarized in paragraphs 2.23 - 2.24 of this report.
  5. C. The panel's preliminary ruling of 2 april 1998

  6. At our first substantive meeting we made the following preliminary ruling at the request of Japan:
  7. "Having carefully reviewed the written submissions made by the parties on the preliminary issues before us and having heard the oral arguments made by Japan in this respect, we rule as follows.

    (i) We first examine Japan's request to exclude Article 7 of the SPS Agreement from our examination on the grounds that it was only mentioned for the first time in the US panel request (document WT/DS76/2) and that no consultations were held on it. We note that our terms of reference (set out in document WT/DS76/3) direct us to examine the matter before us "in the light of the relevant provisions of the covered agreements cited by the United States in document WT/DS76/2". This document, the US panel request, specifically cites Article 7 of the SPS Agreement. We thus consider that claims under that provision fall within our terms of reference.

    (ii) We next address Japan's request for a finding that the phrase "including but not limited to", mentioned in the US panel request, does not constitute part of our terms of reference. We note that the United States, in its first submission, did not make any claim with respect to a provision not specifically mentioned in the US request for this Panel. Japan did not contest this. Consequently, there is no claim before us (other than the one under Article 7 of the SPS Agreement we just dealt with) on which to make a ruling of whether or not it falls within our terms of reference.

    (iii) Thirdly, as to the Japanese measures in dispute, we note that the United States, in its first submission at paragraph 74, limited these to "the prohibition by Japan on the importation of any variety of an agricultural product on which Japan claims that the pest codling moth may occur until such time as the variety has been separately tested with respect to the efficacy of treatment with methyl bromide or treatment with methyl bromide and cold storage". We regard this statement as setting the factual parameters of this case. It limits the scope of this dispute to (1) agricultural products on which Japan claims that the pest codling moth may occur (in its oral statement Japan stated that there are eight such products: apricot, plum, pear, quince, apple, walnut, peach including nectarine, and cherry; in its first submission, the United States only addressed four products: apples, cherries, nectarines and walnuts) and (2) varietal testing with respect to the efficacy of treatment with methyl bromide or treatment with methyl bromide and cold storage".

    D. The scope of the measure in dispute

  8. The measure at issue in this dispute is only one element of Japan's plant protection regime. The scope of this measure is limited in several respects. 220
  9. Firstly, only the varietal testing requirement imposed by Japan for lifting the import prohibition on US products on which Japan claims that codling moth may occur is in dispute. The request for this Panel, which sets out the scope of our mandate221, does not further limit the product coverage of the Japanese measure challenged to certain specific products only. At our first substantive meeting, Japan stated that it considers the following US products to be hosts of codling moth: apricots, cherries, plums, pears, quinces, peaches (including nectarines222), apples and walnuts. We consider, therefore, that we are called upon to examine the measure before us as it applies to all products covered by the contested measure. However, as we already noted in our preliminary ruling223, the parties only submitted evidence with respect to apples, cherries, nectarines and walnuts. We shall, therefore, examine the measure at issue on the basis of that evidence and refer to the experts advising the Panel when it comes to evaluating the relevance of that evidence for the other products covered by the measure in dispute.
  10. Secondly, we only need to examine Japan's varietal testing requirement to the extent it applies to the demonstration of efficacy of MB treatment or of MB treatment combined with cold storage as a treatment against codling moth. We are not called upon to address the varietal testing requirement as it applies to any other treatment or any other pest.
  11. E. Matters not in dispute

