Prepared for the Environment Centre of Western Australia, August 1999.
Update reports and links are being added at the foot of this document. Also, see Tasmania Fightback
Free trade doctrine trumped
salmon import ban
by Brian Jenkins
On 19 July, 1999, The Australian Quarantine Inspection Service (AQIS) alarmed conservationists, anglers and domestic salmon growers by ending a 24-year ban on imports of uncooked salmon. The ban was supposed to keep fish diseases out of Australia. It must now be replaced by increased watchfulness by AQIS scientists.
The World Trade Organisation (WTO) has ruled that the salmon ban violated international trade obligations. Australia, with a merchandise trade deficit of $7.9 billion in 1998, wants trading partners to remove import barriers - and therefore cannot afford to be accused of "protectionism".
There was immediate criticism from Tasmanian fishfarmers and the Australian Conservation Foundation.
"This decision to allow salmon imports is an unacceptable gamble based on trade desire at the expense of basic environmental and quarantine control. Australia is allowing short term trade interests to undermine our marine and estuarine environments" said Ms Margi Prideaux, ACF National Marine Campaigner. (1)
The Tasmanian Salmonid Growers Association reportedly called on the Federal Government to guarantee compensation to the industry of up to A$500 million in the event exotic diseases are imported. (2)
The World Trade Organisation has sweeping power to enforce its rulings with compensation orders and punitive sanctions. And, if Australia wants to use those powers to challenge other countries, eg, the USA over its tariff barrier against lamb imports, we need to have "clean hands" ourselves.
VALUES, STANDARDS SACRIFICED
Commitment to "free trade" involves a sacrifice of values and standards in other areas - social, environmental, human rights and health, to name a few. The decision on salmon illustrates this - and it must have been very galling for AQIS and its conscientious scientists to have to announce it at the insistence of the Coalition Government.
The Government is pinning a great deal of faith in what it calls "global trade reform" (also described by some critics as the abandonment of environmental and labour standards in "a race to the bottom").
AQIS was obliged to consider not only salmon but other fish species including trout, chars, sweetfish, galaxias, smelt, halibut, eels, herring, cod, perch, pilchards, bass, haddock, sea bream, hake, turbot, goldfish, tetras, livebearers, barbs and gouramis.
THOUSANDS OF TONNES TO BE IMPORTED
The heart of the matter is that Canada, wishing to sell its ocean and farmed salmon to Australians, was able to convince the WTO that the Australian salmon ban was not backed by proper scientific analysis and that we cheerfully allowed importation of other fish, such as live ornamental fish and frozen baitfish, even though the disease risk could be considered at least as high as that for salmon.
A conclusion that the ban shielded the local salmon industry against competition was hard to avoid. Now, our markets will be open to several thousands of tonnes per annum of fresh, chilled and frozen salmon, principally from Canada and New Zealand. There will be regulations "to ensure that products will only be available in the wider community in consumer-ready form (such as fillets) that offer negligible risk of disease establishment." Exporting countries will be subjected to scrutiny of their fish health control measures. (3)
THE QUARANTINE SERVICE
Australia has had animal and plant quarantine laws since 1908. Administered by the Australian Quarantine Inspection Service (AQIS) under the Australian Department of Primary Industries & Energy (DoPIE), these are designed to protect our valuable rural and fishery industries from imported pests and diseases. Protection of native flora and fauna is an important spin-off.
The scientific knowledge and expertise has another spin-off - arguing for the removal of quarantine and technical barriers to Australian exports in foreign countries. From June 1995 to March 1997 AQIS helped in the introduction of 103 new arrangements for access by Australian exports to new markets including wool to Argentina, sheep, cattle and goats to Bosnia, animal food and pig semen to South Africa, meat and meat products, skins and hides to Croatia, organic oranges to Denmark, poultry and poultry products and emu oil to South Korea, pharmaceuticals to Japan and ostriches to the Philippines (4). It is therefore unsurprising that other trading nations are equally aggressive in the field.
