I · Web viewThe apple industry consists of approximately 1,200 apple growers with 9.9 million apple trees producing, on average, 306,000 tonnes per year over the last ten years

WORLD TRADE ORGANIZATION

Panel established pursuant to Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes

AUSTRALIA – MEASURES AFFECTING THE IMPORTATION OF APPLES FROM NEW ZEALAND

(DS367)

First Written Submission of Australia

Geneva, 18 July 2008

Australia – Apples (DS367) Australia’s First Written Submission of Australia 18 July 2008

Table of ContentsTABLE OF CONTENTS.......................................................................................................ii

TABLES AND FIGURES....................................................................................................ix

LIST OF EXHIBITS..............................................................................................................x

CASES CITED IN THIS SUBMISSION...........................................................................xix

GLOSSARY OF ABBREVIATIONS AND ACRONYMS...............................................xxi

GLOSSARY OF SCIENTIFIC TERMS..........................................................................xxiii

I. EXECUTIVE SUMMARY..........................................................................................27

II. INTRODUCTION........................................................................................................31

(a) New Zealand has not discharged its burden of proof.......................................31

(b) The SPS Agreement is a delicate balance of rights and obligations.................31

(c) Australia’s measures are based on a valid risk assessment..............................32

(d) Australia’s risk assessment is based on objective and credible evaluation of the evidence....................................................................................................................32

(e) New Zealand erroneously relies on the findings of the Japan-Apples dispute 33

(f) New Zealand’s allegations of politicisation should be disregarded by the Panel34

III. PROCEDURAL BACKGROUND..............................................................................36

IV. FACTUAL BACKGROUND......................................................................................38

A. Overview of Australia’s quarantine and biosecurity situation.................................38

1. Australia is free of many of the world’s plant pests and works hard to preserve this status.............................................................................................................................38

2. Australia has particular vulnerabilities to exotic pests.............................................39

3. Australia’s biodiversity and agriculture are significant assets.................................39

(a) Australia’s biodiversity is of intrinsic value....................................................39

(b) Australia’s agricultural sector is economically significant..............................40

(c) Australia’s apple and pear industry is important..............................................41

B. Australia’s quarantine system..................................................................................43

1. Australia has a comprehensive and effective quarantine system.............................43

2. Australia dedicates significant resources to its quarantine continuum.....................43

3. Australia’s quarantine system is based on a strong legal, administrative and operational framework.................................................................................................45

C. The Final Import Risk Analysis for Apples from New Zealand..............................46

D. Pests at issue in this dispute.....................................................................................49

1. Fire blight.................................................................................................................49

2. European canker.......................................................................................................50

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3. Apple leafcurling midge...........................................................................................50

E. The methodology applied by the IRA Team............................................................51

1. The IRA Team comprehensively and rigorously assessed likelihood and consequences to arrive at risk.......................................................................................51

2. The IRA Team comprehensively and rigorously evaluated the likelihood of entry, establishment and spread..............................................................................................52

3. The IRA Team comprehensively and rigorously evaluated consequences..............57

4. The IRA Team concluded that risk mitigation measures were required..................60

V. LEGAL FRAMEWORK..............................................................................................61

A. The product at issue in this dispute is mature apples...............................................61

B. The measures at issue limit the scope of this dispute...............................................62

1. The Panel’s terms of reference are limited to the 17 measures specifically identified in New Zealand’s panel request...................................................................................62

(a) New Zealand disregards the consequences of the Panel’s preliminary ruling.62

(b) New Zealand has not established that all measures are challengeable under the relevant provisions of the SPS Agreement...............................................................63

2. Australia does not impose the pruning requirement alleged by New Zealand in respect of European canker..........................................................................................63

3. New Zealand cannot challenge some of the “measures at issue” individually........64

4. New Zealand’s description of certain “measures” imposed by Australia is flawed 67

(a) New Zealand has misunderstood the nature of AQIS involvement in orchard inspections................................................................................................................67

(b) New Zealand has mischaracterised Australia’s principal requirement in respect of fire blight..............................................................................................................69

(c) New Zealand has misunderstood the fire blight requirement in respect of pruning......................................................................................................................70

(d) New Zealand has mischaracterised the European canker requirement in respect of planting stock.......................................................................................................70

5. Conclusion on the measures at issue........................................................................71

C. The burden of proof is on New Zealand...................................................................71

D. It is important to apply the appropriate standard(s) of review.................................72

1. New Zealand fails to address the crucial issue of standard of review......................72

2. The standard of review is informed by the relevant obligation and covered agreement.....................................................................................................................73

3. The standard(s) of review must maintain the balance of rights and obligations under the SPS Agreement.......................................................................................................74

4. The SPS Agreement reflects a balance of jurisdictional competences.....................75

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5. The Panel’s role where scientific judgment is not in issue......................................76

6. The standard of review in relation to assessing the scientific basis of SPS measures evaluated in a risk assessment requires a panel to show considerable deference........77

(a) The mandatory requirement for Members to obtain a risk assessment excludes a panel from conducting the required risk assessment itself....................................77

(b) Panels should review the risk assessment rather than assess the risk..............78

(c) The Panel may only intervene in the assessment of risk in limited circumstances...........................................................................................................79

(d) The Panel should also show considerable deference under the third requirement of Article 2.2........................................................................................82

(e) The Panel should also show considerable deference when evaluating whether alternative SPS measures would achieve Australia’s ALOP...................................83

(f) The Panel’s right to consult experts cannot extend its role..............................83

7. A panel should also show a degree of deference in assessing a Member’s decision to adopt SPS measures based on a valid risk assessment.............................................84

VI. LEGAL AND FACTUAL REBUTTAL......................................................................86

A. Article 2.2 and Article 5.1 must “constantly be read together”...............................86

1. New Zealand is wrong to treat Article 2.2 and Article 5.1 in virtual isolation........86

2. Consistency with Article 5.1 establishes consistency with Article 2.2....................87

B. New Zealand fails to properly interpret Article 5.1.................................................92

1. New Zealand does not acknowledge that a risk assessment must be “appropriate to the circumstances”........................................................................................................92

(a) Risk assessments are “appropriate to the circumstances” if they consider factors which are relevant to the risk at hand...........................................................93

(b) Japan – Apples was a legal, not scientific, process..........................................94

2. New Zealand misinterprets the requirement to conduct an “evaluation” of likelihood under Article 5.1.........................................................................................98

(a) “Probability” and “possibility” are distinct concepts.......................................98

(b) New Zealand’s complaint concerning the use of “negligible” likelihoods is misdirected.............................................................................................................100

(c) New Zealand wrongly assumes that “negligible” events should be treated as ruptures in the pathway..........................................................................................101

(d) New Zealand’s argument on “theoretical uncertainty” is baseless................102

(e) Summary of New Zealand’s flawed arguments on Article 5.1......................102

3. New Zealand cannot make a prima facie case by conducting its own risk assessment..................................................................................................................102

4. New Zealand fails to identify flaws in the methodology used by the IRA Team. .105

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C. Australia’s measures are consistent with Article 5.1, and accordingly, with Article 2.2 122

1. The Panel should be guided by the approach in Australia – Salmon (Article 21.5)122

2. The IRA Team made an objective and credible evaluation of the likelihood of entry, establishment and spread of the pests, as well as the associated potential biological and economic consequences......................................................................123

3. Fire blight...............................................................................................................123

(a) New Zealand makes four key errors...............................................................124

(b) The IRA Team’s analysis of the probability of entry is objective and credible133

(c) The IRA Team’s analysis of the probability of establishment and spread is objective and credible.............................................................................................152

(d) The IRA Team’s assessment of the probability of entry, establishment and spread should not be disturbed...............................................................................164

(e) The IRA Team’s analysis of the potential consequences is objective and credible...................................................................................................................167

(f) Conclusion: New Zealand fails to discredit the IRA Team’s assessment on fire blight.......................................................................................................................176

4. European canker.....................................................................................................177

(a) The IRA Team’s analysis of the probability of entry is objective and credible177

(b) The IRA Team’s analysis of the probability of establishment and spread is objective and credible.............................................................................................198

(c) The IRA Team’s analysis of the potential consequences of European canker is objective and credible.............................................................................................215

(d) Conclusion: New Zealand fails to discredit the IRA Team’s assessment on European canker.....................................................................................................225

5. Apple leafcurling midge.........................................................................................226

(a) The IRA Team’s analysis of the probability of entry is objective and credible226

(b) The IRA Team’s analysis of probability of establishment is objective and credible...................................................................................................................245

(c) The IRA Team’s analysis of probability of spread is objective and credible 250

(d) The IRA Team’s analysis of potential consequences is objective and credible254

(e) Conclusion: New Zealand fails to discredit the IRA Team’s assessment on ALCM....................................................................................................................261

6. The IRA Team made an objective and credible evaluation of the likelihood of entry, establishment and spread according to the SPS measures which might be applied........................................................................................................................262

(a) New Zealand has failed to show that any measures not evaluated are SPS measures.................................................................................................................262

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(b) The IRA Team correctly evaluated the risk reduction measures...................262

(c) New Zealand’s claims are without basis........................................................264

(d) Conclusion: The IRA Team objectively and credibly evaluated the measures which reduce risk....................................................................................................267

7. Australia has demonstrated that the Final IRA Report is consistent with Article 5.1 and the third requirement of Article 2.2.....................................................................268

D. Australia has acted consistently with Article 5.2...................................................269

1. New Zealand inappropriately seeks to alter the legal obligation...........................269

2. The IRA Team took into account available scientific evidence.............................270

3. The IRA Team took into account relevant processes and production methods.....273

4. The IRA Team took into account relevant inspection, sampling and testing methods275

5. The IRA Team took into account the prevalence of specific diseases or pests......276

6. The IRA Team took into account relevant ecological and environmental conditions277

7. Conclusion: New Zealand has failed to demonstrate that Australia has acted inconsistently with Article 5.2...................................................................................278

E. Alternatively, Australia’s measures are nonetheless consistent with Article 2.2...279

1. New Zealand’s approach to Article 2.2 is confused and inconsistent....................279

2. New Zealand has abandoned is claim in relation to Article 2.2 second requirement280

3. A rational and objective relationship between the SPS measure and the scientific evidence is required....................................................................................................280

4. Australia’s measures for fire blight are not maintained without sufficient scientific evidence......................................................................................................................282

5. Australia’s measures for European canker are not maintained without sufficient scientific evidence......................................................................................................287

6. Australia’s measures for apple leafcurling midge are not maintained without sufficient scientific evidence......................................................................................290

7. Australia’s general measures are not maintained without sufficient scientific evidence......................................................................................................................291

8. Conclusion: New Zealand has failed to demonstrate that Australia’s measures are inconsistent with Article 2.2.......................................................................................294

F. Australia’s measures are consistent with Article 5.5.............................................295

1. Australia has had limited time to prepare its defence............................................295

2. New Zealand must satisfy the three distinct elements of Article 5.5.....................295

3. Australia applies a consistent level of protection...................................................296

(a) Australia’s ALOP is consistent with respect to New Zealand apples and Japanese nashi pears...............................................................................................296

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(b) The applied level of protection is a result of the measures applied to the unrestricted risk......................................................................................................297

(c) There is a lower likelihood of entry, establishment and spread for Japanese nashi pears compared to New Zealand apples........................................................298

(d) The potential consequences associated with Japanese nashi pears are much lower compared with New Zealand apples............................................................302

(e) The resulting risk associated with Japanese nashi pears is much lower than the risk associated with New Zealand apples...............................................................303

(f) The measures applied for Japanese nashi pears demonstrate that Australia’s ALOP is consistently applied.................................................................................304

(g) Conclusion: New Zealand has failed to establish a distinction in Australia’s ALOP......................................................................................................................306

4. Australia’s ALOP does not exhibit arbitrary or unjustifiable distinctions in its treatment of different situations.................................................................................306

5. The application of Australia’s ALOP in different situations does not result in discrimination or a disguised restriction on international trade.................................308

(a) New Zealand has failed to distinguish between discrimination and a disguised restriction on trade..................................................................................................309

(b) Discrimination must be arbitrary or unjustifiable between countries where identical or similar conditions prevail....................................................................310

(c) There is no disguised restriction on international trade.................................311

(d) The warning signals and additional factors proposed by New Zealand do not support a finding of discrimination or a disguised restriction on trade..................311

6. Conclusion: New Zealand has failed to demonstrate that Australia applies its ALOP inconsistently with Article 5.5...................................................................................315

G. New Zealand has abandoned its claim under Article 2.3.......................................315

H. Australia’s measures are consistent with Article 5.6.............................................316

1. New Zealand must satisfy the three distinct elements of Article 5.6.....................316

(a) Any alternative measure must meet the importing Member’s ALOP............317

(b) Any alternative measure must be reasonably available, taking into account technical and economic feasibility.........................................................................317

(c) Any alternative measure must be significantly less restrictive to trade.........317

2. The alternative measures identified by New Zealand for fire blight and European canker would not achieve Australia’s ALOP.............................................................318

3. The alternative measure identified by New Zealand for apple leafcurling midge would not achieve Australia’s ALOP or be significantly less trade restrictive..........320

(a) New Zealand’s alternative measure would not achieve Australia’s ALOP...321

(b) New Zealand’s alternative measure would not be significantly less trade-restrictive................................................................................................................323

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4. New Zealand has not identified any alternatives to the general measures.............325

5. Conclusion: New Zealand has failed to demonstrate that Australia’s measures are inconsistent with Article 5.6.......................................................................................327

6. New Zealand has abandoned its claim under the first requirement of Article 2.2. 327

I. New Zealand’s claim that the IRA process is inconsistent with Article 8 and Annex C(1)(a) falls outside the Panel’s terms of reference.......................................................329

1. New Zealand has disregarded the Panel’s preliminary ruling................................329

2. In any event, New Zealand’s panel request does not refer to the “IRA process”. .330

3. New Zealand has not made a case of undue delay in relation to any of the measures at issue........................................................................................................................330

4. New Zealand’s factual allegations are therefore irrelevant....................................330

5. Conclusion: New Zealand has not made a case under Article 8 and Annex C(1)(a)331

VII. CONCLUSION..........................................................................................................331

ANNEX 1 TIMELINE FOR THE NEW ZEALAND APPLES IRA PROCESS.....332

ANNEX 2 AUSTRALIA’S REVIEW OF ANNEX 3 OF NEW ZEALAND'S FIRST WRITTEN SUBMISSION...............................................................................................337

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Tables and Figures

TABLESTABLE 1: EVOLUTION OF IRA TEAM’S PROPOSED MEASURES FOR FIRE BLIGHT........................48TABLE 2: RISK ESTIMATION MATRIX USED BY THE IRA TEAM...................................................59TABLE 3: BIOSECURITY NEW ZEALAND’S DESCRIPTION FOR CRITICAL ATTRIBUTES OF RISK....103TABLE 4: RESULTS OF STUDIES TESTING FOR THE PRESENCE OF E. AMYLOVORA.......................140TABLE 5: AUSTRALIAN APPLE PRODUCTION 2006-07.................................................................170Table 6: Numbers of infested apples predicted to arrive at orchard wholesalers........................241

FIGURESFigure 1: Australia and New Zealand apple prices......................................................................119

ix


List of Exhibits

Exhibit No.

Exhibit Name

AUS-1 Biosecurity Australia (2006) Final Import Risk Analysis for Apples from New Zealand, Part A, Canberra, November 2006, pp25.

AUS-2 Biosecurity Australia (2006) Final Import Risk Analysis for Apples from New Zealand, Part B, Canberra, November 2006, pp376.

AUS-3 Biosecurity Australia (2006) Final Import Risk Analysis for Apples from New Zealand, Part C, Canberra, November 2006, pp197.

AUS-4 Anderton, J. (2008) Third Reading, Biosecurity and Hazardous Substances New Organisms Legislation Amendment Bill, 3 April 2008, pp2.

AUS-5 Dominion Post (2008) “Sour Taste of Apple Imports”, 31 January 2008.Federated Farmers (New Zealand) (2007) “Press Release: Honey Imports Must Stop For Good”, 5 December 2007.

AUS-6 International Plant Protection Convention, International Standard for Phytosanitary Measures No. 11: Pest risk analysis for quarantine pests including analysis of environmental risks and living modified organisms, 2004.

AUS-7 Biosecurity New Zealand, Risk Analysis Procedures, Version 1, Wellington, 12 April 2006, pp1, 8, 16, 17, 29, 43, 46, 50, 79.

AUS-8 Department of Internal Affairs New Zealand (2008) "Notice Number: 4582: Biosecurity (Process for Establishing Independent Review Panel) Notice 2008" New Zealand Gazette - Te Kahiti o Aotearoa, 26 June 2008, p2765.

AUS-9 Consultancy Agreement For Participation on the Risk Analysis Panel for the Importation of Apples From New Zealand to Australia (Commonwealth of Australia and Armour's Apples Pty Ltd), 20 March 2002, pp13, 14, 24.

AUS-10 Biosecurity Australia (2003) Import Risk Analysis Handbook, pp.45.AUS-11 Diagram of parts of an apple flower and apple fruit.AUS-12 Diagram of the life cycles of fire blight, European canker and apple leafcurling

midge.AUS-13 Diagram of importation steps for apple fruit from New Zealand.AUS-14 International Plant Protection Convention, International Standard for

Phytosanitary Measures No. 14: The use of integrated measures in a systems approach for pest risk management, 2002.

AUS-15 Biosecurity New Zealand, The Risk Analysis Framework: Delivering to Expectations, Version 1.3, 23 November 2005, p5.

AUS-16 International Plant Protection Convention (2007) IPPC pest risk analysis course - Participant manual, pp1, 36-37.

AUS-17 Biosecurity Australia (2001) Draft Guidelines for Import Risk Analysis, pp25, 83, 89.

AUS-18 Biosecurity New Zealand, Importing Countries' Phytosanitary Requirements (ICPR) Register, including ICPR: Argentina (p12), Chile (p19), India (p16) and Taiwan (pp28-29).

x


Exhibit No.

Exhibit Name

Website: http://www.biosecurity.govt.nz/commercial-exports/plant-exports/icpr-registerAccessed: 14 July 2008.

AUS-19 Fresh Fruits Company New Zealand (2008) Apple Bytes - New Zealand Apple Newsletter, Issue 3: 7 February 2008.Website: http://www.nzfreshfruits.com/newsletter/issue-03-feb-2008.htmlAccessed: 9 July 2008.

AUS-20 Pipfruit New Zealand, "Pipfruit Industry in Support of NZ Submission to WTO", Media Statement, 21 June 2008.Website: http://www.pipfruitnz.co.nz/Accessed: 7 July 2008.

AUS-21 Innomarc Consulting Project Team (2006) Smarter, Faster, Better – Leading Niche Player: A Development Strategy for the New Zealand Pipfruit Industry, pp21-32.

AUS-22 Coles Myer Ltd (2005) Submission to the Agriculture and Food Policy Reference Group, Department of Agriculture, Fisheries and Forestry, p3.

AUS-23 United States Department of Agriculture Foreign Agricultural Service, "New Zealand Fresh Deciduous Fruit Annual 2006", GAIN Report Number: NZ6001, 22 December 2005, p6.

AUS-24 Rabobank (2006) "New Zealand Apple Industry – crunch time!" Rabobank Global Focus, January 2006, pp8.

AUS-25 Ministry of Agriculture and Forestry New Zealand (2007), Situation and outlook for New Zealand agriculture and forestry (apples and pears).Website: http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/sonzaf/2007/page-11.htmAccessed: 15 July 2008.

AUS-26 Billing, E. and Berrie, A.M. (2002) "A re-examination of fire blight epidemiology in England" Acta Horticulturae 590, pp61-67.

AUS-27 Northwest Horticultural Council, South Africa.Website: http://www.nwhort.org/nhcpublic/southafrica.htmlAccessed: 14 July 2008.

AUS-28 van der Zwet, T., Biggs, A.R., Heflebower, R. and Lightner, G.W. (1994) "Evaluation of the Maryblyt computer model for predictiong blossom blight on apple in West Virginia and Maryland" Plant Disease, 78:225-230.

AUS-29 Hildebrand, E.M. (1937) "Infectivity of the fire-blight organism" Phytopathology 27, pp850-852.

AUS-30 International Plant Protection Convention, International Standard for Phytosanitary Measures No. 31: Methodologies for sampling of consignments, 2008, from Report of the Third Session of the Commission on Phytosanitary Measures, Rome, 7-11 April 2008.

xi


Exhibit No.

Exhibit Name

AUS-31 van der Zwet, T., Thomson, S.V., Covey, R.P. and Bonn, W.G. (1990) "Population of Erwinia amylovora on external and internal apple fruit tissues" Plant Disease 74 (9), pp711-716.

AUS-32 van der Zwet, T. (2002) "Declaration of Dr Tom van der Zwet", 16 July, 2002. (provided as Exhibit US-18 in Japan-Apples), pp4.

AUS-33 McManus, P.S. and Jones, A.L. (1995) "Detection of Erwinia amylovora by nested PCR and PCR-Dot-Blot and Reverse-Blot hybridizations" Phytopathology 85, pp618-623.

AUS-34 Sholberg, P.L., Gaunce, A.P. and Owen, G.R. (1988) “Occurrence of Erwinia amylovora of pome fruit in British Columbia in 1985 and its elimination from the apple surface” Canadian Journal of Plant Pathology 10, pp178-182.

AUS-35 Hale, C.N. and Clark, R.G. (1990) "Detection of Erwinia amylovora from apple tissue by DNA hybridisation" Acta Horticulturae 273, pp51-55.

AUS-36 Ordax, M., Biosca, E.G., Wimalajeewa, S.C., Lopez, M.M., and Marco-Noales, E. (2008) “Survival of Erwinia amylovora in mature apple fruit calyces” (submitted for publication), pp17.

AUS-37 Cabrefiga, J. and Montesinos, E. (2005) "Analysis of Aggressiveness of Erwinia amylovora Using Disease-Dose and Time Relationships" Phytopathology 95, pp1430-1437.

AUS-38 Agrios, G.N. (1997), Plant Pathology (Fourth Edition),Academic Press, pp318-321, 410-413, 426-429.

AUS-39 Thomson, S.V., Wagner, A.C. and Gouk, S.C. (1999) "Rapid epiphytic colonization of apple flowers and the role of insects and rain" Acta Horticulturae 489, pp459-464.

AUS-40 Thomson, S.V. (1986) "The role of the stigma in fire blight infections" Phytopathology 76 (5), pp476- 482.

AUS-41 Schroth, M.N., Thomson, S.V., Hildebrand, D.C. and Moller, W.J. (1974) "Epidemiology and control of fire blight" Annual Review of Phytopathology 12, pp389-412.

AUS-42 Longstroth, M. (2007) "Horticulture: Fire Blight Symptoms" Michigan State University College of Agriculture and Natural Resources, 2002-2007.Website: http://www.canr.msu.edu/vanburen/fbpicts.htmAccessed: 15 July 2008.

AUS-43 Burke, A (2008) “Healing flame”, Mail Tribune, 9 July, 2008. AUS-44 Longstroth, M. (2001) "The 2000 fire blight epidemic in southwest Michigan

apple orchards" The Compact Fruit Tree 34 (1), pp16-19.AUS-45 Vanneste, J.L. (2000) "What is fire blight? Who is Erwinia amylovora? How to

control it?" In: Vanneste, J.L. (Ed) Fire blight: The disease and its causative agent, Erwinia amylovora. CABI Publishing, CAB International, Wallingford, pp1-6.

xii


Exhibit No.

Exhibit Name

AUS-46 Norelli, J. L., Jones, A.L., and Aldwinckle, H.S. (2003) "Fire blight management in the twenty-first century using new technologies that enhance host resistance in apple" Plant Disease 87 (7), pp756-765.

AUS-47 United States Department of Agriculture (1999) 1997 Census of Agriculture, Michigan State and County Data, Volume 1, Geographic Area Series, Part 22, Table 31.

AUS-48 United States Department of Agriculture (2004) 2002 Census of Agriculture, Michigan State and County Data, Volume 1, Chapter 2, Table 31.

AUS-49 Wittwer, G., McKirdy, S. and Wilson, R. (2004) "Dynamic CGE analysis of the economic effects of a fireblight outbreak in Goulburn Valley" Monash University/Plant Health Australia, pp11.

AUS-50 Latorre, B.A., Rioja, M.E., Lillo, C. and Muñoz, M. (2002) "The effect of temperature and wetness duration on infection and a warning system for European canker (Nectria galligena) of apple in Chile" Crop Protection 21 (4), pp285-291.

AUS-51 Ministry of Agriculture and Forestry, New Zealand (2005a) Correspondence sent from MAFNZ to BA, 16th May 2005.

AUS-52 Atkinson, J.D. (1971) "Bacterial diseases of pip fruit" in: Diseases of tree fruits in New Zealand. New Zealand Department of Scientific and Industrial Research, Information Series 81, pp102-106.

AUS-53 Brook, P.J. and Bailey, F.L. (1965) "Control of European canker" The Orchardist of New Zealand 38, pp117-118.

AUS-54 Ivess, R. (1996) Letter to B. Roberts from R. Ivess, 15 July 1996, enclosing Braithwaite, M. (1996) "The occurrence of fruit rots caused by Nectria galligena (European canker) in New Zealand and a comparison of brown rot strains between New Zealand and Australia", Ministry of Agriculture and Forestry New Zealand report, pp9.

AUS-55 Dive T.E.C., Mean Monthly Rainfall (mm).Website: http://homepages.ihug.co.nz/~petemes/mean_monthly_rainfall.htmAccessed: 13 July 2008.

AUS-56 Puia, C., Oroian, I. and Florian, V. (2004) "Effect of Ozone Exposure on Phytopathogenic Microorganisms on Stored Apples" Journal of Agricultural Sciences, Debrecen, 2004/15, pp9-13.

AUS-57 Combrink, J.C. and Ginsburg, L. (1973) "Core rot in Starking apples - a preliminary investigation into the origin and control" The Deciduous Fruit Grower 23, pp16-19.

AUS-58 Agarwala, R.K. and Sharma, V.C. (1968) "Storage rot diseases of apple" Indian Phytopathology 21, pp294-298.

AUS-59 Holmes, R.J. (1993) "Diseases causing post-harvest crop loss of apples and pears: Epidemiology and control" PhD Thesis, LaTrobe University, Australia, pp100-166.

AUS-60 Butler, E.J. (1949) "Apple canker, Nectria galligena Bres" In: Bulter, E.J. and

xiii


Exhibit No.

Exhibit Name

Jones, S.G. (Eds) Plant Pathology, Macmillan, London, pp724-728.AUS-61 Bondoux, P. and Bulit, J. (1959) "Sur la pourriture des pommes due au

Cylindrocarpon mali (All.) Wr. Comptes Rendus de l'Academie d'Agriculture de France 45, pp275-277 (English translation also included).

AUS-62 Coles Group’s returnable plastic crate initiative: Coles Group, National Packaging Covenant Annual Report 2006/7, p27.Website: http://www.packagingcovenant.org.au/documents/File/Coles_Group_AR_06_07_Public.pdfAccessed 9 July 2008.Coles Myer Ltd, Corporate Social Responsibility Report 2005, p16.Website: http://www.colesgroup.com.au/library/newsmedia/20051019_corporate_social_responsibility_report.pdfAccessed 9 July 2008.

AUS-63 United States Department of Agriculture Foreign Agricultural Service, "New Zealand Fresh Deciduous Fruit Report 2007", GAIN Report Number: NZ7033, 18 December 2007, pp7-8.

AUS-64 Photograph, Photograph of trash coming off a dump tank in a packing house in Hawkes Bay, New Zealand, 5 May 1999.

AUS-65 Lolas, M. and Latorre, B.A. (1997) "Effecto Comparativo de Fungicidas en el control del Cancro Europeo Del Manzano Causado Por Nectria galligena" Fitopatologia 32(2), pp131-135 (English abstract also included).

AUS-66 Photographs of Packing Houses near Melbourne, Australia, 2008.AUS-67 Dubin, H.J. and English, H. (1974) "Factors affecting apple leaf scar infection by

Nectria galligena conidia" Phytopathology 64, pp1201-1203.AUS-68 Brayford, D., Honda, B.M., Mantiri, F.R. and Samuels G.J. (2004) "Neonectria

and Cylindrocarpon: the Nectria mammoidea group and species lacking microconidia" Mycologia 96(3), pp572–597.

AUS-69 Hirooka Y., Kobayashi T., Natsuaki K.T. (2005) "Neonectria castaneicola and Neo. rugulosa in Japan" Mycologia 97(5), 2005, pp1058–1066.

AUS-70 Booth, C. (1959) Studies of Pyrenomycetes: IV Nectria (Part I), 30 December 1959, CAB, pp48-51.

AUS-71 Lortie, M. (1964) "Pathogenisis in cankers caused by Nectria galligena" Phytopathology 54, pp261-263.

AUS-72 Lacoste, L. and Dehorter, B. (1973) "Mycologie Determinisme de la Reproduction Sexuee de Nectra Galligena Bres. in Vitro" Annales des Sciences Naturelles Botanique, Paris, 12 Serie, 1973, Tome 14, pp87-91.

