Background back to top
Fire blight is a disease of apple trees and other plants which is caused by the bacteria Erwinia amylovora (E. amylovora). Although it poses no risk to human health, it can damage trees and cause infected fruit to shrivel and turn brown. The fire blight exists in some regions of the United States, but does not currently exist in Japan. Japan prohibits imports of fresh apple fruit unless a set of requirements has been met. These include requirements that the fruit come from designated orchards free of fire blight; that no other fire blight host plants exist in the designated orchards; that the orchards be surrounded by a 500-metre buffer zone free of fire blight; that the orchard and buffer zones be inspected at least three times each year; that the harvested apples be treated with a chlorine surface wash; that the containers for harvesting and the interior of the packing facilities be disinfected with a chlorine treatment; that apples designated for Japan be kept separate from other apples, and that US officials certify the fruit has been treated as required; and that Japanese officials confirm the certification and inspect the facilities. Japan claimed that all of these requirements constitute an integrated systems approach and are necessary to avoid the introduction of fire blight into Japan, which has a fire blight susceptible environment.
The United States argued that despite a long history of world trade in apples, there was no evidence that mature, symptomless apples such as those exported from the United States had ever spread fire blight, and no scientific evidence that they were capable of being a pathway for the spread of the disease.
The Panel back to top
The Panel was established in June 2002. The Panel members were Mr. Michael Cartland (chairman), a former Hong Kong trade diplomat, Ms Kathy Ann Brown, a trade diplomat representing St. Lucia, and Mr. Christian Haeberli, a Swiss trade diplomat. The Panel consulted scientific experts on fire blight and on the transmission of the disease. The experts were chosen in consultation with the parties based on lists provided by the secretariat of the International Plant Protection Convention (IPPC).
Legal issues and findings back to top
Scientific justification — Article 2.2
There was no disagreement among the parties that fire blight was not currently found in Japan, that the disease did occur in some US apple orchards, and that the disease could cause serious phytosanitary damage. The Panel thus focussed on whether there was sufficient scientific evidence supporting the need for Japan's set of requirements on imports of fresh apple fruit from the United States. The Panel considered the evidence both with regard to mature, symptomless apples, which the United States claimed was the product it exported, and with regard to immature or damaged fruit which might inadvertently enter Japan. The Panel noted that this was a well-studied plant disease, and that there was much scientific evidence regarding the disease and its spread. However, there was not conclusive evidence that fresh apple fruit could serve as a pathway for the spread of fire blight, nor was there convincing evidence that the disease has ever been spread through trade in apples. The Panel therefore found that, Japan was maintaining its measure (the set of requirements taken as a whole) without sufficient scientific evidence.
The Appellate Body upheld the findings of the Panel that Japan's measure was maintained without sufficient scientific evidence, in violation of Article 2.2. In its appeal, Japan argued that the United States had not established a prima facie case that infected apples would not act as pathway for the spread of fire blight. However, the Appellate Body noted that the United States allegations of fact related to mature, symptomless apples, and it was Japan which sought to counter these allegations by introducing arguments related to failures in control systems of exporting countries and the possibility of infected apple fruit to be exported. The Appellate Body indicated that the party which asserts a fact is responsible for providing proof thereof, a principle distinct from the requirement that the complainant must establish a prima facie case of inconsistency with a provision of a WTO agreement. It also rejected Japan's contention that a panel is obliged to give precedence to the importing Member's approach to scientific evidence and risk when analyzing and assessing scientific evidence
A provisional measure under Article 5.7?
Japan argued that if the Panel were to find that its measure was maintained without sufficient scientific evidence, than its measure should be considered as a provisional measure as permitted by Article 5.7. This article permits Members to adopt provisional SPS measures in cases where relevant scientific evidence is insufficient, provided that the Member bases its provisional measure on available pertinent information, seeks to obtain the information necessary for a more objective assessment of risk, and reviews the measure within a reasonable period of time.
The Panel found that, given the extensive amount of scientific evidence available regarding fire blight disease and its spread, this was not a situation in which Article 5.7 could be invoked.
The Appellate Body upheld the findings of the Panel that Article 5.7 did not apply in this situation, as the body of available scientific evidence would allow for the performance of an assessment of risk under Article 5.1. It noted that the application of Article 5.7 was triggered by the insufficiency of scientific evidence, and not by the existence of scientific uncertainty.
Risk assessment — Article 5.1
Japan had conducted two risk assessments on fire blight; one in 1996 on fire blight in general, and another in 1999 on fire blight in apples imported from the United States. This latter was considered to be the relevant risk assessment for the purposes of this dispute. The Panel found, however, that the 1999 pest risk assessment did not meet the requirements of a risk assessment within the meaning of Article 5.1. In particular, it failed to evaluate the likelihood of the entry, establishment or spread of fire blight through the importation of apple fruit, and furthermore did not evaluate the risk according to the phytosanitary measures which might be applied. Because of this, the Panel concluded that Japan's measures were not based on a risk assessment appropriate to the circumstances.
