Japan--measures affecting agricultural products: Lessons for future SPS and agricultural trade disputes

Whitlock, Joseph P

JAPAN-MEASURES AFFECTING AGRICULTURAL PRODUCTS: LESSONS FOR FUTURE SPS AND AGRICULTURAL TRADE DISPUTES^

I. INTRODUCTION

Evidence suggests that the WTO dispute settlement system has been very effective in resolving disputes, as 48 of 103 resolved cases through 2000 were settled without panel procedures.4 However, the record of compliance with the recommendations of panels and the Appellate Body is not perfect. For example, parties long delayed the implementation of recommendations in three important cases: the Beef Hormones case, the Bananas case, and the Brazil Aircraft case.5 Some commentators have suggested that these refusals to comply with Dispute Settlement Body (DSB) recommendations threaten its legitimacy, thus arguably weakening the entire WTO system.6 As of this writing, the Beef Hormones and Bananas cases have been resolved yet the Canada-Brazil Aircraft dispute remains open. The lengthy delay in resolving these three cases and the heightened international tensions resulting therefrom demonstrate the need to reexamine the WTO's retaliation-based enforcement mechanism and, if possible, to augment or improve it.7

gies, and their various modes of interaction at the international and domestic level.

Drawing on theories of compliance developed during recent years, this Note will examine issues of compliance in the area of sanitary and phytosanitary (SPS) measures, paying particular attention to the process leading up to the August 30, 2001 notification of a mutually acceptable resolution in Japan-Measures Affecting Agricultural Products case.8 This case, which involved Japanese phytosanitary regulations on apple imports, is particularly important as an example of the early success of the dispute settlement system in the areas of agriculture and SPS measures and as one of the first U.S.-Japan agricultural trade disputes brought to the WTO.9 The case promises to shed light on the effectiveness of the WTO dispute settlement system in resolving U.S.-- Japan agricultural and SPS disputes.

This Note begins by discussing the legal and institutional framework established to address SPS measures. It then introduces the Japan-- Agricultural Products dispute, discussing in turn the background of the dispute, the WTO panel and Appellate Body reports, and key events in the compliance process that stretched from March 1999 to August 2001. Finally, this Note introduces theories of compliance particularly suited to the analysis of compliance with WTO DSB recommendations, and examines the results of the compliance process in Japan-- Agricultural Products in light of those theories. This Note concludes that, despite the appearance of flaws in the process and degree of "compliance," Japan-Agricultural Products presents a model for meaningful resolution of disputes under the SPS Agreement.

II. INTERNATIONAL TRADE AND SPS MEASURES

A. Introduction

many measures that could potentially be considered non-tariff barriers, special problems of identification are created by trade-distorting sanitary and phytosanitary (SPS) measures, which are often necessary to protect a nation's economic and ecological welfare from foreign health risks,11 yet can also be abused12 to protect politically powerful domestic agricultural producers from the rigors of free trade.13

importation of certain agricultural products without justification.16 Even when countries institute phytosanitary measures for legitimate reasons, the welfare gains to farmers and native ecology assured by the particular plant protective measure may be greatly outweighed by the long-term loss of welfare to consumers resulting from the exclusion of inexpensive foreign agricultural products.17 Also, conflicting and inconsistent national SPS regulatory frameworks can lead to trade distortion.18

B. Activities of International Bodies Relevant to Plant Health Concerns

1. Treatment of Plant Health Concerns Under the GATT and WTO

to this problem were considered inadequate, the contracting parties agreed to negotiate an agreement specifically addressing SPS measures, the Agreement on the Application of Sanitary and Phytosanitary Measures ("SPS Agreement").21