AUS-73 El-Gholl, N.E., Barnard, E.L., and Schroeder, R.A. (1986) “Homothallism in Nectria galligena” Canadian Journal of Botony 64, pp902-903.

xiv


Exhibit No.

Exhibit Name

AUS-74 Kruger, J. (1974) "Zur Genetik von Nectria galligena Bres" Phytopathol, Z 79, pp320-342.

AUS-75 Plante, F., Hamelin, R.C. and Bernier, L. (2002) "A comparative study of genetic diversity of populations of Nectria galligena and N. coccinea var. faginata in North America" Mycol. Res. 106, pp183-193.

AUS-76 Swinburne, T.R. (1971b) "The seasonal release of spores of Nectria galligena from apple cankers in Northern Ireland" Annals of Applied Biology 69, pp97-104.

AUS-77 McCracken, A.R., Berrie, A., Barbara, D.J., Locke, T., Cooke, L.R., Phelps, K., Swinburne, T.R., Brown, A.E., Ellerker, B. and Langrell, S.R.H. (2003b) "Relative significance of nursery infections and orchard inoculum in the development and spread of apple canker (Nectria galligena) in young orchards" Plant Pathology 52 (5), pp553-566.

AUS-78 Cooke, L.R. (2003) "Nectria galligena (European canker): Questions for Drs. A. Berrie & L. Cooke: Responses from Drs. L. Cooke & A. McCracken" E-mail communication with Biosecurity Australia, May 2003, pp3.

AUS-79 Braun, P.G. (1997) "Distribution and severity of anthracnose canker and European canker of apple in Kings County, Nova Scotia" Canadian Journal of Plant Pathology 19, pp78-82.

AUS-80 Manaaki Whenua Landcare Research, NZFUNGI - New Zealand Fungi (and Bacteria): Collection details for PDD 31850, 32629, 32509, 32502, 32495, 30639 and 32679.All available from: http://nzfungi.landcareresearch.co.nz/html/data_collections.asp?ID=&NAMEPKey=12911

AUS-81 Lolas, M. and Latorre, B.A. (1996) "Importancia y control del cancro europeo del manzano" Rev.Fruiticola (Chile) 17, pp23-27 (English translation also included).

AUS-82 Hawkes Bay Emergency Management Group, Pest or Diseases affecting Agriculture, Forestry or Horticulture, 2006.Website: http://www.hbemergency.govt.nz/Search/SearchResult_IDL=6_IDT=496_ID=1837_.htmlAccessed: 13 July 2008.

AUS-83 HortWatch (2002) Post-harvest Clean Up Sprays.Website: http://www.hortwatch.com/library/post-harvest-clean.htmlAccessed 12 July 2008.

AUS-84 Commonwealth Agricultural Bureaux International (2003) Crop Protection Compendium - Global Module, CAB International.Website: http://www.cabi.org/compendia.asp

AUS-85 Cooke, L.R. (1999) "The influence of fungicide sprays on infection of apple cv. Bramley's seedling by Nectria galligena" European Journal of Plant Pathology

xv


Exhibit No.

Exhibit Name

105, pp783-790.AUS-86 City of Melbourne (2005) "Tree management/replacement program, impact and

implications" Planning and Environment Committee Report, 31 May 2005.AUS-87 National Trust of Australia (2008) Royal Exhibition Building.

Website: http://www.nattrust.com.au/trust_register/search_the_register/royal_exhibition_buildingAccessed: 9 July 2008.

AUS-88 Stewart, T.M. and Mumford, J. (1995) "Pest and disease management in Hawke's Bay, New Zealand apple orchards: results of an "advice-givers" survey" New Zealand Journal of Crop and Horticultural Science, 1995, Vol. 23, pp257-265.

AUS-89 Tomkins, A.R. (1998) "Apple leaf-curling midge life cycle." The Horticulture and Food Research Institute of New Zealand Ltd, HortFACT, pp3. Website: http://www.hortnet.co.nz/publications/hortfacts/hf401055.htm. Accessed 2 November 2005.

AUS-90 Pipfruit New Zealand (2005) Email correspondence sent from Pipfruit New Zealand to Biosecurity Australia, 3 August 2005.

AUS-91 Australian Bureau of Statistics, “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, p1, 3-6.

AUS-92 Tomkins, A.R., Bradley, S.J., Walker, J.T.S., Gibbs, A.R., Marshall, R., Shaw, P.W., Thomson, C., Burnip, G., Wearing, C.H. and Wilson, D.J. (2006) "Spring emergence of apple leafcurling midge in New Zealand" Unpublished paper provided by Ministry of Agriculture and Forestry New Zealand, 2pp.

AUS-93 Australian Quarantine and Inspection Service (2008) Australia-New Zealand Bilateral Quarantine Arrangement (BQA) Systems Operation Manual (SOM) 7, Canberra, February 2008, pp155.

AUS-94 Interstate Plant Health Regulation Working Group (1996) The Standing Committee on Agriculture and Resource Management Code of Practice for Management of Queensland Fruit Fly, September/October, sections 3-4.

AUS-95 HortResearch (1999b) “Apple leafcurling midge” in: BugKey; Insects and mites of pipfruit and stonefruit. Website: http://www.hortnet.co.nz/key/pipfruit.htm Accessed 31 May 2004.

AUS-96 Cross, J. (2005) Personal communication from Jerry Cross of East Malling Research, Kent, UK on apple leaf curling midge, 30 March 2005, pp2.

AUS-97 Courtney, P. (2005) "Scientist battles lettuce aphid" Landline, Australian Broadcasting Corporation, 30 October 2005.Website: http://www.abc.net.au/landline/content/2005/s1493620.htmAccessed: 13 July 2008. ABC Rural News (2004) "Current-lettuce aphid origin determined", Australian Broadcasting Corporation, 18 August 2004.

xvi


Exhibit No.

Exhibit Name

Website: http://www.abc.net.au/rural/news/stories/s1179390.htm Accessed: 12 July 2008.

AUS-98 Aukema, B., Bruers, J.M. & Viskens, G. (2005) “A New Zealand endemic Nysius established in the Netherlands and Belgium (Heteroptera: Lygaeidae)" Belgian Journal of Entomology 7, pp37-43.

AUS-99 Australian Quarantine and Inspection Service (2008) Data extracted from the AQIS Pest and Disease Interception Database and provided by the Senior Entomologist, AQIS Operational Science Program.

AUS-100 European and Mediterranean Plant Protection Organization (2006), “First report of Nysius huttoni in the Netherlands and Belgium: addition to the EPPO Alert List” EPPO RS 2006/030, February 2006, pp1-23.Website: http://archives.eppo.org/EPPOReporting/2006/Rse-0602.pdfAccessed 9 July 2008.

AUS-101 Smith, J.T. and Chapman, R.B. (1995) "A survey of apple leafcurling midge (Dasyneura mali) in the Nelson District" Proceedings of the 48th New Zealand Plant Protection Conference,pp117-120.

AUS-102 United States Department of Agriculture (2008) Fresh Fruits and Vegetable Import Manual, June 2008, pp2-36, 2-37, 2-49, 3-216, 3-217.

AUS-103 Harris, M.O., Foster, S.P., Agee, K. and Dhana, S. (1996) "Sex pheromone communication in the apple leafcurling midge (Dasineura mali)" Proceedings of the 49th New Zealand Plant Protection Conference, pp52-58.

AUS-104 Anonymous (2002) Fruit and vegetables. Methods and procedures, pp241, 292. AUS-105 Murdoch, H. (2002) "Apple disease spreads", The Nelson Mail, 27 August 2002,

p1.AUS-106 Wilton, J. (2002b) "Recognising European canker symptoms" Fencepost.com.

Website: http://www.fencepost.com/horticulture/expert/detail.jhtml?ElementID=/content/news/reposito ry/20020909_163544_Recognising_European_Canker_Symptoms.xml. Accessed: 7 April 2003.

AUS-107 Lovelidge, B. (2003) "Closing in on canker" Grower 139 (3), pp22-23.AUS-108 Biosecurity Australia (2003) Review of the Australian Requirement for Petal

Testing and Flower Cluster Examination at Blossoming for Pome Fruit from Japan, The Republic of Korea and The People’s Republic of China, pp76.

AUS-109 Department of Primary Industries and Energy (1989) Quarantine Circular Memorandum (Plants) 1989/34: Importation of Nashi Pears from Japan, 11 May 1989, pp4.

AUS-110 Ministry of Agriculture, Forestry and Fisheries of Japan (2003) Report on Free Status of the Bacterial Shoot Blight of Pear in Japan, 28 March 2003.

AUS-111 Department of Primary Industries and Energy (1989) Quarantine Circular

xvii


Exhibit No.

Exhibit Name

memorandum (Plants) 1989/63: Fourth Australia – Japan Plant Quarantine Technical Discussions: 25-26 July 1989, 15 September 1989, pp4.

AUS-112 Australian Quarantine and Inspection Service (1998) Final Import Risk Analysis of the New Zealand Request for the Access of Apples (Malus pumila Miller var. domestica Schneider) into Australia, p27.

AUS-113 Australian Quarantine and Inspection Service, Summary of Import Statistics for nashi pears from Japan, 1996-2003.

AUS-114 Maxson-Stein K., McGhee G.C., Smith J.J., Jones A.L. and Sundin G.W. (2003) "Genetic Analysis of a Pathogenic Erwinia sp. Isolated from Pear in Japan" Phytopathology 93, pp1393-1399.

AUS-115 Jones, A.L. and Aldwinckle, H.S. (1990) "Compendium of Apple and Pear Diseases" The American Phytopathological Society, St. Paul, Minnesota, p32.

AUS-116 Commonwealth Agricultural Bureaux International (CABI), Crop Protection Compendium: Monilinia fructicola; Monilinia laxa, 2007 Edition.

xviii


Cases cited in this submission

Short Title Full Case Title and Citation

Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515

Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327

Australia – Salmon Panel Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/R and Corr.1, adopted 6 November 1998, as modified by Appellate Body Report, WT/DS18/AB/R, DSR 1998:VIII, 3407

Australia – Salmon (Article 21.5 – Canada)

Panel Report, Australia – Measures Affecting Importation of Salmon – Recourse to Article 21.5 of the DSU by Canada, WT/DS18/RW, adopted 20 March 2000, DSR 2000:IV, 2031

Canada – Dairy (Article 21.5 – New Zealand and US II)

Appellate Body Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products – Second Recourse to Article 21.5 of the DSU by New Zealand and the United States, WT/DS103/AB/RW2, WT/DS113/AB/RW2, adopted 17 January 2003, DSR 2003:I, 213

Canada – Continued Suspension

Panel Report, Canada – Continued Suspension of Obligations in the EC – Hormones Dispute WT/DS321/R, circulated 31 March 2008

EC – Biotech Products Panel Report, European Communities – Measures Affecting the Approval and Marketing of Biotech Products, WT/DS291/R, WT/DS292/R, WT/DS293/R, Corr.1 and Add.1, 2, 3, 4, 5, 6, 7, 8 and 9, adopted 21 November 2006

EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, 3243

EC – Asbestos Panel Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/R and Add.1, adopted 5 April 2001, as modified by Appellate Body Report, WT/DS135/AB/R, DSR 2001:VIII, 3305

EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135

EC – Hormones (Canada) Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), Complaint by Canada, WT/DS48/R/CAN, adopted 13 February 1998, as modified by Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R, DSR 1998:II, 235

EC – Hormones (US) Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), Complaint by the United States, WT/DS26/R/USA, adopted 13 February 1998, as modified by Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R, DSR 1998:III, 699

Japan – Agricultural Products II

Appellate Body Report, Japan – Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277

Japan – Agricultural Products II

Panel Report, Japan – Measures Affecting Agricultural Products, WT/DS76/R, adopted 19 March 1999, as modified by Appellate Body Report, WT/DS76/AB/R, DSR 1999:I, 315

Japan – Apples Appellate Body Report, Japan - Measures Affecting the Importation of Apples, WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, 4391

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Short Title Full Case Title and Citation

Japan – Apples Panel Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/R, adopted 10 December 2003, upheld by Appellate Body Report, WT/DS245/AB/R, DSR 2003:IX, 4481

Japan – Apples (Article 21.5 – US)

Panel Report, Japan – Measures Affecting the Importation of Apples – Recourse to Article 21.5 of the DSU by the United States, WT/DS245/RW, adopted 20 July 2005, DSR 2005:XVI, 7911

Japan – DRAMs (Korea) Panel Report, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea, WT/DS336/R, adopted 17 December 2007, as modified by Appellate Body Report, WT/DS336/AB/R

US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted 5 November 2001, DSR 2001:XII, 6027

US – Countervailing Duty Investigation on DRAMS

Appellate Body Report, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, 8131

US – Export Restraints Panel Report, United States – Measures Treating Exports Restraints as Subsidies, WT/DS194/R and Corr.2, adopted 23 August 2001, DSR 2001:XI, 5767

US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R and Corr.1, adopted 20 April 2005, DSR 2005:XII, 5663

US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697

US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 4051

US – Softwood Lumber VI (Article 21.5 – Canada)

Appellate Body Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW and Corr.1, adopted 9 May 2006

US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R and Corr.1, adopted 23 May 1997, DSR 1997:I, 323

US – Continued Suspension Panel Report, United States – Continued Suspension of Obligations in the EC – Hormones Dispute WT/DS320R, circulated 31 March 2008

xx


Glossary of Abbreviations and Acronyms

ABARE Australian Bureau of Agricultural and Resource Economics

ABS Australian Bureau of Statistics

ALCM apple leafcurling midge

ALOP appropriate level of sanitary or phytosanitary protection

APAL Apple & Pear Australia Limited

AQIS Australian Quarantine and Inspection Service

BA Biosecurity Australia, an operating group within the Australian Government Department of Agriculture, Fisheries and Forestry

BRS Bureau of Rural Sciences

BNZ Biosecurity New Zealand, Ministry of Agriculture and Forestry

CSIRO Commonwealth Scientific and Industrial Research Organisation

DAFF Department of Agriculture, Fisheries and Forestry (formerly Agriculture, Fisheries and Forestry - Australia)

DSB Dispute Settlement Body

DSU Understanding on Rules and Procedures Governing the Settlement of Disputes

ESG Eminent Scientists Group

FAO Food and Agriculture Organization of the United Nations

Final IRA Report Final Import Risk Analysis Report for Apples from New Zealand, November 2006

HortResearch Horticulture and Food Research Institute of New Zealand Ltd

IPPC International Plant Protection Convention (as amended)

IRA import risk analysis

ISPM International Standards for Phytosanitary Measures

MAFNZ Ministry of Agriculture and Forestry, New Zealand; New Zealand’s National Plant Protection Organization

OIE Office International des Epizooties

PEES probability of entry, establishment and spread

ppm parts per million

PRA pest risk analysis; the process of evaluating biological or other scientific evidence to determine whether a pest should be regulated and the strength of any phytosanitary measures to be taken against it

SOP standard operating procedures

xxi


SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures

USDA United States Department of Agriculture

APHIS Animal and Plant Health Inspection Service, United States Department of Agriculture

VBNC viable but non-culturable

WTO World Trade Organization

WTO Agreement Marrakesh Agreement Establishing the World Trade Organization

xxii


Glossary of Scientific Terms

The terms provided in this glossary are representative of their usage in this submission only. Some terms – particularly those of a biological nature – may have alternative uses outside of the context of this document.

Amenity plant Any plant located in a public place, or intended for public usage

Area An officially defined country, part of a country or all or parts of several countries (ISPM 5)

Arthropod The largest phylum of animals, including the insects, arachnids and crustaceans

Ascospore A sexual spore produced in an ascus

Biological control Also ‘biocontrol’ – a method of controlling pests and diseases in agricultural production that relies on the use of natural predators rather than chemical agents

Block An identifiable sub-area of an orchard

Calyx A collective term referring to all of the sepals in a flower

Canker General term for a large number of different plant diseases characterised by the appearance of small areas of dead tissue

Consignment The apples covered by one phytosanitary certificate shipped via one port in New Zealand to a designated port in Australia

Contaminant An organism responsible for transferring a chemical or other substance from one site to another

Control (of a pest) Suppression, containment or eradication of a pest population (ISPM 5)

Cultivar A cultivated plant selection that can be propagated reliably in a prescribed manner

Deciduous plant Plants, principally trees and shrubs, that lose their foliage for part of the year

Diapause Period of suspended development/growth occurring in some insects, in which metabolism is decreased

Endangered area An area where ecological factors favour the establishment of a pest whose presence in the area will result in economically important loss (ISPM 5)

Endemic Belonging to, native to, or prevalent in a particular geography, area or environment

Endophytic (of a pest) Describes the endophytic (internal) colonisation (infection) of the core of an apple or the plant itself, and is generally associated with the development of disease symptoms

Entry (of a pest) Movement of a pest into an area where it is not yet present, or present but not widely distributed and being officially controlled (ISPM 5)

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Epidemiology The study of factors influencing the initiation, development and spread of infectious disease; the study of disease in populations of plants

Epiphytic (of a pest) Describes the epiphytic colonisation (infestation) of the surface, calyx and stem-end of apple fruit, although the fruit and plant is unlikely to display disease symptoms

Establishment (of a pest)

The perpetuation, for the foreseeable future, of a pest within an area after entry (ISPM 5)

Establishment potential

Likelihood of the establishment of a pest

Exposure group A category of susceptible host plants for which the likelihood of exposure, or the impact of a pest, are likely to be meaningfully different. Exposure groups in this analysis include: commercial fruit crops; nursery plants; household and garden plants, including weed species; and, wild (native and introduced) and amenity plants including susceptible plants growing on farmland

Fruitlet A very small fruit soon after formation

Fumigation A method of pest control that completely fills an area with gaseous pesticides to suffocate or poison the pests within

Herbivore An organism that feeds primarily upon plants.

Host An organism that harbours a parasite, mutual partner, or commensal partner, typically providing nourishment and shelter.

Host range The collection of hosts that an organism can utilise as a partner or parasite.

Hypanthium A bowl-shaped part of a flower consisting of the bottoms of the sepals, petals and stamens stuck together. It is present in all members of the Rosaceae (rose) family

Infection The internal ‘endophytic’ colonisation of a plant, or plant organ, and is generally associated with the development of disease symptoms as the integrity of cells and/or biological processes are disrupted

Infestation The ‘epiphytic’ colonisation of the surface of a plant, or plant organ, and is characterised by the absence of disease symptoms

Inoculum Pathogen or its parts, capable of causing infection when transferred to a favourable location

Introduction (of a pest) The entry of a pest, resulting in its establishment (ISPM 5)

Larva A juvenile form of animal with indirect development, undergoing metamorphosis (for example, insects or amphibians)

Lenticel A small oval/rounded spot on the stem or branch of a plant, from which the underlying tissues may protrude or roots may issue, either in the air, or more commonly when the stem or branch is covering with water or earth.

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Lot All apple fruit packed for export to Australia each day by a registered packing house

Mature fruit Commercial maturity is the start of the ripening process. The ripening process will then continue and provide a product that is consumer–acceptable. Maturity assessments include colour, starch index, soluble solids content, flesh firmness, acidity, and ethylene production rate

Midge A small two-winged insect belonging to the Order Diptera

Mite An arthropod belonging to the Order Acarina (mites and ticks)

Mortality The total number of organisms killed by a particular disease

Official Established, authorised or performed by a National Plant Protection Organization (ISPM 5)

OrchardA contiguous area of apple trees operated as a single entity

Organophosphate A soluble fertiliser material consisting of organic phosphate esters (glucose, glycol, etc.)

Parasitoid An insect parasitic only in its immature stages, killing its host in the process of its development, and free living as an adult (ISPM 5)

Pathogen A biological agent that can cause disease to its host

Pathway Any means that allows the entry or spread of a pest (ISPM 5)

Pedicel The stalk of a flower

Peduncle A flower stalk, or stem

Perithecium (pl: perithecia) A flask or jug-shaped fungal fruiting body that is slightly open at one end

Pest The collective term used for insect pests, plant diseases, viruses, bacteria and fungi that could harm plants. The formal definition used is the one provided in the International Plant Protection Convention (IPPC): any species, strain, or biotype of plant, animal or pathogenic agent injurious to plants of plant products

Pest Free Area An area in which a specific pest does not occur as demonstrated by scientific evidence and in which, where appropriate, this condition is being officially maintained (ISPM 5)

Pheromone Any chemical produced by a living organism that transmits a message to other members of the same species

Phytosanitary measure Any legislation, regulation or official procedure having the purpose to prevent the introduction and/or spread of quarantine pests, or to limit the economic impact of regulated non-quarantine pests (ISPM 5)

Pome fruit A type of fruit produced by flowering plants in the subfamily Maloideae of the Family Rosaceae

xxv


Pupa (Pl: Pupae) An inactive life stage that only occurs in insects that undergo complete metamorphosis, for example butterflies and moths (Lepidoptera), beetles (Coleoptera) and bees, wasps and ants (Hymenoptera)

Quarantine pest A pest of potential economic importance to the area endangered thereby and not yet present there, or present but not widely distributed and being officially controlled (ISPM 5)

Quiescent Inactive, latent, or dormant, referring to a disease or pathological process

Rootstock A stump with an established healthy root system, onto which a tree part (scion) with fruiting properties desired by the propagator, during the process of plant propagation by mechanical grafting

Spread (of a pest) Expansion of the geographical distribution of a pest within an area (ISPM 5)

Stakeholders Government agencies, individuals, community or industry groups or organisations, whether in Australia or overseas, including the proponent/applicant for a specific proposal, having an interest in the subject matter of an IRA

Stigma A part of the female organ of a flower, essentially the terminal part of a pistil

Symptomless Without any visible indication of disease by reaction of the host, e.g. canker, leaf spot, wilt

TrashSoil, splinters, twigs, leaves and other plant material, other than fruit stalks.

Utility points The five key points at which apples are distributed or utilised and at which apple waste will be generated: orchard wholesalers; urban wholesalers; retailers; food services; and, consumers

Vector An organism that does not cause disease itself, but which causes infection by conveying pathogens from one host to another

Viable Alive, able to germinate or capable of growth

xxvi


I. EXECUTIVE SUMMARY

1. Australia opened its market to New Zealand apples in 2007. This followed an extensive

import risk analysis which determined that a number of measures were required to mitigate the

real risk that the causal agents of fire blight and European canker, and apple leafcurling midge

(ALCM), could enter Australia with serious and irreversible consequences.

2. In taking this dispute, New Zealand bears the burden of proof to establish that each of the

challenged measures is inconsistent with each of the SPS Agreement obligations cited in the

panel request. New Zealand’s submission makes flawed legal arguments and bald, and

sometimes misleading, assertions but without hard evidence to back them up. These failings

mean that New Zealand has not discharged its burden of proof and Australia is therefore entitled

to the presumption that its measures are WTO-consistent. Australia has nonetheless positively

demonstrated in this submission through solid scientific evidence and legal argument that its

measures are fully consistent with the SPS Agreement. While New Zealand is entitled to rebut

Australia’s arguments, it is not entitled to introduce new evidence at a later stage in these

proceedings just because the evidence it currently relies upon is fundamentally lacking.

3. Australia’s risk management measures are consistent with Articles 5.1 and, it follows,

Article 2.2 of the SPS Agreement. They are based on a comprehensive risk assessment (the Final

IRA Report) which expresses the conclusions of qualified and respected scientists and technical

experts (the IRA Team) which are appropriate to Australia’s circumstances. The IRA Team

concluded on the basis of available scientific evidence that in order to meet Australia’s

appropriate level of protection (ALOP), certain measures were necessary to protect plant life and

health from debilitating pests and diseases not present in Australia but endemic to New Zealand.

New Zealand wrongly claims there are flaws in the methodology used by the IRA Team.

Australia will show that the IRA Team adopted a thorough methodology in assessing risk which

is scrupulously detailed in the Final IRA Report. Its approach was commensurate with best

practice risk assessments worldwide, including the International Plant Protection Convention

(IPPC) standards.

4. New Zealand’s characterisation of the scientific evidence considered by the IRA Team is

often selective and based on erroneous calculations or assumptions. Furthermore, New Zealand

27


has misunderstood the concept of a science-based risk assessment required by Article 5.1. It

argues that instead of conducting a proper scientific risk assessment appropriate to its

circumstances, Australia should have based its measures on the outcome of the Japan – Apples

dispute. The findings of the Japan – Apples dispute are not a risk assessment. Australia does

not accept that the panel in that dispute envisaged that its legal conclusions should be substituted

for a proper risk assessment applying to an entirely different set of circumstances between two

countries with entirely different risk profiles. This is far too high a responsibility to put on

panels and it does not reflect the delicate balance of rights and obligations in the SPS Agreement.

5. New Zealand relies on the superficially attractive notion of scientific “certainty” around

the transfer and spread of the pests and diseases at issue. This conveniently ignores the range of

credible scientific views on these issues. The IRA Team, in exercising its scientific judgment,

was entitled to rely on the full spectrum of scientific evidence, provided this was from qualified

and respected sources. Neither New Zealand nor the Panel is entitled to substitute its preferred

view of the scientific evidence for that of the IRA Team. In the real world, Members regularly

take measures to mitigate the potentially significant consequences of low probability events.

This is good risk management practice and does not mean that Australia has over-estimated or

exaggerated the risk.

6. Turning to the individual measures, Australia is confident that the Panel will be able to

verify the rational and objective relationship between the scientific evidence and Australia’s

measures on the basis of the comprehensive assessment of the available evidence in the Final

IRA Report, much of which has been misunderstood by New Zealand.

7. In respect of fire blight, the Final IRA Report outlines in precise detail the analysis of risk

to arrive at the conclusion that there is an identifiable risk that the causal agent of fire blight,

Erwinia amylovora, could find a pathway into Australia on mature apples and result in serious

consequences. New Zealand relies on irrelevant trade figures from other parts of the world,

erroneous interpretations of the methodology used by the IRA Team and untested assertions

about the likely volume of trade. New Zealand has also wrongly assumed that the consequences

of fire blight infestation in Australia would be the same as they are in New Zealand. Australia

has systematically rebutted these tenuous arguments, thereby demonstrating that New Zealand

has failed to discharge its burden of proof.

28


8. In respect of European canker, the Final IRA Report outlines in similarly precise detail

the IRA Team’s analysis to arrive at the conclusion that there is an identifiable risk that mature

fruit could provide a pathway for the entry, establishment and spread of the disease, leading to

serious consequences. New Zealand seeks to overturn the IRA Team’s meticulous approach by,

for example, relying on a simplistic climatic analysis which dismisses the fact that a number of

Australia’s apple production areas are in the climatic range New Zealand argues is most

conducive to European canker. New Zealand ignores the biology of the pathogen and its

potential hosts in Australia. Australia has systematically rebutted each of these tenuous

arguments and demonstrated that New Zealand has failed to discharge its burden of proof.

9. The IRA Team adhered to its methodical approach when analysing the risk of ALCM’s

entry, establishment and spread, with variations in its methodology to reflect the pest’s mobility.

New Zealand’s arguments display a misunderstanding of the IRA Team’s methodology and the

evidence it relied upon. New Zealand fails to appreciate that ALCM’s mobility required the IRA

Team to consider a much more complex pathway. Australia’s systematic rebuttal of New

Zealand’s arguments demonstrates that New Zealand has failed to discharge its burden of proof.

10. Australia rejects New Zealand’s assertion that the IRA Team failed to evaluate other

measures that might be applied. It is clear from the Final IRA Report that each of the principal

risk reduction measures and alternatives were evaluated for each of the pests at issue.

11. Accordingly, Australia’s measures are consistent with Article 5.1 of the SPS Agreement

and, it follows, they are consistent with Article 2.2.

12. The IRA Team appropriately took into account all of the factors listed in Article 5.2 of

the SPS Agreement. New Zealand’s attempt to convert this to an obligation to give “genuine

consideration” to the factors is not grounded in the text of the provision. Accordingly, Australia

has acted consistently with its obligations under Article 5.2 of the SPS Agreement.

13. New Zealand has failed to establish that Australia applies different levels of protection in

different situations under Article 5.5. Its simplistic comparison of Australia’s measures for New

Zealand apples and Japanese nashi pears ignores the fact that the risks presented by these two

products are markedly different. Australia applied the same ALOP to each product. New

Zealand has not shown that Australia’s measures are inconsistent with Article 5.5 of the SPS

29


Agreement. Nor has it provided any substantive arguments to support its claims under Article

2.3.

14. Australia rejects New Zealand’s claim that its measures are more trade restrictive than

required to achieve its ALOP, under Article 5.6. Australia is not obliged to implement

alternative measures that do not meet its ALOP, which are not reasonably available or which are

not significantly less restrictive to trade. New Zealand has failed to show that any alternative

measures would achieve Australia’s ALOP. It has not discharged its burden of proof under

Article 5.6.

15. New Zealand’s claims under Article 8 and Annex C(1)(a) depend on the IRA process

being a measure at issue in this dispute. The Panel has already ruled that the dispute is confined

to the 17 measures listed in New Zealand’s panel request, which do not include the IRA process.

