Bringing quarantine barriers to account

meta-cre­ation_­date: April 10, 2003 The fol­low­ing is the text of an Op-ed arti­cle by Peter Gal­lagher that appeared in the Aus­tralian Finan­cial Review on 10 April The Euro­pean Union’s com­plaint to WTO against the whole of our Quar­an­tine reg­u­la­tions is a tac­ti­cal move in the cur­rent round of WTO agri­cul­tur­al nego­ti­a­tions. But don’t dis­miss the claim alto­geth­er: it points to some­thing that is bad­ly wrong with our quar­an­tine pro­tec­tion. And it has noth­ing to do with WTO. Pas­cal Lamy, the EU’s trade Com­mis­sion­er, left no doubt that he was launch­ing the dis­pute to ‘pay out’ Aus­tralia for it’s crit­i­cism of EU agri­cul­tur­al policies.

We believe [Aus­trali­a’s quar­an­tine] sys­tem fla­grant­ly breach­es WTO rules, despite Aus­tralia ‘s con­stant claims to be the only bea­con of free agri­cul­tur­al trade.  The EU will use WTO pro­ce­dures to ensure that Aus­tralia prac­tis­es what it preach­es on agri­cul­tur­al mar­ket access..

It’s a tac­tic the Com­mis­sion has used before; a smoke­screen to con­fuse the issues in the agri­cul­ture reform nego­ti­a­tions and to dis­guise their respon­si­bil­i­ty for drag­ging the reform talks to a halt. It’s an abuse of the WTO dis­putes sys­tem to use it for con­tentious pur­pos­es. But the com­plaint seems unlike­ly to have much legal mer­it, in any case. There’s lit­tle like­li­hood that Aus­tralian quar­an­tine pro­ce­dures — which have been poured over in lengthy inter­nal reviews and in recent WTO cas­es — are in gen­er­al breech of the WTO rules. That’s not to say the com­plaint is not plau­si­ble. Lamy’s barbs will res­onate with many of our trad­ing part­ners and even with many Aus­tralian indus­tries. The rest of the world does not believe that the dis­ease and pest risks for Aus­tralian pro­duc­ers can be so seri­ous that they jus­ti­fy ban­ning imports from the most suc­cess­ful pro­duc­ing and export­ing coun­tries in the world. We have banned, or severe­ly restrict­ed, imports of bananas from the world’s fourth biggest banana pro­duc­er (Philip­pines); imports of chick­en meat from the world’s largest exporter (Thai­land); fresh salmon imports from the num­ber two exporter world-wide (Cana­da), and; table grapes from the world’s third biggest exporter (USA). If the dis­ease risks are as high as we say, how is it that these coun­tries are such suc­cess­ful pro­duc­ers and exporters? How is it that com­pet­i­tive pro­duc­ers in oth­er coun­tries man­age to con­trol dis­eases and pests with­out loos­ing their world-lead­ing export posi­tion? The real prob­lem with our quar­an­tine bar­ri­ers is not a WTO issue: it’s much clos­er to home. High lev­els of quar­an­tine import bar­ri­ers are cre­at­ing a ben­e­fit for some agri­cul­tur­al indus­tries by low­er­ing dis­ease con­trol costs and inci­den­tal­ly reduc­ing import price com­pe­ti­tion. But, as import bar­ri­ers, they could also be cost­ing con­sumers bil­lions of dol­lars each year. We just don’t know whether our quar­an­tine bar­ri­ers are good for the econ­o­my as a whole because our quar­an­tine pro­ce­dures con­sid­er only the ben­e­fits to the ‘threat­ened’ domes­tic indus­try and take no account of the costs that a quar­an­tine import bar­ri­er impos­es on the rest of the econ­o­my. Unlike every oth­er form of import pro­tec­tion in Aus­tralia, quar­an­tine pro­tec­tion is a ‘free kick’ for the pro­tect­ed indus­try. Although the gov­ern­ment minute­ly exam­ines the costs and ben­e­fits of import restric­tions such as tex­tile tar­iffs, motor-vehi­cle tar­iffs and anti-dump­ing mea­sures, there is no attempt to assess the costs of a quar­an­tine bar­ri­er. At best, this is unfair to con­sumers and oth­er Aus­tralian indus­tries who bear the costs of the quar­an­tine bar­ri­er. At worst, it’s a reck­less way to man­age our agribusi­ness resources. What sort of costs are involved? The threat of retal­i­a­tion by our trad­ing part­ners is often the first cost that springs to mind. It’s cer­tain­ly a sig­nif­i­cant threat and a real­i­ty in Asian mar­kets as the beef and dairy export indus­tries can tes­ti­fy. But loss­es due to retal­i­a­tion and the dam­age to com­mer­cial rela­tions — although cru­cial for exporters — are like­ly to be dwarfed by the costs in our own mar­ket. Typ­i­cal­ly, con­sumers and oth­er indus­tries pay high­er prices due to loss of access to com­pet­i­tive import sup­ply which, in turn, means reduced domes­tic demand and a ‘lock-in’ of domes­tic resources in low­er-val­ue indus­tries. We don’t need the EU to tell us that we have a quar­an­tine prob­lem — and its noth­ing to do with the WTO.

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