2. Elements under Article 5.6

70. We note that Article 5.6 provides in relevant part:

"� when establishing or maintaining � phytosanitary measures to achieve the appropriate level of � phytosanitary protection, Members shall ensure that such measures are not more trade-restrictive than required to achieve their appropriate level of � phytosanitary protection, taking into account technical and economic feasibility" (underlining added).

A footnote to Article 5.6 states the following:

"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 � phytosanitary protection and is significantly less restrictive to trade".
71. Article 5.6 must be read in context. We consider, in particular, that the more specific language of Article 5.6 should be read in light of the more general language in Article 2.2 providing that:

"Members shall ensure that any ... phytosanitary measure is applied only to the extent necessary to protect ... plant life or health" (underlining added).

72. In this dispute, Article 5.6 provides that the varietal testing requirement not be "more trade-restrictive than required to achieve [Japan's] appropriate level of ... phytosanitary protection, taking into account technical and economic feasibility". According to the footnote to Article 5.6, the varietal testing requirement shall be considered to be "more trade-restrictive than required" if there is another phytosanitary measure which:

• is "reasonably available taking into account technical and economic feasibility";
• "achieves [Japan's] appropriate level of ... phytosanitary protection"; and
• is "significantly less restrictive to trade" than the varietal testing requirement.

These three elements are cumulative in nature. Only when the United States has raised a presumption, not sufficiently rebutted by Japan, that all three elements are present, can the varietal testing requirement be found to be inconsistent with Article 5.6.

3. Alternative measures before the Panel

(a) Testing by product

73. The first alternative before the Panel is the one posited by the United States. It involves testing product-by-product (instead of variety-by-variety). ³⁰⁵ Once a variety of a product has been approved, no further testing at all would be required for any other varieties of that product.

(b) Alternatives derived from the testing of possible differences in sorption

74. The scientific experts advising the Panel suggest other alternatives based on the testing of possible differences in sorption. We deduced these alternatives from their written answers to our questions and, more particularly, from their statements at the expert meeting. Subsequently, at our second substantive meeting with the parties, both parties have expressed their views on these alternatives. Moreover, before issuing our interim report we sent a draft of those parts addressing these alternatives to the experts for their comments. ³⁰⁶ We shall, therefore, also examine whether any of these alternatives meet the three elements under Article 5.6.
75. We recall that one of the basic understandings confirmed by the experts advising the Panel is that if, and to the extent, there are differences between varieties, these would be mainly or even exclusively related to different levels of sorption of the fruit. ³⁰⁷ Therefore, to control any possible varietal differences, the experts advising the Panel note that, as an alternative to the varietal testing requirement, one could either monitor or test the sorption characteristics of the different varieties of the products at issue.

(i) Monitoring a predetermined CxT value during commercial treatment

76. According to the experts advising the Panel, quarantine efficacy against codling moth could be achieved by determining a fixed CxT value, i.e., a certain concentration of the fumigant in the chamber during a certain period of time, to be obtained during quarantine treatment. This CxT value would be so determined that if a codling moth were fumigated with this concentration during this time, it would die, irrespective of the host product or variety on which it occurs. To obtain this CxT value during commercial treatment, the MB concentration in the chamber would need to be monitored. If the concentration drops below that required by the CxT value, an additional dose would need to be injected in the chamber. As long as the CxT value were met, varietal differences (if there are any, such as sorption) would not affect quarantine efficacy nor would any other factors. ³⁰⁸

(ii) Determine whether the sorption level of additional varieties differs from that of the already approved variety

77. For the approval of additional varieties of a product for which a treatment for one or more varieties has already been accepted, Japan currently imposes dose-mortality tests for all varieties and an on-site confirmatory test � preceded, if required³⁰⁹, by a large-scale confirmatory test � for one representative variety. ³¹⁰ Instead, the experts advising the Panel suggest that Japan could simply determine the sorption level of each of the additional varieties when treated as required for the already approved varieties. ³¹¹ For those additional varieties which do not exceed the sorption level of the already approved varieties, there would be no need for further testing or confirmation. The commercial treatment (i.e., a fixed dose-temperature-time relationship, as is the case today) for the initial variety could then also be approved for the additional variety. For those additional varieties which do have a higher sorption level, it could then be determined � if need be by means of additional tests � whether the level of sorption is of sufficient magnitude to reduce the concentration of MB gas below the level of insect mortality required by Japan. ³¹² If this were to be the case, a different commercial treatment for the additional variety could then be imposed.

