Philippines fruit case

meta-cre­ation_­date: 15 July 2003 The Philip­pines Gov­ern­ment chose to announce a WTO chal­lenge to Australia’s quar­an­tine sys­tem on the day that the Prime Min­is­ter arrived in the coun­try for a three-day vis­it. bq. In its appli­ca­tion to the WTO, the Philip­pines said Aus­tralia is in breach of inter­na­tion­al quar­an­tine trad­ing reg­u­la­tions by keep­ing out the bananas and papayas. It said Australia’s quar­an­tine sys­tem is not sci­en­tif­i­cal­ly based and not in line with inter­na­tion­al stan­dards, com­plaints which Aus­tralia rejects. Trade Min­is­ter Mark Vaile admit­ted to being dis­ap­point­ed that Mani­la had tak­en the step but said the gov­ern­ment would defend its quar­an­tine sys­tem.

The issue is the Aus­tralian ban on imports of bananas from Philippines—the world’s fourth largest exporter—on the basis of a claimed risk of dis­ease for Australia’s her­met­i­cal­ly pro­tect­ed banana indus­try. The prob­lem is that our response to this risk is dis­pro­por­tion­ate to our nation­al inter­est. The Moko and Siga­to­ka bugs do seem to rep­re­sent at least a the­o­ret­i­cal threat to Aus­tralian pro­duc­tion. But the eco­nom­ic impor­tance of the threat has not been prop­er­ly assessed by the Aus­tralian quar­an­tine author­i­ties. They have not accu­rate­ly deter­mined the eco­nom­ic scale of the risk and they have made no assess­ment of the cost of risk mit­i­ga­tion ver­sus the ben­e­fits. It appears that Aus­tralia has only one reac­tion to any lev­el of import risk greater than zero: an import ban or a restric­tion so close to a ban it makes no dif­fer­ence. The EU is pur­su­ing a broad-rang­ing WTO case against Australia’s quar­an­tine pro­ce­dures on exact­ly these grounds. We can’t go on defend­ing this absurd and expen­sive sys­tem: it’s time to make some eco­nom­i­cal­ly ratio­nal changes.

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