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TWN Info Service on WTO and Trade Issues (Feb18/21)
28 February 2018
Third World Network

  
Korea's import ban on Japanese fish products held WTO-illegal
Published in SUNS #8629 dated 26 February 2018


Geneva, 23 Feb (Kanaga Raja) - A dispute panel at the World Trade Organisation (WTO) has largely ruled that South Korea's imposition of import bans on certain fishery products as well as additional testing and certification requirements on all imported food products from Japan in the wake of the Fukushima Dai-ichi Nuclear Power Plant (FDNPP) accident in March 2011 were inconsistent with Korea's obligations under the WTO.

In a ruling issued on 22 February (WT/DS495/R), the Panel found that, to the extent that the measures at issue are inconsistent with Articles 5.6, 2.3, 7 and Annex B(1) and B(3) of the SPS (Sanitary and Phytosanitary Measures) Agreement, they have nullified or impaired benefits accruing to Japan under that agreement.

The Panel recommended that Korea bring its measures into conformity with its obligations under the SPS Agreement.

The ruling appears largely to rely on the views of external experts consulted by the Panel relating to the "safety" of food products, and the acceptable level of content of cancer-causing radionuclides (such as isotopes of Caesium, Iodine, Strontium and Plutonium) in the food products, rather than levels of such elements and their continued leakage from the Fukushima Dai-ichi nuclear power plant.

BACKGROUND AND SOME FACTUAL ASPECTS

Japan had requested consultations with Korea on 21 May 2015, and consultations were held on 24 and 25 June 2015, but these failed to resolve the dispute.

On 20 August 2015, Japan requested the establishment of a panel in the dispute, and at its meeting on 28 September 2015, the Dispute Settlement Body (DSB) agreed to established a panel.

In conducting its analysis in this dispute, the Panel consulted several scientific experts and international organizations.

According to the Panel report, the Panel contacted the Codex Alimentarius Secretariat, the United Nations Food and Agriculture Organisation (FAO), the International Atomic Energy Agency (IAEA), the International Commission on Radiological Protection (ICRP), the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR), and the World Health Organisation (WHO) and sought their assistance in identifying scientific or technical experts in the following areas:

(i) release of nuclear materials into the environment (by accident or by other means); (ii) radionuclide contamination in food including testing methods and any differences in contamination based on the source of contamination (air, groundwater, or naturally occurring); and (iii) radionuclides in marine environments including issues of radionuclide deposits in the ocean and levels of radioactivity in marine organisms.

According to the Panel report, radionuclides - nuclides that are radioactive - are a source of ionizing radiation. Radionuclides occur in both natural and man-made forms throughout the world and humans are exposed to them on a continuous basis. Natural sources of ionizing radiation can be found in soil, water, or vegetation; certain X-rays and medical devices are a source of human-made ionizing radiation.

They can also occur as a consequence of nuclear weapons usage or testing or following accidental events in nuclear facilities.

The common radionuclides in food are potassium-40 (K-40), radium-226 (Ra-226) and uranium 238 (U-238) and their associated progeny. In general, K-40 is the most commonly occurring natural radionuclide (or radioisotope).

When large amounts of radioisotopes are discharged into the environment, they can affect foods by either falling onto the surface of foods like fruits and vegetables or animal feed as deposits from the air or through contaminated rain or snow. Radioactivity in water can also accumulate in rivers and the sea, depositing on fish and seafood.

Radionuclides generated in nuclear installations that could be significant for the food chain include radioactive hydrogen (H-3), carbon (C-14), technetium (Tc-99), sulphur (S-35), cobalt (Co-60) strontium (Sr-89 and Sr-90), ruthenium (Ru-103 and Ru-106), iodine (I-131 and I-129), uranium (U-235) plutonium (Pu-238, Pu-239 and Pu-240), caesium (Cs-134 and Cs-137), cerium (Ce-144), iridium (Ir-192), and americium (Am-241).

Korea informed Japan that the twenty radionuclides listed in the Codex Alimentarius Commission General Standard for Contaminants and Toxins in Food and Feed, CODEX STAN 193-1995 (CODEX STAN 193-1995), were the subject of Korea's concerns with respect to food-borne radionuclides.

Because of prior release events resulting from the Chernobyl accident and nuclear weapons detonations, these 20 radionuclides - most of which are man-made - can be found at varying levels, everywhere in the world.

The Panel said there are six radionuclides that are particularly referenced in this dispute: caesium (Cs-134 and Cs-137), strontium (Sr-90), plutonium (Pu-239 and 240) and radioactive iodine (I-131).