4. Does any alternative meet all of the elements in Article 5.6?

(a) Testing by product³¹³

78. Japan does not contest that testing by product is "reasonably available taking into account technical and economic feasibility" (i.e., it meets the first element under Article 5.6). We agree. Technically and economically speaking it is easier to implement testing by product, both for Japan and the exporting country, than the various tests and procedural steps currently imposed to obtain approval for additional varieties. Indeed, under the testing by product alternative no further testing at all of additional varieties would be required.
79. Japan does not contest either that testing by product is "significantly less restrictive to trade" than the varietal testing requirement (i.e., it meets the third element under Article 5.6). We agree. Under the testing by product alternative, market access for additional varieties would be automatic. No additional testing would be required.
80. Japan only contests the remaining element under Article 5.6, namely whether testing by product would "achieve [Japan's] appropriate level of ... phytosanitary protection".
81. Both parties agree that it is up to Japan to determine its appropriate level of phytosanitary protection with respect to codling moth. We agree since the SPS Agreement (in paragraph 5 of Annex A) defines the "appropriate level of � phytosanitary protection" as "[t]he level of protection deemed appropriate by the Member establishing a ... phytosanitary measure to protect � plant life or health within its territory"³¹⁴, in casu, the level deemed appropriate by Japan.
82. Both parties also agree on the level of mortality that Japan is seeking with respect to coddling moth. ³¹⁵ We consider that, for present purposes, this level of mortality can be regarded as Japan's appropriate level of protection. Japan will lift the import prohibition if it can be replaced by a measure which achieves the same level of protection as that reached by the import prohibition. With respect to measures imposing disinfestation, this level is complete mortality in large-scale tests on a minimum of 30,000 codling moths. ³¹⁶ For the testing by product alternative, the question thus becomes whether the treatment approved for the first variety of a product would meet the same level of protection, i.e., complete mortality in large-scale tests on a minimum of 30,000 codling moths, with respect to all other varieties of that product.
83. Referring to the opinions we received from the experts advising the Panel, we consider that � to date and on the basis of the evidence before the Panel � it is not possible to state with an appropriate degree of certainty that one and the same treatment would be effective for all varieties of a product. In the view of the experts advising the Panel, there is no evidence before us which establishes a causal link between divergent quarantine efficacy and the presence of varietal differences (i.e., evidence which could justify Japan's varietal testing requirement). ³¹⁷ However, at least one of the experts advising the Panel made equally clear that the US alternative of one treatment for all varieties, including those to be developed in the future, does not, to date, have a scientific basis either. In his answer to Panel question 16, Dr. Ducom states:

"The arguments put forth by Japan for requiring varietal trials are not based on scientific data. They are supported by a few experimental data in which varietal difference exists, in terms of LD₅₀, among a lot of other data in which it does not �

The arguments put forth by the USA are based on a large number of experiments, of which Japan has thoroughly made use.

Varietal difference appears several times, but each time, the confirmatory test has revealed sufficient efficacy. Extrapolation to all available varieties is no more scientific than the Japanese's contrary assertion. This sort of extrapolation is something along the order of intuition. It is unfortunate that there has not been a research program on the subject in order to try to present some scientific proof".³¹⁸

84. Therefore, after having carefully examined all the evidence before us in light of the opinions we received from the experts advising the Panel, we are not convinced that there is sufficient evidence before us to find that testing by product would achieve Japan's appropriate level of protection for any of the products at issue.

