INTRODUCTION

In a communication dated 7 April 1997, the United States requested consultations with Japan pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), Article 11 of the Agreement on the Application of Sanitary and Phytosanitary Measures (“SPS Agreement”), Article XXIII of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”), and Article 19 of the Agreement on Agriculture regarding the prohibition by Japan of imports of certain agricultural products.

The United States specifically alleged that, for each agricultural product for which Japan required quarantine treatment, Japan prohibited the importation of each variety of that product until the quarantine treatment had been tested for that variety, even though the treatment had proven effective with respect to other varieties of the same product. The United States claimed that Japan's prohibition adversely affected exports of US agricultural products, and, furthermore, that Japan's measure appeared to be inconsistent with the obligations of Japan under the SPS Agreement, the GATT 1994 and the Agreement on Agriculture. The provisions of these agreements with which these measure appeared to be inconsistent included, but were not limited to: (i) SPS Agreement, Articles 2, 4, 5 and 8; (ii) GATT 1994, Article XI; and, (iii) the Agreement on Agriculture, Article 4. The measures also appeared to nullify or impair benefits accruing to the United States directly or indirectly under the cited agreements. Consultations were held on 5 June 1997, but failed to settle the dispute.

In a communication dated 3 October 1997, the United States requested the Dispute Settlement Body (“DSB”) to establish a panel with standard terms of reference as set out in Article 7 of the DSU. The US claims of inconsistency in their Request for the Establishment of a Panel were identical to those set out in their re-quest for consultations, except for an additional claim of inconsistency under Article 7 of the SPS Agreement.

On 18 November 1997, the DSB established a panel pursuant to the request of the United States, in accordance with Article 6 of the DSU.