Published online by Cambridge University Press: 14 April 2021
The recent WTO dispute case, Korea–Import Bans, and Testing and Certification Requirements for Radionuclides, illustrates complex legal issues and significant political implications associated with the regulatory autonomy of a sovereign country under the WTO Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). There has been constant tension between the sovereign right of a WTO member state to determine its own appropriate level of protection (ALOP) and the regulatory constraints imposed under the SPS Agreement to prevent abuse and disguised trade protection. The case emerged from this tension and raises questions on the extent of the regulatory autonomy in the application of an SPS measure. This article addresses these questions and examines the criteria for the qualitative standards for the ALOP, the question that the Appellate Body decision did not fully resolve. The criteria for the qualitative ALOP standards affect the regulatory autonomy significantly under the current SPS rules as they determine the manner and the extent to which a Member may meet the sensitive public interests in the application of an SPS measure. The article proposes a rational basis test to restrain abuse of SPS measures while preserving the regulatory autonomy protected under the SPS Agreement.
1 Centers for Disease Control and Prevention (CDC), Food and Coronavirus Disease 2019 (COVID-19) (25 June 2020), www.cdc.gov/coronavirus/2019-ncov/daily-life-coping/food-and-COVID-19.html [https://perma.cc/4T66-Z8P6].
2 H. Gu and D. Patton (2020) ‘China Steps up Checks on Meat, Seafood after COVID-19 Cases in Market’, Reuters (15 June 2020), www.reuters.com/article/us-health-coronavirus-china-food/china-steps-up-checks-on-meat-seafood-after-covid-19-cases-in-market-idUSKBN23M1NI (accessed 22 July 2020).
3 For the past 20 years, over 18,000 SPS measures were notified to the SPS Committee. Committee on Sanitary and Phytosanitary Measures, Specific Trade Concerns. Note by the Secretariat of 7 March 2017, G/SPS/GEN/204/Rev.17.
4 See also, Du, M. (2010) ‘Autonomy in Setting Appropriate Level of Protection under the WTO Law: Rhetoric or Reality?’, Journal of International Economic Law 13(4), 1077–1102Google Scholar, at 1079.
5 SPS Agreement, art. 5.3; Appellate Body Report, Australia – Measures Affecting Importation of Salmon (Australia–Salmon), WT/DS18/AB/R (20 October 1998), para. 199. The SPS Agreement defines ALOP in Paragraph 5 of Annex A to the SPS Agreement as the level of protection deemed appropriate by the Member establishing a sanitary and phytosanitary measure to protect human, animal, or plant life and health within its territory. WTO Agreement, Annex A, para. 5. According to the Appellate Body, a Member's ALOP is an ‘objective’ and that an SPS measure is the instrument chosen to attain or implement that objective. Appellate Body Report, Australia–Salmon, para. 200.
6 SPS Agreement, art. 3.1.
7 Ibid., art. 2.2. See also, Correa, C. (2000) ‘Implementing National Public Health Policies in the Framework of WTO Agreements’, Journal of World Trade 34(5), 89–121Google Scholar, 97–98. For a further discussion of the SPS Agreement, see Lee, Y.S. (2016), Reclaiming Development in the World Trading System (2nd edn), Cambridge: Cambridge University Press, pp. 224–232CrossRefGoogle Scholar.
8 Korea – Import Bans, and Testing and Certification Requirements for Radionuclides (Korea–Radionuclides), DS495.
9 Panel Report, Korea–Radionuclides, WT/DS495/R (22 February 2018), para. 7.120.
11 Appellate Body Report, Korea–Radionuclides, WT/DS495/AB/R (11 April 2019), para. 5.29.
12 See also, T. Hamada and Y. Ishikawa (2020) ‘Are Korea's Import Bans on Japanese Foods Based on Scientific Principles? Comments on Reports of the Panel and the Appellate Body on Korean Import Bans and Testing and Certification Requirements for Radionuclides (WT/DS495)’, European Journal of Risk Regulation 11(1), 155–176.
13 The outcome is described as a ‘hung jury’, not because there was any dissent, but because the Appellate Body did not conclude on the consistency of Korea's food security measures with the substantive obligations of the SPS Agreement. Sohlberg, M. and Yvon, A. (2019) ‘Korea – Import Bans, and Testing and Certification Requirements for Radionuclides (Korea–Radionuclides (Japan)), DS495’, World Trade Review 18(3), 533–535CrossRefGoogle Scholar, at 535.