The SPS Agreement, as clarified through panel and Appellate Body reports, strengthens the protections against abuse of SPS measures as disguised restrictions on trade by requiring that all SPS measures be based on scientific principles and maintained with sufficient scientific evidence.22 SPS measures must be "based on an assessment . . . of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations."23 In assessing risk to plant life in particular, members are required to consider a broad range of factors enumerated in Articles 5.2 and 5.3 of the SPS Agreement.24 The Appellate Body detailed a three-step process for risk assessment in Australia-Measures Affecting the Importation of Salmon. Members are to (a) identify the potential diseases whose entry is threatened by trade and their potential effects, (b) evaluate the likelihood of such entry and its consequences, and (c) evaluate the likelihood of entry and follow-on consequences under the proposed SPS measure.25

human, animal or plant life or health."26 The SPS Agreement, however, does not mandate uniformity under all circumstances. Members wishing to maintain more stringent SPS measures than international standards must provide either a justification based on science or a risk assessment, though scientific theories on which the justifications are based do not need to be the prevailing or dominant view in the scientific community.27 The SPS Agreement also contains a transparency provision that requires all SPS measures to be published promptly.28

2. Treatment of Plant Health Concerns Under Other International Organizations

Even before the GATT contracting parties began to focus on SPS measures in detail, other international bodies were attempting to harmonize standards in the food safety arena. Understanding the results of these efforts is important because of the role that such international standard setting bodies play in shaping the SPS Agreement, and in creating an environment that promotes compliance with DSB recommendations.29

measures (ISPMs)32 in order to promote phytosanitary measures that are scientifically sound yet do not distort trade. Under the SPS Agreement, a phytosanitary measure that conforms to the corresponding ISPM is deemed to be consistent with the obligations imposed by the SPS Agreement, but a measure that is more stringent than the corresponding ISPM must be justified by scientific evidence or a risk assessment. Thus, ISPMs play an important role in determining the range of permissible phytosanitary measures.

A second international convention relevant to trade in plant organisms is the Codex Alimentarius Commission. Created by the Food and Agricultural Organization (FAO), the Organization for Economic Cooperation and Development (OECD), and the World Health Organization (WHO) , the Commission declares its mission to be the "protection of the health of consumers, the assurance of fair practices in food trade and the coordination of all food standards work."34

III. HISTORICAL BACKGROUND OF THE JAPAN-- AGRICULTURAL PRODUCTS CASE

The year 1971 marked the date of the end of a prior import ban on apples and other fruit into the Japanese market.37 However, simultaneous with the liberalization of the market, the Japanese government imposed a new ban on imports of apples and other fruit for phytosanitary reasons.38 The Ministry of Agriculture, Forestry and Fisheries (MAFF) imposed an import ban on U.S. apples because of the danger of introducing the codling moth, the larvae of which burrow into the core of ripening apples, causing the fruit to fall prematurely from the trees.39 This parasite would be damaging to Japan ecologically and economically. The United States Department of Agriculture (USDA) began a costly research effort in the 1970s to export apples to Japan and, in 1982, held the first of twelve rounds of bilateral talks aimed at certifying American apples for export to Japan.40 By the early 1990s, however, the countries had failed to agree on any procedure.41

completion of Japanese rulemaking procedures.45

In spite of limited access to the Japanese market beginning in 1994, U.S. growers were unsuccessful in their efforts to export to Japan and all but withdrew from the market by 1997(46) because of the erosion of price competitiveness resulting from exchange rate fluctuations and rigorous phytosanitary requirements.47 This withdrawal led to a renewal of the United States Trade Representative's (USTR) pressure to relax the phytosanitary measures, particularly the "varietal testing" requirement.48 Under the varietal testing requirement, exporters were required to perform a separate battery of methyl bromide fumigation tests on every single variety of apple and prove that a particular concentration of methyl bromide effectively killed all codling moths.49 Bilateral talks faltered, and the United States requested consultations under the WTO DSU in April 1997,(50) followed by invocation of a panel in October 1997.(51)

