DISPUTE SETTLEMENT

DS: Costa Rica — Measures Concerning the Importation of Fresh Avocados from Mexico

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Key facts

 

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Mexico

On 8 March 2017, Mexico requested consultations with Costa Rica with respect to certain measures imposed by Costa Rica that allegedly restrict or prohibit the importation of fresh avocados for consumption from Mexico.

Mexico claimed that the measures appear to be inconsistent with:

  • Articles 2.1, 2.2, 2.3, 3.1, 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.8, 6.1, 6.2, 7, 8, Annex B(2), (5) and (6) and Annex C(1) of the SPS Agreement; and
     
  • Articles I:1, III:4, X and XI of the GATT 1994.

 

Panel and Appellate Body proceedings

On 22 November 2018, Mexico requested the establishment of a panel. At its meeting on 4 December 2018, the DSB deferred the establishment of a panel.

At its meeting on 18 December 2018, the DSB established a panel. Canada, China, the European Union, El Salvador, Honduras, India, Panama, the Russian Federation and the United States reserved their third-party rights.

Following agreement of the parties, the panel was composed on 16 May 2019.

On 15 November 2019, the Chair of the panel informed the DSB that in light of the substantive and procedural complexities of this dispute, the panel expected to issue its final report to the parties by the second half of 2020. The Chair noted that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depended on completion of translation.

On 29 May 2020, Mexico and Costa Rica informed the DSB that they had agreed to Procedures for Arbitration under Article 25 of the DSU in this dispute. Such procedures were entered into by Mexico and Costa Rica to give effect to the communication JOB/DSB/1/Add.12 (“Multi-Party Interim Appeal Arbitration Arrangement Pursuant To Article 25 Of The DSU (MPIA)”) and with the objective of setting a framework for an arbitrator to decide on any appeal of any final panel report issued in this dispute.On 26 November 2021, Mexico and Costa Rica informed the DSB that they had agreed to a revised version of the Procedures for Arbitration.

On 18 November 2020, the Chair of the panel informed the DSB that in view of the situation regarding the COVID-19 pandemic, including the ongoing travel restrictions and the health risks associated with travelling to meetings, the panel, after consulting the parties, had decided to postpone the remaining meetings and, given the substantive and procedural complexities of this dispute, it now expected to issue its final report to the parties early in the second half of 2021. The Chair apprised the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depended on completion of translation. On 8 July 2021, the Chair of the panel informed the DSB that in view of the situation regarding the COVID-19 pandemic, as well as the substantive and procedural complexities of this dispute, the panel expected to issue its final report to the parties in the last quarter of 2021. On 16 December 2021, the Chair of the panel informed the DSB that in view of the situation regarding the COVID-19 pandemic, as well as the substantive and procedural complexities of this dispute, the panel expected to issue its final report to the parties before the end of the first quarter of 2022.

On 13 April 2022, the panel report was circulated to Members.

This dispute concerns certain measures imposed by Costa Rica on the importation of fresh avocados for consumption from Mexico, related to Avocado sunblotch viroid (ASBVd). Mexico challenged:

  • Two resolutions by the State Phytosanitary Service of the Ministry of Agriculture and Livestock of Costa Rica (Resolutions DSFE-003-2018 and DSFE-002-2018), issued on 29 January 2018, imposing certain phytosanitary requirements related to ASBVd for imports of fresh avocado fruit.
  • Two reports prepared by the Pest Risk Analysis Unit of the State Phytosanitary Service (Reports ARP-002-2017 and ARP-006-2016), dated 10 July 2017, containing the phytosanitary risk assessment with respect to the risk of ASBVd.
  • Manual NR-ARP-PO-01_M 01, of 10 May 2016, prepared by the Pest Risk Analysis Unit (UARP) of the SFE, which contains the methodology for phytosanitary risk analysis that was used to prepare Reports ARP-002-2017 and ARP-006-2016.

 

Scope of the SPS Agreement

The Panel found that Mexico had demonstrated that Resolutions DSFE-002-2018 and DSFE-003-2018, which contain the phytosanitary requirements, individually constitute phytosanitary measures subject to the SPS Agreement.