14 Panel Report, Korea–Radionuclides, supra note 9, paras. 2.40, 2.41.
15 Estimates were up to 26.9 PBq (petabecquerel) of contaminated water released and discharges of caesium137 into the ocean. Ibid., para. 2.51.
17 Ibid., paras. 2.12, 2.14. Radioactive materials are introduced into the food chain by falling onto fruits and vegetables or animal feed by either contaminated air or rain. Radionuclides also can accumulate in bodies of water, contaminating plant life, fish, and seafood. The products most susceptible to contamination are leafy vegetables, milk, and food collected from the wild, such as berries, mushrooms, and fish. Ibid., paras. 2.5 and 2.6.
21 See also, Hamada and Ishikawa (2020), supra note 12, at 157.
22 Panel Report, Korea–Radionuclides, supra note 9, para. 2.98.
24 J. McCurry (2010) ‘“We always get an A”: Fukushima strives to prove food safety before Tokyo Games’, The Guardian (10 March 2020), www.theguardian.com/environment/2020/mar/10/we-always-get-a-fukushima-strives-to-prove-local-food-safe-before-tokyo-games [https://perma.cc/N8HG-6XQH].
26 Panel Report, Korea–Radionuclides, supra note 9, para. 2.113.
30 WTO, ‘Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)’, art. 4.
31 Panel Report, Korea–Radionuclides, supra note 9, para. 1.4.
33 SPS Agreement, arts. 7 and 8.
34 SPS Agreement, art. 5.6. Commentators described Article 5.6 as a ‘pure trade liberalization provision’. Schebesta, H. and Sinopoli, D. (2018) ‘The Potency of the SPS Agreement's Excessivity Test’, Journal of International Economic Law 21, 123–149CrossRefGoogle Scholar, at 146. According to Schebesta and Sinopoli, Article 5.6 ‘does not necessitate discrimination, nor does it test indirect discrimination or arbitrary measures. Its exclusive precondition is that an alternative measure exists that would be less restrictive to trade … Article 5.6 SPS aims purely at trade liberalization. Therefore, in its specific area it can be characterized as a “neo-necessity” test that constitutes both a “post-discrimination” and a “post-protectionism” trade discipline.’ Other commentators took a different view and opined that the Appellate Body has abstained from finding a less trade-restrictive measure under Article 5.6 out of respect for the Member's autonomy, which is not compatible with the view that Article 5.6 is a trade liberalization provision that supports a less trade-restrictive measure. Hamada and Ishikawa (2020), supra note 12, at 171.
35 The footnote of Article 5.6 stipulates ‘For purposes of paragraph 6 of Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary or phytosanitary protection and is significantly less restrictive to trade.’ SPS Agreement, art. 5.6, n. 3. Under Article 5.6, it is necessary to assess whether the alternative measure will meet the ALOP, which is conducted in three steps: (i) identifying the level of protection the responding Member has set as its appropriate level; (ii) determining what level of protection would be achieved by the proposed alternative measure, and (iii) determining whether the level of protection that would be achieved by the alternative measure would satisfy the ALOP. Appellate Body Report, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367/AB/R (29 November 2020), para. 368. An alternative measure must improve trade benefits. There has been criticism that the assessment of the latter has neither acknowledged actual costs of the alternative measure nor required that the trade benefit be actually ‘significant’. Ibid., at 144–145.
36 Panel Report, Korea–Radionuclides, supra note 9, para. 7.120.
49 It is because the Panel could not conclude that Japan's alternative measure would achieve human exposure at 1 mSv/year at the time of adoption of the 2011 additional testing requirements and the product-specific import bans. Ibid., para. 7.242. The Panel found for the 2011 additional testing requirements that ‘the data were not sufficient to support the conclusion that levels of strontium and plutonium would normally have been lower than levels of caesium in products and that testing for 100 Bq/kg of caesium would have ensured that the levels of the other radionuclides were below their Codex guideline levels’. Ibid. With respect to the product-specific import bans, the Panel found that Japan had ‘conducted its own risk assessment and determined that the products were not safe for distribution’, and concluded for this reason that ‘the evidence does not support a conclusion that Japan's alternative measure would achieve 1 mSv/year in 2012 for Alaska pollock and Pacific cod from the five relevant prefectures’. Ibid. The Panel also found that in 2013 and onward, the data were sufficient to confirm that caesium levels were consistently below 100 Bq/kg and that other radionuclides (strontium and plutonium) had not been detected in levels even close to their respective Codex guidelines. Ibid., para. 7.243.
