WASHINGTON - U.S. Trade Representative Robert B. Zoellick announced today that the United States asked a World Trade Organization (WTO) panel to review whether Japan has complied with earlier WTO rulings against its restrictions on imported U.S. apples. The United States is also seeking authorization to impose trade sanctions against Japan totaling $143.4 million.

"American apple growers have been blocked from the Japanese market - that’s wrong. The United States does not believe that Japan has brought its measure into compliance with WTO agreements," stated Zoellick. "Japan continues to require various restrictions, including orchard inspection and buffer zones. The revised restrictions are little changed from the original restrictions found to be inconsistent by a WTO panel with Japan’s obligations under the SPS Agreement. We won’t be satisfied until there is a level playing field, and that’s why we are moving to assert our WTO rights."

In its request seeking authorization to impose trade sanctions against Japan, the United States proposes to increase tariffs on Japanese products with an annual trade value of up to $143.4 million, which is the approximate amount of annual harm to the U.S. economy caused by Japan’s measure on U.S. apples. The United States may also opt to suspend obligations to Japan under the SPS and Agriculture Agreements in order to achieve this annual value. Under an agreement with Japan, the United States would not suspend trade concessions until an arbitrator has confirmed the level of trade harm suffered by the United States.

The request for authorization to suspend trade concessions includes a list of potential product categories from which the United States could draw in selecting specific products that will be subject to increased duties. At this time, USTR is not publishing in the Federal Register a list of the specific products that may be subject to increased duties. However, at a later date USTR will publish, as appropriate, a Federal Register notice seeking public comment on a specific list of products.

Background

On December 10, 2003, the WTO Dispute Settlement Body (DSB) adopted the panel and Appellate Body reports in the fire blight case which found that Japan’s restrictions on imported U.S. apples are scientifically unfounded and inconsistent with WTO SPS obligations. In January 2004, the United States and Japan met to agree on the reasonable period of time (RPT) to implement the DSB’s decision. The parties agreed that the RPT would expire on June 30, 2004.

The DSB decision found that Japan’s requirements for three orchard inspections, 500 meter buffer zones between infected trees and trees with apples for export to Japan and chlorine treatment requirements are not based on scientific evidence nor did Japan base its measures on a risk assessment. The United States successfully argued that mature symptomless apples, the only apples exported, are not vectors for the fire blight bacteria.

Japan and the United States met on several occasions to discuss Japan’s implementation of the WTO decision, most recently on June 15. Japan issued a revision to its measure on June 30, 2004, the date the RPT expired. The United States does not believe that the revision to the measure brought it into compliance with Japan’s obligations under the SPS Agreement.