14 June 2005

New Zealand escalates WTO action against Australia

The Government is taking action at the World Trade Organisation to get movement on the long-standing problem of access for New Zealand apples into the Australian market, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton said New Zealand had been trying hard for many years to get a fair deal, based on science, for New Zealand apple growers.

"That's not the situation in Australia at the moment ? and we're not going to stop until we get the right outcome.

The science is clear, but regrettably this whole process has dragged on too long. So the Government has decided to inscribe the issue on the agenda of this month's meeting of the WTO Sanitary and Phytosanitary Committee."

The SPS Committee provides a setting for WTO Members to formally raise issues of concern about biosecurity trade measures taken by other Members.

Mr Sutton said that formal inscription was a significant step in the process towards achieving New Zealand's access objective.

"We have never raised an issue with Australia in the WTO before. We do not take this step lightly. Raising our serious concerns at the SPS Committee will signal to Australia, and other WTO Members, just how important resolution of this issue is to New Zealand."

Mr Sutton said New Zealand had previously taken only three cases to the WTO SPS Committee.

"In all three cases we have made excellent progress without having to go to the next step of dispute settlement. And we hope to do so with Australia. But if we can't do this, further options in the WTO cannot be ruled out."

Background:

Why is the Government confident that raising the issue in the SPS Committee will be effective?

Because it's been effective every time we've used it before. Going to the SPS Committee can sometimes deliver results more quickly than using the WTO's formal dispute settlement processes.

We have taken three cases to the SPS Committee before. Most recently, we raised an issue involving Japan and its 'official control' horticulture fumigation policy. This has been on the Committee's agenda since 2002. While this issue is likely to take some time to resolve, New Zealand has already secured a significant improvement in Japan's regime.

In October 2003 we raised a market access issue with Chinese Taipei for the export of New Zealand potatoes. The issue was on the agenda for the following SPS Committee meeting in March 2004 but was withdrawn following progress by Chinese Taipei. The issue has since been resolved.

The first issue we inscribed, in November 2000, regarded the restrictions imposed by Indonesia in the wake of an incursion of fruit fly in 1996. Indonesia notified in October 2001 that it had lifted its restrictions.

Why has the Government not undertaken WTO action / formal inscription until now?

Answer:

Multilateral action is not something any country should take lightly.

New Zealand has a close working relationship with Australia, and we have been, and will continue to, actively pursue resolution of this issue through bilateral channels.

We appreciate the Australian Government's assurances that they are following a science-based import risk analysis process. Regrettably, however, this process has dragged on for too long. The SPS Committee gives us the opportunity to underline our serious concerns about the issue.

What exactly is formal inscription?

Answer:

The process of formal inscription is straightforward.

When a WTO Member has serious concerns about a biosecurity trade measure taken by another Member, they can ask to have the issue inscribed on the agenda of a WTO SPS Committee meeting.

Once an issue is inscribed, it remains on the Committee's agenda until it is resolved or removed.

The Committee provides the opportunity for the Member who inscribed, and also other Members, to voice their concerns about the issue. In other words, the issue gets a public airing in a multilateral forum.

What is the status of the Japan-US apples dispute, and why is it important to New Zealand's case with Australia?

Answer:

The Japan-US dispute turns on a similar point, and is therefore relevant to our case for apples access to Australia. That's why New Zealand was a third party in the dispute proceedings.

In November 2003 the WTO ruled in favour of the US - that the risk of apples in commercial trade spreading fire blight is negligible. This ruling supports our view that any measures to protect against fire blight are unjustified.

Japan modified its measures in light of the WTO decision, and these are now the subject of WTO compliance panel proceedings. The result of that case is expected shortly.

Is the Government waiting on the result of Australia's Import Risk Analysis?

Answer:

Clearly, we're looking forward to Australia publishing a scientifically sound Import Risk Analysis for New Zealand apples. We encourage them to this as soon as possible. Nothing we are doing here will slow that process down.

Why is the Government not taking WTO dispute settlement action now?

Answer:

Formal inscription on the SPS Committee agenda is the next logical step for us to take.

As I have pointed out, this is significant step, and one that New Zealand has previously taken only three times, and never against Australia. In each case, we've made good progress without having to go to the next step of dispute settlement.

I hope we can do the same on this issue. But we won't be satisfied until we get our apples into Australia, and no options are ruled out.

ENDS

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