50 Ibid., paras. 7.250–7.256. WTO, Trade Topics: Dispute Settlement, DS495: Korea – Import Bans, and Testing and Certification Requirements for Radionuclides, www.wto.org/english/tratop_e/dispu_e/cases_e/ds495_e.htm [https://perma.cc/QT94-BS2Y].
65 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.73.
80 Procedurally, the Appellate Body did not have to address this issue, because Korea appealed the Panel's finding under Article 5.6 and did not ask for a completion of the legal analysis. Ibid., para. 5.37.
82 The Panel described this justification as a ‘rational relationship’ between the measure and the objective. Panel Report, Korea–Radionuclides, supra note 9, para. 7.359.
83 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.54.
90 Ibid., paras. 5.75–5.76. The Appellate Body noted a clear contradiction between the Panel's conclusion as to ‘the potential to be contaminated with radionuclides’, without regard to any specific source or relative degree and its earlier observations concerning the sources of worldwide contamination. Ibid., para. 5.74. The Appellate Body pointed out another gap in the Panel's assessment insofar as it equates ‘the potential for contamination’ with ‘the observation of actual measurements below a quantitative tolerance level’. Ibid., paras. 5.78–5.79. The Appellate Body also raised an issue with lack of clarity with the Panel's finding. It stated that depending on the measure and claim being addressed, the findings may be read to mean that (i) the potential caesium contamination was itself below the 100 Bq/kg level, (ii) there was a low potential for contamination in excess of 100 Bq/kg, or (iii) simply that caesium levels were below 100 Bq/kg. Ibid., para. 5.80.
91 Ibid., paras. 5.83–5.85. The Appellate Body noted that ‘the expert specifically indicated a higher likelihood of caesium contamination in Japanese foods, while also expressing the view that the concentration levels in Japanese and non-Japanese foods would both be ‘very low and significantly lower than 100 Bq/kg’. The Panel thus credited the expert's finding that there is in fact a dissimilar potential for caesium contamination in Japanese and non-Japanese products, but that caesium levels would similarly be ‘significantly lower than 100 Bq/kg’. The Panel does not explain, however, whether caesium concentration ‘significantly lower than 100 Bq/kg’ means that the dissimilar potential for contamination is irrelevant under Article 2.3. Ibid., para. 5.84.
93 Consequently, the Appellate Body reversed the Panel's finding that adoption of the blanket import ban (except Cod from 2 prefectures) and 2013 additional testing requirements, as well as the maintenance of all of Korea's measures, were inconsistent with Article 2.3. Ibid., para. 5.93. The Appellate Body exercised judicial economy and did not address Korea's additional claims of error on arbitrary or unjustifiable discrimination and disguised restrictions on international trade in consideration of its reversal of the Panel's findings regarding the existence of ‘similar conditions’ under Article 2.3.
96 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.26.
103 SPS Agreement, art. 3.3.
104 Appellate Body Report, Australia–Salmon, supra note 5, para. 199.
105 Correa (2000), supra note 7, at 100.
106 Appellate Body Report, Australia–Salmon, supra note 5, para. 206.
107 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.35.
109 Appellate Body Report, Australia–Salmon, supra note 5, para. 197.
110 Compliance Panel Report, Australia–Salmon (Article 21.5 – Canada), supra note 34, para 7.129.
111 Schebesta and Sinopoli (2018), supra note 34, at 135–137. The ultimate decision under Article 5.6 was based on the determination as to whether the alternative measures would meet the ALOP, and not on the vagueness of the ALOP.
112 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.35.
113 According to a case study, alternative measures that meet international standards have been upheld. Schebesta and Sinopoli (2018), supra note 34, at 142. Underscoring the influence of international standards, such as the Codex guidelines, Schebesta and Sinopoli further noted that ‘the application of Article 5.6 leads to a shift of the locus of regulatory power towards the international standards by the three endorsed SPS standard-setting bodies [Codex Alimentarius, OIE, and IPPC], which decisively influenced case outcomes, either as an “irresistible” alternative measure or as supporting the technical and economic feasibility of alternative measures’. Ibid. at 148. However, in this case, Korea's ALOP is evidently higher than the Codex guidelines.
114 Hamada and Ishikawa have argued that the quantitative thresholds, rather than qualitative factors, must control, as it is conventional in radiological protection. Hamada and Ishikawa (2020), supra note 12, at 169. Despite this argument, the use of qualitative factors beyond the numerical thresholds is justifiable in Korea–Radionuclides since the measures were necessitated by a major nuclear crisis that created a significant potential risk as well as imminent contamination. As such, the qualitative factors were necessary to respond to the potential risk which may not be imminently manifested by the level of contamination detected in the tested products.