(b) Alternatives derived from the testing of possible differences in sorption

(i) Monitoring a predetermined CxT value during commercial treatment³¹⁹

85. The United States recognizes that the process of monitoring a predetermined CxT value could be less trade-restrictive than the current regime of testing by variety. For the United States, this would depend on a number of assumptions, including (1) the new treatment methodology would not apply for varieties already approved for entry to Japan nor for those varieties for which an application is currently pending; (2) with respect to new commodities, the initial variety on the basis of which the fixed CxT value would be determined, would not be subject to an on-site confirmatory test; and (3) since the treatment of apples also involves cold treatment, which is not affected by sorption, the approved treatment for some varieties of apples should be extended to all varieties of apples without further testing.
86. The United States submits that the question of technical and economic feasibility requires more extensive research and examination. The United States notes that increasing the time and/or dose of an MB treatment to achieve a particular CxT value could result in residues unacceptable for reasons of human health and/or conflict with applicable US environmental laws and regulations. ³²⁰ The United States also points out that in order to conduct precise measurements of CxT values, gas chromatographs would be required. However, for commercial applications of MB a fumiscope (which is less precise) is much more commonly available. Fumiscopes are also significantly less expensive and simpler to operate than gas chromatographs. The United States further argues that since monitoring of each treatment would be required, treatments would become more labour intensive than current applications of accepted treatments.
87. Japan submits that it does not have information on whether the process of monitoring a predetermined CxT value would be technically or economically feasible for exporting countries. Consequently, Japan is not certain if the process would be less trade-restrictive than the present regime.
88. When we asked the experts advising the Panel whether in their expert opinion the process would be technically and economically feasible, Dr. Ducom answered "yes". ³²¹ Mr. Taylor stated that it is technically feasible, but reserved his judgment on the economic feasibility, adding that it is probably economically feasible. ³²² Dr. Heather deferred to the other two experts. ³²³
89. Referring to the arguments made by the parties³²⁴, the evidence before us and the opinions of the experts advising the Panel, we are of the view that, to date, there is not enough evidence before the Panel to enable us to find that the process of monitoring a predetermined CxT value would be technically and economically feasible and significantly less restrictive to trade than the current regime (i.e., fulfils the first and third element under Article 5.6).
90. We note, however, that according to the opinions of the experts advising the Panel³²⁵, this alternative would not only guarantee, to a high probability, quarantine efficacy irrespective of possible varietal differences, but also irrespective of any other variables such as crop-to-crop and year-to-year differences within the same variety, i.e., differences which are not taken into account under the current regime. ³²⁶

(ii) Determine whether the sorption level of additional varieties differs from that of the already approved variety³²⁷

91. Japan does not contest that determining the sorption level of additional varieties, and comparing it with the sorption level of an approved variety, is "reasonably available taking into account technical and economic feasibility". The United States has given views which are consistent with this. ³²⁸
92. Under this alternative, the initial variety of a product would be subject to the existing testing requirements; a certain treatment (including a fixed exposure time, dose and temperature) would then be determined. For additional varieties there would only be a need to determine to what extent, if any, the sorption characteristics of the additional varieties differ from those already approved. Such determination would only require a one-time test for each additional variety. According to the experts advising the Panel, this test would be a relatively easy one; at least easier to conduct than the currently required dose-mortality test since it involves neither codling moths nor LD trials. In this respect, Dr. Ducom notes the following:

"I just advise something about sorption. Levels are important for varieties but that means no insects, no LD₅₀ trials to show that sorption is different. I mean we don't need any insects and any dose mortality tests to show that sorption is different and it makes very different, it's very easy, it's easier to run a sorption test than the dose mortality test. That's an important point in practice".³²⁹

Mr. Taylor, in turn, states:

"� there are quite well known methods by which accurate levels of sorption can be tested � certainly techniques such as these have been conducted over many years so there should be no problem in actually conducting these trials. As Dr. Ducom said, to determine the sorption of fumigant would not involve insects in these test, just the gas and the commodity, and from these tests to see to what extent there is a difference between varieties as between commodities, and to determine just to what extent this is an important factor and whether the level of sorption is very high or very little difference exists between the two".³³⁰