THE BAN ON SALMON IMPORTS
In 1975, Australia established a quarantine ban against imports of fresh, chilled or frozen Atlantic salmon. The ban remained in place following a risk assessment in 1996 in response to Canada's formal complaint that Australia was in breach of the WTO's Sanitary and Phytosanitary (SPS) Agreement. The breach was subsequently confirmed by the WTO's Appelate Body (appeals tribunal) on 20 October, 1998, on grounds that:
- Australia allowed importation of other fish and fish products with risks at least as high as that for salmon.
- the 1995 Draft Report by Australia had recommended allowing conditional imports of salmon (a finding overturned in the final report); and
- Australia had no internal controls on the movement of salmon, and had not conducted a proper risk assessment of salmon imports.
Australia asked to be allowed to implement WTO-consistent quarantine measures by February 2000. Canada challenged this through binding arbitration. On 23 February 1999 the WTO Arbitrator ruled that Australia had until 6 July 1999 to implement measures which are WTO-consistent.
THE IMPORT RISK ANALYSIS
Relevant import proposals must be lodged with the Australian Quarantine and Inspection Service (AQIS) and are subject to a scientific import risk analysis (IRA) process which is set out in the AQIS Risk Analysis Process Handbook, available in PDF format . (This publication also contains information about relevant international standards and agreements, including the WTO's SPS agreement.)
On 30 March, 1999, the Executive Director of AQIS, Mr Paul Hickey, announced: "The Australian Quarantine and Inspection Service (AQIS) is proposing to accelerate import risk analyses concerning the importation of salmon and other aquatic products, in response to a World Trade Organisation (WTO) decision..."
"AQIS must review its previous risk analysis on ocean-caught Pacific salmon from Canada and the United States and, if necessary, modify existing import controls by the 6 July deadline established by the arbitrator," Mr Hickey said.
At the same time AQIS will complete its risk analyses on salmon products from other sources, on ornamental finfish and on non-viable marine finfish so comparable risk management decisions can be made on these items, Mr Hickey said.
FINDINGS OF THE RISK ANALYSIS
Australian farmed Atlantic salmon has a disease-free status in export markets. There is genuine concern that if fresh salmon is imported to Australia, some product carrying disease may find its way into the marine environment and seriously impact on the farmed salmon industry.
AQIS in its report to the WTO concluded that there was an unacceptable risk of exotic salmon diseases being introduced into the farmed salmon industry in Australia, if fresh wild Canadian salmon is imported. Wild Canadian salmon were found to be capable of carrying about 24 viral, bacterial and parasitic diseases not present in salmon farmed in Australia. In comparison with imported pilchards, where no disease risk has been identified in testing to date, one may conclude that the importation of fresh salmon provides a greater risk to the marine environment.
Fish imported for bait use are to be considered in a separate import risk analysis by AQIS. This IRA has been given a lower priority than the Canadian salmon IRA for a number of scientific and economic reasons. Although Australia has the right to cease importation of baitfish on precautionary grounds, pending results of the IRA, there would be immediate appeals for breach of the SPS Agreement.
THE WTO's SPS Agreement
The SPS Agreement defines the basic rights and obligations of WTO member countries with regard to the use of 'sanitary and phytosanitary' (SPS) measures, which are measures necessary to protect human, animal or plant life or health, including procedures to test, diagnose, isolate, control or eradicate diseases and pests. SPS measures may directly or indirectly affect international trade and should not be used as a disguised restriction on trade.
WTO Member countries have the right to take SPS measures to the extent necessary to protect human, animal, or plant life or health, provided these measures are based on scientific principles and are not maintained without sufficient scientific evidence.
The SPS Agreement encourages Members to base their national SPS measures on relevant international standards, guidelines and recommendations. Governments may choose national measures that provide a higher level of protection than relevant international standards, subject to conformity with obligations relating to risk assessment and a consistent approach to risk management.