115 SPS Agreement, art. 5.6, n. 3.
116 Appellate Body Report, European Commission – Measures Concerning Meat and Meat Products (EC–Hormones I), WT/DS16/AB/R (16 January 1998), para. 213.
117 Du (2010), supra note 4, at 1085.
118 Appellate Body Report, Australia–Salmon, supra note 5, para. 140.
120 Du (2010), supra note 4, at 1084–1086.
121 Australia–Salmon, Report of the Compliance Panel, supra note 109, para. 7.129. See also, Panel Report, India–Measures Concerning the Importation of Certain Agricultural Products (India–Agricultural Products), WT/DS430/R (14 October 2014), para. 7.562; and SPS Committee, Guidelines to Further the Practical Implementation of Article 5.5, G/SPS/15 (18 July 2000).
122 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.38.
123 Schebesta and Sinopoli (2018), supra note 34, at 137.
124 Appellate Body Report, Australia–Salmon, supra note 5, para. 199; Appellate Body Report, India–Agricultural Products, supra note 121, para. 5.205.
125 The Appellate Body in Australia–Salmon stated that the determination of the ALOP is ‘a prerogative of the Member concerned’ and not of a panel or of the Appellate Body. Ibid.
126 Schebesta and Sinopoli (2018), supra note 34, at 135. This is consistent with the Appellate Body position that a panel is ‘not required to defer completely to a respondent's characterization of its own ALOP, particularly where the respondent has not expressed its ALOP with sufficient precision. Rather, a panel must ascertain the respondent's ALOP on the basis of the totality of the arguments and evidence on the record, which may include the level of protection reflected in the SPS measure actually applied.’ Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.14, citing the Appellate Body decisions in India–Agricultural Products and Australia–Salmon. Appellate Body Report, Australia–Salmon, supra note 5, para. 207; Appellate Body Report, India–Agricultural Products, supra note 121, para. 5.221. The Appellate Body, however, also required the Panel to clearly explain what it has determined the respondent's ALOP to be, along with the reasons and evidentiary basis for the Panel's determination, where a panel considers that a respondent's ALOP differs from that articulated by the respondent. Appellate Body Report, Korea–Radionuclides, supra 11, para. 5.34.
127 The objective of the protection would be the objective of an SPS measure. In Korea–Radionuclides, the objective of the protection would be protecting Korea's population from potential adverse effects from consumption of food contaminated with radionuclides. Panel Report, Korea–Radionuclides, supra note 9, para. 7.283.
128 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.35
129 An anonymous reviewer, a correspondence on file with the author.
130 See K. Dawar and E. Ronen (2017) ‘How “Necessary”? A Comparison of Legal and Economic Assessments–GATT Dispute Settlements Under: Article XX (B), TBT 2.2 And SPS 5.6’, Trade, Law and Development 8(1), 1–28.
132 SPS Agreement, art. 3.3.
133 Appellate Body Report, EC Measures Concerning Meat and Meat Products (EC–Hormones), WT/DS26/AB/R, WT/DS48/AB/R (16 January 1998), para. 193.
135 Appellate Body Report, Japan – Measures Affecting Agricultural Products (Japan–Agricultural Products), WT/DS76/AB/R (22 February 1999), para. 78.
138 The rational basis test can be used to determine whether the qualitative elements of the ALOP are overly vague or otherwise incapable of being elements, but passing this test does not guarantee that the measure is ultimately compliant with Article 5.6; i.e., the measure can nevertheless be found inconsistent as being more trade-restrictive than necessary due to the presence of a less-trade restrictive alternative measure. SPS Agreement, art. 5.6.
139 Panel Report, Korea–Radionuclides, supra note 9, para. 7.162.
140 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.35.
141 Panel Report, Korea–Radionuclides, supra note 9, para. 7.162.
144 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.64.
151 Hamada and Ishikawa (2020), supra note 12, at 174.
152 Appellate Body Report, India–Agricultural Products, supra note 121, para. 5.261.
153 Panel Report, Korea–Radionuclides, supra note 9, para. 7.136.
154 Hamada and Ishikawa (2020), supra note 12, at 172. The particular nature of the measure is also significant for the trade improvement test under Article 5.6. Another study concluded that the most decisive criterion is ‘the nature of the restriction that is challenged’. Schebesta and Sinopoli (2018), supra note 34, at 141.