New Zealand’s assertion that Australia is in breach of Article 8 and Annex C(1)(a) is therefore

not within the scope of this dispute.

16. As New Zealand has failed to meet its burden of proof in respect of any of its claims,

Australia asks the Panel to find that it has not established a prima facie case that any of

Australia’s measures are inconsistent with the SPS Agreement. Alternatively, if the Panel

considers New Zealand has established a prima facie case in respect of one or more measures,

then Australia requests the Panel find that it has rebutted that case on the basis of its evidence

and legal argument.

30


II. INTRODUCTION

17. Australia has exercised its right to protect its favourable plant life and health from risks

arising from the introduction of certain debilitating pests and diseases that are endemic to New

Zealand, but not present in Australia. New Zealand can export its apples to Australia, provided it

observes certain risk management measures. New Zealand has challenged these trade

liberalising, science-based measures by seeking to present an alternative picture of the science.

However, it completely fails to address the legal framework in which the dispute is to be

resolved and as a result fails to demonstrate any breach by Australia of its SPS Agreement

obligations.

(a) New Zealand has not discharged its burden of proof

18. New Zealand needs to demonstrate through sufficient evidence and legal argument that

each of the challenged measures fails to meet each of the SPS Agreement provisions cited in the

panel request. It cannot do this by merely presenting an alternative scientific case. Australia

will demonstrate in this submission that New Zealand has not discharged its burden of proof to

establish that Australia’s measures are inconsistent with the SPS Agreement. This is an

indispensable hurdle that must be met by New Zealand in relation to each of the claims made and

it cannot submit new evidence later in the proceedings to cure any defects.

(b) The SPS Agreement is a delicate balance of rights and obligations

19. The Appellate Body has clearly acknowledged “the delicate and carefully negotiated

balance in the SPS Agreement between the shared, but sometimes competing, interests of

promoting international trade and of protecting the life and health of [humans, animals or

plants].”1 Australia fully endorses this statement. In fact, New Zealand has also previously

expressed “a strong interest in ensuring that the delicate balance of rights and obligations set out

in the WTO Agreements, especially the SPS Agreement, is maintained.”2 However, New

Zealand ignores this principle in its first written submission. Instead it challenges the scientific

method and evidence used by the IRA Team apparently oblivious to the need to maintain the

1 Appellate Body Report, EC – Hormones, para. 177.2 Third party written submission of New Zealand in Panel Report, EC – Biotech Products, para. 5.55; and

third party oral statement of New Zealand in Panel Report, EC – Biotech Products, para. 5.73.

31


careful balance it has previously recognised. Australia requests the Panel to have close regard to

this careful balance as it considers this dispute.

(c) Australia’s measures are based on a valid risk assessment

20. It is a fundamental tenet of the SPS Agreement that WTO Members retain the sovereign

right to determine their own ALOP and, where necessary, to impose risk management measures

to achieve that ALOP. Australia’s ALOP reflects community expectations that quarantine risks

will be managed to achieve a very low level of risk, but not zero. This ALOP has been carefully

calibrated to enable Australia to maintain its freedom from invasive and at times devastating

pests and diseases that have proliferated elsewhere.

21. In order to ensure its ALOP was met, Australia conducted a risk assessment3 for New

Zealand apples in accordance with its obligations under the SPS Agreement. The Final IRA

Report expresses the conclusions of qualified and respected scientists and technical experts in the

exercise of their expert judgment. The IRA Team conducted the risk assessment according to

internationally recognised scientific method that is elaborated at every step in its reasoning in the

600-plus page report. It is a comprehensive and rigorous report which New Zealand

misunderstands.

22. Following a detailed analysis of the available scientific evidence, the IRA Team

reasonably concluded that a number of risk mitigation measures were required to ensure that

certain serious and debilitating pests endemic in New Zealand would not be transmitted to

Australia. Australia demonstrates in this submission that the measures required by the Final IRA

Report to minimise the risks of entry, establishment and spread of fire blight, European canker

and apple leafcurling midge (ALCM) are consistent with its SPS Agreement obligations.

(d) Australia’s risk assessment is based on objective and credible evaluation of

the evidence

23. The fact that New Zealand can present an alternative view of the scientific evidence does

not establish a breach of the SPS Agreement. In making quarantine regulatory decisions to

achieve its ALOP, Australia is entitled to rely on scientific opinion from qualified and respected

sources, including those which display a degree of scientific prudence. The Appellate Body has 3 Exhibit AUS-2: Biosecurity Australia (2006), Final Import Risk Analysis for Apples from New Zealand,

Part B, Canberra, November 2006.

32


recognised this, stating that “responsible and representative governments may act in good faith

on the basis of what, at a given time, may be a divergent opinion coming from qualified and

respected sources”.4 Australia submits that this is especially so when, as in this matter, the

consequences of identified risks may be serious and irreversible.

24. If the Panel determines that the Final IRA Report is based on one of the range of credible

scientific accounts, then Australia submits that the Panel has no mandate to overturn the

judgments of the IRA Team reflected in the Final IRA Report. The SPS Agreement does not

enable the Panel to put itself in the shoes of the IRA Team and decide which of the various

credible scientific accounts represents the “correct” view of the science. There will be a range of

credible, but competing, scientific views on many issues. Australia is entitled to rely on the

credible scientific account that is most appropriate to its circumstances.

(e) New Zealand erroneously relies on the findings of the Japan-Apples dispute

25. The constant reliance by New Zealand on alleged “scientific” findings in the Japan –

Apples dispute represents a major error in terms of how a previous panel decision should be

treated. It is untenable for New Zealand to suggest that Australia should have essentially

abandoned its own science-based risk assessment process and instead based its risk management

measures on the outcomes of the Japan – Apples dispute.5 Australia submits that the Panel

should reject New Zealand’s argument in this regard.

26. Furthermore, Australia will demonstrate critical differences between the Japan – Apples

dispute and the current dispute. The Japan – Apples dispute was solely concerned with fire

blight, whereas the present dispute also includes European canker and ALCM. Even in relation

to fire blight, there are significant differences including ALOP, climatic conditions, native flora,

potential host plants, the pest and disease status of the importing and exporting Member and the

volume and mode of trade. It is therefore essential that the Panel fulfil its mandate to make an

“objective assessment” of the matter pursuant to Article 11 of the DSU, rather than adopting the

findings of the Japan – Apples dispute as New Zealand suggests.

4 Appellate Body Report, EC – Hormones, para. 194.5 For example: New Zealand, First Written Submission: Australia – Measures Affecting the Importation of

Apples from New Zealand, WT/DS367, 30 June 2008 (hereinafter: “New Zealand’s first written submission”), para. 2.4.

33


(f) New Zealand’s allegations of politicisation should be disregarded by the

Panel

27. Australia notes that New Zealand makes a number of unsubstantiated allegations that the

IRA process was “intertwined” with a political process and asserts that the Final IRA Report was

therefore tainted.6 Australia completely rejects these allegations and notes that New Zealand has

not advanced any credible evidence to support its claims. Instead, New Zealand has presented a

deliberately misleading account based on innuendo, inference, hearsay and misquotes. Australia

does not intend to address each one of New Zealand’s allegations in this submission but

highlights below three examples which demonstrate the baseless nature of New Zealand’s

claims.

28. New Zealand refers throughout its submission to the activities of various bodies,

including a Senate Committee, an industry group and unions to infer that the IRA process was

“politicised”.7 Australia is surprised that New Zealand, as a fellow parliamentary democracy

with strong pluralist values, considers that robust scrutiny of biosecurity issues by a range of

legitimate bodies amounts to “politicisation” of a separate risk analysis processes undertaken by

the appropriate domestic regulatory agency. It is common in both Australia and New Zealand,

for biosecurity issues to be subject to intense political8 and public9 debate, parliamentary

committee inquiries10 and, at times, domestic court proceedings.11 Australia submits that such

activities are not evidence of “politicisation”, but rather the normal functioning of a healthy

democracy.

6 For example, New Zealand’s first written submission, paras. 2.8, 2.9, 4.554, 4.559. 7 For example, New Zealand’s first written submission, para. 2.9; also, paras. 3.18, 4.463-4.471.8 Exhibit AUS-4: For example, New Zealand’s Minister for Biosecurity said in a press release on New

Zealand’s Biosecurity and Hazardous Substances New Organisms Legislation Amendment Bill that “On some occasions, however, the process for developing an import health standard becomes affected by a protracted dispute over some aspects of MAF’s risk management decisions.”

9 Exhibit AUS-5: For example, “Sour Taste of Apple Imports, Apple exporter Enza has upset some of its Hawke’s Bay growers by shipping in competing stocks of apples from its North American orchards.” The Dominion Post, 31 January 2008; and “Honey Imports Must Stop For Good”, Press Release, Federated Farmers (New Zealand), 5 December 2007.

10 For example, New Zealand’s Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill was referred by the New Zealand Parliament to its Select Committee on Primary Production on 19 February 2008 and that Committee issued its report and recommendations on 17 March 2008, which included amendments to the legislation subsequently implemented by the New Zealand Government.

11 For example, New Zealand’s bee keepers have obtained a court injunction which bans the import of Australian honey until the import health standard for Australian honey is reviewed by an independent panel.

34


29. New Zealand also alleges that the then Prime Minister and Deputy Prime Minister

“pledged” that New Zealand apples would not enter Australia12, and purports to support this

claim by quoting a second hand reference by a State politician in a debate in the New South

Wales State Parliament in March 2001.13 Australia submits that it is the contemporaneous

statements by the Federal Minister for Agriculture in the Federal Parliament of Australia that

accurately reflect the Australian Government’s principled approach to the issue. The following

statement is illustrative:

My Department is cooperating fully with the [Senate] Committee’s inquiry. However, the import risk analysis on apples from New Zealand is being carried out in accordance with a science-based administrative process that is politically independent and was developed in consultation with stakeholders. The process is consistent with both government policy and Australia’s international obligations.14

30. New Zealand also claims the inclusion on the IRA Team of an individual from the apples

industry demonstrates a conflict of interest that tainted the IRA process. Australia rejects this

allegation. Information on industry production systems, pest management programs and

packing, handling and distribution networks is directly relevant to many of the factors identified

in ISPM No. 1115 to be considered when conducting a risk assessment. The individual concerned

brought this relevant expertise to the IRA Team. Moreover, the fact that someone has

commercial interests does not mean they have an automatic conflict of interest and should be

barred from the process. New Zealand’s own risk assessment processes do not bar such

individuals16 and acknowledge that a range of knowledge, experience and skill, in addition to

scientific expertise, may be appropriate on a risk assessment panel.17 Furthermore, the individual

concerned signed a declaration detailing his commercial interests and pledging that he would

carry out his duties impartially and independently.18

12 New Zealand’s first written submission, paras. 3.14 and 4.555.13 Exhibit NZ-86: Parliament of New South Wales, Legislative Assembly Hansard, New Zealand apple and

pear importation, Urgent motion, 6 March 2001, 3.50pm.14 Parliament of Australia, Hansard, House of Representatives, 26 March 2001.15 Exhibit AUS-6: International Plant Protection Convention, International Standard for Phytosanitary

Measures No. 11: Pest risk analysis for quarantine pests including analysis of environmental risks and living modified organisms, 2004.

16 Exhibit AUS-7: Biosecurity New Zealand, Risk Analysis Procedures, Version 1, Wellington, 12 April 2006, paras. 3.3.3 and 3.2.4.

17 Exhibit AUS-8: Department of Internal Affairs New Zealand (2008), “Notice Number: 4582: Biosecurity (Process for Establishing Independent Review Panel) Notice 2008”, New Zealand Gazette - Te Kahiti o Aotearoa, 26 June 2008, p. 2765.

18 Exhibit AUS-9: Consultancy Agreement for Participation on the Risk Analysis Panel for the Importation of Apples From New Zealand to Australia (Commonwealth of Australia and Armour’s Apples Pty Ltd), 20 March

35


31. New Zealand has also erroneously claimed that public comments by the Executive

Manager of Biosecurity Australia at the time of the appointment “acknowledging the clear

36


conflict of interest created”.19 In fact, according to the media report that New Zealand relies on

37


to support its claims, the Executive Manager merely acknowledged that it was “a potential

38


issue”.20

32. In view of these serious shortcomings, Australia requests the Panel to disregard these

allegations in their entirety and confine itself to considering the scientific and legal issues that

arise in this dispute as reflected in the rights and obligations elaborated in the SPS Agreement.

Australia requests the Panel have faithful regard to the carefully negotiated text of the SPS

Agreement which recognises the fundamental right of all WTO Members to conduct their own

risk assessment against their own ALOP and to base their SPS measures on scientific evidence.

This is what Australia has rightly done with respect to New Zealand apples.

III. PROCEDURAL BACKGROUND

39


33. On 31 August 2007, New Zealand formally initiated WTO dispute settlement action by

40


requesting consultations with Australia.21 Consultations took place in Geneva on 4 October

2007, with the United States and European Communities participating as third parties.

Consultations failed to resolve the dispute.

41


34. On 6 December 2007, New Zealand requested the establishment of a WTO dispute

42


settlement panel.22 This request was considered at the WTO Dispute Settlement Body (DSB)

meeting on 17 December 2007. Australia did not consent to New Zealand’s first request for the

establishment of a panel, but a panel was established at the DSB meeting on 21 January 2008

following New Zealand’s second request.

35. The Director-General of the WTO composed the dispute settlement panel (the Panel) on

12 March 2008. The United States, the European Communities, Japan, Chinese Taipei, Pakistan

and Chile joined the dispute as third parties.

36. On 13 March 2008, Australia submitted to the Panel a request for a preliminary ruling on

the adequacy of New Zealand’s panel request. New Zealand lodged a rebuttal submission on 7

April 2008. Australia and New Zealand lodged further submissions on 14 and 16 April 2008

respectively. The European Communities and Chile submitted third party submissions on 30

April 2008 and 2 May 2008 respectively, and both Australia and New Zealand lodged further

submissions in response to the third party submissions on 9 May 2008. The Panel issued its

43


ruling on 6 June 2008, limiting the measures at issue in this dispute.23 Australia is proceeding on

the basis of the Panel’s preliminary ruling, but without prejudice to its rights to pursue its

procedural claims at a later stage.

44


IV. FACTUAL BACKGROUND

37. Parts A and B of this Factual Background outline information on Australia’s quarantine

and biosecurity situation, the size and location of the apple and pear industry and the operation of

Australia’s quarantine system. Parts C, D and E provide factual background specific to issues

raised in this dispute, particularly regarding the Final IRA Report.

A. OVERVIEW OF AUSTRALIA’S QUARANTINE AND BIOSECURITY SITUATION

1. Australia is free of many of the world’s plant pests and works hard to preserve this

status

38. Australia’s island status, geographic isolation, relatively short history (220 years) of

agricultural production and established science-based quarantine system24 have helped it to

remain free from many of the world’s serious agricultural plant pests and diseases.25 This means

that Australia is free of many serious horticultural pests and diseases including fire blight,

European canker and apple leafcurling midge.

39. Maintaining this favourable plant health status is critical for the success of Australia’s

agricultural sector. The lower incidence of pests and diseases in Australia allows for increased

productivity, enables Australia to promote its produce as “clean and green”, and is crucial to

developing and retaining access to overseas markets. Australia therefore invests significant

resources in a “quarantine continuum” of pre-border, border and post-border quarantine and

biosecurity activities. These activities not only help to maintain the health of Australia’s

agricultural industries, but also the unique natural environment and biodiversity.

2002, Clause 13, “Conflict of Interest”.19 New Zealand’s first written submission, para 4.470.20 Exhibit NZ-90: “Apple grower added to risk panel”, ABC National Rural News, 10 January 2002.21 WT/DS367/1.22 WT/DS367/5.23 WT/DS367/7.

24 Australia has had a federal quarantine service since 1908.25 According to the CAB International Crop Protection Compendium (Global Module, 4 th Edition,

Wallingford UK, 2002) around 80% of the world’s plant pests and diseases are not present in Australia (the Compendium records 5732 pests and diseases present in the Western Hemisphere, Europe, Asia, Africa and Oceania, of which 4581 are not recorded in Australia).

45


40. Maintaining Australia’s favourable plant health status is increasingly challenging with

the expanding range and volume of internationally traded plant commodities. The Food and

Agricultural Organization has noted that “[g]rowth in the trade of fresh fruit and vegetables is

responsible for many of the quarantine pest problems today”.26 Although Australia is a major

agricultural exporter, food and agricultural product imports amounted to A$8.2 billion in 2006-

07.27 Australia’s quarantine system therefore needs to be dynamic and rigorous to respond to this

challenge. For example, quarantine controls at the Australian border have recently been

strengthened and more scientific and technical staff engaged to undertake import risk

assessments.

2. Australia has particular vulnerabilities to exotic pests

41. The Australian continent has six distinct climatic zones, ranging from tropical,

subtropical, desert, warm and cool temperate, and alpine zones, making it suitable for the

establishment and spread of all exotic pests and diseases.

42. Australia’s broad climatic conditions support the production of a diverse range of crops

and plants over a vast land area, providing a wide range of potential hosts for exotic pests and

diseases. Australian horticultural production, for example, occurs across the tropical, subtropical

and temperate climatic zones and includes stone fruit, orange, grape, banana, pineapple,

mandarin, avocado, mango, papaya, tomato, potato, pear, nuts, olives, and apples.28

43. Nearly all of Australia’s agriculture is based on introduced plant species that have

flourished in the absence of pests and diseases found in their source countries. As a result, in

many instances the species used in Australian agricultural production lack resistance to exotic

pests and diseases.

3. Australia’s biodiversity and agriculture are significant assets

(a) Australia’s biodiversity is of intrinsic value

26 Food and Agricultural Organization of the United Nations (2001). The State of Food and Agriculture 2001. FAO Agriculture Series 33, Part III: Economic Impacts of Transboundary Plant Pests and Animal Diseases, Section 1, Overview – A History of Transboundary Pest and Disease Control, Plant Pests.

27 ABARE 2007, Australian Commodity Statistics 2007, Canberra28 Department of Agriculture, Fisheries and Forestry (2005). Australian Horticulture Factsheet, December

2005.

46


44. Australia is one of the most biologically diverse countries in the world29 with an

estimated one million species of plants, animals and micro-organisms (7% of the world’s total).30

About 80% of Australia’s plant and animal species are not naturally found on any other

continent.31 Australia’s unique biodiversity is largely the result of the country’s geographic

isolation, its vast size32, and its climate variability.33

45. In addition to its benefit to human-kind, Australia’s unique biodiversity also has

considerable economic value. The distinctive flora and fauna of Australia are of world renown.

In the year ending June 2007, 68% of all international visitors to Australia participated in nature-

based tourism activities.34 There is also established trade in native flowers and plants35 and an

increasing range of gourmet bush foods.36

46. The potential susceptibility of Australian native flora to exotic pests and diseases is

largely untested although some serious exotic pests and diseases have been shown

experimentally to be suited to native plants as hosts. Examples include the Asian gypsy moth37

and Eucalyptus rust38 (also known as Guava rust). These pests and diseases have the potential to

29 Williams, J., Read, C., Norton, A., Dovers, S., Burgman, M., Proctor, W. and Anderson, H. (2001). Biodiversity, Australia State of the Environment Report 2001 (Theme Report). Part 2: The meaning, significance and implications of biodiversity – Megadiverse countries (pg 13). CSIRO Publishing on behalf of the Department of the Environment and Heritage, Canberra.

30 Australian Museum Online: Australia’s biodiversity. Website last accessed April 2008: http://www.amonline.net.au/biodiversity/what/australia.htm

31 Beeton, R., Buckley, K., Jones, G., Morgan, D., Reichelt, R. and Trewin, D. (2006). Australia State of the Environment Report 2006. Chapter 5: Biodiversity. Independent report to the Australian Government Minister for the Environment and Heritage by the 2006 Australian State of the Environment Committee.

32 7,617,930 square kilometres: Geoscience Australia webpage: Australia’s size compared. http://www.ga.gov.au/education/facts/dimensions/compare.htm

33 Beeton, R., Buckley, K., Jones, G., Morgan, D., Reichelt, R. and Trewin, D. (2006). Australia State of the Environment Report 2006. Chapter 5: Biodiversity. Independent report to the Australian Government Minister for the Environment and Heritage by the 2006 Australian State of the Environment Committee.

34 Tourism Australia (2007). Nature tourism fact sheet 2007. Tourism Research Australia.35 For example, up to 95% of Australian flower exports are Australian native flowers, with production of

Australian native species valued at $50 million per year: NSW Department of Primary Industries webpage. Growing Australian native flowers commercially.

36 For example, the macadamia tree is an Australian native plant that has been successfully commercialised through development of the market for the nuts, with production valued at over $100 million per year: Macadamia Society (2007) Australian Macadamias, Statistics.

37 Matsuki, M., Kay, M., Serin, J., Floyd, R. and Scott, J. (2000). Potential risks of accidental introduction of Asian gypsy moth (Lymantria dispar) to Australia and New Zealand: effects of climatic conditions and suitability of native plants. Contracted Report no. 57. CSIRO, Entomology.

38 Tommerup, I., Alfenas, A. and Old, K. (2003). Guava rust in Brazil - a threat to Eucalyptus and other Myrtaceae. New Zealand Journal of Forestry Science 33: 420-428.

47

http://www.ga.gov.au/education/facts/dimensions/compare.htm

http://www.amonline.net.au/biodiversity/what/australia.htm


devastate Australia’s wildlife flora and dependent fauna, with flow-on effects to the social value

of public amenities.

(b) Australia’s agricultural sector is economically significant

47. Agriculture’s contribution to the Australian economy is substantial. In the 2006-07

financial year, agriculture directly contributed A$39.5 billion to the Australian economy (3.9%

of Gross Domestic Product), with crops valued at A$20.2 billion and livestock products valued

at A$19.3 billion.39 It also directly employed around 3.5% of the Australian workforce40, rising

to around 17% if associated industries are included.41

48. Agriculture in Australia has a strong export focus with around 67% of total production

being exported each year.42 In 2006-07 total farm exports were valued at close to A$28 billion43

and agricultural products, including processed products, accounted for 16.1% of Australian

merchandise exports.44 Horticulture is the fastest growing agricultural industry in Australia. It

has a farm gate value of A$7 billion and total horticultural exports in 2006-07 were valued at

A$763 million.45

49. Exotic pests and diseases pose a real threat to the viability and sustainability of

Australia’s plant industries and the regional economies and communities that they sustain. The

negative impacts associated with plant pests and diseases, such as produce damage and reduced

yield, in turn result in increased production inputs and higher management costs.46

(c) Australia’s apple and pear industry is important

39 Australian Bureau of Agricultural and Resource Economics (2008). Australian Commodities, Volume 15 No. 1, March Quarter 08.1, Table 21: Gross value of farm and fisheries production.

40 Australian Bureau of Agricultural and Resource Economics (2008). Australian Commodities, Volume 15 No. 1, March Quarter 08.1, Table 10: Employment.

41 Econtech Pty Ltd (2005). Australia's Farm-Dependent Economy: Analysis of the Role of Agriculture in the Australian Economy. Overview (pg x). Australian Farm Institute, Surry Hills, Australia.

42 Department of Foreign Affairs and Trade website. Agriculture and the WTO, Australia – Agricultural and Food Exporter. http://www.dfat.gov.au/trade/negotiations/trade_in_agriculture.html

43 Australian Bureau of Agricultural and Resource Economics (2008). Australian Commodities, Volume 15 No. 1, March Quarter 08.1, Table 25: Value of commodity exports.

44 Department of Foreign Affairs and Trade website. Agriculture and the WTO, Australia – Agricultural and Food Exporter. http://www.dfat.gov.au/trade/negotiations/trade_in_agriculture.html

45 Horticulture Australia Ltd (2008). Horticulture Industries. 46 Hyam, L. (2008) Plant Biosecurity – The Way Ahead. Farm Policy Journal, Vol.5 No. 1, pp 47-57,

February Quarter 2008.

48

http://www.dfat.gov.au/trade/negotiations/trade_in_agriculture.html

http://www.dfat.gov.au/trade/negotiations/trade_in_agriculture.html


50. The apple and pear industry is Australia’s second largest fruit industry by value.47 Total

production of apples and pears in 2006-07 was approximately 405,000 tonnes with the apple

industry accounting for two thirds of the total.48

51. The apple industry consists of approximately 1,200 apple growers with 9.9 million apple

trees49 producing, on average, 306,000 tonnes per year over the last ten years.50 While, apple

production dropped to 270,000 tonnes in 2006-0751 due to the effects of drought, the gross value

of apple production in 2006-07 was nonetheless A$475 million.52 Approximately 97% of apple

production was sold on the domestic market in 2006-07 and exports accounted for 3% of

production.53 The major export markets for Australian apples in 2006-07 were the United

Kingdom, Indonesia, India, Chinese Taipei, Malaysia and Sri Lanka.54

52. Apples are produced in all Australian states, with Victoria and New South Wales the

largest producers, respectively accounting for, in round figures, 43% and 14% of total

production. The share of production in other states is as follows: Western Australia (12%),

Tasmania (11%), Queensland (11%), and South Australia (10%).55 A high proportion of apple

growers also produce pears, stone fruit or cherries. The map at Figure 3 of Annex 2 to this

submission shows the major pome fruit regions of Australia.

53. Australia has a large domestic pear production industry, with approximately two million

pear trees.56 Over the last ten years pear production has averaged 147,000 tonnes per year.57 The

47 Australian Bureau of Statistics (ABS), “2006 – 07 Value of Principal Agricultural Commodities Produced Australia Preliminary”, 7501.0, 12 February 2008, Canberra, p5.

48 ABS, “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, Canberra, p4-5.

49 ABS, “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, Canberra, p3..

50ABS, “1999-2000 Agriculture”, 7113.0, 4 October 2001 p83; ABS, “2002-2003 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, Canberra, p4-5; ABS, “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, Canberra, p4.

51 ABS “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, p4.52 ABS, “2006-2007 Value of Principal Agricultural Commodities Produced Australia Preliminary”,

7501.0, 12 February 2008, p5. 53 ABS, “2006-07 International Trade Australia”, 5465.0, Canberra.54 ABS, “2006-07 International Trade Australia”, 5465.0, Canberra.55 ABS, “2006-2007 Agricultural Commodities”, 7121.0, 28, May 2008, Canberra, p18.56 ABS, “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007; p3.57 ABS, “1999-2000 Agriculture”, 7113.0, 4 October 2001 p83; ABS, “2002-2003 Agricultural Survey,

Apples and Pears”, 7121.0.55.002, 18 December 2007, Canberra, p4-5; ABS, “2006-2007 Agricultural Survey, Apples and Pears”, 7121.0.55.002, 18 December 2007, Canberra, p4.

49


gross value of pear production in 2005-06 was A$86 million.58 The major export markets for

Australian pears in 2006-07 were New Zealand, Canada, Indonesia, Malaysia, India and

Singapore59 with exports accounting for approximately 3% of total production.60

54. Pear production is heavily concentrated in Victoria and accounts for 88% of total

Australian production.61 Most of this production is in the Goulburn Valley.62 Production in other

States is as follows: Western Australia (6%), South Australia (4%), Tasmania (0.5%),

Queensland (0.4%) and New South Wales (0.2%).63

B. AUSTRALIA’S QUARANTINE SYSTEM

1. Australia has a comprehensive and effective quarantine system

55. In 1908, the Australian government introduced the Quarantine Act 1908 (Cth), Act No. 3

of 1908 to establish a federal quarantine service.64 Since that time, Australia’s quarantine system

has successfully responded to developments in scientific understanding, technology and the

expansion of trade. This has been facilitated by a number of major reviews which have driven

continuous improvement and consistently highlighted the importance of Australia’s rigorous

approach to quarantine in a dynamic trading environment.

2. Australia dedicates significant resources to its quarantine continuum

56. Australia’s quarantine and biosecurity system is a continuum of activities in all three

stages of quarantine control – pre-border, border and post-border – involving all levels of

government, industry and the community.

i. Pre-border

58 ABS, “2005-06 Value of Agricultural Commodities Produced”, 7503.0, Canberra, p7.59 ABS, “2006-07 International Trade Australia”, 5465.0, Canberra.60 ABS, “2006-07 International Trade Australia”, 5465.0, Canberra.61 ABS, “2006-2007 Agricultural Commodities”, 7121.0, 28, May 2008, Canberra, p18.62 Oliver, G., Viljoen, J., McGillivray, M. and Orton, T. (1997), The Potential impact of fire blight on the

Australian apple and pear industry: a socio-economic study. Corporate Strategy Consulting. 60p. 63 ABS, “2006-2007 Agricultural Commodities”, 7121.0, 28, May 2008, Canberra, p18.64 Quarantine Act 1908 (Cth), Act No. 3 of 1908 as amended, remains the main legislative instrument

underpinning Australian quarantine.