93. If, as a result of sorption tests, the sorption level of the additional variety is not higher than the sorption level of the initial variety, the same treatment can be applied for both varieties, without further testing or confirmation. If the sorption level of the additional variety is higher than that of the initial variety, it could then be determined � if need be by means of additional tests � whether the level of sorption is of sufficient magnitude to reduce the concentration of MB gas below the level of insect mortality required by Japan. ³³¹ If this were to be the case, a different commercial treatment for the additional variety could then be imposed.
94. On these grounds, we consider that the process of determining the sorption level of additional varieties can be presumed to be "reasonably available taking into account technical and economic feasibility" (i.e., to meet the first element under Article 5.6).
95. Japan does not contest that the process of determining the sorption level of additional varieties is "significantly less restrictive to trade" than the varietal testing requirement. The United States has given views which are consistent with this. ³³²
96. Under this alternative, testing for most (if not all) additional varieties would be limited to a sorption test. If the sorption level is not higher than that of already approved varieties, no further testing or confirmation would be required. In that event, market access would be obtained significantly more easily than under the current regime. If the sorption level is higher than that of already approved varieties, further examination and, if need be, additional testing could then be required. In that case, market access would be obtained in circumstances no more difficult than under the current regime.
97. On these grounds, we consider that the process of determining the sorption level of additional varieties can be presumed to be "significantly less restrictive to trade" than the varietal testing requirement (i.e., to meet the third element under Article 5.6).
98. Japan has not accepted that the process of determining the sorption level of additional varieties would achieve its appropriate level of protection. The United States, on the other hand, suggests that this process would meet Japan's appropriate level of protection".³³³
99. We recall that it is for Japan to determine its level of phytosanitary protection and that, in this case, the level of mortality sought by Japan for codling moth is not in dispute. ³³⁴ Japan's level of mortality is complete mortality in large-scale tests on a minimum of 30,000 codling moths. ³³⁵ For the alternative of determining the sorption level of additional varieties, the question thus becomes whether the treatment approved for the initial variety of a product would meet the same level of protection, i.e., complete mortality in large-scale tests on a minimum of 30,000 codling moths, with respect to all other varieties of that product which have the same (or lower) sorption levels as the initial variety.
100. According to the experts advising the Panel, this would be the case. ³³⁶ Dr. Ducom notes, for example:

"If varieties are tested to find the CT value [an indication of the amount of fumigant sorbed], then no further testing is necessary � The results of these tests are sufficient in themselves to give confidence in the conformity of the varietal candidate without having to include the reference variety and insects for efficacy confirmation".³³⁷

Mr. Taylor, in turn, states:

"CxT values are used to indicate the fumigant concentration and exposure period required to achieve a 99% mortality of all development stages of an insect at a particular temperature and humidity under practical conditions. If these values were obtained for additional varieties and were found to fall within the range already observed for other varieties it would be difficult to justify why further testing would be necessary".³³⁸

101. On the basis of the evidence before the Panel and the views we received from the experts advising the Panel, we thus consider that it can be presumed that the process of determining the sorption levels of additional varieties � so as to ensure that these levels do not differ in a way which would affect the efficacy of MB treatment � "achieves [Japan's] appropriate level of � phytosanitary protection" (i.e., meets the second element under Article 5.6). We also consider that Japan has not been able to rebut this presumption.

To continue with The Panel's conclusion under Article 5.6

³⁰⁵ See paragraph 8.65.

³⁰⁶ See paragraphs 6.116 and following.

³⁰⁷ See paragraph 8.33 and the references in footnote 261.

³⁰⁸ See Dr. Ducom's answer to Panel question 10:

See also Dr. Heather's answer to Panel question 11:

See also the experts' answers to additional Panel question 9 at the meeting with the experts, Transcript, paragraph 10.198 - 10.202. See also Mr. Taylor's closing statement at the meeting with experts, Transcript, paragraph 10.267:

³⁰⁹ In casu, in the event any of the additional varieties demonstrate, in the dose-mortality tests, significantly lower disinfestation effects than the already approved varieties.

³¹⁰ See paragraph 2.24.

³¹¹ See answer by Dr. Ducom to Panel question 11:

See also answer by Mr. Taylor to Panel question 11:

See further the answers to additional Panel question 9 at the meeting with the experts, Transcript, paragraph 10.198 - 10.202. See also the experts' answers to questions by Japan dealing with this alternative approach, Transcript, paragraphs 10.233 - 10.253.

³¹² The experts advising the Panel noted that the differences in sorption would need to be significant in order to affect treatment efficacy. See Mr. Taylor's answer to Panel question 9, at paragraph 6.67 and his statement at the meeting with the experts, Transcript, paragraph 10.82; Dr. Heather's answer to Panel question 10, at paragraph 6.81.

³¹³ See paragraph 8.65.