The Panel concluded that Mexico had failed to demonstrate that Reports ARP-002-2017 and ARP-006-2016 and Manual NR-ARP-PO-01_M-01 individually constitute phytosanitary measures subject to the SPS Agreement.

The Panel also found that Mexico had failed to demonstrate the existence of one phytosanitary measure consisting of the five measures identified by Mexico as a whole. However, in order to analyse the claims put forward by Mexico, the Panel decided that it would read Resolutions DSFE-002-2018 and DSFE-003-2018, which contain the phytosanitary requirements, together with Reports ARP-002-2017 and ARP-006-2016 and Manual NR-ARP-PO-01_M-01, and would make any necessary findings and recommendations in relation to those instruments, with a view to securing a positive solution to the dispute.

Claims on risk assessment

The panel found that Costa Rica has acted inconsistently with Article 5.1 of the SPS Agreement, by failing to ensure that its phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to plant life or health.

The Panel also found that Costa Rica has acted inconsistently with Article 5.2 of the SPS Agreement, because, in the assessment of risks, it failed to take into account available scientific evidence and the prevalence of specific disease or pests.

The Panel found that Costa Rica has acted inconsistently with Article 5.3 of the SPS Agreement, because, in assessing the risk to plant life or health and determining the measure to be applied for achieving the appropriate level of phytosanitary protection from such risk, it failed to take into account as relevant economic factors: the potential damage in terms of loss of production or sales in the event of the entry, establishment or spread of ASBVd; the costs of control or eradication in Costa Rica's territory; and the relative cost-effectiveness of alternative approaches to limiting risks.

Finally, the Panel found that Costa Rica has acted inconsistently with Article 2.2 of the SPS Agreement, by failing to ensure that its phytosanitary measures, i.e. Resolutions DSFE-002-2018 and DSFE-003-2018, which contain the phytosanitary requirements, are based on scientific principles and are not maintained without sufficient scientific evidence.

Claims on discrimination

The Panel found that, in respect of two situations that Mexico indicated as comparable, i.e. fresh avocados imported for consumption from countries where ASBVd is present vis-à-vis domestic Costa Rican avocados in which Mexico alleged ASBVd is likely to be present, there are arbitrary or unjustifiable distinctions in the levels of protection that Costa Rica considers to be appropriate in different situations, which result in discrimination or a disguised restriction on international trade. Therefore, the Panel concluded that Costa Rica has acted inconsistently with Article 5.5 of the SPS Agreement.

The Panel also found that Costa Rica's phytosanitary measures, i.e. Resolutions DSFE-002-2018 and DSFE-003-2018, which contain the phytosanitary requirements, arbitrarily or unjustifiably discriminate between its own territory and that of Mexico, and are applied in a manner which constitutes a disguised restriction on international trade. Thus, the Panel concluded that Costa Rica has acted inconsistently with the first and second sentences of Article 2.3 of the SPS Agreement.

Claim on trade restrictiveness

The Panel found that Mexico had failed to demonstrate that Costa Rica has acted inconsistently with Article 5.6 of the SPS Agreement.

Claims on adaptation to regional conditions

The Panel found that Mexico had failed to demonstrate that Costa Rica has acted inconsistently with its obligation under Article 6.1 of the SPS Agreement.

Claims on harmonization

The Panel exercised judicial economy with regard to Mexico's claims under Articles 3.1 and 3.3 of the SPS Agreement.

Claims relating to general conformity with the SPS Agreement

The Panel found that Costa Rica has acted inconsistently with: (i) Article 1.1 of the SPS Agreement, by failing to develop and apply its phytosanitary measures, i.e. Resolutions DSFE-002-2018 and DSFE-003-2018, which contain the phytosanitary requirements, in accordance with the provisions of the SPS Agreement; and (ii) Article 2.1 of the SPS Agreement, by adopting phytosanitary measures that are inconsistent with the provisions of the SPS Agreement.

Claims under the GATT 1994

The Panel exercised judicial economy with regard to Mexico's claims under Articles III:4 and XI:1 of the GATT 1994, and Costa Rica's defence under Article XX(b) of the GATT 1994.

 

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