155 In line with this assessment, a study concluded that ‘the Appellate Body abstained from finding another less trade-restrictive measure suggested by the complaining party because the Appellate Body respects and values the discretion of the defending party to take SPS measures necessary for the protection of human, animal, or plant life, or health … ’, Hamada and Ishikawa (2020), supra note 12, at 171.
156 According to a report, in all cases since 2012, prior to this one, violations of the SPS Agreement (particularly Article 5.6) had been found. Schebesta and Sinopoli (2018), supra note 34, at 148.
157 Hamada and Ishikawa (2020), supra note 12, at 175–176.
158 Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.37.
159 See also, Japan–Agricultural Products, supra note 135, para. 143(c). Hamada and Ishikawa also claim that the Appellate Body decision may violate Article 17.6 of the DSU because the Appellate Body reviewed the factual aspects of the Panel Report regarding Korea's ALOP and based its decision on what the Panel did not actually mean to find (i.e., what the qualitative factors mean as part of Korea's ALOP because it was convinced that the quantitative threshold controls Korea's ALOP). Ibid. However, the Appellate Body clarified that there is a gap between what the Panel accepted as Korea's ALOP (both the qualitive factors and the quantitative threshold) and what it used to determine whether Japan's alternative measure would meet Korea's ALOP (the quantitative element), and the Panel did not assess whether the qualitative elements were part of the relevant ALOP under Article 5.6. Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.36. The Appellate Body can find error based on what the Panel should have evaluated or should have found in its own evaluation, whether or not the Panel meant to do so. The Appellate Body legitimately reviewed legal interpretations developed by the Panel of the covered Articles, including Articles 5.6 and 2.3, pursuant to the terms of DSU Article 17.6.
160 SPS Agreement, art. 5.3.
161 Hamada and Ishikawa (2020), supra note 12, at 166.
162 The Panel considered Korea's measures under Article 5.7, the provision that authorizes a provisional measure where there is insufficient scientific evidence. However, the Appellate Body ruled that the issue was moot and the Panel decision was of no legal effect since Japan did not invoke this Article and the Panel decision was found to be outside its mandate under the terms of reference. Appellate Body Report, Korea–Radionuclides, supra note 11, para. 5.118.
163 Du (2010), supra note 4, at 1083. In line with this position, the Appellate Body stated that ‘[I]t is essential to bear in mind that the risk that is to be evaluated in risk assessment under article 5.1 is not only risk ascertainable in a science laboratory under strictly controlled conditions, but also risk in human societies as they actually exist, in other words, the actual potential for adverse effects on human health in the real world where people live and work and die’. Appellate Body Report, EC–Hormones, supra note 133, para. 187.
164 SPS Agreement, art. 5.7. Article 5.7 authorizes a provisional measure on a precautionary basis where there is insufficient scientific evidence.
165 The precautionary principle supports the position that potentially dangerous substances should be proven safe before they are put on the market. L. Wallach and M. Sforza (1999) Whose Trade Organization? Corporate Globalisation and the Erosion of Democracy, Washington, DC, Public Citizen, at 54. The precautionary principle also imposes the burden of proof on the complainant – ‘there should be proof of no harm prior to action, rather than proof of harm prior to halting action’. J. Cameron, (1999) ‘The Precautionary Principle’, in G. Simpson and W. Chambers (eds.), Trade Environment, and the Millennium, Tokyo, New York, Paris, United Nations University Press, at 245.
166 See supra note 2.
168 See, e.g., Hamada and Ishikawa (2020), supra note 12, at 175–176.
169 Dispute Settlement Understanding (DSU), Art. 17(6).
170 See also R. Brewster and C. Fischer, ‘Fishy SPS Measures? The Korea–Radionuclides (Japan) Appellate Report’, unpublished paper on file with the author.
171 C. Loew (2019) Korea to Japan: Don't Use Flatfish Inspections as a Discriminatory Measure, Seafood Source (18 June 2019). www.seafoodsource.com/news/food-safety-health/korea-to-japan-don-t-use-flatfish-inspections-as-a-discriminatory-measure [https://perma.cc/H2QD-PU33].
174 Y.S. Lee, ‘Mimicking President Trump? –Trade and Politics in Japan's Recent Export Measure’, UK Trade Policy Observatory Blog, University of Sussex (5 September 2019), https://blogs.sussex.ac.uk/uktpo/2019/09/05/mimicking-president-trump-trade-and-politics-in-japans-recent-export-measure/ [https://perma.cc/5WDD-DP97].
175 DSU, art. 23.2.