The Appellate Body also upheld the findings of the Panel with regard to the inconsistency of Japan's risk assessment with the obligations of Article 5.1, noting that a Member may adopt any appropriate methodology for a risk assessment, provided that the risk assessment attributes a likelihood of entry, establishment or spread of the disease to each relevant agent specifically. Furthermore, the Appellate Body agreed that a risk assessment should not be limited to an examination of the measure already in place or favoured by the importing Member. The risk assessment should not be distorted by preconceived views on the nature and the contents of the measure to be taken, nor should it develop into an exercise carried out for the purpose of justifying decisions ex post facto.
According to Annex B, Members have to notify in advance proposed new SPS regulations or changes in regulations when these are not substantially the same as a relevant international standard and when they may have a significant effect on trade. The United States argued that Japan had modified its fire blight requirements in 1997, but had not notified these changes. The Panel found that there may have been some modifications to the requirements in 1997, but concluded that the United States had failed to make a prima facie case that these modifications might have a significant effect on trade. This finding of the Panel was not appealed.
Implementation back to top
On 10 February 2004 the parties agreed that the reasonable period of time for compliance with the rulings and recommendations of the DSB would expire on 30 June 2004. Japan adopted new measures, arguing that they thus had fully implemented the DSB's recommendations. The United States was unconvinced and considered that Japan had failed to bring its phytosanitary measures on imported US apples into compliance with its obligations under the SPS Agreement. The United States therefore requested that a panel be established pursuant to Article 21.5 of the DSU.
At the meeting of the DSB held on 30 July 2004, Japan informed the DSB that it had amended its measures on 30 June 2004 to implement the DSB's recommendations and rulings within the reasonable period of time. At the same meeting, the United States requested the establishment of a panel pursuant to Article 21.5 of the DSU. The DSB requested the original Panel to consider the question of Japan's compliance (Article 21.5 of the DSU) and appointed an arbitrator to decide on the appropriate level of “retaliation” (Article 22.6 of the DSU). Both countries agreed that they would wait until the Panel had decided on compliance before proceeding with arbitration over the level of suspension of concessions.
Determination of compliance back to top
Japan claimed to implement the legislated phytosanitary requirements through administrative instructions called “Operational Criteria”. The United States argued that the Operational Criteria were not “measures” and had not been adopted at the time the matter was referred to the Panel. The Panel noted that the Operational Criteria provided for a number of procedures which were not otherwise specified in other parts of Japan's legislation. According to the Panel, the Operational Criteria provided a statement of how Japan intended to implement the recommendations and rulings of the DSB at the time the Panel had been called upon to review the “measures taken to comply” by Japan.
Legal reasoning of the Panel
Japan claimed that it had new scientific evidence of (i) possible infestation/infection of apple fruits through the pedicel which could lead to latent infection of otherwise mature and symptomless apples; and (ii) possible completion of the pathway through transmission of bacteria by flies from infected discarded apples to host plants in Japan. The Panel examined four new scientific studies provided by Japan. The Panel considered the extent of the relationship between the scientific evidence and the risk which this evidence was claimed to establish and concluded that these new studies did not provide sufficient scientific evidence to establish, in natural conditions, the risk of latent infection in mature, symptomless apples or the completion of the pathway for transmission of fire blight.
The Panel then assessed the existence of a rational relationship between the scientific evidence and each element of the compliance measure. The Panel found that each element of the measure at issue, with the exception of the requirement that US plant protection officials certify that fruits are free from fire blight, and the related confirmation by Japanese officials, was not supported by sufficient scientific evidence. To the extent that the United States claimed to export mature, symptomless apples constituted a phytosanitary requirement, Japan would be entitled to verify that this was actually the case.
Since Japan relied in its PRA on the four studies mentioned above and reviewed by the Panel under Article 2.2, the Panel sought to determine whether the conclusions of the PRA were actually supported by the scientific evidence already addressed. The studies relied upon by Japan did not demonstrate that latent infection in mature, symptomless apples could occur in real orchard conditions. Furthermore, the studies did not support the view that apple fruit would be likely to complete the pathway and contaminate host plants in Japan under non-laboratory conditions. Since the scientific evidence relied upon by Japan did not support the conclusions reached by Japan in its PRA, the Panel concluded that the PRA was not an assessment, as appropriate to the circumstances, of the risks to plant life or health. Furthermore since the PRA was not an assessment as appropriate to the circumstances, the Panel concluded that Japan's compliance measure was not based on a risk assessment.
The Panel examined the United States’ proposed alternative SPS measure (requiring that only mature, symptomless apples) to determine whether it was reasonably available taking into account technical and economic feasibility; achieved Japan's appropriate level of sanitary or phytosanitary protection; and was significantly less restrictive to trade than the Japan’s contested SPS measure. The Panel concluded that if the United States only exported mature, symptomless apples, the alternative measure proposed by the United States would meet the requirements of Article 5.6 as a substitute to Japan's current measure.
Subsequent situation back to top
The report of the Panel on compliance was adopted without appeal on 20 July 2005. Japan and the United States notified that they had reached a mutually agreed solution on 2 September 2005.