Now and then countries that do business together run into a state of disagreement concerning the nature of imports and exports that are carried out between countries. The world trade organization (WTO) is an organization that intends to oversee and ensure fair international trade practices among countries of the world. The Marrakech Agreement which replaced the General Agreement on Tariffs and Trade is currently used as a multilateral instrument of governing international trade. World trade organization believes in transparency, safety valves, building enforceable agreements reciprocity, and non-discrimination.
Before any country comes to a decision of restricting imports from another country the due process must be followed to justify -these claims. If the due process is not followed and enough evidence gives a reason why a given country has put a ban on the importation of products from another country then the world trade organization may retaliate by imposing trade sanctions on this country.
When New Zealand launched a panel request to resolve the issue of banned apple exportation it claimed that Australia was in breach of the Sanitary and Phytosanitary Measures (SPS Agreement) that was a binding world trade organization agreement that Australia was a signatory to. Article 11.1 of the SPS Agreement provides that:
“The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding shall apply to consultations and the settlement of disputes under this Agreement, except as otherwise specifically provided herein”.
Australia and New Zealand concerning apple imports
Australia banned the importation of New Zealand apples back in the 1920s and there has been a 90-year war between Australia and New Zealand concerning this ban therefore for almost one century it was illegal for new Zealand to export its apples to Australia. New Zealand had under some cases continued exporting apples to Australia but the Australian government stood its ground and insisted that the ban was still own. The Australian government and agriculture ministry believed that new Zealand apples were dangerous and that they could introduce blight bacteria into the apple farming regions of Australia and therefore went ahead to ban the importation of these apples as a measure of quarantine.
On the other hand, New Zealand farmers and government read suspicion seeing this action as an act of sabotage and a blow into their $ 21 million apple export to Australian industry (Tripp, 2010). New Zealand itself was angered by this action of banning their apples because on their part they so no conclusive rational and scientific reason as to why Australia had decided to ban the importation of apples from New Zealand Steger, 2009. 330)
Therefore on August 31, 2007, New Zealand decided to look for means to ensure dialogue between its trade and agricultural departments together with the Australian authorities with aim of lifting the ban. Later in 2007, the Australian director of animal and plant quarantine set a policy demanding that new Zealand could only export its apples to Australia if it abided by the quarantine act of 1908. Later after these consultations new Zealand considered this decision as unfair and inconsistent with the world trade organization’s SPS (sanitary and phytosanitary measures) agreement and in particular articles 2.1, 2.2, 2.3, 5.1, 5.3, 5.5, 5.6,8.
New Zealand’s panel request to resolve the ban on importation of apples took place on 7th December 2007 and by then an official letter notifying Australia of this decision reached Australian authorities on 6th December 2007. When the panes were set up and the appellate body started its hearings Australia complained that Article 6.2 of the DSU was not followed by New Zealand this article imposed the following requirements on panel requests:
“The request must:
- Be in writing;
- Indicate whether consultations were held;
- Identify the specific measures at issue, and
- Provide a summary of the legal basis of the complaint sufficient to present the problem.”
Australia went ahead to launch a complaint as the proceedings continued saying that it could not properly prepare its defense due to a high level of ambiguity because New Zealand had deliberately not identified specific measures at issue as required by article 6.2 of the DSU. The panel in Canada – Wheat Exports and Grain Imports observed that:
“Without identification of the precise measures at issue, the jurisdiction of a panel could not be clearly established. Likewise, the due process objective of notifying and informing the responding party and the third parties could not be attained”
Furthermore, Australia claimed that New Zealand did not provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly to the panel as this was the case in Thailand – H-Beams, where it was determined:
“A defending party is entitled to know what case it has to answer, and what violations have been alleged so that it can begin preparing its defense. Likewise, those Members of the WTO who intend to participate as third parties in panel proceedings must be informed of the legal basis of the complaint. This requirement of due process is fundamental to ensuring the fair and orderly conduct of dispute settlement proceedings”.
Therefore Australia requested that the panel should find New Zealand’s panel request to be inconsistent with the DSU (Dispute Settlement Understanding) article 6.2 and therefore consequently the Panel ought to abstain from considering the substance of New Zealand’s assertions in this dispute.
Australia and New Zealand went ahead to render in their oral submissions at a panel hearing in late 2008 and a second-panel hearing was given to the parties in April 2009. The panel released an interim decision to the parties in confidence in march 2010 and the Final Import Risk Analysis Report for Apples from New Zealand which was released in August 2010 was a win for New Zealand. The WTO stated that there wasn’t sufficient and conclusive scientific evidence that justified Australia’s risk assessment that led to quarantine and the subsequent banning import of apples from New Zealand (Tripp, 2010). The panel concurred that there are other available trade measures that don’t include complete banning of imports that Australia could pursue. In retaliation to the WTO’s decision Australia has launched an appeal.
