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WTO condemns Australian ban on New Zealand apples

September 9, 2010

http://www.reuters.com/article/idUSLDE6750ZM20100809

“Australia’s decades-old restrictions on imports of New Zealand apples break international trade laws and should be amended, the World Trade Organization said on Monday. The WTO panel ruling should open the way for New Zealand to resume sales of apples to its biggest trading partner after nearly 90 years, and holds out the possibility of access to other Asian markets where its apples are banned for similar reasons.”

Australia banned New Zealand apples in 1921 because New Zealand had fire blight, a disease that attacks apple and pear trees and rose bushes which Australia did not and does not currently have. New Zealand began arguing in 1986 for lifting the ban and launched its WTO challenge in 2007.

The WTO did not claim that Australia’s quarantine was arbitrary but argued that the current rules and Australian safety checks on New Zealand apples were unscientific and disrupted trade more than necessary.

Australia is in the process of appealing the ruling.

1. Do you agree with the WTO that Australia’s quarantine of New Zealand’s apples is a ‘restraint of trade’?
2. What will be the ‘gains from trade’ if New Zealand apples finally enter the Australian market? Will be there economic losses as well?
3. How would Australian ‘consumer surplus’ be affected by freer trade in New Zealand apples?
4. What are the noneconomic costs and benefits of the current Australian apple ban? Do you think the noneconomic factors outweigh the economic factors in this case?

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