The World Trade Organisation (WTO) has ruled in favour of New Zealand’s complaint that Australia’s quarantine rules regulating the import of its apples are too restrictive.
fruitlet, with bacterial ooze.
The ruling is the latest stage in a long-running campaign by New Zealand apple-producers, backed by their government, to force Australia to accept apples from New Zealand where the fire-blight disease is endemic.
The WTO disputes panel called on Australia to amend its quarantine rules to bring them into conformity with its international obligations, under the Agreement on the Application of Sanitary and Phytosanitary Measures (known as the SPS Agreement), to which both countries are signatories.
The quarantine restrictions in Australia are designed to prevent the import of fire-blight, as well as other diseases, including European canker and apple leaf-curling midge (ALCM).
Fire-blight is a disease which would threaten the future not only of the apple and pear industries, but of a range of other horticultural plants which are members of the Rosaceae family.
Once introduced, fire-blight is ineradicable, as New Zealand has found since it was first discovered there around 1919. Control is costly and evidence given to the WTO showed that the disease is present in almost every orchard in New Zealand.
Australia’s tight quarantine rules were introduced following a sustained campaign by Australia’s apple and pear growers, led by their industry body, Apple and Pear Australia, to protect the future of the industry by keeping out exotic diseases.
New Zealand was supported by the United States – another apple-exporter where fire-blight is endemic – in trying to overturn Australia’s quarantine rules.
China, which was recently given permission to export apples to Australia under controls similar to those which apply to New Zealand, is refusing to admit New Zealand apples because of its fear of fire-blight.
The central issue in the WTO dispute is New Zealand’s claim that fire-blight, a bacterial disease, cannot be transmitted in mature symptomless apples, although it was common ground that the disease will be present in orchards, and that apples destined for export will be in contact with plant material exposed to fire-blight.
Biosecurity Australia estimated that without controls there was a significant risk that fire-blight and other exotic diseases would enter Australia, devastating the apple and pear industries, and damaging the horticultural industry as well.
Australia agreed to permit the import of New Zealand apples in 2007 subject to a treatment regime designed to prevent the import of fire-blight, including washing of all fruit, inspection of all export orchards and packing sheds, and the elimination of all plant trash from imported apples.
New Zealand countered that these conditions were unnecessary, and the costs of meeting them were designed to make the import of apples into Australia uneconomic.
Australia’s apple and pear industries are involved in a long-running campaign for survival. In the early 1970s, Tasmania’s apple export industry was virtually destroyed when preferential exports to Britain ended at the time of Britain’s entry into the Common Market (now called the European Union).
Since 1997, Australia’s apple production has contracted from 350,000 tonnes to 270,000 tonnes, as a result of rising costs and drought. Around 400 apple-growers have left the industry over that period.
Following the WTO ruling, the Federal Minister for Agriculture, Tony Burke, has announced that Australia will appeal the ruling; but realistically, Australia needs to challenge the WTO’s agenda which puts free trade ahead of the jobs of Australian farmers and their families.
The claim that imports will lead to significantly reduced cost for consumers in Australia is a fallacy, arising from modern-day free-market dogma.
It claims, in contradiction to observable reality, that under free trade the law of supply and demand will mean that an increase in supply will force down prices. However, this is true only if no buyer is large enough to control prices. In the Australian retail industry, this is simply untrue.
Those who buy groceries from fruit and vegetable markets around Australia can regularly buy apples for around $2 per kg. The prevailing retail price in supermarkets, around $6 per kg, is due to the profiteering of Australia’s supermarket duopoly, Coles and Safeway-Woolworths, which together sell about half of Australia’s green groceries.
If the supermarket duopoly were to sell New Zealand apples, the price would remain about the same, with the supermarkets pocketing the difference. As they do with other goods, an increase in supply would simply be used to force down the price at which they purchase apples from their suppliers, at the expense of Australian farmers who receive little for what they produce.