50


57. At the pre-border level, Australia conducts targeted surveys, monitoring and awareness

programs along our northern coastline and in neighbouring countries; funds offshore research to

assist countries to our near north address risks with transboundary movement of pests and

diseases; develops offshore quarantine and biosecurity arrangements; and gathers intelligence on

the pest and disease status of trading partners through bilateral and multilateral cooperation.

ii. At the border

58. The level of intervention by Australian quarantine officers at the border is among the

highest of any country in the world.65 Over 80% of passenger baggage is screened at

international airports and 100% at international ports. In addition, 100% of international mail is

screened for material of quarantine concern, 100% of international vessels are inspected and the

exteriors of all sea cargo containers and 95% of air cargo containers are inspected. As a result,

each month quarantine staff seize on average around 7.7 tonnes of plant material of quarantine

concern (fresh fruit, vegetables, plants and seeds) at airports and 500kg at mail centres.66

iii. Post-border

59. A major focus of Australia’s post-border biosecurity system is preparedness, early

detection and a nationally-coordinated response to exotic pest and disease incursions.

Significant investment is made in the eradication of exotic pests and diseases. For example, the

eradication of a citrus canker outbreak in Queensland in 2004 cost in excess of A$18 million

over four years.67 The Government also funded a A$12 million recovery package to assist

affected citrus growers.68 It is not always possible to eradicate exotic pests and diseases. For

example, Western flower thrip has established and spread in most Australian states since 1993

and costs to industry for control of this pest are estimated at $100 million annually.69

65 Each year, more than 11 million passengers and crew at airports, 146 million mail items and 1.6 million non-commercial air-cargo consignments, 13,000 vessels and 95,000 sea passengers, and 1.6 million seas containers and 380,000 air cargo containers arrive in Australia.

66 These figures are subject to seasonal variation. For the Airports program, there is a spike in incoming passengers at the end of January and start of February as people return home from overseas trips following school holidays. For the Mail program, there is a spike in December associated with increased incoming mail during the Christmas period.

67 Queensland Department of Primary Industries and Fisheries webpage. National Citrus Canker Eradication Program, Program Summary.

68 The Senate Rural and Regional Affairs and Transport Legislation Committee (2006). The Administration by the Department of Agriculture, Fisheries and Forestry of the Citrus Canker Outbreak. Chapter 4: Impact of citrus canker on the Australian industry.

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3. Australia’s quarantine system is based on a strong legal, administrative and

operational framework

60. The Australian quarantine system is supported by Commonwealth, and State and

Territory quarantine laws.70

61. At the Federal level, the key quarantine and biosecurity functions are located within the

Department of Agriculture, Fisheries and Forestry (DAFF). The Secretary of DAFF is the

Director of Animal and Plant Quarantine under the Quarantine Act 1908 and is responsible for

determining whether the import of a particular commodity may be permitted, and if so, whether

any conditions are required.

62. The Australian Quarantine and Inspection Service (AQIS) manages quarantine controls at

the border, develops operational procedures for imports, provides export certification, and makes

import permit decisions. Biosecurity Australia provides science-based risk analyses and

quarantine policy advice to the Director of Animal and Plant Quarantine and AQIS.

63. DAFF works with State and Territory governments on national activities to maintain

Australia’s favourable animal and plant health status, including emergency preparedness and

response programs. The State and Territory governments have their own quarantine legislation

to manage risks associated with the interstate movement of plants, animals and their products.

64. Each year, Australia receives many proposals to commence imports of plants, animals

and their products. An import risk analysis (IRA) is conducted by Biosecurity Australia when

there is no existing quarantine policy or a significant change in existing quarantine policy is to be

considered. For example, an IRA would be required for new commodities that have not

previously been imported into Australia and commodities that are already imported where the

import request is from a different country or area with a significantly different pest status.

69 Ullio, L. (2002). Australia’s National Strategy for the Management of Western Flower Thrips (WFT), Frankliniella occidentalis (Pergande). Acta Horticulturae; Lonsdale, M., Floyd, R., Vickers, R., De Barro, P., Chakraborty, S., Groves, R. and Clarke, G. (2001). Implications of Incursion Ecology for Managing Incursions for the Plant Sector, Appendix 1 (pg 22), CSIRO, Canberra, ACT.

70 Commonwealth quarantine laws are contained in the Quarantine Act 1908 and in its subordinate legislation found in the Quarantine Proclamation 1998, Quarantine (Cocos Islands) Proclamation 2004 and Quarantine (Christmas Island) Proclamation 2004, the Quarantine Regulations 2000 and Quarantine Amendment Regulations 2007 (No. 1).

52


65. The administrative process that applies to Biosecurity Australia’s conduct of IRAs is set

out in the Import Risk Analysis Handbook. The Import Risk Analysis Handbook 200371 applied

to the conduct of the New Zealand apples IRA.72 New regulations came into effect in September

200773 (after the New Zealand apples IRA was finalised) to increase the transparency and

efficiency of the system and to provide a greater opportunity for independent scientific review.

The updated process is set out in the Import Risk Analysis Handbook 2007.

C. THE FINAL IMPORT RISK ANALYSIS FOR APPLES FROM NEW ZEALAND

66. New Zealand submitted a market access application in January 1999, requesting a review

of available risk management options for apples from New Zealand. AQIS advised stakeholders

in February 1999 that it would conduct an IRA for the importation of apples from New Zealand.

67. Biosecurity Australia (formerly a part of AQIS) released a draft IRA report on apples

from New Zealand to stakeholders on 11 October 2000. It recommended the importation of

New Zealand apples to Australia subject to 11 phytosanitary measures, including inspection and

disinfestation regimes in orchards, packing houses and stores. The draft IRA report was made

available for public comment and 142 submissions were received, including a submission from

New Zealand.

68. Biosecurity Australia informed stakeholders on 8 October 2001 that a Risk Analysis

Panel would complete the IRA74 in order to more efficiently utilise the available scientific and

other expertise, and to allow more comprehensive attention to the issues raised by stakeholders. 71 Exhibit AUS-10: Biosecurity Australia (2003) Import Risk Analysis Handbook.72 The IRA Handbook 2003 applied during the period from August 2003 to 5 September 2007. 73 The Quarantine Amendment Regulations 2007 amend the Quarantine Regulations 2000 to identify two

types of Import Risk Analysis (IRA), a standard IRA and an expanded IRA, and specify the steps and maximum timeframes that apply for each type of IRA.

74 The seven Risk Analysis Panel members were confirmed on 10 January 2002 as :Dr Bill Roberts (Chairman) – Biosecurity Australia’s Principal Scientist;Mr Bill Hatton – Specialist in fruit production with expertise in growing, packing and shipping;Mr David Cartwright – Plant pathologist and Manager Plant Health, Department of Primary Industries and

Resources, South Australia;Dr Kent Williams – Principal Research Scientist, CSIRO Sustainable Ecosystems;Mr Ian Armour – Owner and manager of an apple production business;Dr Brian Stynes – Plant pathologist and former General Manager, Plant Biosecurity, Biosecurity Australia; Mr Mike Kinsella – Passed away in January 2002. No replacement was sought.

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The Risk Analysis Panel was subsequently renamed the “Import Risk Analysis team”, consistent

with the terminology in the Import Risk Analysis Handbook 2003. Throughout 2002 and 2003

the IRA Team met 16 times to review relevant scientific information and separate technical

working groups met to examine arthropod and fungal pests in more detail.

69. Biosecurity Australia released a revised draft IRA report for New Zealand apples in

February 2004 for stakeholder comment. The formal comment period was extended until

23 June 2004 to allow stakeholders sufficient time to review scientific content and provide

meaningful feedback. Two hundred submissions were received.

70. When Biosecurity Australia was made a prescribed agency in late 2004, the Government

undertook that the agency would review and reissue draft IRAs in progress at that time,

including the New Zealand apples revised draft IRA. An Eminent Scientists Group (ESG) was

also established to provide independent scientific scrutiny of IRAs.75

71. In preparing a further revised draft IRA report, the IRA Team again met a number of

times to consider the substantial number of submissions that had been received on the previously

issued revised draft IRA report and Biosecurity Australia held meetings with stakeholders in

major apple producing areas of Australia and with New Zealand. The further revised draft IRA

report was released in December 2005 for a 120 day comment period that closed on

30 March 2006. Stakeholders provided 40 submissions on the report. Biosecurity Australia met

with New Zealand to clarify issues arising from its previous submission.

72. A draft final IRA report was provided to the ESG on 1 August 2006. On 4 October 2006

the ESG reported to the Director of Animal and Plant Quarantine that Biosecurity Australia had

properly considered the 40 stakeholder submissions. The Final IRA Report for New Zealand

apples was issued by Biosecurity Australia on 30 November 2006.

73. The IRA process was comprehensive and rigorous, requiring the examination of an

extensive range of scientific and technical information, a large number of stakeholder

submissions and consultations with interested parties, including New Zealand. A timeline

summarising these steps is included at Annex 1. Overall the IRA process involved the

categorisation of 443 pests and diseases to identify the quarantine pests and diseases of concern

75 Plant Biosecurity Policy Memorandum 2004/22: New Arrangements to Strengthen Import Risk Analysis, 16 August 2004.

54


to Australia on New Zealand apples and the subsequent detailed examination of 16 pests and

diseases.

74. The IRA Team exercised scientific judgment at every step of the process, taking into

account the numerous stakeholder submissions, including New Zealand’s. Table 1 below

demonstrates how the measures proposed for one of the pests examined evolved in each iteration

of the IRA in light of this deliberative process:

Table 1: Evolution of IRA Team’s Proposed Measures for Fire Blight

2000 Draft IRA 2004 Draft IRA 2006 Final IRA Report

Apples to be sourced from areas free of fire blight symptoms

- verified by 3 inspections per season (fruitlet, full bloom and 2 weeks before harvest)


- verified by 1 inspection of fruit immediately before harvest


- verified by 1 inspection 4-7 weeks after flowering

50 metre buffer zone around an orchard

Not required Not required

Chlorine disinfestation of harvesting bins

Not required Not required

Chlorine disinfestation of fruit

Chlorine disinfestation of fruit

Chlorine (or equivalent) disinfestation of fruit

Not required Cold storage of fruit for 6 weeks

Not required

D. PESTS AT ISSUE IN THIS DISPUTE

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75. New Zealand’s first written submission76 outlines the pests77 at issue in this dispute - fire

blight, European canker and apple leafcurling midge (ALCM). Australia does not intend to

repeat this factual information but has flagged some points of difference, which are elaborated

later in this submission. It is important to note that Australia is free from all three of these

serious pests, which are widespread in New Zealand.

76. To assist the Panel, Australia has exhibited diagrams showing the different parts of an

apple flower and an apple fruit, as well as the respective life cycles of the three pests at issue.78

1. Fire blight

77. Fire blight has been reported in 46 countries and is endemic in New Zealand. The

discovery of fire blight in Australia by a New Zealand scientist in the Royal Botanic Gardens

Melbourne was an isolated and unexplained occurrence. National surveys conducted for the

three years following the detection have confirmed the absence of the disease in Australia.

78. Australia disagrees with New Zealand’s assertion79 that infection of mature fruit does not

occur and cannot serve as a source of new infection.

79. Australia notes that rain, insects, wind and pruning tools are the main methods of

spreading inoculum of Erwinia amylovora (the causal agent of fire blight) and that bees are the

primary agents for secondary spread of inoculum from infested flowers to newly opened ones.

80. New Zealand claims recent incursions of fire blight are attributed to the introduction of

nursery stock from infected regions and not from trade in apple fruit.80 Australia notes that there

is considerable uncertainty as to the cause of fire blight incursions and unexplained occurrences

are not unknown.

76 New Zealand’s first written submission, paras. 3.46 -3.80.77 According to the IPPC definition, “Pest” means any species, strain or biotype of plant, animal or

pathogenic agent injurious to plants and plant products. Australia therefore uses the term “pest” in this context.78 Exhibit AUS-11: Diagram of parts of apple flower and apple fruit; Exhibit AUS-12: Life cycles of fire

blight, European canker and apple leafcurling midge.79 New Zealand’s first written submission, para. 3.51.80 New Zealand’s first written submission, para. 3.53.

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81. New Zealand’s concept of primary hosts for fire blight is flawed.81 Around 150 suitable

host plants for fire blight are widely distributed throughout Australia, including apple and pear

orchards and common household and garden plants.

82. New Zealand has not provided any details of the serious consequences of fire blight

disease. Fire blight is the most serious disease of pome fruit trees in the world. It directly

impacts on production by killing branches and reducing the fruiting capacity of future crops.

2. European canker

83. European canker is present in large parts of Europe, North America, South America, the

Middle East, and South Africa. In New Zealand, European canker is present in several districts

in which export orchards are located.

84. Australia disagrees with New Zealand’s assertions on spread,82 and climatic conditions

required for development.83 Australia has provided an alternative climatic analysis in Annex 2 of

this submission. Australia does not accept New Zealand’s characterisation84 of the Tasmanian

outbreak. In respect of New Zealand’s claims regarding fruit rot85, Australia notes that fruit rot

has occurred in New Zealand. New Zealand has not provided any details of the serious

consequences of European canker, which is one of the most economically damaging diseases of

apple production.86

3. Apple leafcurling midge

85. Australia disagrees with New Zealand’s assertions as to the requisite conditions for adult

emergence of ALCM,87 the number of generations of ALCM per year,88 the flight range of

ALCM and its assertions on spread.89 As the adult ALCM is a flying insect, it does not require a

vector (or carrier) to be able to spread from its initial location.

81 New Zealand’s first written submission, para. 3.46.82 New Zealand’s first written submission, paras. 364-366.83 New Zealand’s first written submission, para. 3.66, Annex 3. 84 New Zealand’s first written submission, para. 3.68.85 New Zealand’s first written submission, para. 3.57.86 Final IRA Report, Part B, p. 146; Exhibit NZ-7: Grove, 1990a; Exhibit AUS-50: Latorre et al. 2002.87 New Zealand’s first written submission, para. 3.74.88 New Zealand’s first written submission, para. 3.75.89 New Zealand’s first written submission, para. 3.77.

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86. New Zealand has not provided any details of the serious consequences of ALCM. High

populations of ALCM in young trees result in reduced crop yields in apple orchards.90 Leaf and

shoot damage to young trees and grafts can be very severe, resulting in poor shoot development

and distortion of the shape of the tree, potentially affecting the long term yield potential of trees.

A yield increase of 10% has been achieved in studies in which insecticides were applied to

ALCM infestations.91 ALCM has also been shown to affect photosynthesis in leaves. The

detection of ALCM larvae or pupae on apple fruit can lead to the rejection of that fruit for pre-

clearance export by some countries and other countries require treatment upon arrival.92

E. THE METHODOLOGY APPLIED BY THE IRA TEAM

1. The IRA Team comprehensively and rigorously assessed likelihood and

consequences to arrive at risk

87. Annex A(4) of the SPS Agreement, in part, defines “risk assessment” as:

[t]he evaluation of the likelihood of entry, establishment or spread of a pest or disease within the territory of an importing Member according to the sanitary or phytosanitary measures which might be applied, and of the associated potential biological and economic consequences.

88. Australia submits that the Final IRA Report falls within this definition. The definition

contains the elements of “likelihood” and “consequences” which are combined to estimate risk.93

This concept of risk founds the IRA Team’s methodology.

90 Tomkins, 1998 (accessed 5/06/2008); CABI, 2002.91 Kolbe, 1982.92 Exhibit NZ-15: Suckling DM, Walker JTS, Shaw PW, Manning L, Lo P, Wallis R, Bell V, Sandanayaka

WRM, Hall DR, Cross JV & El-Sayed AM (2007) “Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples”, Journal of Economic Entomology 100(3), 745; Tomkins AR (1998) “Apple leaf-curling midge life cycle”, HortFACT, (Horticulture and Food Research Institute of New Zealand Ltd); Final IRA Report, Part B, page 186.

93 See also ISPM No. 5 which defines “pest risk (for quarantine pests)” as: “The probability of introduction and spread of a pest and the magnitude of the associated potential economic consequences.”

58


2. The IRA Team comprehensively and rigorously evaluated the likelihood of entry,

establishment and spread

89. For a pest incursion to happen in Australia as a result of trade in fruit, there has to be a

chain of events from the exporting country to suitable host plants in Australia. Typically, this

requires that the pest is present in the orchard; that it remains on or in the fruit at harvest; that it

survives packing, storage and transport to Australia; that it is not detected at on-arrival

inspection; that it ends up close to and is exposed to suitable host plants; that infestation or

infection occurs; and that the pest population becomes self-perpetuating. These events constitute

a pathway.

i. The IRA Team rigorously applied a sound quantitative approach

90. The SPS Agreement does not prescribe a methodology for evaluating the likelihood of

entry, establishment and spread of pests. Accordingly, a Member may choose its own

methodology. The IRA Team rigorously applied a sound and transparent quantitative

methodology in evaluating pathways for pests associated with apples from New Zealand.94 The

IRA Team estimated probabilities for individual elements of pathways, which were combined

into an overall probability of entry, establishment and spread (PEES) for each pest. The term

“probability” is used rather than “likelihood”.95 The commercial risk modelling package

@RISK96 was used to facilitate the quantitative evaluation of PEES.

ii. The IRA Team chose individual apples as the appropriate risk unit

91. In evaluating PEES, the IRA Team had to determine the risk unit on which to base its

analysis. The IRA Team concluded that individual apple fruit carrying a pest could present a

risk and that it was therefore appropriate to use individual fruit as the risk unit. Accordingly,

probabilities were estimated on a “per apple” basis.97

iii. The IRA Team took into account uncertainty

94 See Appellate Body Report, Australia – Salmon, para. 124: “likelihood may be expressed either quantitatively or quantitatively”.

95 The Appellate Body in Australia – Salmon considered both terms to have the same meaning (para. 123).96 A Monte Carlo stochastic (random) simulation model was used with @RISK, based on random sampling

from a set of values. 97 No guidance is provided by the ISPMs on this issue.

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92. Frequently, the IRA Team did not use single point values to represent the probability of

an event occurring, but rather used a range of values, or distributions, which took account of

variation and uncertainty. ISPM No. 11 emphasises the need to address areas of uncertainty in

risk assessments, stating that:

… [e]stimation of the probability of introduction of a pest and of its economic consequences involves many uncertainties. In particular, this estimation is an extrapolation from the situation where the pest occurs to the hypothetical situation in the PRA area. It is important to document the areas of uncertainty and the degree of uncertainty in the assessment, and to indicate where expert judgment has been used.98

a. Uniform and triangular distributions

93. The IRA Team used uniform distributions in cases where there was insufficient evidence

available to allow it to determine a most likely value for the probability of an event occurring. A

uniform distribution indicates that the probability of a particular event occurring is equally likely

to be any probability value within the minimum and maximum range of the distribution.

94. The IRA Team used triangular distributions in cases where there was sufficient evidence

available to allow the Team to exercise its judgment to determine a “most likely value”. A

triangular distribution has a maximum, a most likely and a minimum value.

iv. The IRA assessed the probability of importing infected or infested apples

95. The first element of the pathway examined by the IRA Team was the importation

scenario comprised of the following eight importation steps (Importation steps 1 – 8):99

Importation step 1: proportion of orchards in which the pest is present;

Importation step 2: proportion of fruit coming from an infected or infested orchard that is

infected or infested with the pest;

Importation step 3: proportion of clean fruit that is contaminated during picking and

transport to the packing house (during picking and transfer to the packing house, apples

that are not carrying pests may be contaminated by, for example, pests on pickers’ hands,

picking bags and field boxes);

98 Exhibit AUS-6: ISPM No.11. (emphasis added)99 Exhibit AUS-13: Diagram of importation steps for apple fruit.

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Importation step 4: proportion of infected or infested fruit that remains infected or

infested after routine processing procedures in the packing house (apples would be

subjected to several operations in the packing house which may reduce the number of

pests present or the number of apples carrying a particular pest);

Importation step 5: proportion of clean fruit that is contaminated during processing in the

packing house (processes may increase the number of apples carrying a pest or the

numbers of pests on individual apples, for example, a water dump that is contaminated

with bacteria may result in clean apples being contaminated with the pest);


infested during palletisation, quality inspection, containerisation and transportation to

Australia (depending on the pest, some of these operations may reduce the number of

apples carrying pests or the number of pests present on individual apples);

Importation step 7: proportion of clean fruit that is contaminated during palletisation,

quality inspection, containerisation and transportation (some of these operations could

result in an increase in the number of apples carrying pests);


infested after on-arrival minimum border procedures.

96. The IRA Team estimated probability values for each of the Importation steps on a “per

apple” basis, generally using distributions to take account of variation and uncertainty.

a. The IRA Team assessed volume of trade

97. The IRA Team needed to relate its evaluation of probabilities on a per apple basis to the

number of apples that might be imported from New Zealand. It considered that a 12-month

period was a convenient interval with which to estimate the potential volume of trade in apples.

98. As there is no existing trade in apple fruit from New Zealand to Australia, the volume of

apples that might be imported during a 12 month period was difficult to estimate. In doing so,

the IRA Team took into account the nature of the market for apples in Australia; fluctuations in

Australia’s apple production from year to year because of climatic and environmental influences;

factors influencing the capacity of New Zealand to supply apples; including the varieties of

61


apples exported by New Zealand; and developments in the world apple market. Having assessed

these factors, the IRA Team estimated the most likely annual volume of trade to be 150 million

apples (approximately 27,000 tonnes).

99. The IRA Team did not use 150 million apples as the only input. It represented volume of

trade by using a Pert distribution, with a minimum value of 50 million apples, a most likely value

of 150 million apples and a maximum value of 400 million apples.100 A Pert distribution was

used in response to submissions from New Zealand on the level of trade it expected to occur.

The Final IRA Report advises that the final distribution:

… gives significantly more emphasis to the lower end of the volume range but does allow for volumes higher than that suggested by New Zealand at the higher end.101

v. The IRA Team assessed the proximity of major handlers and users of

apples to host plants for pests

100. With the probability of importation of a pest determined, the IRA Team then analysed

how apples would be distributed, used and subsequently disposed of as waste. This established

the likelihood that major handlers and users of apples (utility points) would be located

sufficiently close to pest hosts (exposure groups) for transfer of pests from apples discarded by

handlers and users to host plants to take place (likelihood given as a proximity value).

101. The IRA Team identified five different utility points: orchard wholesalers; urban

wholesalers; retailers; food services; and consumers. It identified four different exposure groups

of plants: commercial fruit crops; nursery plants; household and garden plants; and wild and

amenity plants.

vi. The IRA Team estimated the probability of transfer of a pest from a

discarded apple to a susceptible host plant (exposure)

102. Having established proximity values, the IRA Team then evaluated the probability of

exposure. This involved estimating the likelihood of a successful transfer of a pest from a

discarded apple to a susceptible host plant. In doing so, the IRA Team took into account a range

100 Although a Pert distribution contains a most likely value as does a triangular distribution, the minimum, most likely and maximum values of a Pert distribution are joined by a curve, rather than the straight lines of a triangular distribution.

101 Final IRA Report, Part B, p. 19.

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of factors, including: viability of the pest; survival mechanism of the pest; transfer mechanism(s)

of the pest; receptivity of host plants; and environmental conditions.

vii. The IRA Team estimated the probability of a pest establishing on a host

plant

103. The IRA Team did not consider that the successful transfer of a pest from a discarded

apple to a host plant would necessarily mean that the pest would establish (propagate) on the

host plant. The IRA Team separately evaluated the probability of pests becoming established on

host plants taking into account factors relevant to estimating the probability of exposure, such as

host receptivity and environmental conditions, as well as other factors, including the

reproductive strategy of the pest and minimum population of the pest needed for establishment.

viii. The IRA Team estimated the probability of a pest spreading to other hosts

104. The IRA Team did not consider that the successful establishment of a pest on a single

initial host plant would necessarily mean that the pest would spread to other hosts in a

geographical area. It undertook a separate evaluation of the probability of spread for each pest,

taking into account several factors, including: suitability of the natural and/or managed

environment for natural spread of the pest; presence of natural barriers; the potential for

movement with commodities or conveyances; potential vectors of the pest; and potential natural

enemies of the pest.

ix. The IRA Team varied the methodology for apple leaf curling midge to

account for a different biology

105. The IRA Team used the methodology for determining PEES outlined above for fire

blight and European canker. The IRA Team varied the methodology for ALCM102 because its

capacity to fly meant it would not necessarily remain associated with individual apples and it

could therefore enter the environment from several points along the pathway. Furthermore,

ALCM’s lifecycle and the environmental conditions necessary for its successful entry,

establishment and spread differ considerably to fire blight and European canker.

x. Calculation of the probability of entry, establishment and spread

102 Final IRA Report, Part B, pp. 33-35.

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106. The volume of trade expressed as a Pert distribution, the probability for importation, the

proximity values, the probability of transfer, the probability of establishment and the probability

of spread were combined using a stochastic (random) model running in @RISK. This involved

thousands of iterations, with each iteration combining individual probability values drawn from

the distributions for each factor. The outcome of this process was a distribution for the PEES.

3. The IRA Team comprehensively and rigorously evaluated consequences

i. The IRA Team evaluated relevant types of consequences

107. Having determined the PEES for a pest, the IRA Team evaluated the consequences of an

incursion by that pest. Annex A(4) of the SPS Agreement requires the evaluation of the potential

biological and economic consequences associated with the incursion of a pest. Article 5.3 of the

SPS Agreement identifies certain factors that are required to be taken into account when

evaluating the economic consequences of a pest incursion, including the potential damage in

terms of lost production or sales and costs of control or eradication of the pest.

108. ISPM No. 11 distinguishes between direct effects of a pest which are host-specific and

indirect effects of a pest which are not host-specific. The former focus on the biological impact

of a pest on hosts and the latter focus on the economic and broader environmental effects of a

pest incursion. The range of potential economic effects include: impacts on domestic and export

markets; including in particular effects on export market access; changes to producer costs,

including control costs; and changes to domestic or foreign consumer demand for a product

resulting from quality changes.

109. Taking into account Article 5.3 of the SPS Agreement and ISPM No. 11, the IRA Team

evaluated the potential direct consequences of a pest incursion on host plants and the

environment and the potential indirect consequences of such an incursion as represented by: the

costs of control or eradication; impact on domestic and international trade; indirect impacts on

the environment from, for example, control measures using chemicals; and reduced rural and

regional economic viability.

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ii. The IRA Team rigorously applied a sound and transparent qualitative

methodology

110. The SPS Agreement does not prescribe a methodology for evaluating consequences.

Accordingly, a Member may adopt either a qualitative or quantitative methodology to doing so.

The IRA Team rigorously applied a sound and transparent qualitative methodology to evaluate

consequences.

iii. The IRA Team assessed consequences at the local, district, regional and

national level

111. The IRA Team evaluated direct and indirect consequences of a pest incursion at the local

level (an aggregate of households or enterprises), district level (a geographically or geopolitically

associated collection of aggregates), region level (a geographically or geopolitically associated

collection of districts) and national level (Australia wide).

112. The IRA Team evaluated direct and indirect consequence at each of these levels. At each

level, the impact was assessed to be either “unlikely to be discernible”, “of minor significance”

(effects generally being reversible), “significant” (effects may not be reversible), or “highly

significant” (effects unlikely to be reversible).103 These impacts were translated into an overall

impact score (A to G) for each direct and indirect consequence through recourse to Table 10 in

the Final IRA Report.104

iv. The IRA Team reached overall estimate of consequences for each pest

113. After obtaining an impact score for each direct and indirect consequence, the IRA Team

applied an established set of decision rules to estimate whether the overall consequence of a pest

incursion 105 was negligible, very low, low, moderate, high or extreme.

v. The IRA Team used a transparent risk estimation matrix to combine

likelihood and consequences

114. As the SPS Agreement does not prescribe the methodology to be used in risk assessments,

Members may adopt their own methodology for combining likelihood and consequences. In 103 Final IRA Report, Part B, p. 38.104 Final IRA Report, Part B, p. 39.105 Final IRA Report, Part B, pp 39-40.

65


Australia’s case, the risk estimation matrix106 reproduced below in Table 2 is used to combine the

likelihood of the entry, establishment and spread of pests and the associated consequences. This

is used routinely for all Australian risk analyses and promotes transparency and consistency.

Table 2: Risk Estimation Matrix Used by the IRA Team

Lik

elih

ood

of e

ntry

, es

tabl

ishm

ent a

nd sp

read

High Negligible risk

Very low risk

Low risk Moderate risk

High risk Extreme risk

Moderate Negligible risk

Very low risk


High risk Extreme risk

Low Negligible risk

Negligible risk

Very low risk


High risk

Very low Negligible risk

Negligible risk

Negligible risk

Very low risk


Extremely low

Negligible risk

Negligible risk

Negligible risk

Negligible risk

Very low risk

Low risk

Negligible Negligible risk

Negligible risk

Negligible risk

Negligible risk

Negligible risk

Very low risk

Negligible Very low Low Moderate High Extreme

Consequences of entry, establishment and spread

115. Although the PEES for a pest is expressed quantitatively, it is equated to a qualitative

descriptor on the vertical axis of the risk estimation matrix by recourse to Table 12 in the Final

IRA Report.107 Table 12 divides the numerical range between 0 and 1 into “probability intervals”

and equates these intervals to qualitative descriptors appearing on the vertical axis. For example,

the interval between 0.7 and 1 is equated to “High” and the interval between 0 and 10-6 is

equated to “Negligible”. The horizontal axis represents consequences with qualitative

descriptors ranging from “negligible” to “extreme”.