IV. CASE ANALYSIS: JAPAN-MEASURES AFFECTING AGRICULTURAL PRODUCTS

This case shows the WTO distinguishes between legitimate science-based testing versus thinly veiled protectionist measures. . . . The panel ruling establishes that there is no scientific basis for the Japanese varietal testing regime. We fully expect that Japan will honor its WTO obligations and open its market to U.S. apples and other produce.53

The panel's main findings were that the varietal testing requirement violated Articles 2.2,(57) 5.7,(58) 5.6,(59) and 7(60) of the SPS Agreement. On appeal, Japan contested the panel's findings that the varietal testing requirement violated Japan's WTO obligations,61 and the United States contested the panel's finding that the "testing-by-product" methodology would not achieve Japan's appropriate level of protection.62 Largely rejecting both parties' arguments, the Appellate Body upheld the panel's conclusions under Articles 2.2, 5.7, and 7, as well as the conclusion that "testing-by-product" would not achieve Japan's appropriate level of protection.63 Finally, in a ruling potentially significant to the parties' behavior during the compliance process, the Appellate Body reversed the panel finding that the varietal testing requirement was more restrictive than necessary.64

V. THE COMPLIANCE PROCESS

Lacking specific guidance regarding a particular measure that would bring Japan into compliance with its WTO obligations, the parties were left to negotiate their differences. At first, it appeared that the compliance process would be relatively smooth, especially in light of the resolution of a related dispute in mid-March.65 Several weeks after the DSB adopted the Appellate Body Report, the parties announced that they had agreed on a reasonable period for compliance, a surprisingly short nine months and twelve days.66 Consistent with that timeline, Japan retracted the varietal testing requirement on December 31, 1999.(67) However, no new methodology permitting importation of new apple varieties had been agreed upon, and the parties did not announce their resolution of the dispute for another eighteen months.68 The long delay in agreement upon a new methodology forced Japan into the embarrassing position of issuing eighteen separate status reports to the DSB even after it had claimed to have complied with the DSB's recommendations.69

and Plant Health Inspection Service (APHIS) began technical consultations with the Plant Quarantine Division of MAFF in order to agree on a mutually agreeable methodology for testing previously unapproved fruit for import. The negotiations made slow progress, and it was only in April 2001 (approximately two years later) that APHIS and MAFF's Plant Quarantine Division agreed upon a technical framework.70 During this long interim, USTR, APHIS, and U.S. apple growers consulted frequently; the Ministry of Foreign Affairs (MOFA), MAFF, and Japanese apple growers consulted frequently;71 and top administration officials in Japan and the United States communicated on this issue at least three times.72 From April to August 2001, MAFF then worked through the domestic procedures to amend a new regulation,73 which included a public hearing to receive comments from interested parties, particularly Japanese apple growers.

codling moths. Instead, MAFF will accept proof of fumigation testing performed according to standards at least as rigorous as prior testing performed for approved apple varieties.

In many ways, this compromise simply preserved the status quo. U.S. producers were still obliged to comply with strict quarantine procedures that ensured the Japanese environment would be protected from the codling moth that also had the effect of raising their costs. 5 Japanese producers would be faced with a gradual increase in competition as more and more varieties of imported apples were approved.

VI. THEORIES OF COMPLIANCE

A. Introduction

Among the various theories of compliance developed in recent years, there is much that is useful in understanding compliance with DSB recommendations. These theories fall into two categories. On the one hand are theories that describe the compliance process as resulting from the initiative of two sets of negotiators (each representing a national government) that also mediate among the demands of other interested groups. On the other hand are theories that describe the compliance process as a discursive, decentralized process in which many interested parties can affect the outcome.76 Despite the difference in focus, however, both sets of theories are useful in highlighting distinct aspects of the compliance process of mediation among competing actors and choices. These theories reveal a variety of institutional, political, and economic dynamics that shape the compliance outcome.

with the DSB's recommendations or risking sanctions. Theories, for example, describing compliance with notions of customary international law may be less suitable for analogy to compliance in the highly institutionalized WTO context, where members have agreed not only to detailed treaty provisions but also to enforcement of those provisions through a formal adjudication system supported by a retaliatory sanctions regime. On the other hand, theories that address the interaction of different treaty signatories (and other interested parties) to a dispute may well be useful in guiding national governments and ministries responsible for complying with DSB recommendations that incorporate language from a particular WTO Agreement.

