RP poised to file WTO case versus Australia

The Philippine government is poised to bring its case against Australia to the World Trade Organization (WTO) as it castigated the Australian government for soliciting support from the Cairns Group.

"We have been very accommodating, bending over backwards to address your trade concerns, but how about our trade concerns, why can’t Australia reciprocate and open its doors for more equitable trade?" asked Agriculture Secretary Luis Lorenzo Jr. in a speech Tuesday night before the regular monthly meeting of the Australia-New Zealand Chamber of Commerce and Industry.

It is ironic, Lorenzo pointed out, that while Australia has been seeking the support of the Cairns Group (of which the Philippines is a member) to advance the common interests of the group before the WTO, it has been imposing the same trade barriers to one of its members.

"Here we have Australian Trade Minister Mark Vaile eliciting support from the member countries of the Cairns Group so that it can pursue trade issues before the WTO, and yet, it is doing exactly what the other members are complaining about more developed countries of the WTO," said Lorenzo.

The Cairns Group is a coalition of traders founded in 1986 around the time of the launching of the Uruguay Round negotiations. The members – Australia, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, New Zealand, Philippines, Thailand and Uruguay, Bolivia, Costa Rica, Paraguay and South Africa – account for more than 30 percent of global agricultural trade. Their objective is to chip away the resistance of superpowers like the US and European Union to global trade reforms.

Lorenzo said Filipino farmers, exporters and government officials are repeatedly subjected to "mental torture" as Australia continues to refuse the fruits, requiring them to undergo long and tedious process of import risk analysis (IRA).

Had Australia been more reciprocal, he said government projections show local banana exports to Australia alone can generate A$300 million yearly.

"We have the opinion of bringing our case to the WTO through the Dispute Settlement Panel and we will resort to this if we cannot get an assurance from Australia that it is willing to start a dialogue and that reforms in their trade relations will be achieved," said Lorenzo.

For nearly decade now, the Philippines has been battling Australia’s continued use of non-tariff barriers such as sanitary and phytosanitary regulations to ban the entry of Philippine agricultural products, particularly fruits like pineapple and banana.

The DA is confident of getting a favorable ruling from the WTO if it decides to apply a full-court press against Australia.

Earlier, Agriculture Assistant Secretary Segfredo Serrano said: "The momentum is with us. We have a strong case that has the potential of dealing their import regime on fruits and vegetables inconsistent with WTO rules."

Serrano said the country is pursuing a trade dispute with Australia by presenting scientific evidence showing that production, risk management measures, fumigation, treatment and pre-shipment practices conform to established international standards and by questioning Australia’s entire quarantine rules an legislation.

Late last year, the Department of Agriculture submitted two letters to David Herbert Spencer, Australian Ambassador to the WTO, raising questions on the quarantine laws and the measures affecting the importation of fresh pineapple fruit, fresh fruits and vegetables.

In both letters the Philippines charged that Australia’s Quarantine Act is inconsistent with its obligations under the General Agreement on Tariffs and Trade, the Agreement on the Application of Sanitary or Phytosanitary Measures (SPS), and the agreement on Import Licensing Procedures.

Serrano said Australia’s quarantine laws violate the principles of free trade set by the WTO because of outdated provisions that were meant to keep out foreign competition before they could even start trade with Australia. Australia’s quarantine rules and its import policy on fruits and vegetables were established in 1908 and amended to accommodate its commitments under the WTO.

Australia has rejected the entry of Philippine pineapples, and said exports will be permitted if the country agrees to de-crown the fruit and subject it to pre-shipment methyl bromide fumigation. At the same time, Australia is also preventing Philippine bananas from penetrating its domestic market, saying this will cause widespread infestation of its local banana plantations.