As to the radioactive contamination from FDNPP, the Panel noted that based on estimates, approximately 17.5 PBq of Cs-134 and 15 Pbq of Cs-137 were released via the atmospheric fallout, 5 PBq of Cs-137 was directly discharged into the environment, 15-20 TBq/year of Cs-137 is released via ongoing groundwater discharge, and 10-12 TBq/year is released through ongoing river runoff. The total atmospheric release of I-131 was estimated to be approximately 150-160 PBq. In total, approximately 1.0-2.4 x 109 Bq of Pu-239 and 240 was released into the environment from the FDNPP reactors.

Most of the Sr-90 released from the FDNPP was directly discharged into the North Pacific, with estimates of total inventories ranging from 0.04 to 1.0 PBq.

"Estimates to this day have varied and there is no definitive calculation of the amounts released," it said.

"It is undisputed that exposure to ionizing radiation can have detrimental impacts on human health. The types of adverse health effects depend on whether the exposure is to high doses (a deterministic effect) or to low doses (stochastic effects)," said the Panel.

It is the risk of these stochastic effects from the potential presence of radionuclides in food exports from Japan that Korea states it is addressing through the measures at issue. One of the most significant adverse health effects of low radiation doses is radiation-induced cancer.

The Panel noted that Japan does not challenge all of the measures Korea has imposed in response to the FDNPP accident and its aftermath.

For example, Japan does not challenge Korea's requirement to provide a certificate of origin with all products imported into Korea from Japan. Japan does not challenge Korea's requirements that all consignments from Japan, regardless of product or prefecture of origin, be tested for caesium at the border.

Japan also does not challenge any of Korea's non-fishery product-specific import bans. As of the Panel's establishment on 28 September 2015, 27 non-fishery products from 13 prefectures are subject to product-specific import bans.

In these dispute proceedings, Japan challenges the additional testing requirements dated 2011 for non-fishery products (except livestock) and dated 2013 for fishery and livestock products when trace amounts of caesium or iodine are detected.

Japan also challenges two types of import bans: (a) the product-specific import bans dated 2012 on Alaska pollock from Fukushima and on Pacific cod from Aomori, Iwate, Miyagi, Ibaraki and Fukushima; (b) the blanket import ban dated 2013 on all fishery products from 8 prefectures for 28 fishery products.

PANEL'S FINDINGS

On whether Korea's measures are SPS measures, the Panel found that Korea's import bans and additional testing requirements are applied to protect human health from the risks arising from the presence of contaminants in foods. These measures directly affect international trade. Therefore, the measures are SPS measures within the meaning of Article 1 of the SPS Agreement.

The Panel addressed the measures adopted after the immediacy of the accident. In that regard, Korea argued that there continues to be insufficient scientific evidence on the amount and types of radionuclides released during and since the accident.

Korea adopted the product-specific import bans that are the subject of Japan's claim (namely those on Alaska pollock from Fukushima and Pacific cod from Aomori, Iwate, Miyagi, Ibaraki, and Fukushima) to mirror those internal restrictions imposed by Japan.

Japan imposed (and then removed) these measures based on an assessment from its Food Safety Commission on the levels of radiation in food that would have an impact on health in combination with monitoring data on the specific products in specific prefectures.

In 2013, Korea tightened its existing measures by instituting a blanket import ban on all fishery products from eight prefectures as well as extending the additional testing requirements to fishery and livestock products.

These measures were a response to the disclosure, in July 2013, of leaks at the FDNPP. Both parties agree that there have been leaks at the FDNPP since the initial accident in March 2011. Korea pointed to news articles from July 2013 to argue that there are undisclosed amounts of leaks of radionuclides and that this uncertainty about the total amount released means that there is insufficient scientific evidence to conduct a risk assessment.

Korea also referred to insufficiency in scientific evidence that is not related to existing contamination, but about potential future contamination. For example, Korea argues that the evidence is insufficient with respect to the types, amount and status of radionuclides remaining in the FDNPP and the likelihood of future releases of radioactive materials into the ocean.

The Panel said that Korea is correct that it is unknown whether another accident could happen at the FDNPP that would release even more radioactive contamination into the environment - on land or water - and in what amounts and combinations. The Panel is sensitive to Korea's fear that an additional accident could increase the levels of radionuclides contaminating food products in international commerce.

The Panel further noted that if another incident were to occur, Korea would be within its rights, to re-evaluate the sanitary risk posed by food products affected by that incident and impose appropriate SPS measures.