  12. It is important to note what this dispute is not about. The United States does not contest that codling moth is a serious pest of quarantine significance. Nor is it in dispute that codling moth is exotic to Japan (i.e., is not found in Japan); that it does occur in the United States; and that the importation of US fruit infected with codling moth could result in the introduction of codling moth in Japan which, in turn, would have serious consequences for Japan's agricultural and forestry production. The legitimacy and need for Japan to protect its plants against codling moth is not at issue. 224
  13. Moreover, the United States does not challenge the original import prohibition imposed on US host plants of codling moth. The United States acknowledges that Japan conducted a risk assessment to determine that codling moth is a pest of quarantine significance for which an original import prohibition might be justified. 225 The United States refers rather to the possibility of obtaining exemptions from this import prohibition and contests the conditions imposed for lifting this prohibition, in particular the fact that it is lifted variety-by-variety.
  14. Even with respect to the conditions for lifting the ban, the United States agrees that, as a general proposition, it is reasonable for Japan to require that the exporting country propose and substantiate the efficacy of an alternative approach or a treatment that achieves Japan's level of phytosanitary protection. Following that line of reasoning, the United States does not contest the testing requirements imposed by Japan for approval of imports of the initial variety of a particular product, i.e., those contained in the "Experimental Guideline for Lifting Import Ban � Fumigation". The United States contends, however, that after such validation no further testing is necessary for additional varieties. It, therefore, challenges not only the content but the very existence of any guidelines imposed for approval of additional varieties, in casu, those contained in the "Experimental Guide for Cultivar Comparison Test on Insect Mortality � Fumigation".
  15. We further note that there is no disagreement as to the efficacy of the treatment applied to the specific varieties of US apples, cherries, nectarines and walnuts which have so far been exempted from the import prohibition. The United States does not dispute the level of mortality, established by Japan, that any quarantine treatment has to achieve (i.e., complete mortality in large-scale tests on a minimum of 30,000 codling moths226), nor does the United States, or Japan, contest that this level of mortality is reached for the varieties already approved for import after they have been treated as required.
  16. Japan does not contest that the measure at issue is a phytosanitary measure covered by the SPS Agreement, invoked by the United States. Referring to Article 1.1 and paragraph 1 of Annex A of the SPS Agreement227, we agree with the parties that the SPS Agreement applies to the measure at issue.
  17. Finally, with respect to the question of burden of proof under the SPS Agreement, we note that both parties refer to the Appellate Body Report on EC � Measures Affecting Meat and Meat Products (Hormones) (hereafter referred to as "EC � Hormones"). 228 Reviewing this report, we agree with the parties that, in this dispute, it is for the United States to establish a prima facie case of inconsistency of the Japanese measure at issue with each of the provisions of the SPS Agreement the United States invokes. Once this is done, it is for Japan to counter or refute the claimed inconsistency. In other words, if "[the United States] adduces sufficient evidence to raise a presumption that what is claimed is true, the burden then shifts to [Japan], who will fail unless it adduces sufficient evidence to rebut the presumption". 229 In response to a Japanese comment on the interim report, we stress that the issue of burden of proof in a WTO dispute settlement proceeding set out above is different and should be distinguished from what a Member requires from an exporting country before it will approve the import of that country's products. The latter issue is dealt with in paragraphs 8.10 and 8.30.
  18. F. Scientific basis and risk assessment (articles 2.2, 5.1, 5.2 and 5.7)

    1. The SPS provisions invoked and their relationship

  19. We first examine the US claims under Articles 2.2, 5.1 and 5.2. In this respect, Japan also invokes Article 5.7. These Articles provide in relevant parts as follows:
  20. Article 2.2:

    "Members shall ensure that any � phytosanitary measure is applied only to the extent necessary to protect � plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5".

    Article 5.1:

    "Members shall ensure that their � phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to � plant life or health, taking into account risk assessment techniques developed by the relevant international organizations".

    Article 5.2:

    "In the assessment of risks, 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".

    Article 5.7:

    "In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt � phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from � phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the � phytosanitary measure accordingly within a reasonable period of time".

  21. We examine these provisions together, in light of the following statement by the Appellate Body in its report on EC - Hormones:
  22. "... Articles 2.2 and 5.1 should constantly be read together. Article 2.2 informs Article 5.1: the elements that define the basic obligation set out in Article 2.2 impart meaning to Article 5.1".230

  23. The United States submits that Article 2.2 does not allow Japan to maintain a phytosanitary measure, in this instance the varietal testing requirement, "without sufficient scientific evidence" and that Article 2.2 requires such measure to be "based on scientific principles". According to the United States, Articles 5.1 and 5.2 require Japan to base the varietal testing requirement on a risk assessment. We first examine the US claims under Article 2.2, taking due account of the more specific obligations imposed under Articles 5.1 and 5.2.
  24. 2. Scientific basis