116. The cells of the matrix provide an overall estimate of risk for different combinations of

likelihood and consequences. The band of cells marked “very low” in the matrix reflects

Australia’s ALOP. Risks above very low (i.e. low, moderate, high and extreme) require the

application of risk management measures in order for Australia to achieve its ALOP.

106 Final IRA Report, Part B, p. 4.107 Final IRA Report, Part B, p. 43.

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vi. The IRA Team determined unrestricted risk

117. The IRA Team used the matrix to determine the unrestricted annual risk associated with

each pest if New Zealand apples were imported without phytosanitary measures. If the

unrestricted annual risk exceeded Australia’s ALOP (represented by the cells marked “very

low”), then the IRA Team considered measures to mitigate the risk to achieve Australia’s ALOP.

vii. The IRA Team evaluated measures to mitigate unrestricted risk to achieve

Australia’s ALOP

118. In considering risk mitigation measures, the IRA Team identified which importation

steps significantly influenced the number of infested/infected apples likely to be imported. It

then assessed the impact of individual measures in reducing the likelihoods associated with these

steps in order to mitigate the unrestricted annual risk to a level which achieved Australia’s

ALOP. Where individual measures did not mitigate the risk sufficiently, a systems approach

was applied, integrating measures with a cumulative effect so as to achieve Australia’s ALOP. 108

4. The IRA Team concluded that risk mitigation measures were required

119. The IRA Team concluded that fire blight, European canker, ALCM and a number of

other pests would require specific risk mitigation measures to reduce the risk associated with

these pests to a level that achieves Australia’s ALOP. The final chapter of the Final IRA Report

details the principal measures and the operational and verification requirements.109

120. The IRA Team recommended that the import conditions for New Zealand apples should

be reviewed after the first year of trade, with further reviews if warranted.110

108 Exhibit AUS-14: International Plant Protection Convention, International Standard for Phytosanitary Measures No. 14: The use of integrated measures in a systems approach for pest risk management, 2002.

109 “Risk management and operational framework”, Final IRA Report, Part B, pp. 313-325. Also, at the end of each chapter on particular pests in Part B of the Final IRA Report, the principal measures are evaluated.


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V. LEGAL FRAMEWORK

121. Before turning to Australia’s substantive arguments in response to New Zealand’s

submission, it is necessary to deal with certain critical issues relevant to the interpretation and

application of the SPS Agreement. Clear identification of the relevant product and the measures

in relation to each particular obligation is required, and the burden of proof and the related

standard of review to be exercised by the Panel need to be established. New Zealand largely

ignores these issues, but they are central to a balanced interpretation and application of the SPS

Agreement. Australia’s arguments on these issues are outlined below.

122. Australia’s detailed legal and factual rebuttal to New Zealand’s claims under Articles 2.2,

2.3, 5.1, 5.2, 5.5, 5.6 and 8 and Annex C(1)(a) is outlined in Part VI of this submission in respect

of each of the pests at issue in this dispute.

A. THE PRODUCT AT ISSUE IN THIS DISPUTE IS MATURE APPLES

123. Australia considers that the product at issue in this dispute should be determined by

reference to the scope of the Final IRA Report, which was “mature apple fruit free of trash,

either packed or sorted and graded bulk fruit from New Zealand.”111 New Zealand’s attempt to

characterise the product at issue as “mature, symptomless apples”112 and its use of terms which

may limit the mode of trade to “retail ready” or “just in time” apples113 should be rejected by the

Panel.

124. The mode of trade was discussed by Australia and New Zealand during the production of

the Final IRA Report. However, in response to requests for clarification, New Zealand was

unwilling to limit trade to “retail ready” or “just in time” apples, and would not rule out the

importation of bulk fruit that may be stored, graded and/or packed in Australia.114

111 Final IRA Report, Part B, p. 9.112 New Zealand’s first written submission, para. 3.44. 113 See: New Zealand’s first written submission, paras. 4.74, 4.129, 4.285, 4.357, 4.361 & 4.418.114 The mode of trade issue is addressed on p. 9 of Part B of the Final IRA Report. The IRA Team made no

assumptions as to the mode of trade.

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B. THE MEASURES AT ISSUE LIMIT THE SCOPE OF THIS DISPUTE

125. The measures at issue define the scope of a dispute and therefore warrant careful

consideration by the Panel. As Australia will show, one of the measures identified by New

Zealand in relation to European canker is not in fact a measure required by Australia. Further, in

two instances, New Zealand has misunderstood the requirements actually imposed by Australia.

In one of these instances, there is no live dispute because what Australia requires is what New

Zealand accepts as satisfactory. In relation to another measure, New Zealand mischaracterises

the requirement. The Panel will need to carefully review New Zealand’s identification of the

measures at issue in order to satisfy itself as to the precise measures the subject of the dispute.

126. Further, New Zealand has not sufficiently established that each measure at issue is an

SPS measure that is subject to the disciplines of the SPS Agreement, nor that each measure is

individually challengeable in WTO dispute settlement proceedings.

127. Australia elaborates on these issues below. A consequence of Australia’s submissions is

that the dispute is not as broad as New Zealand seeks to make it, particularly in light of the

Panel’s preliminary ruling. Nor are the measures imposed as onerous as New Zealand suggests.

1. The Panel’s terms of reference are limited to the 17 measures specifically identified

in New Zealand’s panel request

(a) New Zealand disregards the consequences of the Panel’s preliminary ruling

128. In its preliminary ruling of 6 June 2008, the Panel found that:

New Zealand’s panel request does not identify with sufficient precision any measures contained in Australia’s [Final IRA Report], other than the 17 specific items identified through bullet points. Accordingly, any such other measures are not part of this Panel’s terms of reference…115

129. This ruling has consequences that New Zealand appears to ignore. The Panel’s rejection

of New Zealand’s assertion that it was challenging the “Final IRA as a whole” 116 means that

New Zealand may not challenge any other “measures” which may be “specified in and required

by Australia pursuant to the [Final IRA Report]”, other than the 17 measures specifically

115 Preliminary Ruling of the Panel, Australia – Apples, 6 June 2008, WT/DS367/7, para. 13(b). 116 Written Submission of New Zealand, Request for a preliminary procedural ruling in relation to the

consistency of New Zealand’s panel request with Article 6.2 of the DSU, WT/DS367, 7 April 2008, paras. 2.9-2.10.

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identified in its panel request. The Panel’s ruling also means that the “measures at issue” in this

dispute do not include the Final IRA Report itself. New Zealand cannot treat a reference to the

Final IRA Report in its panel request as equivalent to identifying the Final IRA Report, or the

process by which it was produced, as a “measure at issue”.117

(b) New Zealand has not established that all measures are challengeable under

the relevant provisions of the SPS Agreement

130. Australia notes that New Zealand has only made a general claim that:

Australia’s [17] measures … are clearly “phytosanitary measures”, as defined in the SPS Agreement, because they constitute measures “to protect…plant life or health…from the risks arising from the entry, establishment or spread of pests, diseases, disease-carrying organisms” within the meaning of paragraph 1(a) of Annex A and measures “to prevent or limit other damage within the territory of the Member from the entry, establishment or spread of pests” within the meaning of paragraph 1(d) of Annex A.118

131. Australia does not consider such a general statement to be an adequate basis on which the

Panel should accept that each of the 17 measures challenged meets the definition of “SPS

measure” set out in Annex A(1) of the SPS Agreement. There is little purpose in the SPS

Agreement explicitly defining the term “SPS measure” if its provisions could be applied to any

measure challengeable in WTO dispute settlement. The onus is on New Zealand to establish that

each of the measures challenged, individually and as a whole,119 meets the definition of “SPS

measure”. New Zealand must also satisfy the Panel in respect of each of the “measures” it has

challenged that it is a “procedure to check and ensure the fulfilment of” SPS measures, in order

to sustain claims under Article 8 and Annex C(1). This is one of many instances where New

Zealand does not discharge its burden of proof.

2. Australia does not impose the pruning requirement alleged by New Zealand in

respect of European canker

132. In respect of European canker, New Zealand challenges:

The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the

117 See: Written Submission of Australia, Response to New Zealand’s submission: Request for a preliminary procedural ruling in relation to the consistency of New Zealand’s panel request with Article 6.2 of the DSU, DS367, 14 April 2008, paras. 8-12.

118 New Zealand’s first written submission, para. 3.87. (footnote omitted)119 New Zealand’s first written submission, para. 3.89.

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inspection could constitute an attempt to remove or hide symptoms of European canker.120

133. However, Australia does not impose such a requirement. New Zealand has pointed to

page 154 of the Final IRA Report as support for its assertion. However, the only reference to the

risk of growers pruning in an attempt to remove or hide symptoms of European canker on page

154 of the Final IRA Report appears as follows:

A stakeholder raised the possibility of growers pruning out any diseased twigs and branches before inspection. The inspection proposed needs to occur after autumn leaf fall but before winter pruning. This is reflected in the requirements set out in the operational framework section.121

134. Clearly, this statement does not amount to evidence that Australia imposes a requirement

for suspension following pruning. And no such requirement is set out in the operational

framework section of the Final IRA Report. Australia therefore submits that the Panel should

find that New Zealand has failed to establish that Australia imposes such a requirement and as a

result no findings can be made in respect of such a measure in this dispute. This leaves only 16

measures at issue.

3. New Zealand cannot challenge some of the “measures at issue” individually

135. New Zealand apparently challenges “each of the measures …, individually and as a

whole”.122 However, in Australia’s view, a number of the “measures” identified by New Zealand

cannot be challenged on an individual basis.

136. Australia recalls that, in the US – Export Restraints dispute, Canada challenged four

elements of an alleged United States’ “practice” in respect of export restraints. Canada argued

that:

… each of the elements that it cite[d] (the statute, the SAA, the Preamble, and US practice) individually constitutes a measure that is susceptible to dispute settlement, and that, “taken together” as well, these elements constitute a measure.123

120 New Zealand’s first written submission, para. 3.83; New Zealand, Request for the Establishment of a Panel by New Zealand, WT/DS367/5 (7 December 2007) (“New Zealand’s panel request”), p. 2.

121 Final IRA Report, Part B, p. 154.122 New Zealand’s first written submission, para. 3.89.123 Panel Report, US – Export Restraints, para. 8.82.

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137. The panel analysed whether “each of the measures that [Canada] identified … operates

individually to require [the alleged] treatment”124, and reasoned as follows:

In considering whether any or all of the measures individually can give rise to a violation of WTO obligations, the central question that must be answered is whether each measure operates in some concrete way in its own right. By this we mean that each measure would have to constitute an instrument with a functional life of its own...125

138. Australia submits that the Panel should apply the same approach to determining whether

each of the measures at issue can be challenged both “individually and as a whole”.

i. Measures applicable to fire blight

139. Australia has adopted a “systems approach” with respect to managing the risks associated

with fire blight, requiring:

New Zealand apples to be sourced from orchards free from symptoms of fire blight, requiring orchards to be visually inspected (once annually) at an intensity that would, at a 95% confidence level, detect visible symptoms if shown by 1% of the trees, with the inspection to take place between 4 to 7 weeks after flowering (when conditions for fire blight disease development are likely to be optimal); the detection of any visible symptoms of fire blight will result in the suspension of the orchard/block for the season; and

the use of disinfection treatment (for example complete immersion in a water solution containing a minimum of 100ppm available chlorine for a minimum of one minute) in the packing house to remove existing surface contamination with fire blight bacteria and prevent further contamination.126

140. The Final IRA Report also recommends a number of ancillary procedures to support,

verify and operationalise this systems approach. New Zealand challenges certain of these

requirements as follows:

The requirement that an orchard/block inspection methodology be developed and approved that addresses issues such as visibility of symptoms in the tops of trees, the inspection time needed and the number of trees to be inspected to meet the efficacy level, and training and certification of inspectors.

The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of fire blight.

124 Panel Report, US – Export Restraints, para. 8.84.125 Panel Report, US – Export Restraints, para. 8.85. (emphasis added) The panel’s decision was not

appealed. 126 See: Final IRA Report, Part A, p. 15; Part B, p. 318.

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The requirement that all grading and packing equipment that comes in direct contact with apples be cleaned and disinfected (using an approved disinfectant) immediately before each Australian packing run.

The requirement that packing houses registered for export of apples process only fruit sourced from registered orchards.127

141. In Australia’s view, none of these four requirements “operates in some concrete way in

its own right”128, because each is designed to implement or maintain the principal risk

management measures. These four ancillary requirements cannot therefore individually give rise

to a violation of WTO obligations and therefore cannot be challenged individually. Accordingly,

the Panel should only assess these requirements when “taken together” (or “as a whole”) with the

principal measures for fire blight.

ii. Measures applicable to European canker

142. In order to address the risks associated with European canker, Australia requires:

The proposed risk management measure is to allow export only from pest free places of production. Pest freedom would require a winter inspection of orchards before pruning of trees to confirm freedom. Detection of European canker would result in suspension of exports from that orchard/block for the coming season. Reinstatement would require eradication of the disease, confirmed by inspection.129

143. New Zealand challenges:

The requirement that all new planting stock be intensively examined and treated for European canker.

The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of European canker.130

144. Australia considers that the first requirement identified by New Zealand is designed to

support the principal measure for European canker, and thus is not challengeable on an

individual basis. Accordingly, the Panel should only assess this ancillary requirement when

“taken together” (or, “as a whole”) with the principal measure. Australia has already established

that it does not impose the requirement as stated in relation to pruning.

127 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, pp. 1 & 2. 128 Panel Report, US – Export Restraints, para. 8.85.129 See: Final IRA Report, Part A, p. 15.130 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 2.

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iii. General measures

145. The Final IRA Report also recommends a number of general operational procedures to

support the principal risk management measures for the quarantine risks identified in that

document. New Zealand has challenged:

The requirement that Australian Quarantine and Inspection Service officers be involved in orchard inspections for European canker and fire blight, in direct verification of packing house procedures, and in fruit inspection and treatment.

The requirement that New Zealand ensure that all orchards registered for export to Australia operate under standard commercial practices.

The requirement that packing houses provide details of the layout of premises.131

146. Australia submits that none of these requirements operate in a concrete way in its own

right, and therefore cannot be challenged on an individual basis. Accordingly, the Panel should

only assess these requirements when “taken together” (or, “as a whole”) with the principal risk

management measures recommended in the Final IRA Report.

147. As Australia will show, the categorisation of certain “measures” as mere ancillary

requirements has implications for New Zealand’s claims under Article 2.2 and Article 5.1.

4. New Zealand’s description of certain “measures” imposed by Australia is flawed

148. In Australia’s view, New Zealand has mischaracterised or misunderstood a number of

Australia’s requirements for the importation of New Zealand apples.

(a) New Zealand has misunderstood the nature of AQIS involvement in orchard

inspections

149. In respect of measures applicable to all pests, New Zealand challenges:

The requirement that Australian Quarantine and Inspection Service [AQIS] officers be involved in orchard inspections for European canker and fire blight, in direct verification of packing house procedures, and in fruit inspection and treatment.132

150. Australia considers that New Zealand has misunderstood what its requirement would

mean in practice. New Zealand apparently considers that Australia’s measure “require[s] the

131 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 3.132 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 3.

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involvement of AQIS officials in all [orchard] inspections.”133 New Zealand has further claimed

that “the requirement for AQIS involvement would double the number of inspectors and more

than double the cost of orchard and packing house operations.”134

151. Australia acknowledges that the level and precise nature of “AQIS involvement” was not

defined in the Final IRA Report. However, contrary to New Zealand’s mistaken perception,

Australia’s requirement does not require the involvement of AQIS officials in all orchard

inspections and packing house operations. Rather, AQIS activities are to be by way of systems

audits.135 For orchard inspections, the audit would include 100% of survey teams in the field,

and the intensity of audits would be adjusted over time based on performance. For packing

houses, all relevant packing houses would be audited in their first year of trade.

152. The requirement for AQIS to conduct such systems audits is to be facilitated by another

of the “measures” challenged by New Zealand:


153. This requirement is for packing houses to provide a basic map of the layout of their

premises, so that AQIS officers can identify areas of potential risk in preparation for the required

packing house audits.

154. Australia notes that AQIS clarified these requirements on a number of occasions during

bilateral discussions on the standard operating procedure (SOP) in 2007 and early 2008.

155. In its first written submission, New Zealand indicates that it would not object to systems

audits by AQIS officials as an “alternative” to the requirement of “AQIS involvement”.137 New

Zealand’s description of such systems audits138 accords with Australia’s view of its requirement

and accordingly there is no live dispute with respect to this measure. This leaves 15 measures at

issue.

133 New Zealand’s first written submission, para. 4.459. (original emphasis)134 New Zealand’s first written submission, para. 4.535.135 This is explained in the Final IRA Report as follows: “AQIS field audits will measure compliance with

orchard registration, block identification, pest/disease management/monitoring, records management, and the administration of the area freedom and accreditation requirements.” (Final IRA Report, Part B, p. 314.)

136 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 3. 137 New Zealand’s first written submission, para. 4.525. 138 See: New Zealand’s first written submission, para. 4.527.

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(b) New Zealand has mischaracterised Australia’s principal requirement in

respect of fire blight

156. New Zealand has described one of the measures it challenges in respect of fire blight, as:

The requirement that apples be sourced from areas free from fire blight disease symptoms.139

157. Throughout its submission, New Zealand refers to this measure as a requirement for

“area freedom”140. Australia considers that the term “area freedom” is analogous to the “pest free

area” concept in ISPM No. 4 – that is, “an area in which a specific pest does not occur as

demonstrated by scientific evidence and in which, where appropriate, this condition is being

officially maintained”.141 Australia does not require that the relevant area be free of the disease –

merely its visible symptoms. As the Final IRA Report notes142, the concept of an “area free of

disease symptoms”, is distinct from “pest free areas” and the similar “pest free places of

production” (ISPM No. 10).

158. Australia’s precise requirement is that New Zealand apples be sourced from areas free

from visible symptoms of fire blight during the period between 4 to 7 weeks after flowering. 143

This requirement reflects the concept of “low pest prevalence”. ISPM No. 22 addresses

“requirements for the establishment of areas of low pest prevalence”. It states:

The establishment of an area of low pest prevalence (ALPP) is a pest management option used to maintain or reduce a pest population below a specified level in an area. An ALPP may be used to facilitate exports or to limit pest impact in the area.144

159. The specified pest level in this case is “freedom from visible symptoms”. That is,

Australia is prepared to tolerate the existence of E. amylovora in the areas from which New

Zealand apples are sourced up to the point where disease symptoms are visible in the period

between 4 to 7 weeks after flowering.

139 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 1. 140 New Zealand’s first written submission, paras. 4.33 & 4.39. 141 ISPM No. 4, p. 37.142 Final IRA Report, Part B, p. 106.143 See: Final IRA Report, Part B, pp. 106 & 316. 144 ISPM No. 22, p. 265.

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160. Australia asks that the Panel bear in mind the distinction between an orchard that is

“free” of the bacteria, E. amylovora, and an orchard that is merely “free” of fire blight symptoms

– a distinction which New Zealand appears to blur in its submission.

(c) New Zealand has misunderstood the fire blight requirement in respect of

pruning


The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of fire blight.145

162. The Final IRA Report expresses the requirement as follows:

Any evidence of pruning or other activities carried out before the inspection that could constitute an attempt to remove or hide symptoms of fire blight would result in the suspension of the orchard/block for the season.146

163. New Zealand’s omission of the word “that” changes the nature of this requirement.147

Australia’s requirement is not that any evidence of pruning before the inspection will be taken by

Australia as an attempt to remove symptoms of fire blight, resulting automatically in suspension

of that orchard/block for the season. An orchard/block would only be suspended on evidence of

pruning before the inspection if AQIS officers believe that the pruning in that instance may have

been an attempt to hide symptoms of fire blight.

(d) New Zealand has mischaracterised the European canker requirement in

respect of planting stock


The requirement that all new planting stock be intensively examined and treated for European canker.148

145 New Zealand’s first written submission, para. 3.83; also, see para. 4.38; New Zealand’s panel request, p. 2. (emphasis added)

146 Final IRA Report, Part B, p. 316. (emphasis added)147 New Zealand’s first written submission, para 4.38. Australia notes that New Zealand also omitted the

word “that” from their expression of the like (alleged) requirement in relation to European canker, giving the same impression as in relation to the requirement for fire blight (see: New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 2). However, as will be argued in the following section, New Zealand has not established that Australia imposes such a requirement in relation to European canker.

148 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 2.

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165. However, the requirement imposed by Australia is characterised in the Final IRA Report

as follows:

All new planting stock must be intensively examined, and appropriate cultural practices and fungicide sprays used to minimise the likelihood of canker infections.149

5. Conclusion on the measures at issue

166. Australia submits that it is clear from the arguments above that this dispute is

considerably more narrow than what New Zealand has sought to assert. There are 15 measures

at issue, the descriptions of which Australia has clarified above. In addition, not all of the 15

measures can be challenged individually. If the Panel accepts Australia’s views on the measures

at issue in this dispute, then this should be reflected in the Panel’s analysis and conclusions.

C. THE BURDEN OF PROOF IS ON NEW ZEALAND

167. It is a well-established principle that the “burden of proof rests upon the party, whether

complaining or defending, who asserts the affirmative of a particular claim or defence.”150 The

initial burden lies on the complaining party.151 This reflects the principle that Members’

measures are presumed to be consistent with their WTO obligations unless sufficient evidence is

presented to the contrary.152 In Canada – Dairy (Article 21.5 – New Zealand and US II), the

Appellate Body stated:

[The complaining] Member must make out a prima facie case by presenting sufficient evidence to raise a presumption in favour of its claim. If the complaining Member succeeds, the responding Member may then seek to rebut this presumption.153

168. The Appellate Body has reaffirmed these principles for cases under the SPS

Agreement.154

149 Final IRA Report, Part B, p. 154.150 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.151 Appellate Body Report, EC – Hormones, para. 98.152 Appellate Body Report, Canada – Dairy (Article 21.5 – New Zealand and US II), para. 66. See also,

Appellate Body Report, US – Wool Shirts and Blouses, p. 14.153 Appellate Body Report, Canada – Dairy (Article 21.5 – New Zealand and US II), para. 66. See also,

Appellate Body Report, US – Wool Shirts and Blouses, p. 14.154 Appellate Body Report, Japan – Apples, para. 152. See also, Appellate Body Report, EC - Hormones,

para. 98.

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169. Australia’s measures should therefore be presumed to be consistent with the SPS

Agreement. New Zealand bears the burden of establishing a prima facie case that those

measures are inconsistent with the SPS Agreement. Only if New Zealand successfully

establishes a prima facie case will the evidentiary burden shift to Australia to rebut the

inconsistencies asserted by New Zealand. In US – Gambling, the Appellate Body elaborated that

a prima facie case:

…must be based on “evidence and legal argument” put forward by the complaining party in relation to each of the elements of the claim. A complaining party may not simply submit evidence and expect the panel to divine from it a claim of WTO-inconsistency. Nor may a complaining party simply allege facts without relating them to its legal arguments.155

170. New Zealand submits particular “evidence” without any rigorous analysis to show how

this evidence demonstrates any inconsistency with the SPS Agreement. New Zealand is required

to discharge its burden of proof in relation to each measure under each provision of the SPS

Agreement relevant to its claims.

171. Australia submits that New Zealand has failed to meet its burden of proof, by failing to

present evidence and legal argument sufficient to demonstrate a prima facie case that the

challenged measures are inconsistent with Australia’s obligations under the SPS Agreement.

D. IT IS IMPORTANT TO APPLY THE APPROPRIATE STANDARD(S) OF REVIEW

1. New Zealand fails to address the crucial issue of standard of review

172. Closely related to the burden of proof is the standard(s) of review that should be applied

by the Panel in this dispute. New Zealand’s submission is entirely silent on the issue.

173. The standard of review refers to the appropriate nature and degree of a panel’s scrutiny of

the underlying basis for a Member’s measures. In the context of the SPS Agreement, SPS

measures are required to be science-based and a Member has regulatory discretion as to how best

to address risks to human, animal or plant life or health that have been identified through risk

assessment. Determining the appropriate standard(s) of review at the outset is important

155 Appellate Body Report, US – Gambling, para. 140. (footnotes omitted; original emphasis)

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because, as the Appellate Body has noted, “[a] failure to apply the proper standard of review

constitutes legal error under Article 11 of the DSU.”156

174. According to the Appellate Body, “Article 11 of the DSU lays down the standard of

review for panels in disputes under the [WTO] covered agreements”.157 Article 11 of the DSU

directs a panel to make “an objective assessment of the facts of the case”, inter alia. In EC –

Hormones, the Appellate Body explained that Article 11 of the DSU imposed certain limits on

the standard of review that a panel may adopt in its fact-finding role, stating that:

So far as fact-finding by panels is concerned, their activities are always constrained by the mandate of Article 11 of the DSU: the applicable standard is neither de novo review as such, nor “total deference”, but rather the “objective assessment of the facts”. Many panels have in the past refused to undertake de novo review, wisely, since under current practice and systems, they are in any case poorly suited to engage in such a review. On the other hand, “total deference to the findings of the national authorities”, it has been well said, “could not ensure an ‘objective assessment’ as foreseen by Article 11 of the DSU”.158

175. But this standard of “objective assessment” is couched in broad terms and provides

limited guidance on the precise nature and intensity of the review required of a panel in its fact-

finding role. Australia submits that the standard of review should be informed by the particular

covered agreement(s) and obligation(s) at issue in a given dispute.159

2. The standard of review is informed by the relevant obligation and covered

agreement

176. Australia submits that the precise nature of what is required by an “objective assessment

of the facts” varies across the covered agreements and may also vary across particular

obligations within the same agreement. Australia finds support for its view in the statement by

the Appellate Body in US – Softwood Lumber VI (Article 21.5 – Canada), as follows:

[T]he proper standard of review to be applied by a panel must … be understood in the light of the specific obligations of the relevant agreements that are at issue in the case.160

156 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 187.157 Appellate Body Report, US – Cotton Yarn, para. 68.158 Appellate Body Report, EC – Hormones, para. 117. (footnotes omitted)159 Australia notes that the Anti-Dumping Agreement is the only covered agreement with explicit language

on standard of review. See: Article 17.6(i), Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping Agreement”). Also, see: Appellate Body Report, EC – Hormones, para. 114.

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177. Therefore, the standard of review applied by a panel must reflect not only Article 11 of

the DSU, but also the content of the covered agreement and particular obligation in question.

178. For example, the Appellate Body has opined on how panels should apply the standard of

review mandated by Article 11 of the DSU in the context of disputes under Article 4.2(a) of the

Agreement on Safeguards.161 In US – Lamb, the Appellate Body explained a panel’s role in

relation to standard of review in that context, as follows:

[T]he precise nature of the examination to be conducted by a panel, in reviewing a claim under Article 4.2 of the Agreement on Safeguards, stems, in part, from the panel’s obligation to make an “objective assessment of the matter” under Article 11 of the DSU and, in part, from the obligations imposed by Article 4.2, to the extent that those obligations are part of the claim..162

179. The need to apply standard(s) of review specific to the SPS Agreement was recognised by

the Appellate Body in the EC – Hormones dispute, where it stated that panels must “adopt a

standard of review … clearly rooted in the text of the SPS Agreement itself”.163

3. The standard(s) of review must maintain the balance of rights and obligations under

the SPS Agreement

180. The protection of human, animal or plant life or health is a fundamental non-trade right

of Members recognised by the SPS Agreement. The SPS Agreement essentially balances the

exercise of this right against the trade liberalisation goals of the WTO by requiring SPS measures

to be science-based, non-discriminatory and not more trade-restrictive than required.

181. The SPS Agreement does not impose a requirement of uniformity, whereby all Members

are required to adopt the same SPS regulatory systems, methodologies or measures. Rather,

Members retained the flexibility to comply with their obligations under the SPS Agreement in a

manner which suits their particular circumstances and priorities.

182. Application of the appropriate standard of review by panels to the assessment and

management of risks acknowledges that panels do not have the scientific or technical expertise,

160 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 92 (emphasis added). Also, see: Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 184.

161 See: Appellate Body Report, Argentina – Footwear Safeguard, para. 121; Appellate Body Report, US – Lamb, paras. 102-105.

162 Appellate Body Report, US – Lamb, para. 105; also, see paras. 102-104.163 Appellate Body Report, EC – Hormones, para. 115.

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or the resources, to evaluate risk under the SPS Agreement; and that they are not in a position to

settle scientific debates.

