guidelines for maximum residue level mrl testing in october 2003 the united states expressed concern that koreas changed import regulation was onerous and not supported by science. under the new import inspection programme imported grains fruits and vegetables would be subjected to annual mrl tests for the presence of 196 agricultural chemicals. importers would have to bear the us 1 800 cost of such tests whereas domestic producers were exempt from the mandatory testing requirements. domestic producers were subject to random test for which the korean government bore the costs. australia the european communities and new zealand also requested korea to amend the measure which they described was contrary to annex c of the sps agreement. korea responded that it had amended the regulations to meet its appropriate level of protection and noted that there were no comments on the issue when the sps notification was circulated at the beginning of the year. technical developments had reduced the cost of testing and as such korea planned to considerably reduce the testing fees. the united states replied that it had submitted comments on koreas notification in march and had two meetings in september with korean officials regarding this issue. in march 2004 the united states stated that they were informed during bilateral meetings held with korea that test fees would be reduced. however the korean authorities had not finalized this decision nor addressed the issue satisfactorily. australia new zealand canada and the european communities stated that koreas testing regime would impose substantial costs on imports and discriminated between imported products and similar products produced in korea. korea replied that the relevant administrative procedures to reduce the testing fees were underway and would be completed in two to three weeks but not later than the end of april. in june 2004 the united states commented that under koreas import inspection programme importers would bear the cost of the testing fees now estimated at us 1-2 000 each. while the united states recognized koreas attempts to modify their requirements through the issuance of notifications g sps n kor 154 and 155 in 2004 the proposed fee for testing would still be twice as large as that proposed by koreas food and drug administration. although the number of chemicals subject to mandatory testing had been reduced from 196 to 47 domestic producers were still exempt from the mandatory testing requirement. thus koreas import inspection program was inconsistent with national treatment provisions of the wto. despite bilateral discussions over the past year the united states perceived insufficient progress on this issue and hoped for more significant progress in the future. australia canada and the european communities expressed similar concerns. korea emphasized that both the testing fees and the number of agricultural chemicals for which mandatory testing was required had been substantially reduced. in order to provide testing exemptions based upon compliance history the relevant regulations would need to be revised. in october 2004 the united states stated many of its concerns still remained. for example korea had proposed in g sps n kor 154 that imported foods with clean records would be exempted from the mandatory laboratory inspections. however the proposed exemptions had not been put into effect in the final revised regulations. furthermore although korea had reduced the number of chemicals subject to mandatory laboratory inspection from 196 to 47 testing fees of approximately us 500 per test were still applied. domestic producers were still only subject to random testing and the costs were borne by the korean government. the us concerns were directly related to distinctions in fees between imported goods and like-products produced in korea in accordance with annex c of the sps agreement. the european communities shared the concerns of the united states as the european co