Although clearly not contiguous, these theories are often complementary and overlapping. And paradoxically, it is when these two theories appear to conflict that they are most useful in explaining the process of compliance with DSB recommendations. Theories that appear at first glance to conflict may actually help explain aspects of the compliance process that one theory alone could not.

B. Rational Actor Theory

1. Introduction

Domestic and international responsibility for making the ultimate decision on a level of compliance with a DSB recommendation is concentrated in a national government and its bureaucratic arms. For this reason, rational actor theory, which assumes that nations are essentially unitary actors that perceive their interests rationally through a process of weighing many short- and long-term goals, is a useful starting point for analysis of WTO members' behavior in complying with DSB recommendations.78

aims of each national government (and their bureaucratic agents) are located within a matrix containing often conflicting interests that must be weighed against each other:

* the costs/benefits of exacting or failing to exact (or making or refusing to make) certain concessions that would benefit (harm) domestic constituencies;

* the economic costs/benefits of resolving the conflict;

* the reputational and political costs/benefits of resolving (or not resolving) the conflict, whether those costs/benefits are at the level of domestic politics, at the level of bilateral relations between the countries, or at the international level, particularly in regards to the bureaucratic actors' (and national governments') standing at the WTO; and

* as an extension of the international costs of not resolving the conflict, the extent to which the bureaucratic actor (and supporting government) see themselves negatively impacted in the short- and long-term by the costs that such an outcome would impose on the legal stature of the WTO dispute settlement system and the WTO as a whole.79

The rational actor theory is not without its flaws. It presumes the actor's ability to optimize all of its preferences along a utility curve, and this presumption is an unrealistic abstraction of any actor's limited abilities and resources. However, because the decisions made during the compliance process are often made by a few individuals who work at a few bureaucratic arms of the national government, it is an appropriate starting point for explaining WTO member behavior during the compliance process. After all, negotiations and compliance don't just "happen." They require self-conscious efforts by negotiators vested with the authority to make decisions on behalf of their supporting governments and that government's constituents.

2. Rational Actor Theory and the Japan-Agricultural Products Compliance Process

requirement and replace it with a fundamentally different standard. While the U.S. government publicly cast itself in the role of an aggressive negotiator asserting its rights, the Japanese government cast itself in the role of a WTO member eager to comply fully with the DSB recommendations and announced that it would comply on a very short nine-month timeline.81

The parties' negotiating strategies are susceptible to a classic prisoner's dilemma analysis:

(1) If the United States held out for greater concessions by Japan, and Japan had a lower tolerance for delay than the United States, then the United States might be able to attain its primary goals (relaxed varietal testing and fire blight certification restrictions).

(2) If Japan held out hoping to make fewer concessions, and the United States had a lower tolerance for delay than Japan, then Japan might attain its primary goals (insubstantial changes to the varietal testing requirement and no changes to the fire blight certification scheme).

(3) However, if both parties held out for too long, then they would both incur high costs from delay. (For the United States, extended delay meant delaying exports of hitherto unapproved varieties of apples and other fruit. For Japan, extended delay meant subjecting itself to international criticism for refusing to comply with DSB recommendations.)

(4) Finally, if both parties cooperated, they would each share the costs and benefits of negotiations, each giving up some of their initial primary negotiating goals, but avoiding the high costs inherent in extended delay.

The Japan-Agricultural Products compliance process appears to have resulted in a type 4 situation, in which both parties give up some of their initial demands, yet neither party is left without any gain at all.