183. Accordingly, Australia submits that where a Member has acted in good faith to comply

with its obligations under the SPS Agreement, a panel, in its fact-finding role, should show a

degree of deference (but not total deference) in its review of that Member’s regulatory decisions.

4. The SPS Agreement reflects a balance of jurisdictional competences

184. Australia contends that the extent of deference to be shown by a panel can be ascertained

by examining the distribution of decision-making authority enshrined in the SPS Agreement for

the judgments required to assess and mitigate SPS risks in the territory of a Member. In EC –

Hormones, the Appellate Body recognised that a balance was struck between Members in

relation to the distribution of that decision-making authority, stating that:

[T]he standard of review appropriately applicable in proceedings under the SPS Agreement … must reflect the balance established in that Agreement between the jurisdictional competences conceded by the Members to the WTO and the jurisdictional competences retained by the Members for themselves.164

185. As Members retained certain jurisdiction to themselves, certain limitations are imposed

on the nature of scrutiny that panels may apply to their assessment of factual matters under

particular obligations, such as their review of risk assessments. In relation to certain other

obligations, however, no such limitation applies. Accordingly, the appropriate standard of

review may vary between different obligations in the SPS Agreement.

186. In Australia’s view, this variation takes the form of a sliding scale in relation to the extent

to which a panel may intervene in certain assessments or regulatory judgments made or relied

upon by a Member in order to comply with its obligations under the SPS Agreement. The two

ends of this scale are de novo review and total deference, neither of which are permissible for an

“objective assessment of the facts”.165 Australia contends that a panel’s jurisdictional

competence to review the findings of a risk assessment is considerably limited, but does not

amount to requiring “total deference” to those findings. By contrast, a panel has a different role

in reviewing a Member’s consistency with its obligations in relation to whether the application

of an SPS measure results in, for example, discrimination or a disguised restriction on

164 Appellate Body Report, EC – Hormones, para. 115. (footnote omitted)165 See: Appellate Body Report, EC – Hormones, para. 117.

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international trade. In relation to certain other regulatory judgments made by a Member, such as

a decision to base SPS measures on a particular risk assessment, the level of deference required

falls in between the deference required in the two above examples. These differing levels of

deference reflect the “balance … [of] jurisdictional competences”166 established in the SPS

Agreement.

187. Australia submits that it is incumbent upon panels not to disturb that balance between

regulatory autonomy and international supervision. As the Appellate Body further observed in

EC – Hormones:

To adopt a standard of review not clearly rooted in the text of the SPS Agreement itself, may well amount to changing that finely drawn balance; and neither a panel nor the Appellate Body is authorized to do that.167

188. In order to assist the Panel, Australia sets out its view on the appropriate standard of

review in relation to each of the obligations at issue in this dispute below.

5. The Panel’s role where scientific judgment is not in issue

189. Australia acknowledges that there are certain obligations in the SPS Agreement in

relation to which panels need show a relatively low level of deference to a decision by a

Member. These are obligations directed at meeting specific requirements or managing the trade

impact of the means by which a Member has sought to achieve particular ends, rather than

matters of scientific or regulatory judgment.

190. Australia submits that those obligations include:

whether discrimination or a disguised restriction on international trade can be

established under either Article 2.3 or Article 5.5;

whether there is another measure, reasonably available taking into account

technical and economic feasibility, that is significantly less restrictive to trade,

under Article 5.6 and footnote 3 (but not whether that measure achieves a

Member’s ALOP, to be explained below); and

166 Appellate Body Report, EC – Hormones, para. 115.167 Appellate Body Report, EC – Hormones, para. 115.

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whether a Member has observed the requirements set out in Article 8 and Annex

C(1)(a) of the SPS Agreement.

6. The standard of review in relation to assessing the scientific basis of SPS measures

evaluated in a risk assessment requires a panel to show considerable deference

(a) The mandatory requirement for Members to obtain a risk assessment

excludes a panel from conducting the required risk assessment itself

191. Australia submits that the most significant limitation imposed by the SPS Agreement on

the jurisdiction of panels as to their fact-finding role is in relation to their review of risk

assessments. Risk assessments provide an underlying justification for the adoption of SPS

measures and are required to evaluate certain factual material including the available scientific

evidence. The requirement for Members to “base” SPS measures on a risk assessment means

that an investigative and fact-finding process compulsorily precedes any assessment by a WTO

panel of the relevant scientific and other evidence. Where a Member has obtained and relied

upon a comprehensive and transparent risk assessment, it is incumbent on panels to accord

considerable deference (but not total deference) to that assessment.

192. The requirement in Article 5.1 to “base” SPS measures on a risk assessment means there

is a positive obligation on all Members to obtain and rely upon a risk assessment that is

appropriate to the circumstances in order to justify the adoption of SPS measures to address a

particular risk. In situations where no relevant international standards, guidelines or

recommendations exist, as in the present dispute, a Member does not enjoy the presumption of

consistency under the SPS Agreement which is provided by Article 3.2. In such circumstances,

the SPS Agreement provides no option but to obtain and rely upon a risk assessment (except in

the circumstances set out in Article 5.7).

193. In Australia’s view, the expectation is that Members themselves will procure the

necessary risk assessments, where possible and appropriate. This is supported by the fact that

the International Plant Protection Convention (IPPC) requires that “each contracting party shall

make provision, to the best of its ability, for an official national plant protection organization

with the main responsibilities … [to include] the conduct of pest risk analyses”.168 The IPPC

reflects an acknowledgment that Members themselves are best placed to assess the consequences 168International Plant Protection Convention, Article IV.

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of risks to human, animal or plant life or health within their territory and the appropriate

regulatory response, and to reflect community expectations.

194. Successive panels have recognised that they may not perform the risk assessment

mandated by Article 5.1 of the SPS Agreement.169 The panel in Japan – Apples (Article 21.5 –

US) acknowledged that “we are not supposed to conduct our own risk assessment or to impose

any scientific opinion on Japan.”170 Similarly, the panel in the Canada/US – Continued

Suspension dispute stated that:

The Panel recalls that it is not the appropriate role of the Panel to conduct its own risk assessment based on scientific evidence gathered by the Panel or submitted by the parties during the Panel proceedings.171

195. It is clear that a Member must obtain a risk assessment and that a panel can never supply

that risk assessment. If a panel was to perform the risk assessment required under Article 5.1,

the jurisdictional competence expressly retained by Members in this regard would be nullified.

196. For these reasons, Australia submits that the Panel must refrain from conducting a de

novo review of the evidence (that is, to assess the evidence anew),172 or to re-do, in full or in part,

the Final IRA Report.

(b) Panels should review the risk assessment rather than assess the risk

197. In Canada/US – Continued Suspension, the panel set out the basic task of panels under

Article 5.1 of the SPS Agreement, as follows:

An analysis under Article 5.1 consists of two fundamental questions. First, was a risk assessment, appropriate to the circumstances and taking into account risk assessment techniques developed by the relevant international organizations conducted? Second, is the sanitary measure based on that risk assessment? The Panel will address each question successively.173

169 See: Panel Report, US – Continued Suspension, para. 7.443; Panel Report, Canada – Continued Suspension, para. 7.432; Panel Report, EC – Hormones (Canada), para. 8.104; Panel Report, EC – Hormones (US), para. 8.101; Panel Report, Japan – Apples (Article 21.5 – US), para. 8.137.

170 Panel Report, Japan – Apples (Article 21.5 – US), para. 8.137.171 Panel Report, US – Continued Suspension, para. 7.443; Panel Report, Canada – Continued Suspension,

para. 7.432. (footnote omitted) 172 See: Panel Report, Japan – DRAMs (Korea), para. 7.43.173 Panel Report, US – Continued Suspension, para. 7.439; Panel Report, Canada – Continued Suspension,

para. 7.430.

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198. Under the first question, the panel properly acknowledged that its role was to assess

whether a valid risk assessment had been conducted. By contrast, it is not the role of a panel to

attempt to determine the actual level of risk.

199. The SPS Agreement imposes a number of requirements for a risk assessment to be

considered valid under Article 5.1. The concept of “risk assessment” is defined in Annex A:4,

and a valid risk assessment must take into account the factors set out in Article 5.2 and Article

5.3. The risk assessment relied upon must also be appropriate to the circumstances, and take into

account risk assessment techniques developed by the relevant international organisations,

pursuant to Article 5.1. These are the matters a panel must assess in relation to a risk

assessment.174 The role of the Panel in this dispute is thus to review the risk assessment

performed by the IRA Team, rather than to act as initial trier of the scientific evidence. 175

Australia submits that the Panel’s role is not to ask: “is there a risk?”, but to ask: “was the risk

assessor’s decision objective and credible?”

(c) The Panel may only intervene in the assessment of risk in limited

circumstances

200. Australia considers that the Panel may not intervene in the assessment of risk relied upon

by Australia solely on the basis that it may have drawn different factual conclusions from those

of the IRA Team.176 In circumstances where the scientific evidence available on a particular

point may be susceptible to more than one interpretation by a “qualified and respected source”177,

a panel must not attempt “to settle a scientific debate” or to be an “arbiter of the opinions

expressed by the scientific community”178, even where its preferred view appears to be supported

by the “‘preponderant’ weight of the evidence.”179 The Panel may not substitute its judgment for

that of the IRA Team.180 Australia submits that the question for the Panel is whether the risk

174 See: Panel Report, US – Continued Suspension, para. 7.445; Panel Report, Canada – Continued Suspension, para. 7.434.

175 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 188. Also, see: Appellate Body Report, US – Hot-Rolled Steel, para. 55.

176 See: Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 99; Appellate Body Report, US – Lamb, para. 106.

177 Appellate Body Report, EC – Hormones, para. 194. 178 See: Panel Report, EC – Asbestos, para. 8.181. 179 Appellate Body Report, EC – Asbestos, para. 178. 180 See: Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 99; Appellate

Body Report, US – Lamb, para. 106; Appellate Body Report, US – Cotton Yarn, para. 74.

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assessment relied upon by Australia is objective and credible, rather than whether the outcomes

of that assessment are “correct” (which suggests very little, if any, deference). New Zealand

fails to appreciate this and appears to think it can supply the Panel with its own account of the

scientific evidence and ask the Panel to choose the version it prefers, whereas New Zealand’s

actual burden is to demonstrate that the risk assessment relied upon by Australia is not objective

and credible.

201. The obligation that a risk assessment be “as appropriate to the circumstances” (Article

5.1) supports Australia’s view that a panel should show considerable deference to the findings

reflected in a risk assessment. A risk assessor’s evaluation of risk must be tailored to the specific

circumstances of the particular case, which include the characteristics of the product, its origin

and destination, and other country-specific matters such as climate, geography and established

production processes.181 Australia submits that it would be inappropriate for a panel to attempt to

choose between such an assessment and an alternative account of the risk which is not similarly

embedded in the particular circumstances.

202. Australia submits that the Panel should be guided by the approach taken by the

compliance panel in Australia – Salmon (Article 21.5 – Canada)182, which reasoned as follows:

[W]e find it difficult to read into the summary definition of risk assessment set out in paragraph 4 of Annex A … specific requirements such that minor flaws or misconceptions at a detailed level would preclude a study from falling within the SPS definition of risk assessment. As agreed by all parties and experts involved in this dispute, risk assessment, in particular a qualitative risk assessment like the 1999 IRA [risk assessment], inevitably includes subjective elements. On the other hand, we realize that there may be studies that are flawed or biased to such extent that they cannot be said to meet any standard of objectivity. We do not think that such studies should pass the test of a risk assessment in accordance with the SPS Agreement.183

203. In that panel’s view, a risk assessment is required to meet a threshold level of objectivity.

It found support for its view from the objective factors required to be taken into account in a risk

181 Panel Report, Australia – Salmon, para. 8.71.182 See: Panel Report, Australia – Salmon (Article 21.5 – Canada), paras. 7.44-7.58.183 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.47. (emphasis added; footnotes

omitted)Although the panel made this statement in the context of its consideration of “the question of where to put

the threshold of an evaluation of likelihood consistent with the SPS Agreement”, Australia considers that the substance of the panel’s reasoning is equally relevant across a panel’s evaluation of each element of a risk assessment.

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assessment, the wording of Article 5.7, as well as the 1997 OIE International Aquatic Animal

Health Code on import risk analysis.184 The panel concluded that:

[T]he level of objectivity to be achieved in a risk assessment must be such that one can have reasonable confidence in the evaluation made, in particular in the levels of risk assigned.185

204. The panel in Australia – Salmon (Article 21.5 – Canada) then examined the risk

assessment in question, and made the following findings:

Neither Canada nor the experts advising us, refers to scientific or other information that was not taken into account in the 1999 IRA [risk assessment]. Moreover, whereas Canada and Dr. Wooldridge do point out certain methodological flaws and alleged inconsistencies in the 1999 IRA that – if absent – might have led to a lower level of assessed risk, we have not been convinced that this would be so, at least not to such extent that we would no longer have reasonable confidence in the levels of risk currently assigned in the 1999 IRA. In summary, we believe that the flaws identified are not so serious as to prevent us from having reasonable confidence in the evaluation made and the levels of risk assigned.186

205. The obligation under the SPS Agreement to obtain and rely upon a risk assessment

establishes that the (non-WTO) competent bodies that perform these risk assessments are given a

pre-eminent position in the decision-making process as to whether there is a legitimate basis for

particular SPS measures.

206. Australia submits that the Panel’s obligation to make an “objective assessment of the

facts”, pursuant to Article 11 of the DSU, requires it to ensure that it can have reasonable

confidence in the risk assessment relied upon by Australia. An intense scrutiny of the scientific

evidence by the Panel is not required in order for it to satisfy its obligation to conduct an

184 This OIE Code states that “[t]he principal aim of import risk analysis is to provide importing countries with an objective and defensible method of assessing the disease risks associated with the importation of aquatic animals… Import risk analysis is preferable to a zero-risk approach because it provides a more objective decision” (emphasis added). This, as well, supports the view that the evaluation of likelihood needs to achieve a certain level of objectivity. See: Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.50.

185 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.51. (emphasis added)Australia notes that New Zealand itself appears to agree with the panel’s formulation of the appropriate test

for judging the WTO-validity of a risk assessment. Biosecurity New Zealand’s Risk Analysis Procedures states: “While a risk assessment inevitably includes subjective elements there are a number of factors within the

SPS Agreement, including ‘risk assessment techniques developed by the relevant international organisations’, ‘available scientific evidence’, ‘scientific principles’ and ‘sufficient scientific evidence’, which should be used when evaluating likelihood. The level of objectivity must be such that a reasonable confidence in the evaluation, particularly in the nominated levels of risk, is achieved (WTO (2000)).” Exhibit AUS-7: Biosecurity New Zealand, Risk Analysis Procedures, Version 1, (12 April 2006), Appendix 1, para. 1.3.1.8.

186 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.57. (footnote omitted; original emphasis; emphasis added)

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“objective assessment of the facts”, unless New Zealand has established that the Panel cannot

have reasonable confidence in the risk assessment. In order to do so, New Zealand must show

that the Final IRA Report (insofar as it relates to the risk assessments of the three pests in

question) is not objective and credible, that the IRA Team failed to take into account evidence

that would have led to a lower level of assessed risk had it done so, and that any flaws identified

are so serious as to prevent the Panel from having reasonable confidence in the evaluation

made.187 As the panel in Australia – Salmon (Article 21.5 – Canada) recognised, identification

of minor flaws or inconsistencies by New Zealand would not be sufficient to satisfy its burden.188

The Panel cannot make New Zealand’s case for it.189 If New Zealand fails to demonstrate flaws

so serious in the risk assessment, then there can be no reason for the Panel not to have reasonable

confidence in the Final IRA Report.

207. Therefore, in Australia’s submission, application of the appropriate standard of review in

respect of the Panel’s assessment of the Final IRA Report means that the Panel may not

intervene in the findings or conclusions of the Final IRA Report unless New Zealand has

established that it is so seriously flawed that the Panel cannot have reasonable confidence in it.

Such a standard of review clearly does not require the Panel to show “total deference” to the

findings of the risk assessment, but at the same time it ensures that an appropriately deferential

standard is applied. For the reasons outlined in this submission, New Zealand has failed to meet

its burden.

(d) The Panel should also show considerable deference under the third

requirement of Article 2.2

208. Australia submits that, like the test in relation to the validity of a risk assessment under

Article 5.1, the Panel may only intervene in the IRA Team’s assessment of the scientific

evidence under the third requirement of Article 2.2 (that measures not be maintained without

sufficient scientific evidence), if New Zealand has established serious flaws in the IRA Team’s

assessment of the evidence so that the Panel cannot have reasonable confidence in the evaluation

relied upon by Australia to adopt SPS measures. To do otherwise would effectively undermine

the deference required to be shown to a risk assessment under Article 5.1.

187 See: Panel Report, Australia – Salmon (Article 21.5 – Canada), paras. 7.51 & 7.57.188 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.47.189 Appellate Body Report, Japan – Agricultural Products II, para. 129.

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(e) The Panel should also show considerable deference when evaluating whether

alternative SPS measures would achieve Australia’s ALOP

209. The Panel must also be mindful of the standard of review if it is required to assess

whether particular SPS measures are more trade-restrictive than required under Article 5.6 of the

SPS Agreement, as this would necessitate an assessment of whether any suggested alternative

SPS measure(s) would achieve Australia’s ALOP.190 In Australia’s view, where the suitability of

a particular alternative measure has previously been evaluated as part of a risk assessment (in

accordance with Annex A(4) of the SPS Agreement), a panel may not conduct a de novo review

of whether that potential alternative measure would achieve a Member’s ALOP. Whether a

particular measure would achieve the ALOP involves scientific and technical judgment on the

basis of relevant evidence and the particular circumstances. Where such judgment has

previously been exercised as part of the risk assessment process, a panel may not displace that

judgment where it reflects an objective and credible evaluation.

(f) The Panel’s right to consult experts cannot extend its role

210. In Australia’s view, the Panel’s role in reviewing a risk assessment is established by

Article 5.1 and cannot be extended by virtue of the Panel’s right to seek advice from experts on

scientific and technical issues.191 A panel may “seek information and advice from experts to help

it to understand and evaluate the evidence submitted and the arguments made” by the parties192,

but the role of experts is clearly distinct from that of the Panel, which is obliged to make “an

objective assessment of the facts”, pursuant to Article 11 of the DSU. Just as the Panel is not

entitled to conduct a de novo review of the scientific evidence itself or make scientific findings,

nor are the experts entitled to assume such a role.

7. A panel should also show a degree of deference in assessing a Member’s decision to

adopt SPS measures based on a valid risk assessment

211. In accordance with Article 5.1, SPS measures must be “based on” a valid risk assessment.

The Appellate Body has explained that “based on” means there must “be a rational relationship

190 Australia notes that a similar issue may also arise during a panel’s evaluation under the first requirement of Article 2.2 of the SPS Agreement.

191 See: Article 13 of the DSU and Article 11.2 of the SPS Agreement.192 Appellate Body Report, Japan – Agricultural Products II, para. 130. Also, see: Panel Report, US –

Continued Suspension, para. 7.420; Panel Report, Canada – Continued Suspension, para. 7.411.

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between the measure and the risk assessment.”193 If the Panel finds that the Final IRA Report is a

valid risk assessment within the meaning of Article 5.1, then the burden is on New Zealand to

establish that there is no rational relationship between the measures adopted by Australia and the

recommendations of the Final IRA Report.

212. Australia notes that there may be multiple legitimate interpretations of particular

evidence and conclusions as to risk. The Appellate Body has made it clear that a Member may

rely upon any “opinion coming from qualified and respected sources”.194 In circumstances where

a particular risk has been identified by a qualified and respected source, a Member may choose

to rely on that source, even where it represents a “divergent opinion”.195 Regulatory discretion is

therefore accorded to Members in relation to the expert opinion to be relied upon in determining

how to respond to a risk to human, animal or plant life or health. In Australia’s view, WTO

panels must respect that regulatory discretion.

213. Australia considers that it is essential for the Panel to bear in mind that a particular

evaluation of risk may support a range of possible measures, and that it is up to the Member

concerned to select the most appropriate measure(s) to address the risk, taking into account the

relevant circumstances and its ALOP, as well as its obligation that any measures not be more

trade-restrictive than required. The panel in the EC – Biotech Products dispute recognised this:

[T]he mere fact that relevant scientific evidence is sufficient to perform a risk assessment does not mean that the result and conclusion of the risk assessment are free from uncertainties (e.g., uncertainties linked to certain assumptions made in the course of the performance of a risk assessment). Indeed, we consider that such uncertainties may be legitimately taken into account by a Member when determining the SPS measure, if any, to be taken. In view of these uncertainties, a given risk assessment may well support a range of possible measures. Within this range, a Member is at liberty to choose the one which provides the best protection of human health and/or the environment, taking account of its appropriate level of protection, provided that the measure chosen is reasonably supported by the risk assessment and not inconsistent with other applicable provisions of the SPS Agreement, such as Article 5.6.196

214. Accordingly, in Australia’s view, it is within the discretion of the importing Member to

choose which SPS measures it will adopt in order to address a particular risk, as long as those

measures are reasonably supported by a valid risk assessment.

193 Appellate Body Report, EC – Hormones, para. 193.194 Appellate Body Report, EC – Hormones, para. 194. 195 Appellate Body Report, EC – Hormones, para. 194. 196 Panel Report, EC – Biotech Products, para. 7.1525. (emphasis added)

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VI. LEGAL AND FACTUAL REBUTTAL

A. ARTICLE 2.2 AND ARTICLE 5.1 MUST “CONSTANTLY BE READ TOGETHER”

1. New Zealand is wrong to treat Article 2.2 and Article 5.1 in virtual isolation

215. There is a close relationship between the second and third requirements of Article 2.2 and

Article 5.1 of the SPS Agreement.197 The Appellate Body has on numerous occasions affirmed

that Article 2.2 and Article 5.1 should “constantly be read together” and that the elements of

each provision inform and impart meaning to the other.198

216. New Zealand has, in substance, ignored this established guidance. Except for a few

cursory statements asserting that the provisions are related,199 it makes entirely separate

arguments in relation to Article 2.2 and Article 5.1 and fails to explicitly link the substance of its

claims. As a result, New Zealand fails to inform either Australia or the Panel how it considers

these provisions should operate and relate to each other.

217. Australia’s key concern is that by treating Article 2.2 and Article 5.1 in virtual isolation,

New Zealand artificially divides the substantive matters of relevance under each. Article 2.2 is

not, as New Zealand implies, an obligation to assess a narrow category of scientific literature.200

Likewise, Article 5.1 is not primarily designed to discipline risk assessment methodology.201

Science and methodology, as well as relevant technical and economic factors, need to be

considered together to properly appreciate the determination of risk in the Final IRA Report.

218. This is the vital point which New Zealand misses. The ascertainment of risk is a

multifaceted exercise. Risk is not determined exclusively by science. As appropriate to the

circumstances, it involves the weighing and balancing of a number of scientific, economic and

197 New Zealand only makes substantive arguments in relation to the third element of Article 2.2 which requires that measures are “not maintained without sufficient scientific evidence”. No argumentation is advanced in relation to the second element, that measures be “based on scientific principles”. New Zealand only makes passing assertions of inconsistency with this element (see: New Zealand’s first written submission, paras. 4.6 & 4.405). Accordingly, Australia’s response will likewise concentrate on the third element of Article 2.2.

198 Appellate Body, EC – Hormones, para. 180; Appellate Body, Australia – Salmon, para. 130; Appellate Body, Japan – Agricultural Products II, para. 82.

199 New Zealand’s first written submission, paras. 4.152 & 4.405.200 New Zealand’s first written submission, paras. 4.11-4.51.201 New Zealand’s first written submission, paras. 4.159-4.206 & 4.403.

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technical factors”202, marshalling evidence according to a particular methodology, and finally, the

application of expert judgment at every stage of the process. None of these elements can be

meaningfully separated; they inform and impart meaning to each other. Consequently,

Article 2.2 lacks context without Article 5.1 and Article 5.1 lacks the discipline of a specific

standard of science203 unless it absorbs the evidentiary requirements of Article 2.2.

219. New Zealand’s isolated treatment of Article 2.2 and Article 5.1 fails to accord with the

proper interpretation of the provisions. Australia will therefore set out how the relationship

between these two provisions should be understood. It will demonstrate that the question of

whether Australia has maintained measures “without sufficient scientific evidence” under Article

2.2 can only be answered by considering whether Australia’s measures are based on a valid risk

assessment under Article 5.1.

220. If the Panel applies Australia’s interpretation of the relevant provisions to the facts, rather

than New Zealand’s flawed analysis, it is clear that Australia’s measures are consistent with its

obligations under Article 5.1 and Article 2.2. Even if the Panel adopts New Zealand’s flawed

approach, New Zealand has still failed to make a prima facie case in support of its assertions.

2. Consistency with Article 5.1 establishes consistency with Article 2.2

221. The third requirement of Article 2.2 provides that “Members shall ensure that any

sanitary or phytosanitary measure … is not maintained without sufficient scientific evidence”.

This requirement is general in nature and provides, of itself, little guidance to Members as to

what will constitute a “sufficient” scientific basis for a measure.

222. The Appellate Body has explained that “sufficiency” requires “the existence of a

sufficient or adequate relationship between two elements, in casu, between the SPS measure and

the scientific evidence.”204 “Sufficiency” is a “relational concept”205 and must be determined on

202 See: Article 5.1, Article 5.2 and Article 5.3 of the SPS Agreement.203 Article 5.2 requires risk assessments to “take into account available scientific evidence”. However, as

Australia explains below, this is a purely procedural obligation that does not require a risk assessment to conform its conclusions to the evidence. Accordingly, Article 5.1, of itself, lacks a specific standard against which to weigh scientific evidence. According to Article 31(1) of the Vienna Convention on the Law of Treaties, Article 5.1 and Article 5.2 should be interpreted in light of their context. Given that Article 2.2 is the most significant provision supplying context for Article 5.1 and Article 5.2, in Australia’s view, it necessarily follows that the applicable the standard for scientific evidence should be derived from Article 2.2.

204 Appellate Body Report, Japan – Agricultural Products II, para. 73.205 Appellate Body Report, Japan – Agricultural Products II, para. 73.

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a “case-by-case” basis.206 In Australia’s view, this necessarily implies that the scope and content

of “sufficiency” is to be derived from other more specific and detailed provisions in the SPS

Agreement and the specific facts of each case. That is, its scope and content is context-driven.

223. The Appellate Body has confirmed that “[t]he context of the word ‘sufficient’ or, more

generally, the phrase ‘maintained without sufficient scientific evidence’ in Article 2.2, includes

Article 5.1 as well as Articles 3.3 and 5.7 of the SPS Agreement.”207 Therefore each of these

provisions provides a relevant context for understanding what is meant by the term “sufficient”.

224. Australia does not seek to justify its SPS measures under Article 5.7 or Article 3.

Australia has based its measures on a scientific risk assessment: the Final IRA Report. Since

Article 5.1 is the key discipline for Members seeking to base their SPS measures on risk

assessments, Australia submits that, in this dispute, “sufficiency” under Article 2.2 falls to be

determined within the context of Article 5.1.

225. The relationship between Articles 2.2 and 5.1 is not merely one where two independent

provisions help to confirm the scope and content of one another.208 On the contrary, Article 2.2

and Article 5.1 exist in a very particular relationship whereby Article 5.1 is “viewed as a specific

application of the basic obligations contained in Article 2.2”.209 This means that Article 5.1 and

its associated provisions elaborate specific conditions which, if met, will positively establish

consistency with Article 2.2. Close scrutiny of the provisions reveals that these specific

conditions are the ones which establish risk.

226. Article 5.1 obliges Members to procure a risk assessment that is appropriate to the

circumstances:

Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations. (emphasis added)

227. The relevant definition of the term “risk assessment” is set out in Annex A, paragraph 4

of the SPS Agreement. It requires that a valid risk assessment must consider risk both in terms of

206 Appellate Body Report, Japan – Agricultural Products II, para. 73 & 84.207 Appellate Body Report, Japan – Agricultural Products II, para. 74.208 See: Appellate Body, EC – Hormones, para. 180; Appellate Body, Australia – Salmon, para. 130;

Appellate Body, Japan – Agricultural Products II, para. 82.209 Appellate Body, EC – Hormones, para. 180; Panel Report, Australia – Salmon, para. 8.51.

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likelihood210 of entry, establishment and spread of a pest or disease, and the magnitude of the

economic and biological consequences.211 This definition of “risk assessment” accords with the

concept of risk found in ISPM No. 5. ISPM No. 5 defines “pest risk (for quarantine pests)” as:

The probability of introduction and spread of a pest and the magnitude of the associated potential economic consequences.212

228. “Risk”, accordingly, is not reducible to the probability of entry, establishment and spread,

nor is it wholly focussed on scientific evidence. “Risk”, by definition, must incorporate the

magnitude of associated economic and biological circumstances.213 Australia requests that the

Panel take this important point into account.