    (a) Claims and arguments by the Parties231

    (i) The United States

  25. The United States submits that, at a minimum, to base a measure on scientific principles a WTO Member has to identify a particular risk that the measure is designed to protect against, and to conduct some review of scientific evidence or other relevant scientific information to demonstrate that the measure in fact protects against that risk. According to the United States, the risk to be addressed in this case is the risk of introduction of codling moth in the absence of the varietal testing requirement.
  26. The United States notes that the strongest wording Japan has been able to employ is that it is possible there may be variation in the efficacy of disinfestation if the same quarantine treatment is applied to different varieties. Referring to the descriptions of variations in dose-mortality tests 232 between varieties, offered by Japan in support of the measure233, the United States submits that these descriptions ignore the conclusions of the scientific studies carried out on quarantine treatments for codling moth. In this respect, the United States recalls that to date the quarantine treatment approved for one variety of a product has always proven to be effective for all other tested varieties of the same product. The United States submits that it tested seven varieties of apples, nine varieties of cherries, four varieties of walnuts and ten varieties of nectarines and that in every instance the treatment applied for one variety of a product has never varied from that applied to another variety of the same product.
  27. With respect to the six specific studies submitted by Japan234, the United States points out that all of the tests reported therein are dose-mortality tests which are small-scale tests. The United States argues that the differences in dose-mortality tests for different varieties in these studies cannot constitute a valid scientific basis for the varietal testing requirement because it is in the nature of dose-mortality tests to vary among varieties and even within the same variety from year to year. The United States points to leakage of the fumigation chamber, fruit load, experimental errors, sorption by packaging material, natural variation of pest population and fruit-to-fruit variation such as different ripening times, seasonal variations and physical condition of the fruit as factors explaining the differential. According to the United States, confirmatory tests (which are conducted on a larger scale) are a better indicator of efficacy of a treatment: since confirmatory tests take account of the variability in (small-scale) dose-mortality tests, they establish a treatment that is appropriate for all varieties of a product. The United States further submits that the highest minimum dose observed in the dose-mortality tests that scientists believe would achieve the level of protection required by Japan, is supplemented by a 10-20 per cent buffer in the second stage of testing (the confirmatory tests). According to the United States, this buffer will offset all sources of variation in the dose-mortality tests, including any possible varietal differences.

To continue with Japan


219 With respect to walnuts, the ban also applies to walnuts in the shell.

220 See our preliminary ruling at point (iii), quoted in paragraph 8.4.

221 Our terms of reference are, in accordance with Article 7.1 of the DSU, defined in document WT/DS76/3 and specify that the matter we need to examine is the one referred to in document WT/DS76/2, i.e., the request for the establishment of this Panel.

222 According to the experts advising the Panel, it is scientifically correct to say that peach includes nectarine (see their answers to Panel question 18, paragraphs 6.109 - 6.111).

223 See our preliminary ruling at point (iii), quoted in paragraph 8.4.

224 See, for example, the expert opinions of Dr. Heather and Mr. Taylor, Transcript, paragraphs 10.204 - 10.210.

225 However, in so acknowledging, the United States did not take a position as to whether this risk assessment complies with the requirements in the SPS Agreement, arguing that this risk assessment does not relate to the matter in dispute. Nor did the United States state that this risk assessment does justify the import ban in accordance with the SPS Agreement. See also the expert opinions referred to in footnote and Dr. Heather and Mr. Taylor's answers to question 7 of the Panel, summarized at paragraphs 6.51 to 6.56.

226 See paragraph 2.23 under "Large-Scale mortality test". See also answer by Dr. Heather summarized in paragraph 6.117.

227 Article 1.1 of the SPS Agreement provides that the Agreement applies to "all � phytosanitary measures which may, directly or indirectly, affect international trade". Paragraph 1 of Annex A to the SPS Agreement clarifies, inter alia, that "[a]ny measure applied: (a) to protect ... plant life or health within the territory of the Member from risks arising from the entry, establishment or spread of pests" is a phytosanitary measure for purposes of the SPS Agreement.

228 Adopted 13 February 1998, WT/DS26/AB/R, stating as follows in paragraph 98: "The initial burden lies on the complaining party, which must establish a prima facie case of inconsistency with a particular provision of the SPS Agreement on the part of the defending party, or more precisely, of its SPS measure or measures complained about. When that prima facie case is made, the burden of proof moves to the defending party, which must in turn counter or refute the claimed inconsistency". See also the Panel Reports on EC - Hormones, op. cit., respectively, at paragraphs 8.51 and 8.54.

229 Appellate Body Report on United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, adopted 23 May 1997, WT/DS33/AB/R, p.14.

230 Adopted on 13 February 1998, WT/DS26/AB/R, paragraph 180. See also panel report on Australia � Measures Affecting Importation of Salmon, currently on appeal, WT/DS18/R, paragraph 8.51: "We recall that Articles 5.1 and 5.2 may be viewed as one of the specific applications of the basic obligations contained in Article 2.2".

231 The parties' arguments with respect to Article 5.7, to which Article 2.2 explicitly refers, are outlined later in paragraphs 8.50 and following.

232 The meaning of a "dose mortality test" is explained in paragraph 2.12.

233 Set out in paragraphs 8.21 and 8.23.

234 Ibid.