Australia; New Zealand; World Trade Organization: Restrictions on Importation of New Zealand Apples Found Inconsistent with Trade Agreement
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(Aug 20, 2010) On August 9, 2010, a World Trade Organization (WTO) dispute panel issued its final report on a trade dispute involving a complaint by New Zealand that measures imposed by Australia on the importation of apples from New Zealand breached the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). (Press Release, WTO, Panel Report Out on Apple Dispute (Aug. 9, 2010), http://www.wto.org/english/news_e/news10_e/367r_e.htm.) The panel upheld New Zealand's claims, finding that Australia's 16 measures relating to the diseases of fire blight and European canker, as well as the apple leaf-curling midge, were not based on a proper risk assessment and were therefore inconsistent with articles 5.1 and 5.2 of the SPS Agreement. The panel also concluded that, "by implication," the measures "were inconsistent with Article 2.2 of the SPS Agreement, which requires that SPS measures be based on scientific principles and not be maintained without sufficient scientific evidence." (Dispute Settlement, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367 (Aug. 11, 2010), http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds367_e.htm.)
Australia first banned the importation of New Zealand apples in 1921, when fire blight was found in New Zealand. While this ban was officially lifted in 2006, quarantine-related measures were imposed that New Zealand claimed made exporting apples to Australia uneconomic. (WTO Rules Against Aussies on Kiwi Apples, THE SYDNEY MORNING HERALD (Aug. 10, 2010), http://www.smh.com.au/business/world-business/wto-rules-against-aussies-
on-kiwi-apples-20100810-11uh3.html.) New Zealand had sought since 1986 to have the ban and other restrictions removed, arguing that scientific evidence shows that fire blight cannot be spread through mature apples that have been cleaned. Formal approaches by New Zealand and consultations conducted under the WTO rules failed to resolve the dispute, and in December 2007 New Zealand asked that a WTO dispute panel be established to rule on the matter. (New Zealand Ministry of Foreign Affairs & Trade, Current Disputes – Australia Apples, http://www.mfat.govt.nz/Treaties-and-International-Law/02-Trade-law-and-
free-trade-agreements/NZ-involvement-in-trade-disputes.php#apples (last visited Aug. 16, 2010); Australian Government Department of Foreign Affairs and Trade, Summary of Australia's Involvement in Disputes Currently Before the World Trade Organization, http://www.dfat.gov.au/trade/negotiations/disputes/index.html (last visited Aug. 16, 2010).)
Australia's first submission to the panel stated that it had "exercised its right to protect its favorable plant life and health from risks arising from the introduction of certain debilitating pests and diseases that are endemic to New Zealand, but not present in Australia." (First Written Submission of Australia, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367, 31 (July 18, 2008), available at http://www.dfat.gov.au/trade/negotiations/disputes/Australia_Apples_1st_
written_submission.pdf.) Australia argued that the level of sanitary or phytosanitary protection that it determined was appropriate "reflects community expectations that quarantine risks will be managed to achieve a very low level of risk, but not zero," and that, in order to meet this, it had conducted a risk assessment and imposed certain measures in accordance with its obligations under the SPS Agreement. (Id. at 32.)
The panel concluded that alternative measures were available that were less restrictive on trade. In particular, it accepted New Zealand's argument that restricting imports to mature, symptomless apples would meet Australia's desired level of protection from fire blight and European canker. (Panel Report, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367/R, 497 (Aug. 9, 2010), available at http://www.wto.org/english/news_e/news10_e/367r_e.htm.) It also found that New Zealand had demonstrated that an alternative measure of inspecting 600 apples in each import lot (rather than the 3,000 currently required by Australia) was available to protect against the apple leaf-curling midge. (Id. at 520.) The panel recommended that the WTO Dispute Settlement Body request that Australia bring the inconsistent measures into conformity with its obligations under the SPS Agreement. (Id. at 548.)
New Zealand's Trade Minister, Tim Groser, said that the decision "is excellent and long awaited news for our apple industry. The report represents a solid and very clear win in this long running case. Critically, the report is based on extremely thorough analysis by independent external arbiters – it settles any debate." (Press Release, Hon. Tim Groser, WTO Finds in Favour of NZ Apples in Australia Case (Aug. 10, 2010), http://beehive.govt.nz/release/wto+finds+favour+nz+apples+australia+case.) Apple growers in New Zealand have estimated that exports of apples to Australia could be worth NZ$50 million (about US$35.4 million) per year. (THE SYDNEY MORNING HERALD, supra.)
The Australian government released a statement saying that it has decided to appeal the decision and that the outcome of the appeal may be known by the end of 2010. (Press Release, Tony Burke MP & Stephen Smith, Australia to Appeal WTO Apples Decision (Aug. 10, 2010), http://www.foreignminister.gov.au/releases/2010/fa-s100810.html.)
|Author:||Kelly Buchanan More by this author|
|Topic:||Foreign trade and international finance More on this topic|
|Jurisdiction:||Australia More about this jurisdiction|
|New Zealand More about this jurisdiction|
|World Trade Organization More about this jurisdiction|
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Last updated: 08/20/2010