After careful analysis, the Panel found that while there was an insufficiency of scientific evidence with respect to the 2011 additional testing requirements, this was not the case for the product-specific bans, the blanket import ban, or the 2013 additional testing requirements.

Although there is an uncertainty with respect to the potential for future nuclear accidents at the FDNPP or elsewhere, this uncertainty does not relate to the science necessary to assess the risks associated with the consumption of contaminated food, but rather to the inherent uncertainty of life, it said.

The Panel said even if it finds in favour of Japan, if another accident were to happen and contamination of food products were to increase, nothing in this report would prevent Korea from imposing new measures to ensure that its limits for radionuclides were enforced.

The Panel also found that Korea has based its 2011 additional testing requirements and product-specific bans on available pertinent information. However, this was not the case for the blanket import ban and the 2013 additional testing requirements.

In sum, Korea has failed to establish that there was insufficient scientific evidence with respect to the product- specific bans, the blanket import ban, or the 2013 additional testing requirements.

Korea has not demonstrated that it based the blanket import ban or the 2013 additional testing requirements on available pertinent information. Moreover, it has failed to review any of its measures within a reasonable period of time. As none of the measures fulfils all four cumulative elements of Article 5.7, the Panel found that Korea's measures do not fall within the scope of Article 5.7.

On whether Korea's measures are more trade-restrictive than required, the Panel noted that in the present dispute, Korea argues that, for the additional testing requirements, the alternative measure proposed by Japan is not significantly less trade restrictive than the current regime.

Japan proposes a single alternative measure that it argues can achieve Korea's appropriate level of protection (ALOP) with respect to the challenged measures that Korea is currently imposing on all products. Japan proposes testing for caesium, to verify that the products' caesium content does not exceed Korea's level of 100 Bq/kg, as a means to control both caesium contamination and contamination from additional radionuclides.

On whether Japan's proposed alternative measure is significantly less trade restrictive than Korea's measures, the Panel noted that Japan does not challenge the requirement for pre-export testing or that randomly selected samples from all consignments from Japan be tested for caesium and iodine, but rather the testing for additional radionuclides if the caesium or iodine content is more than 0.5 but below 100 Bq/kg.

In Japan's view, this additional testing is unnecessary from a sanitary protection point of view and is trade restrictive because of the additional time and cost associated with the testing.

Japan provided the Panel with evidence as to the cost of the additional testing if conducted in Korea would be roughly half the value of the average consignment of fishery products exported from Japan to Korea (8,000 USD) or in Japan. Japan also argues that it can take up to six weeks for the tests to be conducted.

The Panel found, in the absence of any refutation of Japan's prima facie case as to the additional cost and time required for the additional testing that the proposed alternative measure is significantly less trade restrictive than the additional testing requirements.

The Panel also concluded that Japan has established that the proposed alternative measure is technically and economically feasible.

The Panel noted that rigorous environmental and seawater monitoring is in place in addition to the food monitoring programme in Japan. Data from monitoring points in the harbour is available on an hourly basis and publicly available.

It also noted that both parties use all the Codex guideline levels for all the radionuclides except caesium. Both Japan and Korea have adopted a level of 100 Bq/kg of caesium, which is 10 times lower than the Codex standard.

In sum, said the Panel, Japan has proposed another measure that is technically available and economically feasible and is significantly less trade restrictive than the measures Korea currently applies.

With respect to whether Japan's alternative measure achieves Korea's level of protection, the Panel found that it would not have met Korea's level of protection at the time the 2011 additional testing requirements and the product-specific bans were adopted. Similarly, the Panel found that it would not have achieved Korea's ALOP for Pacific cod from Fukushima and Ibaraki at the time the 2013 blanket import ban was adopted.

With respect to the 2013 additional testing requirements and the other fishery products and prefectures subject to the blanket import ban, the Panel found that Japan's alternative measure would have achieved Korea's ALOP at the time the measures were adopted.

The Panel found that for all the measures, Japan's alternative measure would have achieved Korea's ALOP at the time of the establishment of the Panel and continue to do so to this date.

Therefore, the Panel found that Korea's 2011 additional testing requirements and 2012 product-specific import bans were not more trade-restrictive than required when adopted.

However, at the time of the establishment of the Panel, they were maintained inconsistently with Article 5.6 of the SPS Agreement because they are more trade-restrictive than required.

The Panel found that the 2013 additional testing requirements were adopted and maintained inconsistently with Article 5.6 of the SPS Agreement because they were and are more trade-restrictive than required.

