December 2nd 2000

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Articles from this issue:

COVER STORY: U.S. Elections - And the winner is ... Alan Greenspan!

EDITORIAL: Kyoto Protocol may harm Australian industry

CANBERRA OBSERVED: Country voters won't buy rural road scheme

QUARANTINE: Has Canberra misconstrued WTO rules on quarantine?

COMMENT: Globalisation + monopolies = a less free market


Straws in the Wind


SOCIETY: Is There a Way Out of the West's Cultural Crisis?

TRADE AND THE ECONOMY: How important is trade for Australia?

AGRICULTURE: WTO rules permit assistance to agriculture

INDONESIA: Conflict intensifies in West Papua

EDUCATION: The Great Exam Diversion

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Has Canberra misconstrued WTO rules on quarantine?

by Colin Teese

News Weekly, December 2, 2000
Colin Teece, former Assistant Secretary of the Department of Trade, demolishes AQIS claims that Australia was obliged to drop quarantine standards over NZ apples.

Popular mythology, and, indeed, AQIS itself, asserts that international trade obligations now require us to maintain less stringent controls over the import of diseases which could threaten human, animal and plant life in Australia. It is further asserted that our membership of the World Trade Organisation precludes us from maintaining a so-called, "no risk" policy. Neither of those assertions is correct.

Minimum risk

Before it signed the WTO agreement, Australia did not, nor has it ever, maintained a "no risk" quarantine practice. The very idea of such a policy is absurd - except for a nation which was prepared to cut itself off completely from the rest of the world.

Australia did, however, maintain generally stricter quarantine regulations than did most other countries, for very sound reasons. Because of its isolation, history and its status as an island continent, Australia started off with a more or less clean slate.

Everything was to be gained from surrendering as little as possible of that special advantage over almost all other countries, always recognising the need to maintain communication with the outside world. Hence the stringency of our quarantine conditions - or, more precisely, the way we managed risks associated with maintaining contact with the rest of the world. So what has changed?

Not much. As to generality, the old GATT rules on quarantine remain the guiding principles of the World Trade Organization. Governments may act as necessary to protect human, animal and plant life by restricting the entry of specified goods, subject (1) to the condition that that such rules may not be used as a disguised barrier to trade, and (2) they must not be discriminatory as between countries enjoying like conditions.

The WTO has added a protocol on quarantine, in effect elaborating on the GATT rules. Importantly, they underline that measures more stringent than prevailing international standards may be maintained, subject to these being based upon scientific evidence, or if none such is available, on the basis of the best available, pertinent information.

The thrust of the protocol is to ensure that risk assessment, at whatever level of stringency, is objectively measured and assessed.

To this writer at least, it appears that, in recent public statements, AQIS officials have - either explicitly or by implication - mistakenly invoked WTO rules to suggest that they must apply more relaxed practices on quarantine than was previously permissible.

That they are mistaken as to the facts is perhaps understandable; it is, after all, not their business to understand or explain trade policy arrangements by which members of the WTO have agreed to be bound.

Should they need clarification as to the procedures they are obliged to follow in order to ensure that Australia complies with its WTO obligations, then guidance should be sought from those government officials who negotiated the WTO agreements. Presumably, that has been the basis upon which AQIS has compiled its handbook.

Those understandings and that guidance should be the basis on which AQIS evaluates risk and makes its preliminary determinations. Those determinations should be made available to the interested parties and to the government. At this point it is inappropriate for AQIS to comment simply on its determinations, or upon any criticisms which may be made upon them by the interested parties, other than to underline, that as a draft, the document is not the final word on the subject: at least until the comments of the interested parties (both importers and domestic producers) have been digested.

If domestic producers or importers are of the view that AQIS has not followed its own procedures, then the government, not AQIS, should be the arbitrator, with AQIS obviously having the opportunity to put its case.

If, however, the importer believes that AQIS has proceeded outside the WTO rules, then that is a matter, not for the Government, but for the WTO.

Unfortunately, none of this seems to be happening. In response to criticism, AQIS, for its own reasons, chose to opine on the trade policy consequences of their examinations or findings.

And Ministers are encouraging this kind of response by washing their hands of responsibility for quarantine procedures. Agriculture Minister Truss and the Deputy Prime Minister, Mr Anderson, have both said publicly and, apparently in their party rooms, that it's all up to AQIS.

Which is fine, so long as the interested parties are happy with the outcomes AQIS delivers. If they are not, then, like it or not, the Government must step in.

Inadvertently, the Deputy Prime Minister admitted as much - though perhaps not in the most appropriate of circumstances - when he was prompted to observe that beef from foot and mouth countries would never enter Australia.

No mention was made of waiting for, still less being bound by, any AQIS due process. Are cows more sacred than apples? We know that a greater percentage of beef production is exported than is so with apples, and that beef exports are worth far more to us than apples.

But could this justify a different approach on quarantine? Hardly, unless the WTO rules on objectivity and scientific evidence are ignored.

There is a further concern. If the word passes around that the Australian market - in so far as quarantine is concerned - is more easily contestable than previously, then it is not impossible that we may have applications to import from beef exporting countries with foot and mouth problems, who could compete on price in our market if they could satisfy quarantine conditions.

From a WTO standpoint, it may well be that, despite the Deputy Prime Minister's desire, a risk analysis procedure which permitted the entry of fire blighted apples, may well be deemed a sufficient basis for safeguarding against the entry and spread of foot and mouth disease. We would then have a trade policy problem on our hands of major dimensions.

On the one hand, we may not be able to keep out infected beef products, without loss to other exporting industries through WTO rulings against us. Our beef export trade, at least to Japan and the United States, would be threatened if we admitted beef from foot and mouth infected sources.

Wouldn't it be better to head off that possibility at the pass by tidying up our administrative procedures on quarantine, and putting ultimate responsibility where it properly lies, with ministers?

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