Under this type 4 situation, Japan succeeded in changing its varietal testing requirement to the minimum extent necessary, which meant that it would still be able to demand that all exporting countries in the future undertake a comprehensive series of tests to prove that their products would be free of quarantine pests.84 However, the delay in attaining a resolution of the case may have hurt Japan's reputation for compliance with DSB recommendations.

However, viewed from another perspective, the compliance process in Japan-Agricultural Products could well have resulted in a type 3 outcome. This view emphasizes the costs incurred by the parties. By delaying the resolution of the dispute, Japan was subjected to intense international scrutiny during the compliance process, yet the United States was unable to begin export as quickly as it had desired.

C. Managerial Approach

1. Introduction

The rational actor theory described above proposes that an abstract "government" actor can account for all relevant factors in a calculus of its interests. This theory, however, oversimplifies the process that leads to decisions about compliance by reducing the actions of other economically and politically powerful private and public actors to mere considerations within a command center of an omniscient government actor. The theory assumes a unitary government actor as the ultimate locus of decision-making activity; however, no single government ministry could effectively mediate all the interests involved in deciding on the appropriate level of compliance.

2. Efficiency Considerations

a. Introduction

The Chayeses assert that continuous recalculation of costs and benefits consumes governmental resources, and thus it is more "efficient" to follow the established norms of treaty obligations.87 "Efficiency," as the Chayeses use the term, presumes that treaty obligations have become so firmly established that the responsible ministries will perceive compliance as either necessary or advantageous. It is also possible that the level of acceptance of treaty obligations depends on other factors, such as the length that the treaty has been in operation, the extent to which the treaty norms diverge from the bureaucracy's prior practice, and the presence or absence of competing policies within the bureaucracy.88

Thus, it may be an overstatement to claim that efficiency considerations always push bureaucracies in the direction of compliance. Nevertheless, efficiency considerations remain a useful concept in examining the compliance process. "Efficiency" explains not only the necessity of relying on expert bureaucracies to formulate compliance plans but also the possibility that the bureaucracies' institutional and political characteristics may channel decisions about compliance in certain directions. To help determine how efficiency considerations affect the compliance process, it is useful to examine the extent to which a treaty rule has become established within a particular bureaucratic context, policy preferences that are either consistent or inconsistent with the treaty rule, and the body of administrative precedent that is either consistent or inconsistent with the treaty rule.

b. Role of Efficiency Considerations in the Japan-Agricultural Products Compliance Process

ture.89

As Japan's representatives at the WTO, MOFA is much more heavily invested in the WTO's institutional and legal structure than MAFF:90 its bureaucrats must participate in the various WTO institutions, and they must be familiar with the principles of WTO jurisprudence and international law in order to make legal arguments that advance their government's interests. This institutional and legal environment in which MOFA representatives are immersed is likely to affect their analytical frame of reference.91 Through its participation in the DSB (where it announced a short period for compliance and thereafter had to justify its progress towards resolution in status reports), for example, it is subjected to institutional pressures favoring prompt compliance.92

Thus, one could argue that MAFF's institutional and political alignment with farmers' interests makes it vulnerable to political pressures from agricultural interests, enhancing protectionist values in certain sensitive product areas.103 Furthermore, a recent government survey suggests that the population generally supports the formulation of a new policy approach to help domestic farmers compete in the world marketplace.104 Thus, MAFF stands in contrast to MOFA, where efficiency arguably favors compliance with DSB recommendations. At MAFF, concerns of farmers and the public along with MAFF's institutional experience may engender a more negative view of the appropriate level of compliance with DSB recommendations in the agricultural trade arena.105

3. Norms

a. Introduction

to describe (at least part of) the behavior described by Harold Koh in his discussion of the internalization of international norms through "transnational legal process."106

b. Role of Norms ofInternational Law in the Japan-Agricultural Products Compliance Process

