INTRODUCTION

1.1 On 10 December 2003, the Dispute Settlement Body ("DSB") adopted its recommendations
and rulings in the dispute Japan - Measures Affecting the Importation of Apples (the "Japan – Apples
Panel Report").1 Having found Japan's phytosanitary measure for imported US apples to be
inconsistent with its obligations under the Agreement on the Application of Sanitary and
Phytosanitary Measures ("SPS Agreement"), the DSB recommended that Japan bring its measure into
conformity with that agreement. On 30 January 2004, the United States and Japan concluded an
agreement pursuant to Article 21.3(b) of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU")2 that the reasonable period of time available to Japan to implement
the DSB's recommendations and rulings would expire on 30 June 2004.
1.2 On 19 July 2004, the United States requested authorization from the DSB to suspend tariff
concessions and other related obligations with respect to Japan under the General Agreement on
Tariffs and Trade 1994 (GATT 1994), pursuant to Article 22.2 of the DSU.3
1.3 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 agreed that the Article 21.5 request be referred
to the Original Panel. The DSB also agreed, at the request of Japan, that the matter would be referred
to arbitration to determine the level of suspension of concessions, pursuant to Article 22.6 of the DSU.
Japan and the United States agreed that the arbitration proceedings would be suspended until after the
adoption of the panel report under Article 21.5. If the Article 21.5 Panel found that Japan had acted
inconsistently with its WTO obligations, then the Article 22.6 arbitrator would automatically resume
its work.

CLAIMS OF THE PARTIES

3.1 The United States recalled that on 10 December 2003, the DSB adopted its recommendations
and rulings in the dispute Japan – Apples and found that Japan's phytosanitary measure on imported
US apples was inconsistent with Articles 2.2 and 5.1 of the SPS Agreement. Two sets of conclusions
about the scientific evidence had been central to these findings. First, the DSB concluded that the
scientific evidence did not establish that mature, symptomless apple fruit:

(a) would be infected by fire blight;

(b) would harbour endophytic populations of the fire blight-causing bacteria,
E. amylovora; or
(c) would harbour epiphytic populations of bacteria capable of transmitting fire blight.
Second, the DSB concluded that the scientific evidence did not establish that apple fruit – whether
mature or immature – would serve as a means or pathway of introduction of fire blight to a fire blightfree
area.
3.2 The United States claims that Japan had not brought its phytosanitary measure into
conformity with the DSB's recommendations and rulings by 30 June 2004 when the reasonable period
of time for Japan to comply with its obligations had expired. To the contrary, Japan had issued a set
of phytosanitary measures remarkably similar to the elements of its previous WTO-inconsistent apple
import regime.
3.3 The United States claims that Japan's revised measures on the importation of apple fruit fail to
comply with the DSB recommendations and rulings and with Japan's obligations under the SPS
Agreement in that:
• Japan has failed to ensure that its fire blight measures are not maintained without
sufficient scientific evidence and these measures are therefore inconsistent with
Article 2.2 of the SPS Agreement;
• Japan has failed to ensure that its fire blight measures are based on an assessment of
the risks to plant life or health and therefore these measures are inconsistent with
Article 5.1 of the SPS Agreement; and
• Japan has failed to ensure that its fire blight measures are not more trade-restrictive
than required to achieve its appropriate level of phytosanitary protection, taking into
account technical and economic feasibility, and these measures are therefore
inconsistent with Article 5.6 of the SPS Agreement.
3.4 The United States further claims that Japan has acted inconsistently with its obligations under
Article XI of GATT 1994 and under Article 4.2 of the Agreement on Agriculture.
3.5 Japan argues that the United States has not established a prima facie case in respect of the
claims it has made.