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Complaint by the United States.
On 1 March 2002, the United States requested consultations with Japan regarding restrictions allegedly imposed by Japan on imports of apples from the United States.
The United States’ complaint arose from the maintenance by Japan of quarantine restrictions on apples imported into Japan, which restrictions were said to be necessary to protect against introduction of fire blight. Among the measures the United States complained of were the prohibition of imported apples from orchards in which any fire blight was detected, the requirement that export orchards be inspected three times yearly for the presence of fire blight and the disqualification of any orchard from exporting to Japan should fire blight be detected within a 500 meter buffer zone surrounding such orchard.
The United States claimed that these measures might be inconsistent with the obligations of Japan under:
- Article XI of the GATT 1994,
- Articles 2.2, 2.3, 5.1, 5.2, 5.3, 5.6, 6.1, 6.2 and 7 and Annex B of the SPS Agreement, and
- Article 14 of the Agreement on Agriculture.
On 7 May 2002, the United States requested the establishment of a panel. At its meeting on 22 May 2002, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request by the United States, at its meeting on 3 June 2002, the DSB established a panel. Australia, Brazil and the European Communities reserved their third-party rights. Subsequently, New Zealand and Chinese Taipei reserved their third party rights.
On 9 July 2002, the United States requested the Director-General to compose the panel. On 17 July 2002, the panel was composed. On 16 January 2003, the Chairman of the panel informed the DSB that the panel could not complete its work within 6 months from its composition. The panel expected to issue its final report to the parties by the end of May 2003.
On 15 July 2003, the panel report was circulated to Members. The panel found that Japan’s phytosanitary measure imposed on imports of apples from the United States was contrary to Article 2.2 of the SPS Agreement and was not justified under Article 5.7 of the SPS Agreement and that Japan’s 1999 Pest Risk Assessment did not meet the requirements of Article 5.1 of the SPS Agreement.
On 28 August 2003, Japan notified the DSB of its decision to appeal to the Appellate Body certain issues of law covered in the panel report and certain legal interpretations developed by the panel.
On 23 October 2003, the Chairman of the Appellate Body informed the DSB that the Appellate Body would not be able to circulate its Report within 60 days due to the time required for completion and translation of the report and that it estimated that the Appellate Body report in this appeal would be circulated to Members no later than 26 November 2003.
On 26 November 2003, the Appellate Body report was circulated to Members. The Appellate Body rejected all four of Japan’s claims on appeal. The Appellate Body upheld the panel’s findings that Japan’s phytosanitary measure at issue was inconsistent with Japan’s obligations under Articles 2.2, 5.7, and 5.1 of the SPS Agreement. The Appellate Body also found that the panel properly discharged its duties under Article 11 of the DSU in the panel’s assessment of the facts of the case. The United States' sole claim on appeal challenged the “authority” of the panel to make findings and draw conclusions with respect to apples other than “mature, symptomless” apple fruit. The Appellate Body rejected this claim, finding that the panel did have the “authority” to make rulings covering all apple fruit that could possibly be exported from the United States to Japan, including apples other than “mature, symptomless” apples.
At its meeting on 10 December 2003, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body report.
Reasonable period of time
At the DSB meeting on 9 January 2004, Japan indicated that it intended to comply with the recommendations and rulings of the DSB in a manner that respected its WTO obligations under the SPS Agreement stating that it would need a reasonable period of time to do so and that it was willing to discuss this matter with the United States in accordance with Article 21.3(b) of the DSU. On 10 February 2004, Japan and the United States informed the DSB that they had agreed that the reasonable period of time shall be six months and 20 days, that is from 10 December 2003 to 30 June 2004.
On 30 June 2004, Japan and the United States notified the DSB of confirmed procedures under Articles 21 and 22 of the DSU.
On 19 July 2004, the United States requested the establishment of a compliance panel under Article 21.5 of the DSU as it considered that Japan had failed to implement the DSB recommendations and rulings.
The United States considered that Japan’s phytosanitary measures on imported US apples were inconsistent with its obligations under the SPS Agreement, the GATT 1994, and the Agreement on Agriculture. The provisions of these agreements with which Japan’s measures appeared to be inconsistent include:
- Articles 2.2, 2.3, 5.1, 5.2, 5.3, 5.5, 5.6, 6.1 and 6.2 of the SPS Agreement ;
- Article XI of the GATT 1994; and
- Article 4.2 of the Agreement on Agriculture.
At its meeting on 30 July 2004, the DSB agreed to refer, if possible, the matter raised by the United States to the original panel. Australia, Brazil, China, the European Communities, New Zealand and Chinese Taipei reserved their third party rights.
On 29 October 2004, the Chairman of the compliance panel informed the DSB that due in particular to the need to consult scientific experts the compliance panel would not able to issue its report within 90 days, and that the compliance panel expected to circulate its final report to Members during the second half of the month of May 2005.
On 23 June 2005, the compliance panel report was circulated to Members. The compliance panel report found that Japan’s phytosanitary measure imposed on imports of apples from the United States is contrary to Articles 2.2 and 5.1 of the SPS Agreement and if the United States only exports mature, symptomless apples, the alternative measure proposed by the United States meets the requirement of Article 5.6 of the SPS Agreement.
At the DSB meeting on 20 July 2005, the compliance panel report was adopted.
Proceedings under Article 22 of the DSU (remedies)
On 19 July 2004, and simultaneously with its request for a compliance panel (see above) the United States requested the DSB to authorize the suspension of concessions or other obligations with respect to Japan under Article 22.2 of the DSU at a level of USD 143.4 million on an annual basis. According to its request the suspension of concessions and other obligations would occur in one or more of the following: tariff concessions and related obligations under the GATT 1994; concessions and other obligations under the SPS Agreement and concessions and other obligations under the Agreement on Agriculture. On 29 July 2004, Japan objected to the proposed level of suspension of concessions or other obligations and requested this matter to be referred to arbitration in accordance with Article 22.6 of the DSU and the foregoing confirmed procedures. Without prejudice to its position with respect to the WTO-consistency of its implementing measures to be examined in the context of the compliance proceedings, Japan considered that the level of suspension proposed by the United States is not equivalent to the level of the nullification or impairment of benefits accruing to the United States as a result of the alleged failure of Japan to comply with the recommendations and rulings of the DSB. At the DSB meeting on 30 July 2004, the DSB agreed that the matter raised by Japan was referred to arbitration. On 4 August 2004, Japan and the United States requested the Arbitrator to suspend the arbitration proceeding until adoption by the DSB of its recommendations and rulings of the compliance proceedings.
Mutually agreed solution
On 30 August 2005, Japan and the United States informed the DSB that they had reached a mutually agreed solution pursuant to Article 3.6 regarding the matters raised by the United States in this dispute.
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