Adopted 26 April 2019
Complainant Japan
Respondent Korea
Third Participants Brazil, Canada, China, Chinese Taipei, European Union, Guatemala, India, Zealand, Norway, Russia, United States
Measure at Issue
The dispute concerns a variety of Korean measures imposed in relation to food imports from Japan following its nuclear accident at Fukushima Dai-ichi Nuclear Power Plant on 11 March 2011. Korea imposed import bans and additional testing and certification requirements in relation to a broad range of fish and non-fishery products from Japan to ensure food safety arising from the possible presence of radionuclides in the food imports. These measures were subject to challenge by Japan under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (‘SPS Agreement’), which applies, among others, to WTO Members’ measures on food security.
Main Adopted Findings of the Panel and Appellate Body
Reversing Panel finding of arbitrary or unjustifiable discrimination in treatment of imports from Japan differently to other WTO Members where identical or similar conditions prevail – Article 2.3 of the SPS Agreement
The Panel had found that Korea's import bans and additional testing requirements constituted ‘arbitrary or unjustifiable discrimination’ and ‘a disguised restriction on international trade’. This was because the trade restrictions applied to imports from Japan but not to other countries where similar conditions regarding the food existed (i.e. contamination levels), and because the measures were deemed not rationally connected to the objective of protecting Korean citizens against the risk arising from consumption of contaminated food products.Footnote 1
However, the Appellate Body reversed the Panel's findings that the import bans, and the additional testing requirements. were inconsistent with Article 2.3 of the SPS Agreement.Footnote 2
The Appellate Body found that the Panel erred in its interpretation and application of Article 2.3, and therefore faulted the conclusion based on this interpretation. It explained that, in determining whether ‘similar conditions prevail’ between Japan and other Members, it is necessary to consider all relevant conditions that are relevant to the specific SPS risks at issue; in this instance, therefore, including both actual contamination levels in foods as well as the potential for contamination of food. The Appellate Body found that the Panel had concluded that the scope of the relevant ‘conditions’ under Article 2.3 may be exclusively limited to ‘the risk present in products’ (i.e. actual contamination), therefore omitting that also potential contamination is relevant.Footnote 3
Reversing Panel finding that Japan's proposed alternative measures achieved the same level of protection as Korea's own appropriate level of protection (ALOP) – Article 5.6 of the SPS Agreement
The Panel had found that Korea's imports bans and additional testing requirements were more trade-restrictive than required to achieve Korea's appropriate level of SPS protection, as Japan had presented an alternative that would have achieved Korea desired level of SPS protection while being less trade restrictive.Footnote 4
However, the Appellate Body also reversed this Panel finding that the import bans and the additional testing requirements were inconsistent with Article 5.6 of the SPS Agreement.Footnote 5
The Appellate Body found that the Panel correctly determined Korea's ALOP as consisting of several quantitative and qualitative elements concerning the radioactivity levels in food,Footnote 6 but faulted the Panel for erroneously focusing on the quantitative element only when assessing whether Japan's proposed alternatives achieved the same level of protection as Korea's ALOP while also being less trade restrictive. In other words, the Panel failed to consider properly in its analysis whether also the Japan's alternatives achieve the same qualitative protection to achieve Korea's appropriate level of SPS protection. In the Appellate Body's view, the Panel's analysis left unclear whether Japan's alternatives satisfied all elements of Korea's ALOP.Footnote 7 On this basis, the Appellate Body found the Panel to have erred in its application of Article 5.6, and hence reversed the finding.Footnote 8
Declaring Panel's findings regarding Korea's alleged invocation of the precautionary principles to be ‘moot and of no legal effect’ – Article 5.7 of the SPS Agreement
A final noteworthy ruling by the Appellate Body is its conclusion that the Panel's findings regarding Korea's failure in invoking the precautionary principle as a basis for its SPS protection were moot and of no legal effect.
The Panel had found that Korea failed to invoke properly the precautionary principle in Article 5.7 of the SPS Agreement, as it failed, among others, to show there was insufficient scientific evidence with respect to the import bans and the additional testing requirements.Footnote 9
However, the Appellate Body noted that Japan had not made any claim under Article 5.7, and thus there was no jurisdiction for the Panel to make a ruling on whether or not Korea acted consistently with Article 5.7. As such, the Panel exceeded its mandate and, for that, its findings under Article 5.7 were declared moot and of no legal effect by the Appellate Body.Footnote 10
In sum, the Appellate Body reversed all substantive findings of the Panel that Korea's SPS measures violated WTO law – only a procedural violation under the SPS Agreement was upheld. The reversal was not premised on an examination of the Panel's assessment of factual matters, such as the levels of contaminants in foods from Japan compared to other similarly situated countries, or the potential exposure of Korean consumers to radionuclides in food products, but rather on issues with the Panel's interpretation and application of the relevant legal provisions. In fact, no factual issues in relation to the Korean measures were considered in the appeal. In a sense, therefore, by reversing the Panel, but not reaching an express conclusion on the consistency of Korea's food security measures with the substantive obligations of the SPS Agreement, there is a‘hung jury’ as to whether Korea's measures taken in response to the 2011 nuclear accident in Japan were consistent with WTO law.