³¹⁴ Emphasis added.

³¹⁵ See paragraph 8.11.

³¹⁶ See paragraph 2.23 under "Large-Scale mortality test" and paragraph 8.11. See also answer by Dr. Heather summarized in paragraph 6.117.

³¹⁷ See paragraph 8.42.

³¹⁸ Dr. Ducom's written answers, pp. 10-11, underlining added. At the meeting with the experts, Japan referred to this statement, noting that Dr. Ducom seems to concur "that there is no valid scientific ground to conclude that a treatment established for a particular variety by confirmatory tests would be efficacious for any additional variety" (Transcript, paragraph 10.92). Dr. Ducom replied as follows: " Yes that is correct. I mean I cannot see any more scientific basis on the Japanese side than on the USA's side to say [that each] variety must be carefully treated � or for one we can have all varieties. I hope you understand. In my opinion it is not scientific to say that one variety is equal to all others �" (Transcript, paragraph 10.93).

³¹⁹ This alternative is outlined in paragraph 8.76.

³²⁰ In answering an additional Panel question, the parties referred to the Montreal Protocol on Substances that Deplete the Ozone Layer which mandates the phasing-out of MB in developed countries by 2005 (Article 2H). However, they also noted that the use of MB for quarantine and preshipment application is exempted from this phasing-out schedule (Article 2H:6). According to the United States, the production and importation of MB is to be phased-out in the United States by 1 January 2001. The United States noted that its administration has expressed a willingness to consult with the US Congress on changes to US law if alternatives do not exist for control of key pests as the 2001 phase-out date approaches.

³²¹ See Transcript, paragraph 10.198.

³²² Mr. Taylor stated:

³²³ Dr. Heather stated:

³²⁴ See paragraphs 8.85-8.87.

³²⁵ See paragraph 8.76 and footnote 308.

³²⁶ See, for example, the statement by Dr. Ducom that

³²⁷ This alternative is outlined in paragraph 8.77.

³²⁸ The United States did not specifically address the technical and economic feasibility of this third alternative. However, the Panel considered all other US arguments in this respect. None of these arguments go against the idea that this third alternative would be technically and economically feasible.

³²⁹ Transcript, paragraph 10.142. See also Dr. Ducom's statement, Transcript, paragraph 10.188.

³³⁰ Transcript, paragraph 10.192. See also Dr. Ducom's written answers, p. 8 ("Research on the CT per variety is an operation which could be rapidly conducted, since only the variety of fruit to be tested is used. Fumigation only lasts two hours and the result is known immediately") and p. 11 ("For the USA, this system is quick and low-cost").

³³¹ The experts advising the Panel noted that the differences in sorption would need to be significant in order to affect treatment efficacy. See Mr. Taylor's answer to Panel question 9, at paragraph 6.67 and his statement at the meeting with the experts, Transcript, paragraph 10.82; Dr. Heather's answer to Panel question 10, at paragraph 6.81;

³³² The United States did not specifically address whether this third alternative is significantly less trade-restrictive. However, the Panel considered all other US arguments in this respect. None of these arguments go against the idea that this third alternative would be significantly less trade-restrictive.

³³³ The United States did not specifically address whether this third alternative would meet Japan's appropriate level of protection. However, the United States submits that testing by product would meet Japan's level of protection. Since this third alternative is more stringent than testing by product, it can thus be presumed that the US view on this alternative would be that it a fortiori meets Japan's level of protection.

³³⁴ See paragraphs 8.81-8.82.

³³⁵ See paragraph 2.23 under "Large-Scale mortality test" and paragraph 8.11. See also answer by Dr. Heather summarized in paragraph 6.117.

³³⁶ See the expert opinions referred to in footnote 311.

³³⁷ Dr. Ducom's written answer to Panel question 11, underlining added. See also Dr. Ducom's written answers to the Panel's question, p. 11: "For Japan, [the alternative] is acceptable in terms of efficacy". Dr. Ducom then refers to a statement by Japan itself according to which "the CT value, a known indicator to control the degree of efficacy of the treatment, will vary as well depending on the variety of the fruit" (First submission of Japan, paragraph 78).

³³⁸ Mr. Taylor's written answer to Panel question 11, underlining added.