It found that the blanket import ban (with the exception of the bans on Pacific cod originating from Fukushima and Ibaraki) was adopted in a manner inconsistent with Article 5.6 of the SPS Agreement because it was more trade-restrictive than required.

The Panel found that the maintenance of the blanket import ban, with respect to all 28 fishery products from all 8 prefectures, is inconsistent with Article 5.6 of the SPS Agreement because it is more trade-restrictive than required.

The Panel addressed Japan's claims that Korea's import bans and additional testing requirements are inconsistent with Article 2.3 of the SPS Agreement, because they arbitrarily or unjustifiably discriminate against Japanese products and they constitute a disguised restriction on international trade.

Japan maintains in that regard that the conditions of food products imported from Japan and of other origins are similar, because they pose similar SPS risks regulated by Korea's measures.

Japan argues that food from all over the world contains some amounts of caesium and other Codex radionuclides due to past releases of radioactive material to the atmosphere. Japan maintains that, as a result, Japanese and non-Japanese food poses similar potential of containing caesium.

On whether Korea's measures discriminate between Japanese products and those of other members, the Panel noted that between October 2012 and February 2015, Japan lifted its restrictions on Pacific cod and Alaska pollock pursuant to its internal guidelines.

"Nevertheless, as already noted, Korea continues to maintain its own bans and has not reviewed them as of the date of establishment of the Panel. Indeed, instead of reviewing the product-specific bans with an eye to removing them, in September 2013, Korea expanded its import bans to cover all fishery products from eight Japanese prefectures," said the Panel.

Korea argues that the discriminatory treatment is justified. However, Korea's arguments focus, once again, on the environmental conditions in Japan and an array of hypothetical fears about future contamination, the Panel added.

The Panel recalled that it has concluded that the potential contamination of Japanese products is similar to that of products from the rest of the world in that the caesium content is below 100 Bq/kg. Indeed, in 2013 when the blanket import ban was adopted, all samples of the 28 fishery products from the 8 prefectures subject of Japan's claim, except for 6 samples of Pacific cod from Fukushima and Ibaraki, were found to contain well below 100 Bq/kg of caesium. The same conclusion can be drawn for all of these 28 fishery products, including Pacific cod, with respect to the maintenance of the blanket and the product-specific import bans.

The Panel also recalled its finding that most of samples of the 28 fishery products tested since October 2013 contained between 0 and 25 Bq/kg. As regards strontium and plutonium, the Panel recalled its findings that their contribution to the risk of radiation exposure from consumed food was minimal.

In light of very low levels of caesium and additional Codex radionuclides detected in Japanese food, the Panel said it fails to see a rational connection between an absolute import ban on these products and the measure's stated purpose of protecting Korean consumers against the risk posed by radionuclides in food in excess of Korea's tolerance levels. In the Panel's view, Korea's import bans constitute the type of "rigid and unbending requirement", which applies regardless of the risk profile of imported products.

In addition, the Panel noted that Korea does not apply similar bans to non-Japanese products expected to be highly contaminated, including in excess of Korea's tolerance levels. Instead, for those products, Korea applies a caesium tolerance level of 100 Bq/kg.

This, in the Panel's view, is a strong indication that the distinction drawn by the measure is not rationally related to the stated regulatory objective. Importantly, the Panel recalled its finding that another measure exists which is technically and economically feasible, significantly less trade restrictive, and achieves Korea's ALOP. The inconsistency of the import bans (product specific and blanket) with Article 5.6 is a strong indication that any distinction in treatment is not rationally related to the stated regulatory objective, but rather a further warning signal that the discrimination resulting from Korea's import bans is arbitrary or unjustifiable.

Following its analysis, the Panel concluded that Korea's maintenance of product-specific bans on Alaska pollock from Fukushima and Pacific cod from Aomori, Fukushima, Ibaraki, Iwate and Miyagi, as well as of the blanket import ban on 28 fishery products from 8 Japanese prefectures amounts to arbitrary or unjustifiable discrimination.

Likewise, the Panel found the discrimination resulting from the adoption of the blanket import ban on 27 fishery products from the 8 prefectures, and on Pacific cod from 6 prefectures (i.e. excluding Pacific cod from Fukushima and Ibaraki), to constitute arbitrary or unjustifiable discrimination.

The Panel also found that there is no rational connection between the discrimination resulting from applying the additional testing requirements to Japanese food products and the stated regulatory objective of the measure.