229. Article 5.2 and Article 5.3 confirm that the determination of “risk” extends beyond the

consideration of scientific evidence. Article 5.2 sets out a list of technical factors that must be

taken into account in a risk assessment. Article 5.3 sets out a list of economic factors that must

be taken into account in a risk assessment. Neither of these provisions exhaust the categories of

evidence that may be considered in a risk assessment. In EC—Hormones, the Appellate Body

confirmed that the potential ambit of relevant considerations in a risk assessment is wide, and

extends to matters affecting risk in the “real world”:

It is essential to bear in mind that the risk that is to be evaluated in a risk assessment under Article 5.1 is not only risk ascertainable in a science laboratory operating under strictly controlled conditions, but also risk in human societies as they actually exist, in other words, the actual potential for adverse effects … in the real world where people live and work and die.214

230. In Australia’s view, there is ample support in the SPS Agreement and the guidance of the

Appellate Body which confirms that the assessment of risk is complex and multifaceted. By

resting most of its arguments on a narrow category of scientific literature, New Zealand ignores

this fundamental point.

210 In Australia – Salmon, the Appellate Body recognised that the term “likelihood” in Annex A(4) has the same meaning as “probability”: Appellate Body Report, Australia – Salmon, para. 123.

211 This definition finds support in: Panel Report, Australia—Salmon, para 8.72. 212 International Plant Protection Convention, International Standard for Phytosanitary Measures No. 5:

Glossary of Phytosanitary terms, 2007. (emphasis added)213 This definition of “risk” is adopted in this submission and is used throughout with this meaning, except

in citing its use in past cases. Note that the Final IRA Report adopts the same notion of risk, defining it as the “product of likelihood and consequences”. See: Final IRA Report, Part B, p. 4.

214 Appellate Body Report, EC—Hormones, para. 187.

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231. New Zealand compounds its error by appealing to the superficially attractive notion that

science is capable of disclosing a single, objective explanation of particular phenomena.

Australia submits that this is simply incorrect. Scientific evidence is permeated with varying

degrees of scientific uncertainty and, accordingly, never capable of monolithic interpretation.

232. Australia is obliged to take into account ISPM No. 11 under Article 5.1. It notes:

Estimation of the probability of introduction of a pest and of its economic consequences involves many uncertainties. In particular, this estimation is an extrapolation from the situation where the pest occurs to the hypothetical situation in the PRA area. It is important to document the areas of uncertainty and the degree of uncertainty in the assessment, and to indicate where expert judgment has been used. 215

233. The specific challenge that scientific uncertainty presents in the context of risk

assessments is that scientific method is not, by definition, competent to resolve its own inherent

uncertainties. It cannot arbitrate between scientific evidence when confronted with a range of

credible or defensible scientific explanations of a particular phenomenon. Nor can scientific

method provide any definitive guidance to risk assessors in reaching conclusions about risk when

information is incomplete, unreliable or in some way compromised. This is especially the case

when, as in the Final IRA Report, risk assessors are seeking to assess risk in geographic areas

that are currently pest and disease free.216 Resolving or accommodating uncertainty can therefore

only be achieved through the exercise of expert judgment in accordance with the specific

requirements of each case. Consequently, risk assessment inevitably entails the application of

expert judgment, as recognised in the extract from ISPM No. 11 above, past SPS disputes217 and

the SPS Agreement itself.218

215 Exhibit AUS-X: ISPM No. 11, para. 2.4 (emphasis added). International Plant Protection Convention, International Standard for Phytosanitary Measures No. 2: Framework for pest risk analysis , 2007, para. 3.1 identifies some of the key sources of scientific uncertainty as follows: “Uncertainty is a component of risk and therefore important to recognize and document when performing PRAs. Sources of uncertainty with a particular PRA may include: missing, incomplete, inconsistent or conflicting data; natural variability of biological systems; subjectiveness of analysis; and sampling randomness. Symptoms of uncertain causes and origin and asymptomatic carriers of pests may pose particular challenges.”

216 Australia notes that New Zealand’s risk assessment for the importation of Litchi fruit (Risk analysis for the importation of Litchi fruit (Litchi chinensis) from Australia, MAFNZ 2008 (p. 71) clearly recognises that uncertainty can be an issue. For example, in relation to Ischnaspis longirostris the risk analysis states (emphasis added): “There is no data on the tolerances or development thresholds in the literature making it hard to predict how widely I. longirostris would establish in New Zealand … There is a high level of uncertainty around the efficacy of the irradiation dose”.

217 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.47; Panel Report, EC – Biotech Products, para. 7.3053.

218 The very term to “assess”, from which “assessment” derives, ordinarily means “evaluate or estimate the nature, ability, or quality of”. In addition, the second requirement of a risk assessment under Annex A(4) provides a clear obligation to “evaluate” (which is synonymous with “judge”) the probability of entry, establishment and spread

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234. Thus, Article 5.1 and its associated provisions are aimed directly at establishing, through

the structured application of expert judgment to scientific, technical and economic evidence, the

existence of a particular risk. Australia submits that Article 2.2 is also guided by similar aims.

The panel in Japan – Apples (Article 21.5 – US) recognised that:

[I]n …order for scientific evidence [under Article 2.2] to support a measure sufficiently, it seems logical … that such scientific evidence must also be sufficient to demonstrate the existence of the risk which the measure is supposed to address”.219

235. However, what Australia has clearly shown is that scientific evidence cannot

“demonstrate” risk, in the manner required by the SPS Agreement, on its own. It is only possible

to test whether the scientific evidence is sufficient to demonstrate a risk within the context of a

risk assessment where it is properly integrated with other relevant economic and technical

factors.

236. Australia therefore submits that a valid risk assessment demonstrates “sufficient scientific

evidence” of a risk under Article 2.2, where a Member chooses to base its measures on a valid

risk assessment. Therefore, where there is a rational relationship between a measure and a valid

risk assessment, then that measure must also be found consistent with the requirement that it is

“not maintained without sufficient scientific evidence” under Article 2.2. Australia submits that

this is what the Appellate Body in Australia – Salmon meant when it affirmed that:

Articles 5.1 and 5.2 … ‘may be seen to be marking out and elaborating a particular route leading to the same destination set out in’ Article 2.2.220

237. Accordingly, if the Panel finds that Australia’s measures are consistent with Article 5.1,

Australia submits that the Panel should also find that the requirement for sufficient scientific

evidence under Article 2.2 is met.

of a pest or disease as well as its associated economic and biological consequences. The SPS Agreement itself therefore carries with it a clear textual direction that a risk assessor applies expert judgment in the assessment of risk. (The Concise Oxford English Dictionary, Eleventh edition revised, 2006; The Oxford Paperback Thesaurus, 2006.)

219 Panel Report, Japan – Apples (Article 21.5 – US), para. 8.45 (emphasis added).220 Appellate Body, Australia – Salmon, paras. 137-138.

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B. NEW ZEALAND FAILS TO PROPERLY INTERPRET ARTICLE 5.1

238. Australia recalls that:

Article 5.1 does not require that [a] risk assessment must necessarily embody only the view of a majority of the relevant scientific community ... [R]esponsible and representative governments may act in good faith on the basis of … [scientific] opinion coming from qualified and respected sources.221

239. In this case, Australia relies on the scientific account provided in the Final IRA Report as

the basis of its SPS measures. The Final IRA Report represents the culmination of a detailed

scientific analysis. It expresses the views of qualified and respected scientists applying their

expert judgment to deliver a robust assessment of the pests of concern.

240. New Zealand disagrees with the conclusions in the Final IRA Report on fire blight,

European canker and ALCM. New Zealand argues that its alternative scientific account is the

only correct account and should prevail over that in the Final IRA Report. In so doing, New

Zealand seeks to characterise what is really scientific disagreement as a legal and factual error.

241. However, the legal question to be answered by the Panel is not whether New Zealand’s

account is credible, or even whether it represents “mainstream” opinion. Australia is entitled to

rely on any objective and credible scientific account. Accordingly, the correct question must be

whether Australia’s measures are based on an objective and credible risk assessment.

242. A valid risk assessment is one that meets the criteria set out in Article 5.1, Annex A(4),

Article 5.2 and Article 5.3. Since New Zealand has not made any claims in relation to Article

5.3 or the first requirement of Annex A(4), Australia takes this as a concession that these

requirements are met. Accordingly, Australia will establish that the Final IRA Report is a valid

risk assessment under the second and third requirements of Annex A(4), and Articles 5.1 and 5.2.

1. New Zealand does not acknowledge that a risk assessment must be “appropriate to

the circumstances”

243. There are two very significant deficiencies in New Zealand’s argument which infect the

whole of New Zealand’s case under Article 5.1. New Zealand fails to acknowledge that risk

assessments must be “appropriate to the circumstances” and in doing so, fails to properly

221 Appellate Body Report, EC—Hormones, para. 194.

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appreciate that they are contextual. In addition, it misrepresents the status of the Japan – Apples

findings and the guidance the Panel should draw from them.

(a) Risk assessments are “appropriate to the circumstances” if they consider

factors which are relevant to the risk at hand

244. The fact that the determination of risk is complex and multifacted attains particular

resonance in the requirement that a risk assessment must be “appropriate to the circumstances”

to satisfy Article 5.1.

245. The Appellate Body in EC—Hormones confirmed that this requirement confers a certain

amount of discretion on Members:

Article 5.1 stipulates that SPS measures must be based on a risk assessment, as appropriate to the circumstances, and this makes clear that the Members have a certain degree of flexibility in meeting the requirements of Article 5.1.222

246. The panel in Australia—Salmon recognised the potential breadth of this term:

Following Article 5.1, a risk assessment needs to be “appropriate to the circumstances”. Answering a Panel question in this respect, Canada is of the view that the circumstances thus referred to are the source of the risk (e.g., an animal pathogen or a chemical contaminant) and the subject of the risk (i.e., whether it is to human, animal or plant life or health). For Australia, the phrase “as appropriate to the circumstances” confers a right and obligation on WTO Members to assess the risk, on a case by case basis, in terms of product, origin and destination, including, in particular, country specific situations. We agree that both interpretations may be covered by the term “as appropriate to the circumstances.”223

247. Country-specific situations, and the significance attached to those situations because of

their relevance to risk, are therefore particularly important to ensure the appropriateness of a risk

assessment. This was recognised by the panel in Japan—Apples:

It might be observed, in this context, that the requirement that the risk assessment be “appropriate to the circumstances” has been considered to leave some flexibility for an assessment of risk “on a case by case basis, in terms of product, origin and destination, in particular country-specific situations”.

A relevant circumstance in this case is, in our view, the fact that Japan is considered to be fire blight-free, as well as its specific climatic conditions, which make it a potentially favourable environment for the spread of fire blight, should the disease enter the country.224

222 Appellate Body Report, EC—Hormones, para. 129 (original emphasis; emphasis added).223 Panel Report, Australia—Salmon, para. 8.71. (emphasis added).224 Panel Report, Japan – Apples, paras. 8.238-8.240. (emphasis added).

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248. It is worth noting that vulnerabilities to pest and disease incursion are specifically

identified in Japan – Apples as factors which may influence the assessment of risk. Australia

has already provided in its factual background a detailed account of its quarantine situation.

Australia enjoys freedom from most of the world’s serious plant pests and diseases. The

economic success of Australia’s agricultural sector is dependent in part on its favourable pest

and disease status, as is the maintenance of the biological diversity of native plant and animal

life. Given these circumstances, the risks of pest and disease incursion in Australia are often

both serious and irreversible, and it is within this context that risk is evaluated.

249. New Zealand omits any reference to the requirement that risk assessments must be

“appropriate to the circumstances” and therefore fails to appreciate that the IRA Team conducted

its work against this very specific factual and methodological background. By ignoring this,

New Zealand makes serious errors in arguing its case. New Zealand cannot discharge its burden

of proof by alternately offering its own view of a limited category of evidence, or deferring to

the findings in Japan – Apples. Neither constitutes a valid or appropriate risk assessment or is a

sufficient substitute for the proper discharge of New Zealand’s burden of proof.

(b) Japan – Apples was a legal, not scientific, process

250. New Zealand attempts to draw a direct analogy between the findings of Japan – Apples

and the present dispute. Since both disputes involve concerns that apples may transmit fire

blight, New Zealand argues that “this dispute is in substance no different” from the Japan –

Apples dispute,225 and the “conclusion[s] of the DSB … [are] directly applicable to the

circumstances of New Zealand apples”.226

251. The panel in Japan – Apples found that the “risk that mature, symptomless apple fruit

would transmit fire blight was negligible”.227 New Zealand’s central contention is that this

finding is correct228, and that therefore, as the Final IRA Report “discounts this finding” and

225 New Zealand’s first written submission, para. 2.12.226 New Zealand’s first written submission, para. 2.4.227 New Zealand’s first written submission, paras. 4.9 & 4.170 quoting Panel Report, Japan – Apples, para.

8.153. New Zealand itself is not consistent on this point. In various parts of its submission, New Zealand glosses over the finding that the likelihood of transmission of fire blight was “negligible” and instead says that “mature, symptomless apple fruit is not a vector for fire blight” and that “fire blight would not be transmitted” (New Zealand’s first written submission, para. 4.247, emphasis added.). The more precise formulation of the Panel’s finding is that the likelihood (rather than the risk) that the transmission pathway was negligible (Panel Report, Japan – Apples, para. 8.153) and accordingly this is formulation that Australia adopts.

228 New Zealand’s first written submission, para. 4.9.

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“proceeds on the assumption that the Panel and the scientific experts were somehow wrong”, it is

inconsistent with both Article 2.2229 and Article 5.1.230

252. Australia submits that New Zealand has completely misrepresented what Japan – Apples

stands for. Australia has never claimed that Japan – Apples is “wrong”, but only that the

conclusions are particular to that case. As such, it is inappropriate to transpose those findings to

the present dispute as if there were no differences between the countries, phytosanitary

circumstances, risk assessments and conditions of trade.

253. Australia submits that there are three reasons why it is not appropriate to apply Japan –

Apples to the facts of this case. First, Japan – Apples is not a risk assessment. Secondly, the

conclusions of Japan – Apples are conclusions conditioned on the evidence in that dispute.

Thirdly, Japan – Apples and the present case are not sufficiently analogous for such findings to

have probative value.

i. Japan – Apples is not a risk assessment

254. A panel report, like those in Japan – Apples, does not meet any of the requirements of a

valid risk assessment under the SPS Agreement. It does not identify pests of phytosanitary

concern to the importing Member;231 it only addresses pests associated with the product of

concern to the particular exporting Member. Panellists do not evaluate risk;232 they merely test

the veracity of the evidence tendered by the parties. Nor do panels assess risk according to the

SPS measures that might be applied;233 they only examine those measures which are applied.

255. Furthermore, the panel in the Japan – Apples dispute was only concerned with the

likelihood of transmission of fire blight and did not consider in depth the potential consequences

of a fire blight incursion.234 Recalling that risk must address both the likelihood of entry,

establishment and spread, and the magnitude of associated economic and biological

229 New Zealand’s first written submission, paras. 4.9, 4.12, 4.15, 4.25, 4.26 & 4.31.230 New Zealand’s first written submission, paras. 4.170, 4.171 & 4.237.231 First requirement of a risk assessment: Appellate Body Report, Australia – Salmon, para. 121.232 Second requirement of a risk assessment: Appellate Body Report, Australia – Salmon, para. 121.233 Third requirement of a risk assessment: Appellate Body Report, Australia – Salmon, para. 121.234 Panel Report, Japan – Apples, para. 8.89. It is clear from this paragraph that the panel was only

concerned with the likelihood that the pathway could be completed up to the stage of possible transmission from an infected or infested apple to a susceptible host.

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consequences, Australia submits that the panel in that case did not consider risk as it should

properly be understood.

256. Accordingly, Japan – Apples is not a risk assessment. If Australia had relied on the

findings in Japan – Apples uncritically, Australia could not have met its obligation under Article

5.1. Australia therefore submits that New Zealand commits a fundamental error in asking the

Panel to place the panel report on the same footing as the Final IRA Report.

ii. The findings in Japan – Apples are specific to that dispute

257. If the reports in Japan – Apples are not risk assessments, then neither do the findings in

those reports constitute scientific evidence. Australia submits that New Zealand treats the

panel’s conclusion regarding the likelihood of transmission as a conclusive scientific fact, when

it is really a conclusion about the evidence in that case. It is very clear from Japan – Apples that

Japan did not adduce sufficient scientific evidence to rebut the United States’ prima facie case

under Article 2.2.235 The panel repeatedly uses words that indicate that its findings are specific to

the evidence in that particular case. For example, the panel states:

On the basis of the information made available to the Panel, we conclude that there is not sufficient scientific evidence that apple fruit are likely to serve as a pathway for the entry, establishment and spread of fire blight within Japan.236

258. This is not a surprising result when other material circumstances of that case are

considered. Japan, in that case, sought to justify the measures it imposed on US apples with its

1999 Pest Risk Assessment (1999 PRA). However, the panel found the 1999 PRA inconsistent

with Article 5.1 on the basis that it was insufficiently specific. The critical flaw was that the

1999 PRA did not assess risk according to apple fruit as a separate and distinct vector:

[The PRA] includes very general conclusions that “E. amylovora is risk Grade A (extremely high)”. This conclusion, however, is based on an overall assessment of possible modes of contamination, where apple fruit is only one of the possible hosts/vectors considered. As cited above, only one paragraph in that chapter specifically addresses fresh fruit, simply noting that not all fruit are distributed or consumed totally and "in the course of distribution, processing and consumption, some can be released to the natural environment as leftovers, waste or useless materials". Thus, although the risk assessment is intended to be conducted, as indicated by its very title, in relation to the

235 Panel Report, Japan – Apples, paras. 8.147, 8.167 & particularly the last line of 8.175.236 Panel Report, Japan – Apples, para. 8.176 (emphasis added).Even the passage cited in New Zealand’s first written submission, para. 4.9 is conditional: “We conclude

from these elements that the scientific evidence presented to the Panel show that … the risk that the transmission pathway be completed is negligible.” Panel Report, Japan – Apples, para. 8.153 (emphasis added).

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importation of US fresh apple fruit, the main portion of the PRA is conducted on the basis of a general assessment of possibilities of introduction of fire blight into Japan, through a variety of hosts, including - but not exclusively - apple fruit.

There is no clear indication in the document as [to] how the other possible vectors might be of relevance to an assessment of the likelihood of entry, establishment or spread through apple fruit specifically. Indeed, the conclusion of the PRA does not purport to relate exclusively to the introduction of the disease through apple fruit, but rather more generally, apparently, through any susceptible host/vector.237

259. Thus, the conclusion that apples are unlikely to transmit fire blight must be viewed in its

proper context. Given that Japan’s 1999 PRA was not specific to apples, it was insufficient to

displace the categories of evidence considered by the Panel under Article 2.2. Likewise, the

absence of a structured assessment of the scientific evidence, together with the other technical

and economic factors to determine risk, meant that the scientific evidence tendered by the United

States under Article 2.2 could not be tested against or within any alternative assessments of risk.

Therefore, the findings in Japan – Apples is a specific conclusion about the sufficiency of

particular evidence under Article 2.2, in circumstances where Japan could not offer an

alternative view in its PRA because that PRA was not specific to apples. Accordingly Australia

submits that it is restricted to the circumstances of that case.

iii. Japan – Apples is not analogous to the present dispute

260. Even if the Panel considers that the findings of Japan – Apples have some factual value,

there are too many differences between the two disputes for any application of the findings to

have a coherent or meaningful result. There are significant differences between Australia and

Japan including environment, phytosanitary circumstances, hosts, fruit distribution systems,

consumption patterns and conditions of trade which all affect the assessment of risk.

261. Moreover, the Final IRA Report for New Zealand apples is starkly different in content

and methodology from Japan’s 1999 PRA. The Final IRA Report reviews a significant body of

literature, especially when compared to the limited number of scientific papers referred to in the

Japan – Apples dispute. Unlike the 1999 PRA, the risks associated with mature apples are

assessed in the Final IRA Report specifically and in detail, together with the associated economic

and biological consequences. Finally, the risks associated with apples are calculated within real

expected trade volumes from New Zealand. 237 Panel Report, Japan—Apples, paras. 8.270-8.271. (emphasis added; footnotes omitted)

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iv. Summary

262. The findings of past disputes are not scientific evidence. Panellists are not scientific

experts. The process of weighing expert testimony is not a scientific experiment conducted in

accordance with scientific method. A panel’s findings are conclusions of evidence on the facts

and circumstances of each case. To the extent that experts give relevant evidence, such evidence

is inseparable from the specific circumstances of that case and therefore not “appropriate” to the

assessment of risk in Australia’s circumstances. Accordingly, New Zealand’s contention that

Japan – Apples disposes of the substance of this dispute is an abdication of its obligations

regarding burden of proof.

2. New Zealand misinterprets the requirement to conduct an “evaluation” of

likelihood under Article 5.1

263. New Zealand alleges that the Final IRA Report does not meet the requirements of Article

5.1 because it fails to “‘evaluate the likelihood’ of entry, establishment or spread of the pests of

concern to Australia” or evaluate the “likelihood of entry, establishment or spread ‘according to

the SPS measures which might be applied’”.238 According to New Zealand, this failure is fatal to

the Final IRA Report and therefore “a risk assessment within the meaning of the SPS Agreement

does not exist to support Australia’s measures”.239

264. Australia submits that this allegation is without merit. New Zealand neither proves that

the IRA Team failed to assess “likelihood” as it should be correctly understood, nor proves that

any of the findings of the Final IRA Report genuinely lack credibility.

(a) “Probability” and “possibility” are distinct concepts

265. New Zealand argues that the Final IRA Report fails to evaluate “likelihood” because it

“ascribes quantitative probability values to what are often no more than possibilities”240 and

therefore “treats as continuous, pathways that even under Australia’s own analysis are not shown

238 New Zealand’s first written submission, para. 4.158.239 New Zealand’s first written submission, para. 4.153.240 New Zealand’s first written submission, para. 4.160.

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to exist”.241 Allegedly, the Final IRA Report “compounds this problem”242 through the

application of semi-quantitative methodology so as to magnify the assessment of risk.243

266. To New Zealand, “possibility” is indistinguishable from a “negligible” event244 which it

also equates with “theoretical uncertainty”.245 By blurring what Australia will show are three

very different concepts, New Zealand obscures the way the genuine differences between them

affect the actual legal obligations that Australia must comply with.

267. In EC – Hormones, the term “possibility” was considered to be synonymous with

“potential”.246 In Australia – Salmon, the Appellate Body clarified the distinction between

“likelihood” and “possibility” by noting that “‘likelihood’…has the same meaning as

‘probability’”,247 and means the “estimation of the likelihood…expressed either qualitatively or

quantitatively”. By contrast, “potential” or “possibility” were “vague statements of mere

possibility of adverse effects occurring; statements which constitute neither a quantitative nor

qualitative assessment of probability”.248

268. The difference between “probability” and “possibility” is therefore one of precision. The

obligation to evaluate “likelihood” requires a risk assessment to provide actual estimates of

probability – that is, to ascribe a quantum or value to an event. Contrary to New Zealand’s

assertions, it is clear that Australia has not assessed “possibility”. This is amply demonstrated by

the fact that every single step in the risk assessment is assigned a quantitative or qualitative

estimation of likelihood, even if that likelihood is very small.

(b) New Zealand’s complaint concerning the use of “negligible” likelihoods is

misdirected

269. When viewed against the proper definition of “possibility”, it becomes clear that New

Zealand’s claim that Australia has only assessed possibility is merely a convenient device to 241 New Zealand’s first written submission, para. 4.160.242 New Zealand’s first written submission, para. 4.160.243 New Zealand’s first written submission, paras. 4.173 & 4.403.244 New Zealand’s first written submission, para. 4.236.245 New Zealand’s first written submission, paras. 4.159 & 4.403.246 Appellate Body Report, EC - Hormones, para. 184: “The ordinary meaning of ‘potential’ relates to

‘possibility’ and is different from the ordinary meaning of ‘probability’”.247 Appellate Body Report, Australia - Salmon, para. 123.248 Panel Report, Australia – Salmon, para 8.83 affirmed in Appellate Body Report, Australia – Salmon,

para. 129.

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colour the Final IRA Report’s use of “negligible” likelihoods with illegitimacy. New Zealand’s

real complaint, as is evident from the fact that it dedicates an entire section of its submission to

this argument,249 is that “negligible” probabilities should not be examined in a risk assessment. It

argues:

In assigning probability values to what are frequently the remotest of possibilities (ie an event that almost certainly would not occur – one that is negligible), Australia…provides no support for the suggestion that these steps could occur.250…

[E]vents that have an extremely low likelihood…are nevertheless assigned probability values which suggest they are likely to occur.251

270. By suggesting that only “likely” probabilities should be assessed in a risk assessment,

New Zealand effectively contends that the SPS Agreement requires risk assessments to identify a

minimum magnitude of risk. Australia submits that such a claim is wholly without foundation.

Such a requirement has been expressly rejected by the Appellate Body as set out below.

271. In EC – Hormones, the panel found that an estimate of risk within the statistical range of

0 to 1 in a million was not a “scientifically identified risk”.252 The Appellate Body did not accept

this reasoning, noting that:

To the extent that the Panel purported to require a risk assessment to establish a minimum magnitude of risk, we must note that imposition of such a quantitative requirement finds no basis in the SPS Agreement. A panel is authorized only to determine whether a given SPS measure is ‘based on’ a risk assessment.253

272. If no risk is therefore too small to form the legitimate focus of a risk assessment, it also

follows that there should be no threshold of probability that each step in a pathway must exceed

in order to establish a risk. Applying this logic, New Zealand’s claim cannot be sustained. A

negligible event is a very small, but defined probability. Accordingly, the Final IRA Report

cannot be impugned for failing to assess “likelihood” simply because some steps in the pathway

are assessed as having a “negligible” likelihood.

249 New Zealand’s first written submission, paras. 4.174-4.186. 250 New Zealand’s first written submission, para. 4.236. (emphasis added)251 New Zealand’s first written submission, para. 4.241 (emphasis added).252 Panel Report, EC—Hormones, para. 8.124 & footnote 331.253 Appellate Body Report, EC—Hormones, para. 186; also, see: Appellate Body Report, Australia—

Salmon, para. 124.

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(c) New Zealand wrongly assumes that “negligible” events should be treated as

ruptures in the pathway

273. New Zealand’s error in the use of “negligible” likelihoods also infects its claim that:

Australia analyses “importation steps” as if there were a continuous pathway for the transmittal of the disease, ignoring the fact that at critical points there is no evidence of a pathway and that the risk analysis should have reflected this.254

274. In other words, New Zealand argues that where the Final IRA Report assigns

“negligible” likelihoods to steps in the pathway, such events should be treated as breaking the

chain of causation for disease transmission, and accordingly, the assessment of risk should have

ceased. This is what New Zealand means by the claim that Australia treats certain pathways as

“continuous”.255 Australia disagrees. This argument demonstrates that New Zealand’s

understanding of Annex A(4), and what is really meant by the term “risk”, is seriously flawed.

275. Australia recalls that “risk” is defined both by the probability of entry, establishment and

spread of a pest or disease as well as the associated economic and biological consequences. For

a risk assessment to validly support measures, it must therefore proceed to an analysis of the

consequences. Therefore, arguing that an analysis should always cease when events in a

pathway are “negligible” is not only introducing an illegitimate minimum threshold of

probability, but it is also improperly truncating the proper analysis of risk as required by Annex

A(4).

(d) New Zealand’s argument on “theoretical uncertainty” is baseless

276. The only kind of risk (or probability) that cannot be assessed under Article 5.1 is

theoretical risk.256 However, New Zealand’s understanding257 of theoretical risk is flawed.

277. Theoretical uncertainty is not the same as “possibility”. It is defined as the “uncertainty

that theoretically always remains since science can never provide absolute certainty that a given

substance will not ever have adverse health effects”.258 However, apart from unsubstantiated

assertions, New Zealand does not demonstrate at any point that the probabilities assessed by the 254 New Zealand’s first written submission, para. 1.9. 255 New Zealand’s first written submission, paras. 1.9 & 4.160.256 Appellate Body Report, EC – Hormones, para. 186.257 See: New Zealand’s first written submission, paras. 4.159 & 4.403.258 Appellate Body Report, Japan – Apples, para. 241 (original emphasis).

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Final IRA Report are theoretical.259 Therefore, a “negligible” likelihood cannot be assimilated to

theoretical uncertainty simply because it is small and, in any event, the Final IRA Report was

transparent about such likelihoods being small.

(e) Summary of New Zealand’s flawed arguments on Article 5.1

278. In Australia’s view, the arguments above demonstrate that New Zealand’s

characterisation of “likelihood” does not set out the proper legal standards to be applied. The

sparsity of any legal analysis by New Zealand on these critical issues in favour of superficially

attractive connections between actually distinct concepts merely disguises the weakness in New

Zealand’s case. New Zealand should not be permitted to benefit from its dispensing with

analytical rigour. Accordingly, Australia submits that the Panel should reject New Zealand’s

characterisation of “likelihood”.