Introduction
Regional trade agreements are associations formed by like-minded countries who either bilaterally or multilaterally come together and make binding agreements in order in order to conduct mutually beneficial trade. These trade pacts can be advantageous and can result to tax benefits, creating jobs, enlarging the market, reduced tariffs and quotas, and so on. Australia aims to sustain an active and highly diverse global trade agenda that aims to either break trade policies using regional or bilateral approaches. Australia’s policies aim to promote equality and international trade competitiveness by advocating for liberalization and healthy investment frameworks for global trade.
Therefore by Australia being a signatory to many of the world trade organization agreements it has a policy of encouraging and supporting successful agreements that arise out of negotiations that aim to provide the best opportunities and potential for international and regional trade. Australia, therefore, looks forward to creating partnerships through free trade agreements that will enhance voluntary trade corporation with its trade partners.
(AANZFTA) which came into general operational effect in January 2010 is an agreement involving Indonesia, Cambodia, LaoDPR, Myanmar, Thailand, Vietnam, Australia, Singapore, New Zealand, and the Philippines. This agreement was formed that this regional block can nature long-lasting ties of friendship that would encourage cooperation between them. Many countries that haven’t entered into bilateral or multilateral trade agreements have always faced obstacles that try to hinder trade and therefore forming free trade agreements and regional trade agreements seem to offer solutions to this problem.
Evaluation for regional trade agreements concerning Australia’s policy
Australia’s trade policies are in line with WTO agreements and therefore the Australian government has always aimed to encourage free, safe, and fair trade that is of mutual benefit to the trading parties. The establishment of the ASEAN-Australia-New Zealand Free Trade Area is consistent with Article XXIV of GATT 1994. The objectives of this agreement were to liberalize and facilitate free trade in goods among parties and eliminate tariff and non-tariff barriers, facilitate and enhance investment opportunities for member states, establish a cooperative framework for improving trade, and providing differential and special treatment to member states thus facilitate more economic integration (Steger, 2009. 350-370). Therefore by ratifying this free trade agreement Australia aims to maximize its trading activities and achieve its economic goals.
The ASEAN-Australia-New Zealand Free Trade Agreement lays a well and comprehensive legal framework using its various articles to outlay procedures, regulations, and rules that are expected to bind ASEAN who are either current members or prospective members. The FTA agreement that aims to eliminate or reduce custom duties that discourage international trade intends to use negotiation and explicit agreements using special delegates to achieve that. Furthermore, Australia’s policies aim to reduce trade and non-trade tariffs that discourage the level of business and so do the FTA agreement. By doing this then the country’s international objectives will be achieved.
The ASEAN-Australia-New Zealand Free Trade Agreement also intends to streamline tax regulation, and provide a clear legal framework that intends to make trade much simple and efficient among ASEAN countries. The FTA agreement, therefore, strives to foster participation and commitment between the member states of the ASEAN countries. By coming up with articles and agreements that will ensure that all countries are committed to the process of liberalizing trade and eliminating trade barriers then ASEAN countries can ensure that the stability of trade in the region can be assured. This will therefore accelerate the processes by which the production of goods and services together with their sale is much faster and efficient in line with Australia’s industry of trade goals.
Many are times that disputes between trade partners arise and therefore it easier to resolve this Theseus for countries who are members of a given trade block. Certain countries, therefore, are given more special treatment by considering that they are members of the same trade block. Mechanisms of dispute settlement can be underlined in the articles of the Free trade agreements which ensure that there exist contact points and consultative opportunities that encourage negotiation (Steger, 2009. 360). Furthermore specific guidelines are put in place by trade agreements such as The ASEAN-Australia-New Zealand Free Trade Agreement on how to handle cases of unfair competition and monopolistic practices it, therefore, ensures that symbiotic relationships are existent among member states.
Many countries which are not subject to trade agreements may often place more tight regulations in place to limit the movement of people inside and outside their borders. Therefore such agreements go forward to encourage all the involved countries to reduce movement restrictions within their jurisdiction to allow trading activities to be more simple and easy. Furthermore, issues of licensing and acquisition of permit become simpler for the human resources involved in trade.
Conclusion
A countries trade and foreign policies may influence the kind of free trade agreements the country forms with other countries. It is important to know that Australia enters into such agreements with an aim of promoting free trade and opening opportunities for its citizens to make money and in turn benefit the government and the country (Steger, 2009. 350). The existence of such agreements such as the ASEAN-Australia-New Zealand Free Trade Agreement advocate for liberalized regional trading and transparency in these trading activities.
The articles of such an agreement go forth to foster cooperation and commitment of the member states through the implementation of regulations and procedures that aim to reduce incidences of conflict and dispute. At the end of it, all such agreements end up with more merits than demerits by making the process of trade simple and more efficient between member states. It is therefore justified to say that Australia as a nation is more likely to meet its specific trade targets by entering into symbiotic trade agreement
Reference
Australian Government, Department of foreign affairs and trade. SEAN-Australia-New Zealand trade agreement. Web.
Chapman Tripp. 2010 NZ-Australia Apples dispute – urgency for a negotiated outcome? Web.
Steger, D.P., 2009. Redesigning the World Trade Organization for the Twenty First Century. Waterloo: Wilfrid Laurier University Press.
World Trade Organization. 2010. Measures Affecting the Importation of Apples from New Zealand. Web.