SPS AGREEMENT TRAINING MODULE: CHAPTER 5

Implementation — Dispute Settlement

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5.5 The Variety Testing Case

Background  back to top

The United States has, since the early 1970s, sought to export various fruit products to Japan, including apples, cherries, peaches, walnuts, apricots, pears, plums and quinces. Japan prohibited the importation of US products on which the pest codling moth may occur, allegedly to protect its own agricultural products from this pest, which does not occur in Japan.

For each fruit product, there are a number of different varieties. These may differ, for example, in colour, ripening time, taste or other characteristics. To lift the import prohibition, Japan required that each variety be tested to ensure that the proposed quarantine treatment was effective. Testing to obtain approval to import additional varieties of a product could take four years. The United States claimed that it was sufficient to test the treatment on one variety within each product category in order to ascertain that the treatment would be effective for all varieties of that fruit.

 

The Panel  back to top

The Panel was established in November 1997. The Panel members were Mr. Kari Bergholm (chairman), a Finnish trade diplomat and the first chairman of the SPS Committee, Mr. Germain Denis, a Canadian trade diplomat, and Mr. Eirikur Einarsson, an Icelandic trade diplomat. The Panel consulted scientific experts on entomology and fumigation. The experts were chosen in consultation with the parties based on lists provided by the IPPC.

 

Legal issues and findings  back to top

Scientific justification — Article 2.2

The parties agreed that codling moth presented a risk to Japan. The Panel thus focussed its analysis on whether there was sufficient scientific evidence supporting the need for the varietal testing requirement. It concluded that there was no rational relationship between the scientific evidence submitted by Japan and the measure, and that therefore Japan was maintaining its measure without sufficient scientific evidence. The Appellate Body upheld this finding.

What about the exception of Article 5.7?

According to this article, in cases where relevant scientific evidence is insufficient, Members may provisionally adopt SPS measures on the basis of available pertinent information. They then have to seek to obtain the additional information necessary for a more objective assessment of risk, and review the measure within a reasonable period of time. Japan invoked this article, claiming that its measure could be considered provisional.

The Panel found no evidence that Japan had actively sought to obtain additional information in order to review its measure within a reasonable period. The Appellate Body agreed with the Panel. It noted that the obligation to review the measure had only existed since the establishment of the WTO in 1995, and that the “reasonable period of time” had to be established on a case-by-case basis.

Least trade-restrictive measure — Article 5.6

The Panel examined two alternative measures to see if they

  1. were reasonably available, taking into account technical and economic feasibility;
  2. achieved Japan’s appropriate level of protection; and
  3. were significantly less trade-restrictive than the varietal testing requirement.

The US had proposed product-by-product testing, but the Panel did not have sufficient evidence to decide whether this would achieve Japan’s appropriate level of protection. As a second alternative, the experts advising the Panel suggested that if there were differences in the way varieties responded to the treatment, these would be related to different levels of sorption of the fumigant by the fruit variety in question. Testing for differences in sorption levels was relatively easy. The Panel thought that the determination of sorption levels could be a less trade-restrictive alternative to the varietal testing requirement.

The Appellate Body upheld the Panel’s finding on the product-by-product testing method proposed by the US. Regarding the determination of sorption levels, the Appellate Body found that the Panel had made an error of law by considering an alternative that had not been proposed by the United States, who bore the burden of proof that an alternative measure existed.

Transparency — Article 7 and Annex B

According to Annex B, Members have to publish all SPS regulations. Japan had not published its varietal testing requirement, arguing that because it was not mandatory (exporting countries could demonstrate quarantine efficiency by other means), it should not be considered an SPS regulation. The Panel and Appellate Body both found that measures had to be published regardless of whether they were mandatory, and that Japan had therefore acted inconsistently with this obligation.

 

Implementation  back to top

The United States and Japan agreed that it would be reasonable to give Japan until the end of 1999 to implement the rulings. In September 2001, the United States and Japan notified the WTO that they had found a mutually acceptable solution.

For an update on the state of play of WTO disputes, go to the WTO website at http://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm#news.

  

  

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