In assessing risks, WTO Members are required to take into account available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases and pests; existence of disease/pest free areas; relevant ecological and environmental conditions; and quarantine or other treatment. (5)
CONCLUSION: FREE TRADE IS NOT FAIR TRADE
Australian governments, both Labor and Liberal, have committed our economy to the view held by multinational corporations - that all barriers to free trade should be progressively dismantled. Unfortunately, measurement of the success of this policy tends to stress dollar values - and ignores the full impact of social, cultural and environmental effects.
By dropping tariff barriers at a faster rate than trading partners, our governments have exposed us to devastating competition from countries which have lower human rights, labour and environmental standards (and/or more favourable currency exchange rates) and can thus supply goods at a lower price.
We now find that it is necessary for our own workers to be paid less, and for our high standards to be dropped in order to meet the demands of global free trade. Thus, we place logging or mining profits ahead of environmental and cutural values; we shirk our international obligations on Greenhouse gas emissions. It is no surprise, therefore, that we can no longer make our quarantine standards stick.
(1) ACF media release. 22/7/99
(2) TSGA chairman, Mr Richard Doedens, quoted by Brendan Pearson, Financial Review 21/7/99.
(3) AQIS media release, 19/7/99, available at http://www.affa.gov.au/corporate_docs/publications/media_releases/quarantine/archive/mrsalmondec.htm
(4) Australian Quarantine - a shared responsibility (The Government Response) Available at http://www.affa.gov.au/content/output.cfm?ObjectID=785CC799-5839-409F-B8F7F112EBEBDE1F
(5) AQIS Risk Analysis Process Handbook, p13 at http://www.affa.gov.au/corporate_docs/publications/pdf/market_access/biosecurity/risk.pdf
See also AQIS paper 'National Risk Management and the SPS Agreement'
Senate Inquiry (Report due in March, 2000) View reports and Hansard transcripts.
OIE International Conference on risk analysis in aquatic animal health, 8-10 Feb, 2000.
( No longer available online, but see the home page of the OIE's Fish Diseases Commission. The Senate Committee inquiry was extended to take account of deliberations of this conference, at which there was WTO participation and a keynote address by AQIS officer Dr E-M Bernoth.)
Structure of the OIE (World Organisation for Animal Health, established 1924)
The OIE enjoys permanent working relations with over 20 other international organisations, including the Food and Agriculture Organization of the United Nations (FAO), the World Health Organization (WHO), the World Trade Organization (WTO), the Inter-American Institute for Cooperation on Agriculture (IICA) and the Pan American Health Organization (PAHO)
OIE formal co-operation with WTO (media release by WTO, 4 May, 1998)
OIE Website contents (English)
Tasmanian permit system proposed for salmon imports Press report (20/10/99)
Australian Government ministerial media release (19/10/99) critical of Tasmania.
Tasmanian ministerial media release (18/11/99) on new Quarantine Bill
Action to eliminate fishery subsidies. On 30/7/99, Peru, Australia, Iceland, New Zealand, the Philippines, United States and Norway proposed, in preparation for the 1999 Seattle ministerial of the WTO, that "[WTO] Members agree to eliminate subsidies that contribute to fisheries overcapacity, in view of the fact that they distort trade, seriously undermine sustainable utilization of fish stocks and hamper sustainable development."
Document available at http://www.usia.gov/topical/econ/wto99/en0730.htm
Correspondence with Tasmanian Minister, David Llewellyn on the new legislation with a compilation of relevant Tasmanian and other URLs.
WTO ruling (released 18/2/00) on an appeal by Canada. The panel met on 8-10 December and this report was given to the parties on 31/1/00). The question of the Tasmanian import ban is introduced at page 105. The panel concluded (page 126) that Canada had failed in the parts of its appeal under Articles 5.5 and 2.3 of the SPS Agreement, but that Australia's imposition of consumer-ready requirements was trade-restrictive and inconsistent with Article 5.6. The Tasmanian ban was in breach of Articles 5.1 and 2.2.
Federal Trade Minister Mark Vaile issued a Media Release on 21 Feb 2000.
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