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Since 1993, Japan has allowed the importation of apples from New Zealand only in accordance with an array of restrictions intended to protect Japan against the introduction of fire blight. Japan also imposes similar restrictions on other countries where fire blight is established, including the United States. In New Zealand’s view, however, scientific evidence shows that fire blight disease is not introduced to new countries via the export of mature apples.
Following unsuccessful formal bilateral consultations, the United States brought dispute settlement proceedings against Japan in May 2002. The United States’ complaint focused on the provisions of the WTO Agreement on Sanitary and Phytosanitary Measures (“the SPS Agreement”). The US considered that Japan’s fire blight measures on apples breached the requirements of the SPS Agreement in that they were being maintained without sufficient scientific evidence. Among other things, the US also argued that Japan had not based its restrictions on an appropriate risk assessment, and that there were other, less-trade restrictive options available to Japan that would equally achieve protection against the introduction of fire blight. The United States has sought the removal of all of Japan’s current restrictions on apple imports.
Along with Australia, Brazil, the EC and Chinese Taipei, New Zealand participated in the Japan-Apples dispute as a third party. New Zealand’s third party submission to the Panel presented scientific evidence to show that mature apples do not cause the introduction of fire blight.
The Panel held its first hearing on 21 October 2002 and issued its report [external link to WTO website] on 15 July 2003. The Panel found that, on the basis of the information provided to it, there was not sufficient scientific evidence that apple fruit are likely to serve as a pathway for the entry, establishment, or spread of fireblight within Japan. Accordingly, the Panel found that the measures imposed by Japan on imports of apples from the United States were, as a whole, maintained "without sufficient scientific evidence" in breach of Article 2.2 of the SPS Agreement and were not based on a risk assessment as required by Article 5.1 of the SPS Agreement.
On 28 August 2003 Japan notified to the DSB its intention to appeal the Panel decision. The United States also cross-appealed certain aspects of the Panel Report. Following receipt of written submissions from the parties, the Appellate Body held an oral hearing on 13 October 2003 and issued its report [external link to WTO website] on 26 November 2003.
The Appellate Body upheld the Panel's findings that Japan's restrictions are inconsistent with Article 2.2 of the SPS Agreement because (i) they are maintained without sufficient scientific evidence; (ii) are not justified as a provisional measure under Article 5.7 of the SPS Agreement because the situation is not one where the relevant scientific evidence is 'insufficient'; and (iii) are not based on a risk assessment as required by Article 5.1 of the SPS Agreement.
New Zealand participated in the appeal as a third party by making a submission and statement to the Appellate Body supporting the Panel's finding that Japan's fire blight-related restrictions on imports of apples from the United States are inconsistent with the SPS Agreement.
On 10 December the WTO Dispute Settlement Body adopted the report of the Appellate Body and the report of the Panel as upheld by the Appellate Body. It was agreed that Japan would have until 30 June 2004 to bring its measures into compliance. Japan notified the WTO of its revised SPS measures on that date.
Then in August 2004 the United States requested that a Compliance Panel be convened under Article 21.5 of the Dispute Settlement Understanding to examine Japan's compliance with the rulings and recommendations of the Dispute Settlement Body. The United States argued that Japan's revised SPS measures continue to breach the SPS agreement in that they are not based on sufficient scientific evidence, are more trade restrictive than necessary, and are not based on a risk assessment. The United States contends that the revised measures are substantially the same as the original measures and contain most of the trade restrictive elements of those original measures. Japan in turn has responded by bringing forth new scientific studies which it argues support its revised measures.
The Compliance Panel, made up of the same panellists as the original Panel, held a hearing of parties on 28 and 29 October 2004. New Zealand filed a written third party submission on 19 October 2004, and made an oral statement at the hearing. The Panel has now indicated that it will consult further with scientific experts before issuing its report.