Norms of international law inform countries' expectations of each others' actions, and thus many actions, whether motivated by practical diplomatic considerations or by reputational concerns, are indirectly influenced by norms of international law. Thus, it is likely that such norms played a role in the compliance process in Japan-Agricultural Products. MOFA, for example, may have been sensitive to reputational concerns informed by such norms in its decision to agree to a short compliance period. Evidence even suggests cases in which international norms trumped other competing domestic political considerations. For example, such norms may have limited additional delay in the issuance of the revised testing requirements in light of mounting international pressure for a prompt resolution of the compliance process.107 The letters sent from Ambassador Zoellick to Japanese diplomats may also have led to an application of pressure to encourage MAFF to expedite its issuance of the new regulations.108

4. Self-Interest

a. Introduction

benefits resulting from other signatories' compliance against the burdens that compliance will impose on various domestic parties, both public and private. This treaty compliance is made more likely in the long run because when countries enter into treaties, they do so voluntarily and on terms with which they expect to be able to comply once domestic stakeholders have provided input on the precise nature of the national self-interest.

Prior to and during the treaty negotiation process, a domestic dialogue occurs among ministries, lawmakers, and private stakeholders over the treaty's costs, benefits and potential compliance problems. If all relevant parties participate in this process, signatories can gain confidence that the treaty terms are in the nation's overall self-interest, increasing chances of compliance further down the road.109

Where countries contemplate compliance problems at the outset because the subject matter is particularly sensitive (e.g., SPS measures), their differing views of self-interest may preclude agreement on treaty language that clearly defines rights and obligations. Negotiating parties wishing to finalize some agreement may defer the hard decisions, inserting instead precatory language that acknowledges both shared goals and conflicting interests. Unfortunately, trying to force a consensus in this way can lead to vague and inconsistent treaty language.

b. Role of Self-Interest in the Japan-Agricultural Products Compliance Process

The usefulness of "self-interest" in explaining Japan's behavior depends on the extent to which relevant actors saw such compliance as in their self-interest. In MAFF's case, the preference for limited terms of agricultural trade might suggest that the Ministry would not consider compliance to be in its self-interest.111 It is important, however, to note that MAFF and Japanese agricultural interests agreed in 1994 to the provisions of the SPS Agreement after deciding they could meet the Agreement's minimum scientific standards.112 More importantly, MAFF officials may have understood their self-interest to be served by compliance with the DSB recommendation in Japan-Agricultural Products because, in the event of non-compliance, the Ministry would have been faced with severe political pressure from elements within its own government.

D. Legitimacy Theory

1. Introduction

The legitimacy theory of compliance, propounded by Thomas Franck, provides another useful theoretical tool for explaining the degree to which WTO members comply with the recommendations of the DSB. The basic premise of the legitimacy theory is that institutions and rules that are perceived to have a high degree of legitimacy generate a correspondingly high measure of compliance behavior from those it demands.113

Franck's legitimacy theory is based on an assumption of an international system in which there is no coercive mechanism, as there arguably is under the WTO. Nevertheless, the legitimacy theory is useful in examining WTO member compliance with DSB recommendations, particularly in light of cases like the Hormones and Bananas cases, which have cast doubt on the efficacy of the WTO's retaliatory enforcement mechanism.

Franck emphasizes the importance of the distinction between the concepts of legitimacy and justice. Legitimacy is more important in ensuring individual nations' compliance with their international obligations than the illusory promise of justice for all actors involved. The following passage, meant to apply to international obligations generally, ring true in the context of WTO DSB decisions:

At its present stage of development, most systemic rules command not persons but states, allocating duties and benefits on an aggregate basis. To say that the rules operate justly among nations, however, is to say little about the rules' actual impact on those who matter: the individuals who, unlike states, are capable of pleasure and pain. That this is an inevitable barrier to assessing the justice of the international rule system, however, does not affect our ability to measure quite accurately and usefully the legitimacy of those rules. . . . [T]he first task for now is to build a rule system of such manifest legitimacy as to engender a broad base of uncoerced habitual compliance.114

coherence of rules and procedures,115 the clarity and determinacy of rules and procedures,116 and the use of symbolically-laden ritual procedures.117 Particularly in view of recent doubts about the viability of the WTO's retaliation-based enforcement mechanism, the legitimacy theory of compliance may be a useful tool in explaining WTO member behavior during the compliance process.

