10/27/2004

Complete Protection

Australian Trade has a problem. The Australian veiw of protection from plant/animal pests and other diseases has been characterized as "Complete protection whatever the cost." Australia has very strict quarantine policies. Importers have to wait years or even decades in some instances to get a complete scientific assessment of import risk.

Recently the Europeon Union has formally challenged the policy in the WTO. The Europeon Commission stated, "The EU does not dispute Australia's right to set an appropriate level of protection. The EU does however consider that Australia should not unfairly protect its own market and producers by imposing quarantine rules which block imports without scientific justification, often for many years."

Although the amount of trade lost due to the quarantine is hard to quantify. However, the commission showed the EU exports of fresh vegetables in Australia were 8,000 tons compared to the 35,000 tons exported to Canada (a comparable market).

I don't think that having any economic policy enforced "whatever the cost" is ever a good idea. There has to be some cut-off point where it is realized that the benefits of a policy are for overshadowed by the costs. I think this is the case with Australia's quarantine. Some sort of change needs to take place in order to relax the strict policy and increase imports.

2 comments:

Ernie said...

No one has ever accused the Aussie's of being all that bright and this occasion gives credence as to why such is so. Australia needs to allow free trade to happen and the EU has every right to be concerned. Hopefully the WTO takes care of this issue.

Dr. Tufte said...

This is an example of using regulatory policy as a cover for trade policy. The Australians don't want to appear to be against foreign trade, so they dress it up as environmental protection. The WTO is calling their bluff.