 
 RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/174 
1 September 2004 
 (04-3627) 
Dispute Settlement Body 
30 July 2004  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 30 July 2004  
 
Chairperson:  Ms Amina Mohamed (Kenya) 
 
 Subjects discussed
: Page  
1. Japan – Measures affecting th e importation of apples..........................................................1  
(a) Recourse to Article 21.5 of the DSU by the United States:  Request for the 
establishment of  a panel....................................................................................................... .......1  
2. Japan – Measures affecting th e importation of apples..........................................................2  
(a) Recourse to Article 22.2 of th e DSU by the United States .........................................................2  
 
 1. Japan – Measures affecting the importation of apples 
(a) Recourse to Article 21.5 of the DSU by the United States:  Request for the establishment of a 
panel (WT/DS245/11) 
1. The Chairperson
 drew attention to the communication from the United States contained in 
document WT/DS245/11. 
2. The representative of the United States  said that on 3 June 2002, the DSB had established a 
panel at the request of the United States to ex amine Japan's phytosanita ry measure concerning 
imported US apples.  Both the Panel and the Ap pellate Body had found Japan's measure to be 
inconsistent with its obligati ons under the SPS Agreement.  On  10 December 2003, the DSB had 
adopted the Appellate Body Report and the Panel Report, as upheld by the Appellate Body.  The 
DSB's recommendations and rulings included the recommendation that Japan bring its measure on 
imported US apples into conformity with its obligations under the SPS Agreement.  The United States 
and Japan had been unable to reach an agreement regarding the WTO-consis tency of newly revised 
measures that Japan had implemented on 30 June 2004, in its attempt to comply with the DSB's 
recommendations and rulings.  Almost all of the elem ents and restrictions of Japan's original, WTO-
inconsistent measure were maintained in the revised  measures, indicating that Japan had failed to take 
into account the findings of the Panel, as upheld by the Appellate Body, the testimony of the scientific 
experts and available scientific evidence in implementing its revised measures.  Those findings had confirmed that mature apples did not transmit fire blight.  In the view of the United States, Japan remained out of compliance with its obligations under the SPS Agreement.  As a result, the United 
States was requesting that a panel be convened pu rsuant to Article 21.5 of the DSU to examine 
Japan's newly revised measures.  Pursuant to th e sequencing agreement between the United States and WT/DSB/M/174 
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 Japan that had been circulated to Members in document WT/DS245/ 10, the United States and Japan 
had agreed that the panel would be  established at the present meeting. 
3. The representative of Japan
 recalled that on 10 December 2003, the Panel and the Appellate 
Body Reports concerning Japan's phytosanitary m easures on fire blight on US apples had been 
adopted.  The Reports had found that Japan's measur es on fire blight were inconsistent with the 
SPS Agreement.  Thus, the DSB had recommended  that Japan should bring its measures into 
conformity with its obligations under the SPS Agr eement.  Following the adoption of the Reports, on 
9 January 2004, Japan had informed the DSB of its intention to implement the DSB's recommendations and rulings in a manner c onsistent with Japan's obligations under the 
SPS Agreement.  In January 2004, Japan and the Un ited States had held a consultation regarding the 
reasonable period of time for Japan to implemen t the DSB's recommendations and rulings.  On 
30 January 2004, the parties had agreed that such a period of time should be six months and 20 days, 
expiring on 30 June 2004.  Since then, both parties ha d held three rounds of consultations on Japan's 
phytosanitary measures on fire blight so as to find a mutually agreed solution.  However, the United 
States had failed to recognize the need for any measur e against fire blight, insisting that mature apple 
fruit could not serve as a pathway fo r the entry of fire blight.  F aced with such in sistence by the 
United States, the parties had been unable to reach agreement on the amendment of measures 
proposed by Japan. 
4. On 30 June 2004, Japan had amended the meas ures in question and had introduced new 
measures on its own initiative, so as to implement the DSB's recommendations and rulings within the 
reasonable period of time.  Japan's new measures were  as follows:  (i) abolishing the 500 meter-width 
buffer zone and introducing 10 me ter-width border zone;  (ii) reducing the number of orchard 
inspections from three times a year  to only once in a fruitlet season;  and (iii) surface disinfection of 
fruit.  Japan had thus amended its phytosanitary meas ures in conformity with the findings of the Panel 
and the Appellate Body thereby implementing the DSB's recommendations and rulings of the DSB in 
good faith. 
5. Japan had notified its amended measures by wa y of a notification under the SPS Agreement 
(G/SPS/N/JPN/118), circulated on 29 June 2004.  Japan believed that its amended measures were 
based on sufficient scientific eviden ce and that they were consistent  with the SPS Agreement.  Japan 
was deeply disappointed that the United States did not recognize the measures taken by Japan as fully complying with the DSB's recommendations and rulin gs.  However, Japan recognized that the United 
States, like all WTO Members, was entitled to reque sting the establishment of an Article 21.5 panel 
under the DSU.  Thus, Japan and the United States had agreed to follow the procedures set out in 
document WT/DS245/10.  Accordingly, Japan agr eed to the establishment of an Article 21.5 
compliance panel at the present meeting. 
6. The DSB took note
 of the statements and agreed , pursuant to Article 21.5 of the DSU, to refer 
to the original Panel, if possible, the matter ra ised by the United States in document WT/DS245/11.  
The Panel would have standa rd terms of reference. 
7. The representatives of Australia , the European Communities , New Zealand  and Chinese 
Taipei  reserved their third-party rights to pa rticipate in the Panel's proceedings. 
2. Japan – Measures affecting the importation of apples 
(a) Recourse to Article 22.2 of the DSU by the United States (WT/DS245/12) 
8. The Chairperson  drew attention to the communication from the United States contained in 
document WT/DS245/12.  WT/DSB/M/174 
 Page 3 
 
