Commission Press Release (IP/03/464), 31 March 2003

WTO - European Union to challenge Australia's protectionist food import regime at WTO

The European Union has decided to request Australia to enter into WTO formal consultations on its quarantine system for imports of agricultural products. Consultations are the first step in the WTO dispute settlement process and if they prove unsuccessful, entitle the EU to ask for a WTO Panel to be set up to rule on the legality of the Australian system. EU Trade Commissioner Pascal Lamy said: "Australia has built a quarantine system which is highly efficient at blocking the import of agricultural products into this country. We believe this 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."

The EU considers that the Australian quarantine system flagrantly breaches WTO rules, set out in the Agreement on Sanitary and Phytosanitary Measures (SPS), which covers regimes dealing with human, animal and plant health.

Australia notes that as an island it is free from many animal and plant diseases prevalent in the rest of the world, and that it takes a conservative approach to quarantine risks. The EU does not dispute the status of Australia in this respect, nor its right to set an appropriate level of protection. The EU does however consider that Australia should not abuse its privileged position to unfairly protect its own market and producers by imposing quarantine rules which block imports for many years without scientific justification.

Some of the market access problems faced by EU exporters include:

• An outright ban on the import of a range of agricultural products such as fruit and vegetables.
  
• Extremely long and complex risk assessment procedures. For example, a string of outstanding requests for access to the Australian market date back to 1997/98 covering products such as poultry meat, citrus fruit and tomatoes. A request for access for fresh pig meat is outstanding since 1980.
  
• Extremely restrictive conditions are applied to imports, even when access is finally granted. For example, for deboned pigmeat, harsh requirements for heat treatment are imposed, with Australia insisting that the treatment is carried out only in Australia and not in the EU.

Background

Australia is a leading member of the Cairns group of agricultural exporting countries which pushes for free trade in agricultural products. Unfortunately, Australia seems to consider that this freedom only applies to its exporters not to those wishing to import perfectly safe products into the Australian market.

Analysing potential lost trade is difficult, but some of the trade effects of the Australian measures can be illustrated. Trade statistics show that EU exports of fresh vegetables to Australia in 2002 were 8,000 tonnes, whereas exports to Canada a comparable market in size and wealth were over 300% greater at 35,000 tonnes. Indeed total fruit and vegetable exports to Australia (plus New Zealand) in 2001 were only €16 m of total EU fruit and vegetable exports of €3,369 m.

Australia's quarantine system has already been challenged in the past. In 1998 the WTO ruled that the Australian quarantine system for salmon violated WTO rules following a complaint by Canada and the US. In 2002 the Philippines, supported by Thailand, requested their own WTO consultations on the Australian quarantine system for pineapples and other fruit and vegetables.

Additional background: http://europa.eu.int/comm/trade/miti/dispute/index_en.htm