2. Legitimacy Theory and the Japan-Agricultural Products Compliance Process

Thomas Franck's theory of legitimacy can help explain the particular result obtained at the end of the compliance process in Japan-- Agricultural Products. His theory, particularly his emphasis on consistency and coherence of rules, also helps legitimize this result as the best result attainable under the circumstances.

for the losing party to comply with the DSB recommendations.118 Further, WTO members have only authorized the panel and Appellate Body to adjudicate disputes according to precise rights and obligations set forth in the relevant Uruguay Round agreement, in this case the SPS Agreement. For the sake of ensuring the "compliance-pull" of the WTO rules, it is crucial that the panel and Appellate Body recognize the coherence and consistency interests by limiting their inquiry to the precise rights and obligations articulated in the SPS Agreement. Thus, the DSB was correct in refusing to prescribe a phytosanitary measure for Japan given the lack of clear scientific evidence supporting such a result. If the DSB were to prescribe a given scientific result, thereby validating one scientific point of view at the expense of another, the DSB would harm the consistency and coherence interests as articulated in Franck's legitimacy theory and thereby weaken the "compliance pull" of the DSB recommendation specifically, and the WTO dispute settlement procedures generally.

More generally, Franck's emphasis of "legitimacy" over "justice" can help explain the correctness of the result obtained through the compliance process in Japan-Agricultural Products. The legitimacy/justice distinction resembles Frederick Abbot's assertion that the international legal system is less about "equity" than "rules."119 One reason for the preeminence of "rules" is that the meaning of clearly defined "rules," unlike "justice," can be objectively agreed upon. In contrast, whether a determination is "just" or "equitable," can depend on the view of the actor affected, as well as related circumstances. Thus, in the present case, although Japanese farmers might consider the result to be `just" (so long as apple imports do not increase dramatically), U.S. agricultural exporters might consider the result "unjust," and the revised testing requirement merely another market access barrier that imposes prohibitively high costs on apple exporters.

Japanese market for apples remains closed to imports is less important than whether the parties comply with the DSB recommendation and whether the panel and Appellate Body are perceived as having made determinations consistent with the SPS Agreement.

E. Distinctions Among Compliance, Implementation, and Effectiveness 1. Introduction

Commentators have also focused on the distinction between compliance, implementation, and effectiveness.120 While the concepts of compliance and implementation are important for the Japan-- Agricultural Products case, the distinction between them is less so. For this reason, this Note uses "compliance" in a broader sense than the commentators below do. The meaning of "compliance," as used in this piece, comprises both the state of "being in compliance" with international obligations and the process of implementing new rules in order to bring rules and practice "into compliance" with international obligations. The distinction that is at the heart of Japan-Agricultural Products is the distinction between "effectiveness" and compliance.

a. Compliance and Implementation

b. Compliance and Effectiveness

Effectiveness, defined narrowly, is a movement closer to an international agreement's objectives.123 Compliance, on the other hand, denotes a condition under which signatories fulfill their formal obligations.124 Such compliance, however, may not be effective in attaining the underlying goals of the treaty if treaty rights and obligations are not tailored to deal effectively with the problems intended by the drafters.125 In other words, a disconnect between effectiveness and compliance can occur where treaty obligations do not ensure effective resolution of the problems that animated the treaty to begin with.126

treaty document from parol evidence. In this vein, some commentators on SPS issues have suggested that more meaningful, effective compliance would result if panels and the Appellate Body were willing to interpret the language of the SPS Agreement expansively and specify the measures that members should take in order to comply.127 However, demanding that panels and the Appellate Body enforce the SPS Agreement more aggressively could ultimately lead to less compliance and therefore less "effective" results than are currently being achieved.

