TWN Info Service on WTO and Trade Issues
Australian ban on
Geneva, 11 Aug (Kanaga Raja) -- A dispute panel of the World Trade Organization (WTO) handed down a ruling this week that found nearly 90-year-old Australian measures against the import of apples from New Zealand to be inconsistent with Australia's WTO obligations.
The panel requested
The ruling is in a nearly 600-page report of the panel made public on 9 August.
The dispute was raised in December 2007, and the panel was established in January 2008.
In a background to
the dispute, the panel noted that
(The panel explained fire blight as being a plant disease caused by the bacterium Erwinia amylovora, and in apple trees, it infects flowers, young leaves, stems and fruits.)
Following a new request
for access to the Australian market filed by
The scope of the risk
analysis is the importation of mature apple fruit free of trash, either
packed or sorted and graded bulk fruit from
(The panel further
explains that the European canker is a plant disease caused by the fungus
Neonectria galligena, whose primary symptom of infected plants is the
production of cankers on limbs and trunks. The ALCM, or Dasineura
New Zealand requested the panel to find that the challenged measures, both individually and as a whole, are inconsistent with the obligations of Australia under the following provisions of the SPS Agreement: Articles 2.2 and 2.3, Articles 5.1, 5.2, 5.5 and 5.6, Article 8, and Annex C(1)(a).
In its first written
submission to the panel that was highlighted in the panel report,
According to the panel
report, during an organizational meeting held by the panel on 19 March
On 15 September 2008, the panel notified the parties in the dispute that it had decided to seek expert advice in four fields: (a) fire blight, including its potential spread through trade in apples and the phytosanitary measures to be applied to control its spread; (b) European canker, including its potential spread through trade in apples, the climatic conditions for its establishment, and the phytosanitary measures to be applied to control its spread; ( c) ALCM, including its potential spread through trade in apples and the phytosanitary measures to be applied to control its spread; and (d) pest risk assessment, including the use of semi-quantitative methodologies.
Three months later, the panel announced that it had selected a list of seven experts.
In its ruling, the
panel found no evidence that the process of selecting and consulting
experts was conducted improperly, that due process in the experts consultation
phase of these proceedings was compromised, nor that
In its review of
According to the panel,
The first methodological
flaw identified by
According to the panel,
In its review of the
IRA's analysis regarding fire blight, the panel considered several issues
including the eight importation steps described in
step 1 for fire blight (representing the likelihood that the relevant
pest is present in the source orchards), the panel said that New Zealand
argues that the IRA's estimation that Erwinia amylovora would be present
in 100 per cent of source orchards in New Zealand is incorrect and constitutes
a "significant overestimation". In
The panel said that while the IRA's basis with respect to this importation step comes from respected and qualified scientific sources, the IRA's reasoning in this regard is not coherent and objective and the resulting likelihood assigned to this step is exaggerated.
The panel found that
the IRA's estimation that Erwinia amylovora will always be present in
the source orchards in
In its conclusions on entry, establishment and spread concerning fire blight, the panel found that New Zealand has not successfully made a prima facie case that the IRA's estimation of the likelihood that Erwinia amylovora survives routine processing procedures in the packing house (importation step 4), and that Erwinia amylovora survives palletization, quality inspection, containerization and transportation to Australia (importation step 6), are exaggerated, and that these estimations do not rely on adequate scientific evidence or are not coherent and objective.
The panel found also that the IRA's conclusion that the likelihood that clean fruit is contaminated by Erwinia amylovora during palletization, quality inspection, containerization and transportation (importation step 7) is negligible appears to be coherent and objective.
It found additionally that New Zealand has not made a prima facie case that the IRA's discussion on utility points and estimates of proximity ratings for the combination of each utility point with exposure groups (proximity values), or that the IRA's conclusions regarding the probability of spread, do not rely on adequate scientific evidence or are not coherent and objective.
The panel found, however, that the IRA's estimation that Erwinia amylovora will be always present in the source orchards in New Zealand (importation step 1); that fruit coming from an infected or infested orchard is infected or infested with Erwinia amylovora (importation step 2); that clean fruit from infected or infested orchards is contaminated with Erwinia amylovora during picking and transport to the packing house (importation step 3); and that clean fruit is contaminated by Erwinia amylovora during processing in the packing house (importation step 5); do not find sufficient support in the scientific evidence relied upon and, accordingly, are not coherent and objective.
In the light of these findings and the absence of any separate justification and evidence in the IRA regarding the estimated overall likelihood of importation, the panel found additionally that the IRA's estimation of the overall probability of importation is not supported by adequate scientific evidence and, accordingly, is not coherent and objective.
The panel also noted that a significant part of the IRA's discussions on exposure, establishment and spread of fire blight, rests on a number of assumptions and qualifications. Some of these assumptions and qualifications are not convincing, which leads to reasonable doubts about the evaluation made by the risk assessor. The IRA has not properly considered a number of factors that could have a major impact on the assessment of this particular risk, it added.
Accordingly, the panel
found that the reasoning articulated in
On the alleged methodological flaws in the IRA identified by New Zealand, the panel concluded that the choice of a probability interval of zero to one in one million, and a midpoint (if uniform distribution is used) of 0.5 in one million for events with a "negligible" likelihood of occurring (corresponding to the qualitative descriptor "the event would almost certainly not occur") is not properly justified in the IRA and leads to an overestimation of the probability of entry, establishment and spread of the pests at issue.
Likewise, the panel concluded that the combination of this probability interval for events with a "negligible" likelihood of occurring, with the IRA's use of a uniform distribution to model the likelihood of these events, would tend to result in an additional overestimation of the likelihood of such "negligible" events.
The panel agreed with
The panel however concluded additionally that New Zealand has not successfully made a prima facie case that the IRA's projected volume of trade is necessarily exaggerated and that such exaggeration would result in an overestimated probability of entry, establishment and spread of the pests at issue.
The panel found that,
because of the methodological flaws that magnify the assessment of risk,
Accordingly, said the
panel, because of these flaws,
Accordingly, the panel
The panel also conducted a similar review in the context of the IRA's analysis on European canker, as well as the IRA's analysis on ALCM.
In its overall conclusions with respect to requirements regarding ALCM, the panel found that with respect to its analysis of the likelihood of entry, establishment and spread of ALCM, and of the potential consequences associated with the entry, establishment or spread of ALCM into Australia, Australia's IRA is not a proper risk assessment within the meaning of Article 5.1 and paragraph 4 of Annex A of the SPS Agreement.
The flaws described
also constitute a failure by the IRA to adequately take into account
factors such as the available scientific evidence, the relevant processes
and production methods in
In its conclusions and recommendations, the panel said that Australia's measures at issue regarding fire blight, European canker and ALCM, as well as the requirements identified by New Zealand as "general" measures that are linked to all three pests at issue in the present dispute, are inconsistent with Articles 5.1 and 5.2 of the SPS Agreement and, by implication, these requirements are also inconsistent with Article 2.2 of the SPS Agreement.
However, it further
It said that
The panel added that
The panel concluded that, to the extent that Australia's measures at issue regarding fire blight, European canker and ALCM, as well as the requirements identified by New Zealand as "general" measures that are linked to all three pests at issue in the present dispute, are inconsistent with the SPS Agreement, they have nullified or impaired benefits accruing to New Zealand under the WTO Agreements.
The panel recommended
that the Dispute Settlement Body request