MEMORANDUM OF UNDERSTANDING

BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND

THE GOVERNMENT OF JAPAN

CONCERNING ENFORCEMENT OF JAPAN’S

PESTICIDE MAXIMUM RESIDUE LEVELS

WHEREAS, the Government of the United States of America (the “United States”) and the Government of Japan (Japan) acknowledge and respect their respective laws, regulations and procedures governing trade in agricultural goods; and

WHEREAS, the Governments of the United States and Japan affirm their rights and obligations under the Agreement on the Application of Sanitary and Phytosanitary Measures of the World Trade Organization; and

WHEREAS, the United States has a strong record of compliance with Japan’s pesticide maximum residue levels (MRLs) and is firmly committed to working with Japan to eliminate violations of Japan’s science-based pesticide MRLs and to minimize disruption of trade between the United States and Japan resulting from violations;

THEREFORE, the United States and Japan (the “Parties”) agree that:

1) In the event of a MRL violation detected on a U.S. horticultural product and where the U.S. pesticide MRL is equal to or more stringent than Japan’s MRL:

a) Japan will, if necessary, impose measures against the specific violator (exporter) concerned; and.

b) Prohibited sanctions include, but are not limited to, sanctions against an entire U.S. agricultural commodity group.

2) In the event of a MRL violation detected on a U.S. horticultural product and where the U.S. pesticide MRL is less stringent than Japan’s MRL:

a) Japan will work directly with the U.S. exporter whose product violates the MRL to address the concern and, if necessary, impose sanctions on that individual exporter.

b) The U.S. exporter whose horticultural products violate the MRL will be responsible for identifying the cause of the violation to Japan within a reasonable period of time.

c) The U.S. exporter whose product violates Japan’s MRL will be responsible for drafting compliance measures and an action plan to ensure that in future the exporter’s products comply with Japan’s MRL.

d) Japan may ask to review the action plan within a reasonable period of time.

e) The U.S. exporter whose product violates the MRL may be subject to the 30 percent testing requirement after the first violation and a 100 percent testing requirement on all shipments after the second violation that occurs within a 12 month period.

f) Japan, in reaction to a MRL violation subject to this paragraph, will not apply sanctions on an industry-wide basis without sufficient scientific evidence

The Parties shall consult on an as needed basis regarding the effective implementation of this Memorandum of Understanding. Such consultations shall take place within 30 days after a party requests consultations.

The provisions of this Memorandum of Understanding shall enter into effect on signature of both Parties.

Done at Tokyo, Japan on this X day of June 2009.

For the Government of the For the Government of Japan

United States of America