Insights

The present dispute arose when Mexico challenged the measures imposed by Costa Rica on imports of Avocados from Mexico, for consumption within its territory, for violating obligations undertaken under the Agreement for Sanitary and Phytosanitary Measures (SPS Agreement) of the WTO.

Costa Rica imposed restrictions on imports of Avocados from Mexico, based on examination undertaken by State Phytosanitary Service of the Ministry of Agriculture and Livestock. Following a pest risk analysis, Costa Rica concluded presence of Avocado sunblotch viroid (ASBVd), a pathogen that causes sunblotch disease affecting avocado trees and fruit that are germinated using the seed of the infected fruit. Based on nation-wide surveys and analysis conducted earlier, Costa Rica claimed absence of ASBVd in its territory and hence, concluded that imports of Avocados from Mexico posed a risk to their own plantations.

Following failed consultations between the two countries, the Dispute Settlement Body constituted a Panel, to resolve the dispute. In particular, the following issues arose –

1. Under the provisions of the SPS agreement, a member can implement sanitary and phytosanitary measures. However, such measures must not affect international trade and must not be more trade restrictive than required to achieve appropriate protection.
2. Mexico alleged that certain Resolutions introduced by Costa Rica constituted phytosanitary measures which restrict imports of fresh Avocados for consumption from Mexico.
3. Mexico also alleged that the risk assessment analysis undertaken by Costa Rica was violative of the SPS Agreement since it was not based in scientific evidence, particularly since ASBVd was also present in the territory of Costa Rica.
4. Mexico also alleged that measures imposed by Costa Rica restricting imports affected international trade and accordingly, the provisions of the SPS Agreement apply to such measures.
5. Costa Rica, however, claimed that such Resolutions did not constitute phytosanitary measures and did not affect international trade, directly or indirectly.

The Panel observed that Resolutions [DSFE-002-2018 and DSFE-003-2018] issued by the State Phytosanitary Service, Costa Rica did constitute phytosanitary measures as defined under the SPS Agreement.

With regards the risk assessment analysis, the Panel observed that Costa Rica failed to base its phytosanitary measures on scientific principles and such measures were not consistent with the available scientific evidence. The Panel also observed that Costa Rica failed to take into account relevant economic factors, while conducting its risk assessment analysis.

The Panel also observed that the measures adopted by Costa Rica resulted in discrimination or disguised restriction on international trade, since the measures resulted in arbitrary or unjustifiable distinctions in the level of protection considered appropriate for ASBVd infected Avocados imported from other countries and infected Avocados grown domestically in Costa Rica. However, the Panel rejected Mexico’s claim that the measures imposed by Costa Rica were more trade-restrictive than required to achieve appropriate protection.

Based on the above, the Panel concluded that Costa Rica must ensure that the phytosanitary measures imposed on imports of Avocados from Mexico must be brought on consistence with its obligations under the SPS Agreement.