 
 9. The representative of the United States  said that on 19 July 2004, the United States had 
requested authorization to suspend concessions or ot her obligations with respect to Japan under the 
covered agreements at a level of US$143.4 million on an annual basis.  This level of suspension was 
equivalent to the level of nullifica tion or impairment of benefits accr uing to the United States that had 
resulted from Japan's failure to bring its phy tosanitary measure on imported US apples into 
compliance by 30 June 2004, the end of the reasonable period of time.  The amount reflected the 
significant harm caused to the US economy by Jap an's measure.  Pursuant to the sequencing 
agreement between the United States and Japan, on 29 July 2004, Japan had objected to the US 
proposed level of suspension, thereby referring this matter to arbitration pursuant to Article 22.6 of 
the DSU.  Thus, no further action was required of th e DSB.  Indeed, Article 22.6 of the DSU did not 
refer to any decision by the DSB.  Nevertheless, the United States had no objection if the DSB wished 
to take note of that fact and confirm that it may not consider the US request for authorization, which 
was the item on the agenda of the present meeting, si nce, as in the past, the parties had already agreed 
that the matter was being referred to arbitration.  At the present meeting, the United States wanted to 
take the opportunity to confirm to Members that  pursuant to the sequencing agreement, once the 
arbitrator was constituted, the United States and Ja pan would request the arbitrator to suspend its 
proceedings until the completion of the Article 21. 5 proceedings.  The United States continued to 
hope that Japan will comply promptly with its WT O obligations, so that there was no need for the 
United States to resort to the withdrawal of concessions or other obligations. 
10. The representative of Japan  said that his country disagreed with the allegations by the United 
States that it had failed to implement the DSB's re commendations and rulings in this case.  Japan's 
objection to the authorization of the level of suspen sion of concessions or other obligations had been 
conveyed to the DSB by the letter dated 29 July 2004, without prejudice to Japan's position with 
respect to the WTO-consistency of its implemen ting measures, which would be examined by the 
Article 21.5 panel proceeding.  Japan believed that  the level of suspension proposed by the United 
States was not equivalent to the level of the nullifi cation or impairment of benefits accruing to the 
United States.  As his delegation had stated, Jap an had already amended its measures and the new 
measures were consistent with the WTO Agreement.  Therefore, in accordance with the provisions of 
Article 22.6 of the DSU, Japan requested that this matter be referred to arbitr ation. According to the 
confirmed procedures, as set out in document WT /DS245/10, both Japan and the United States would 
request the Article 22.6 arbitrator, at the earliest  possible moment, to suspend its work until the 
adoption of the Article 21. 5 compliance panel report. 
11. The DSB took note  of the statements and it was agreed  that the matter raised by Japan in 
document WT/DS245/13 is referred to arbitrati on, as required by Article 22.6 of the DSU. 
 
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