2. Importance of Compliance/Effectiveness Distinctions in Japan-Agricultural Products

Focusing on "effectiveness" would (1) require panelists and AB judges to exceed their mandate, forcing them to rely on too many personal value judgments in areas where they may lack technical expertise, and (2) reduce the long-term benefits promised by the dispute settlement system. To give adjudicators the discretion to search for the most "effective" recommendation to attain what they consider to be the SPS Agreement's aims would override the intent of WTO members, who intentionally refrained from giving the dispute settlement organs such adjudicatory discretion. It is worth noting that the panel and Appellate Body are not required to "suggest ways in which the Member concerned could implement the recommendations," which is important because the Appellate Body must be careful not to "add or diminish the rights and obligations provided" in the SPS Agreement.128

"effectiveness" of the dispute settlement system and "compliance" with rulings made under it.130

For these purposes, the certainty provided by the written text of the WTO Agreements may be as important as the system's institutional and procedural advantages. Narrow and precise interpretation of treaty language is important in ensuring the predictability of dispute settlement outcomes. If rulings are predictable according to clear legal standards, parties will likely view them as correct and will likely be more willing to comply with the rulings. For the long-term integrity of the dispute settlement system, "compliance" takes precedence over "effectiveness."131

VII. CONCLUSION

This view is mistaken, but it raises a number of troubling questions about the result of the compliance process. The most difficult regards whether the amended regulation complies with DSB recommendations or not. It is unlikely that the new quarantine regulation fails to comply because many of the amendments answer the panel and Appellate Body's objections to the old regulation. For example, the promulgation of the amendment in the Government Gazette, as well as its posting on the MAFF website, answers the panel's Article 7 objections to the old regulation. Further, the extensive risk assessments done by MAFF answer the Appellate Body's Article 5.1 objection. Compliance with the DSB recommendation can only be questioned with respect to the Article 2.2 requirement that the measure be based on and maintained with sufficient scientific evidence. However, the very reason that it was hard for Japan to design an unquestionably valid measure under Article 2.2 has more to do with the statements of experts suggesting that neither the U.S. product-based proposal nor the Japanese varietal-- based measure was scientifically justifiable. With this testimony casting doubt on the scientific basis of the available methodologies, it was difficult for Japan to design a measure that unquestionably met the requirements of SPS Agreement Article 2.2.

It is important to keep in mind, however, whether the revised measure fulfills Article 2.2 is ultimately much less important than whether the dispute settlement system succeeded in resolving the issues in dispute. Other questions, such as whether Japan or the United States "unfairly" used negotiating leverage at the expense of the other, are also ancillary to the issue of whether disputes are resolved or not. The dispute resolution system succeeded in bringing the parties to a mutually agreeable resolution by providing a neutral forum in which the parties could have their claims adjudicated according to agreed upon principles. In many ways, this process is less contentious, more principled, and more productive than bilateral recriminations and demands, and can hopefully provide a model for future resolution of U.S.Japan agricultural trade disputes. The WTO dispute settlement system is vindicated by the very fact that the parties were able to reach an agreement despite the DSB's inability to find clearly in favor of either party's proposed scientific method.

^ The editors would like to extend a special thanks to Uwani Martin, J.D. candidate 2003, Georgetown University Law Center, for his assistance in reviewing certain Japanese language sources for this Note.

JOSEPH P. WHITLOCK*

* Associate, Miller & Chevalier, chartered. This Note would not have been possible without the expert advice provided by officials from the Ministry of Foreign Affairs, Embassy of Japan, Washington, D.C.; the United States Department of Agriculture, Animal and Plant Health Inspection Service; and the United States Trade Representative. I am also grateful for the guidance of the editors at LPIB and Professors John H. Jackson, Christopher Parlin, and Chi Carmody. Translations from the Japanese are by the author. Any errors and omissions are solely the author's responsibility.

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