Therefore, the Panel considers the discriminatory treatment afforded by the additional testing requirements when they were adopted in 2013 as well as the maintenance of both the 2011 and the 2013 additional testing requirements to constitute arbitrary or unjustifiable discrimination.

In conclusion, the Panel found that the 2013 additional testing requirements and the blanket import ban with respect to the 27 fishery products subject to Japan's claim from the 8 prefectures and Pacific cod from 6 prefectures, i.e. excluding Pacific cod from Fukushima and Ibaraki, were inconsistent with Article 2.3, first sentence of the SPS Agreement when Korea adopted them and, as a consequence, also with Article 2.3, second sentence.

Moreover, by maintaining the product-specific and blanket import bans on the 28 fishery products from the 8 prefectures and the 2011 and 2013 additional testing requirements on Japanese products, Korea acted inconsistently with Article 2.3, first sentence of the SPS Agreement and, as a consequence, with Article 2.3, second sentence.

The Panel exercised judicial economy on Japan's alternative reasons for inconsistency of the measures with second sentence of Article 2.3.

OVERALL FINDINGS AND RECOMMENDATIONS

The panel found that Korea's measures - the 2011 additional testing requirements, the 2012 product-specific import bans on Alaska pollock and Pacific cod from five prefectures, the 2013 additional testing requirements, and the 2013 blanket import ban - are SPS measures within the meaning of Article 1.1 and Annex A(1)(b) of the SPS Agreement and thus, are subject to the obligations therein. Furthermore, the Panel found that the measures do not fulfil the four requirements in Article 5.7.

The Panel made the following findings on Japan's specific requests:

With respect to the obligation not to establish or maintain SPS measures in a manner that is more trade-restrictive than required to achieve their appropriate level of protection:

a. Korea's 2011 additional testing requirements and 2012 product-specific import bans were not more trade- restrictive than required when adopted.

b. The Panel found that, at the time of the establishment of the Panel, the 2011 additional testing requirements and 2012 product-specific import bans were maintained in a manner inconsistent with Article 5.6 of the SPS Agreement because they were more trade-restrictive than required.

c. The Panel found that the 2013 additional testing requirements were adopted and maintained in a manner inconsistent with Article 5.6 of the SPS Agreement because they were and are more trade-restrictive than required.

d. The Panel found that the blanket import ban (with the exception of the ban on Pacific cod originating from Fukushima and Ibaraki) was adopted in a manner inconsistent with Article 5.6 of the SPS Agreement because it was more trade-restrictive than required.

e. The Panel found that the blanket import ban with respect to all 28 fishery products from all 8 prefectures is maintained in a manner inconsistent with Article 5.6 of the SPS Agreement because it is more trade-restrictive than required.

With respect to the basic obligation in Article 2.3 for Members to ensure that their SPS measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail and to not apply SPS measures in a manner which would constitute a disguised restriction on international trade:

a. The Panel found that the 2013 additional testing requirements and the blanket import ban with respect to the 27 fishery products subject to Japan's claim from the 8 prefectures and Pacific cod from 6 prefectures, i.e. excluding Pacific cod from Fukushima and Ibaraki, were inconsistent with Article 2.3, first sentence of the SPS Agreement and, as a consequence, with Article 2.3, second sentence, when Korea adopted them.

b. The Panel found that, by maintaining the product-specific and blanket import bans on the 28 fishery products from the 8 prefectures and the 2011 and 2013 additional testing requirements on Japanese products, Korea acted inconsistently with Article 2.3, first sentence of the SPS Agreement and, as a consequence with Article 2.3, second sentence.

c. The Panel exercised judicial economy with regard to the other grounds raised by Japan for inconsistency of Korea's measures with Article 2.3, second sentence.

With respect to the obligations in Article 8 and Annex C with respect to the operation of control, inspection and approval procedures, the Panel found that Japan has failed to establish that Korea acted inconsistently with the provisions of Annex C(1), sub-paragraphs (a), (c), (e) and (g) and, as a consequence, with Article 8 of the SPS Agreement in respect of the adoption and maintenance of the 2011 and the 2013 additional testing requirements.

With respect to the transparency obligations in Article 7 and Annex B:

a. The Panel found that Korea has acted inconsistently with Annex B(1), and as a consequence Article 7 of the SPS Agreement, with respect to the publication of all of the challenged measures.

b. The Panel found that Korea's SPS Enquiry Point's failure to respond at all to Japan's follow-up request in conjunction with its earlier failure, is sufficient to establish that Korea acted inconsistently with the obligation in Annex B(3) and as a consequence Article 7 of the SPS Agreement.

 


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