3. New Zealand cannot make a prima facie case by conducting its own risk assessment

279. By keeping the legal standard vague, New Zealand creates a misleading impression that it

has made a prima facie case. Australia will demonstrate that it has not done so. New Zealand in

fact purports to conduct its own risk assessment and attempts to pass it off as a satisfactory

discharge of its burden of proof. Yet, at best, it only offers an alternative account of the

scientific evidence.

280. New Zealand’s characterisation of “likelihood” and particularly, whether “negligible”

likelihoods can legitimately be considered in an Article 5.1 risk assessment, only make sense

when New Zealand’s own risk assessment methodologies260 are examined. New Zealand’s Risk

Analysis Procedures define a “negligible” risk in the following table: 261

Table 3: Biosecurity New Zealand’s description for critical attributes of risk

Risk Attributes Negligible Not worth considering; insignificant Non-negligible Worth considering; significant

259 New Zealand’s first written submission, paras. 4.159 & 4.403. Australia notes that these paragraphs do not contain any substantive argumentation and at no other point in New Zealand’s first written submission is theoretical uncertainty mentioned.

260 Exhibit AUS-7: Biosecurity New Zealand, Risk Analysis Procedures, Version 1, 12 April 2006; Exhibit AUS-15: Biosecurity New Zealand, The Risk Analysis Framework: Delivering to Expectations, Version 1.3, 23 November 2005.

261 Exhibit AUS-7: Risk Analysis Procedures, p. 29.

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Risk Descriptors (not all may be used) Very Low Close to insignificant

Low Less than average, coming below the normal level

Medium Around the normal or average level

High Extending above the normal or average level

Very High Well above the normal or average level

281. Clearly, this is not equivalent to a “negligible” event in the methodology applied by the

Final IRA Report. Even though it is described as an event that would “almost certainly not

occur”,262 a “negligible” likelihood in the Final IRA Report is a definite expression of a level of

probability and therefore an actual probability descriptor. By contrast, a “negligible” risk under

New Zealand’s methodology is a risk attribute which operates as a decision rule to judge

whether a risk is worth considering.

282. This is confirmed by New Zealand’s Risk Analysis Framework:

[T]he risk analyst has the opportunity to stop the risk assessment at any point [where] the risk from the hazard is deemed ‘negligible’, thus avoiding unnecessary effort on insignificant risks…

Each pest, disease or pathway will be discussed only to the extent necessary to enable the reader to gain an appreciation of likelihood of entry, establishment or spread of hazard(s) and of their associated potential consequences. If, for example, it is concluded that the likelihood of a hazard being released into New Zealand is negligible, there is no need to undertake an exposure and consequence assessment and explore risk management options.263

283. Viewed in this context, it becomes clear that by applying this method to its analysis of the

Final IRA Report, what New Zealand in fact does is conduct its own risk assessment according

to its own methodology. This is not contemplated by Article 5.1. It is the Member itself that

must conduct or procure a risk assessment as the basis of its measures.

284. More importantly, conducting another risk assessment does not demonstrate

inconsistency with Article 5.1. All it does is establish that, at best, there is an alternative account

of the scientific evidence. The co-existence of divergent scientific views is well established and

262 Final IRA Report, Part B, p. 43.263 Exhibit AUS-15: Delivering to Expectations, p. 5. The Risk Analysis Procedures indicate that risk

analysts operating under New Zealand’s methodology have the opportunity to conclude an analysis at any of the entry, exposure and establishment or consequence assessment stages if the likelihood ascribed to this step is “negligible”. See: Exhibit AUS-7: Risk Analysis Procedures, pp. 43, 46 & 50.

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accepted.264 Article 5.1 permits reliance on any view emanating from a qualified and respected

source.265 Accordingly, simply by showing that another account of the science may exist is

insufficient to discharge the burden of proving actual inconsistency.

285. The purported errors in the Final IRA Report’s methodology which New Zealand

identifies are not in fact errors but points where the Final IRA Report’s methodology departs

from New Zealand’s risk analysis methodology. Accordingly, what New Zealand casts as

methodological error is in reality no more than methodological difference.

286. The Appellate Body has affirmed, on a number of occasions, a Member’s right to

determine its own methodology. In Japan—Apples, the Appellate Body stated:

Japan contends that the “methodology” of the risk assessment is not directly addressed by the SPS Agreement… We agree…[T]he Panel’s reading of EC – Hormones does not suggest that there is an obligation to follow any particular methodology for conducting a risk assessment.266

287. Given this lies within the discretion of the Member, Australia breaches no obligation by

adopting a semi-quantitative approach that pursues the analysis of risk to its proper conclusion.

4. New Zealand fails to identify flaws in the methodology used by the IRA Team

288. New Zealand asserts that the semi-quantitative methodology used by the IRA Team is

flawed and, as such, it is “impossible to have any degree of confidence in the levels of risk

ascribed in the IRA”.267 New Zealand states that it has no objections “in principle” to the use of

the semi-quantitative methodology.268 Yet it seeks to impugn the use of the methodology by

referring to criticisms of it in the World Organisation for Animal Health (OIE) Handbook on

Import Risk Analysis for Animals and Animal Products269 (OIE Handbook) and asserting that the

methodology has three “fundamental flaws”.270 Australia submits that New Zealand should not

be permitted to expand its claims beyond these so-called “flaws” at a later time in these

proceedings. Australia will show that the methodology is not flawed and that, accordingly, the

Panel should disregard New Zealand’s claims.264 Appellate Body Report, EC - Hormones, para. 194.265 Appellate Body Report, EC - Hormones, para. 194; also see: Panel Report, US – Continued Suspension,

para. 7.444, footnote 550; Panel Report, Canada – Continued Suspension, para. 7.433, footnote 535.266 Appellate Body Report, Japan—Apples, para. 204 (emphasis added).267 New Zealand’s first written submission, para. 4.160.268 New Zealand’s first written submission, para. 4.162.269 New Zealand’s first written submission, para. 4.163.270 New Zealand’s first written submission, para. 4.172.

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289. Australia has already dismissed the assertions made by New Zealand about the

“politicisation” of the risk assessment process. New Zealand makes these baseless assertions

throughout its submission. In relation to methodology, New Zealand claims that the semi-

quantitative methodology was adopted after a Senate Committee recommended that a full

quantitative method be adopted.271 Clearly, the Committee’s recommendation was not accepted.

i. New Zealand’s reliance on the OIE Handbook is inappropriate in a dispute

concerning plants

290. New Zealand refers to the OIE Handbook’s treatment of semi-quantitative methodology.

It cites the Handbook as stating that a “semi-quantitative approach”:

… is sometimes employed as a means of combining various qualitative estimates, by assigning numbers to them, to produce a summary measure or to prioritise risks.272

291. However, the semi-quantitative methodology used by the IRA Team does not assign

numbers to qualitative estimates as suggested in this extract from the OIE Handbook. It does the

reverse. It uses a quantitative approach in its evaluation of the likelihood of entry, establishment

and spread of pests as a result of trade in New Zealand apples. The likelihood is expressed

quantitatively and then equated to a qualitative descriptor to facilitate its use in the risk

estimation matrix.273

292. Australia is surprised by New Zealand’s use of the OIE Handbook, as the OIE deals with

animals, not plants. Indeed, this point is recognised by Biosecurity New Zealand in its Risk

Analysis Procedures, as follows:

It is important to note that under these two standard setting bodies [OIE and IPPC], application of the risk analysis frameworks are limited by the mandates of the organisations.274

293. With regard to the IPPC, Australia notes that the IPPC pest risk analysis training manual

acknowledges that:

No single method of pest risk assessment has proven applicable to all situations; different methods may be appropriate in different circumstances.

271 New Zealand’s first written submission, para. 4.161.272 New Zealand’s first written submission, para. 4.164.273 See Table 2 in this submission.274 Exhibit AUS-7: Risk Analysis Procedures, p. 8. (emphasis added)

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Pest risk assessments can be carried out with qualitative data, quantitative data or a combination of both.275

294. The Manual describes a “semi-quantitative pest risk assessment” as one that:

… combines elements of both quantitative and qualitative assessments, adding precision using quantitative methods where these are applicable, and incorporating qualitative methods for those parts of the assessment where data is not available or the same degree of precision is not required”.276

This describes the methodology used by the IRA Team, which combined a quantitative approach

to estimating the probability of entry, establishment and spread with a qualitative approach to

estimating consequences to give an estimate of risk.

ii. The IRA Team’s use of the probability interval of 0 – 10 -6 is appropriate

295. New Zealand asserts that the first fundamental flaw in the methodology used by the IRA

Team is the choice of the maximum value of 10-6 in the probability interval for the likelihood of

an event being negligible.277 New Zealand seeks to establish that the choice of 10-6 as the

maximum value cannot be justified on the basis of known data.

296. New Zealand claims that setting the probability interval at 0 – 10 -6 is “arbitrary”.278 It

relies on Biosecurity Australia’s 2001 Draft Guidelines for Import Risk Analysis279 in support of

this assertion, claiming that the Draft Guidelines “acknowledge that the probability intervals are

‘arbitrary’”.280 New Zealand selectively quotes from a section dealing with the advantages, not

disadvantages, of semi-quantitative methodology. The relevant text follows:

By specifying (albeit arbitrary) probability intervals it will generally be possible to describe and interpret estimates of likelihood consistently. For example, …analysts using the term ‘moderate’ will have indicated that they have estimated a given likelihood to fall ‘somewhere between 0.3 and 0.7’. All readers would understand that this was the analysts’ understanding of the said likelihood, and that all other likelihoods described as ‘moderate’ should be interpreted in the same way.281

275 Exhibit AUS-16: International Plant Protection Convention (2007) IPPC pest risk analysis course - Participant manual, p. 36. (emphasis added)

276 Exhibit AUS-16: IPPC (2007) Training Manual, p. 37. This page also provided as Exhibit NZ-95.277 New Zealand attempts to support this assertion in paras 4.174 – 4.186 of its first written submission.278 New Zealand’s first written submission, para. 4.175.279 Exhibit AUS-17: Biosecurity Australia (2001) Draft Guidelines for Import Risk Analysis.280 New Zealand’s first written submission, para. 4.175.281 Exhibit AUS-17: Biosecurity Australia (2001), Draft Guidelines, p. 89. (emphasis added)

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297. New Zealand quotes only the word “arbitrary” from this text. It declined to provide the

context for its use. The text explains that the probability intervals are used to assist consistency

in risk analysis. The Draft Guidelines note that problems of consistency may arise when a

qualitative approach is used where the likelihoods are “undefined”.282 This is so because:

[I]t will be impossible to state precisely what is meant by a designation of, for example, ‘low’, because one person’s understanding of ‘the event would be unlikely to occur’ …will be different to another’s.283

a. New Zealand’s focus on the words, and not the numbers, is

misplaced

298. New Zealand reproduces Table 12 of the Final IRA Report as Table 1 in its submission.

It draws the Panel’s attention to the likelihood “negligible” and its qualitative descriptor “the

event would almost certainly not occur”.284 However, New Zealand’s focus on the words, rather

than the numbers, is misplaced. As explained in the Final IRA Report:

The approach used in the 2004 draft was to assign descriptive terms to quantitative ranges, (‘high’, ‘moderate’, ‘low’, etc). These terms were used throughout the text to represent these quantitative ranges. However, this caused some confusion with some stakeholders applying their own interpretation to the terms rather than the meanings set out in the methodology. In order to overcome this problem, in the revised draft and this final IRA, the descriptive terms are only used for qualitative values. Numbers are given for quantitative values.285

In other words, the probability intervals were used in the Final IRA Report in estimating the

probability of entry, establishment and spread, not the qualitative likelihoods. Accordingly, the

focus must be on the numbers represented by the probability intervals in Table 12 of the Final

IRA Report – not the words.

b. New Zealand fails to understand the use of the interval between 0

and 10-6

282 Exhibit AUS-17: Biosecurity Australia (2001), Draft Guidelines, p. 83. 283 Exhibit AUS-17: Biosecurity Australia (2001), Draft Guidelines, p. 83.284 New Zealand’s first written submission, para. 4.177.285 Final IRA Report, Part B, p. 42.

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299. When New Zealand does focus on the numbers, that focus becomes fixed on the use of

10-6 as the maximum value of the probability interval between 0 and 10-6.286 In doing so, New

Zealand demonstrates its failure to understand that it is the interval between 0 and 10 -6, not any

one value in that interval, which was considered by the IRA Team. New Zealand underlines its

lack of understanding, when it states that:

… this figure [10-6] is applied on a per apple basis, rather than in respect of trade as a whole as in Japan – Apples.287

300. In a uniform distribution between 0 and 10-6, it is not the figure of 10-6 alone that is

applied. It is the values between 0 and 10 -6 that are applied on the basis of the distribution. This

means that the probability of a particular event occurring is equally likely to be any probability

value within the interval bounded by the minimum and maximum values of the distribution. In

other words, the probability of an event happening is equally likely to be zero as one in a million

or any value in between.

301. New Zealand refers to the IRA Team conducting its analysis on a “per apple basis” rather

than trade as a whole. In evaluating the probability of entry, establishment and spread of a pest,

the IRA Team had to determine the risk unit on which to base its analysis. The IRA Team

concluded that individual apple fruit carrying a pest could present a risk and that it was therefore

appropriate to use individual fruit as the risk unit. Accordingly, probabilities were estimated on

a “per apple” basis, which, in turn, were used as inputs in estimating the risk associated with the

total volume of trade.

302. In the extract cited above from New Zealand’s submission, it again purports to represent

the findings in Japan – Apples as a risk assessment.288 Even if New Zealand were to rely on

those findings as the outcome of a legal process, Australia cannot locate any findings concerning

the use of probability intervals and uniform distributions.

303. New Zealand then turns to the Final IRA Report and quotes from the section which

explains the use of probability distributions as follows:

286 New Zealand’s first written submission, para. 4.178. New Zealand correctly states that 10 -6 is equivalent to one in a million.

287 New Zealand’s first written submission, para. 4.178.288 New Zealand’s first written submission, para. 4.178.

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In all cases the IRA team considered carefully whether they were confident that the range they had chosen would contain the actual value…289

New Zealand goes on to assert that there is “no indication of the basis on which the IRA team

came to the conclusion they were ‘confident’” and, particularly, why it “considered that one in a

million was ‘negligible’ in the case of the importation of apples”.290 New Zealand’s quote is

selective and needs to be considered in context, which is provided by the following more

extensive quote from the Final IRA Report:

Most pests were assessed using a semi-quantitative approach based on information represented by numerical ranges. In all cases the IRA team considered carefully whether they were confident that the range they had chosen would contain the actual value and that the chosen distribution reflected their beliefs. In particular, the IRA team was not constrained by the intervals suggested in the draft Guidelines.291

304. Clearly, this text is meant as a general statement of the approach taken by the IRA Team

in selecting probability intervals (“ranges”). Not surprisingly, the IRA Team took care to ensure

it was confident that a chosen interval would contain the actual value of an event occurring.

Where the IRA Team believed it had sufficient information to identify a most likely value in an

interval, it used a triangular distribution, represented by a minimum value, a maximum value and

a most likely value. Where the IRA Team considered it had insufficient information to identify

the most likely value in an interval, it adopted a uniform distribution, using a minimum value

and a maximum value.

305. New Zealand goes on to claim that:

Risk assessments should be based not on “feelings of confidence” but rather on conclusions that are technically justified, which as the IPPC indicates means justified on the basis of the examination and evaluation of available scientific information.232

232. International Plant Protection Convention, Rome, 1999, Article II:1.292

New Zealand is seeking to suggest that the IRA Team members did not exercise their judgment

“on the basis of the examination and evaluation of available scientific information”. The

comprehensive review of the scientific literature documented in the Final IRA Report

demonstrates that New Zealand’s suggestion is wrong.

289 New Zealand’s first written submission, para. 4.179. (emphasis added) 290 New Zealand’s first written submission, para. 4.180.291 Final IRA Report, Part B, p. 42. (emphasis added)292 New Zealand’s first written submission, para. 4.181. (emphasis added)

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306. New Zealand makes use of the expression “technically justified” which is defined in

Article II.1 of the IPPC as meaning:

justified on the basis of conclusions reached by using an appropriate pest risk analysis or, where applicable, another comparable examination and evaluation of available scientific information.293

Australia submits that the IRA Team did arrive at “technically justified” conclusions on the basis

of an “appropriate pest risk analysis” as demonstrated in the Final IRA Report.

307. New Zealand asserts that the IRA Team could have checked whether the “maximum

value of 1 x 10-6 had any relationship to what occurs in the real world”.294 Again, New Zealand

fails to appreciate that 10-6 is the maximum value in a probability interval applied as a uniform

distribution. The probability of an event happening as represented by that interval is equally

likely to be zero or one in a million or any value in between.

c. New Zealand’s flawed approach to the use of trade data

308. New Zealand contends that the IRA Team could have looked at trade data and concluded

by doing so that a maximum probability value of 1 x 10-6 is too high given “known data”.295

New Zealand goes on to provide the example of the trade in apples engaged in by itself and the

United States with Chinese Taipei.296 New Zealand contends that:

[d]espite the absence of any special measures to protect against fire blight, no case has occurred of fire blight being introduced into Chinese Taipei from this trade.297

309. Australia submits there are a number of basic flaws in New Zealand’s argument on this

point. To begin with, the IRA Team was concerned with New Zealand exporting its apples to

Australia and not to Chinese Taipei. The IRA Team had to assess the potential volume of trade

that would occur between New Zealand and Australia, and not the existing trade between New

Zealand and Chinese Taipei. Further, the IRA Team was not conducting a risk assessment on

the importation of apples from the United States into Australia. As such, the trade in apples from

the United States to Chinese Taipei is even more irrelevant than the trade in apples between New

Zealand and Chinese Taipei.293 IPPC (New Revised Text). (emphasis added)294 New Zealand’s first written submission, para. 4.182.295 New Zealand’s first written submission, para. 4.182.296 New Zealand’s first written submission, para. 4.183.297 New Zealand’s first written submission, para. 4.183. (emphasis added)

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310. New Zealand states that the result of its “risk assessment” is that the chance of fire blight

being introduced into Chinese Taipei through the trade in apples is at most between three in a

billion and four in ten billion.298 However, without transparency as to the “known data” used as

an input, the outcome cannot be verified. For example, it is unclear whether the “known data”

addressed factors within Chinese Taipei such as the occurrence of fire blight host plants,

environmental factors, distribution systems, consumption patterns, disposal routes and location

of packing houses.

311. Australia notes that New Zealand claims that Chinese Taipei does not apply any “special

measures” for fire blight. However, Australia’s research has shown that, in fact, Chinese Taipei

does have a requirement in relation to E. amylovora. The Chinese Taipei authorities require that

phytosanitary certificates issued by the New Zealand authorities, which accompany shipments,

must include a declaration that “Apples are thoroughly inspected and found free from Erwinia

amylovora.”299

iii. The IRA Team’s use of uniform distributions did not inflate risk

312. New Zealand asserts that the second fundamental flaw in the semi-quantitative

methodology used by the IRA Team was the “use of the uniform distribution to model events,

particularly those that have a ‘negligible’ likelihood of occurring”.300 New Zealand alleges that

the use of the uniform distribution at “key points” inflated the likelihood of entry, establishment

and spread of the three pests at issue.301 Australia submits that this assertion demonstrates New

Zealand’s lack of understanding about the IRA Team’s use of the uniform distribution.

313. Australia agrees that in a uniform distribution “every value between the maximum and

minimum value is equally likely to occur”.302 Indeed, Australia has made this point more than

once above in response to New Zealand’s assertions regarding the maximum value of the

probability interval between 0 and 10-6.

298 New Zealand’s first written submission, para. 4.184.299 Exhibit AUS-18: Biosecurity New Zealand, Importing Countries’ Phytosanitary Requirements

Register: Taiwan, p. 28 (available at http://www.biosecurity.govt.nz/files/regs/stds/icprs/taiwan.pdf; last accessed 11 July 2008).


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http://www.biosecurity.govt.nz/files/regs/stds/icprs/taiwan.pdf


314. New Zealand argues that the mean of a uniform distribution is a value halfway between

the maximum and minimum values of the distribution.303 This is an obvious point. New Zealand

goes on to note that the midpoint for the probability interval 0 – 10 -6 is 5 x 10-7, which is 5 in 10

million or one in two million. New Zealand claims that 5 x 10 -7 represents “one adverse event in

every two million samples” and that:

… under Australia’s approach, an event that “would almost certainly not occur” will in fact be expected to occur on average approximately once in every two million samples.304

315. Once again, New Zealand misunderstands the IRA Team’s use of the probability interval

0 – 10-6 as a uniform distribution. The midpoint of 5 x 10 -7 is no more significant than any other

value in the uniform distribution of 0 – 10-6. As stated by New Zealand, in a uniform distribution

“every value between the maximum and minimum value is equally likely to occur”.305

316. New Zealand again focuses on the “average” of a uniform distribution when it claims

that:

… by using a uniform distribution which effectively averages the higher and lower ends of the probability range, the IRA gave undue weight to the maximum probability of a “negligible” event occurring.306

Australia finds it difficult to the follow the logic of New Zealand’s claim. In Australia’s view, it

would only have merit if each step in the model was estimated separately and the average value

taken forward as the input into the next step. However, this is not the logic used in the model by

the IRA Team. At each step of the model, the full distribution of output values is effectively

taken forward to the next step – not just the average value as New Zealand has apparently

assumed. This is done by the process that “chooses” a value from each step based on the input

distribution for each step in each run of the simulation. In the interests of transparency during

the IRA process, in early 2006 Australia supplied New Zealand with a copy of the model used by

the IRA Team.

317. Australia has demonstrated that New Zealand’s claim that the IRA Team’s use of the

uniform distribution is a fundamental flaw in the semi-quantitative methodology is without

merit.

303 New Zealand’s first written submission, para. 4.190.304 New Zealand’s first written submission, para. 4.191. (emphasis added)305 New Zealand’s first written submission, para. 4.189.306 New Zealand’s first written submission, para. 4.192. (emphasis added)

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318. Further, Australia notes that, as the SPS Agreement does not prescribe methodologies for

use in risk assessments, it also does not prescribe the types of probability distributions to be used

or not used in risk assessments. Accordingly, New Zealand’s efforts to impugn the IRA Team’s

use of uniform distributions have no basis in the SPS Agreement.

iv. New Zealand’s assertions on volume of trade are based on faulty

suppositions

319. New Zealand asserts that the third flaw in the IRA Team’s semi-quantitative

methodology is that it overestimates the likely volume of trade in apples from New Zealand,

thereby magnifying the assessment of risk. Australia submits that this assertion lacks substance

and should be disregarded by the Panel.

320. New Zealand presents a simplistic description of how volume of trade was incorporated

into the IRA Team’s analysis. New Zealand states that:

… the assigned “probability” per apple of a pest being imported is...multiplied by Australia’s estimate of the annual volume of trade in New Zealand apples, to give the number of infested or infected apples imported. From this value, the overall assessed level of risk is calculated. The higher the estimated volume of trade, the higher the overall assessed risk.307

In asserting that the probability per apple of a pest being imported is multiplied by the annual

estimate of trade, New Zealand has misunderstood the process followed. In fact, the volume of

trade expressed as a Pert distribution is used in the same way as all the other distributions in each

of the many thousands of iterations used to generate the overall result.

321. New Zealand asserts that the estimate of the likely volume of trade made by the IRA

Team is “out of all proportion with the trade” that would occur.308 New Zealand correctly states

that the IRA Team represented volume of trade as a range between 50 million apples and 400

million apples per year, with a most likely value of 150 million apples. However, New Zealand

claims that the most likely value of 150 million apples “bears no relationship to the reality of

likely Australian demand for New Zealand apples or New Zealand’s capacity to supply that

demand”.309

307 New Zealand’s first written submission, para. 4.195. (footnote omitted; original emphasis)308 New Zealand’s first written submission, para. 4.196.309 New Zealand’s first written submission, para. 4.196.

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322. Before addressing the lack of economic and commercial substance in this claim,

Australia will provide further detail on the Pert distribution used by the IRA Team to represent

volume of trade. A Pert distribution contains a most likely value, a minimum value and a

maximum value, which are joined by a curve. As the most likely value of 150 million apples is

closer to the minimum value of 50 million apples than the maximum value of 400 million apples,

the shape of the curve gives greater weight to values toward the lower end of the scale.

323. The IRA Team adopted this approach in response to submissions from New Zealand on

the level of trade it expected to occur. The Final IRA Report advises that the final distribution:

… gives significantly more emphasis to the lower end of the volume range but does allow for volumes higher than that suggested by New Zealand at the higher end.310

324. The Final IRA Report acknowledges the difficulty of estimating the volume of trade in

the absence of existing trade.311 However, the most likely value of 150 million apples in a 12

month period was not plucked out of the air by the IRA Team as New Zealand implies in its

submission. The IRA Team took into account a range of economic and commercial factors in

making its judgment on the values for volume of trade.312

a. New Zealand’s four faulty suppositions

325. New Zealand’s assertion that the IRA Team overestimated the most likely value for

volume of trade is based on the following faulty suppositions:

Australian consumers will not buy the main types of apples produced in New

Zealand;

Australian supermarkets will only sell Australian grown apples;

the most likely level of imports used by the IRA Team would drive down prices in

Australia to such an extent that New Zealand’s exports to Australia would become

uneconomic; and

New Zealand exporters will want to continue to service existing customers rather than

diverting exports to Australia.

310 Final IRA Report, Part B, p. 19.311 Final IRA Report, Part B, p. 18.312 Final IRA Report, Part B, pp 18-19.

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b. New Zealand wrongly supposes that Australian consumers will not

buy the main varieties of apples it produces

326. New Zealand suggests that the “main opportunity” for its exporters would be to supply

“limited volumes of high quality varieties of apples that are unfamiliar to Australian

consumers”.313 Implicit in this suggestion is a supposition that Australian consumers will not

accept imports of New Zealand’s two main varieties, Royal Gala and Braeburn. New Zealand

provides a comparison of the composition of Australian and New Zealand production in Table 2

of its submission, showing that only Royal Gala makes up a significant proportion of production

in both countries.314 New Zealand asserts that the composition of Australian production defines

Australian consumers’ “preferred” varieties. New Zealand provides no evidence that Australian

consumers would not accept New Zealand Royal Gala. The variety is one with which Australian

consumers are familiar and which New Zealand infers is “preferred” by those consumers.

Rather, New Zealand concentrates on arguing that Australian consumers will not accept

Braeburn, apparently on the basis that the limited volume of Australian production of Braeburn

is a demonstration that it is not “preferred” by those consumers.

327. The New Zealand presumption that consumer preferences in any country can be inferred

from the composition of that country’s production has no basis in fact. The varietal composition

of production in each of the United States, United Kingdom, Germany, Netherlands and France

is completely different to that in New Zealand. Yet each of these countries is a significant export

market for New Zealand. Royal Gala makes up more than 10% of production in the United

States, 13% in the United Kingdom and 5% in Germany.315 Braeburn accounts for 9% and 5% of

production in France and Germany, respectively. Otherwise New Zealand's main varieties

account for little or none of the production in the above five countries. It is not evident that the

relatively low production of either one or both of Royal Gala or Braeburn in each of the five

countries has inhibited imports of New Zealand fruit. Similarly, there is no reason to believe that

the current composition of Australian production provides a template for what New Zealand fruit

Australian consumers would choose to import.

313 New Zealand’s first written submission, para. 4.199.314 Table 2, New Zealand’s first written submission, para. 4.198.315 US Apple Organisation 2005, “Total US Apple Production by Variety,” http://www.usapple.org/industry/applestats/outlook2005/Table8.xls; Eurofel, EU-27 Apple Production,

http://www.vic.lt/events/prognosfruit2007/docs/Prognosfruit2007_Eurofel.pdf.

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http://www.vic.lt/events/prognosfruit2007/docs/Prognosfruit2007_Eurofel.pdf

http://www.usapple.org/industry/applestats/outlook2005/Table8.xls


328. New Zealand claims that collaboration between the apple industries in both countries “is

expected to make available the same new apple varieties to both countries” thereby removing

“any niche market advantage” enjoyed by New Zealand growers.316 Whatever the future may

hold for collaboration between the respective industries, it is instructive to note the recently

expressed views of the Chief Executive of Pipfruit New Zealand, Mr Peter Beaven, about the

state of the Australian apple market. Mr Beaven believes that Australian consumers are “denied

choice” and pay “the second highest apple prices in the world…for second rate produce”.317

329. Clearly, Mr Beaven believes that Australian consumers will welcome the choice

presented by access to apples from New Zealand. If the “high quality varieties”318 to be exported

to Australia by New Zealand are competing against “second rate produce”, they could be

expected to secure more than a niche market. If Mr Beaven’s assessment of price is correct,

there is a significant marketing opportunity in Australia for New Zealand apples.

330. On the issue of market prospects for apples from New Zealand, Australia also points to

the 2006 report on development strategy prepared by the Innomarc Consulting Project Team for

Pipfruit New Zealand.319 The report identifies Australia as a “significant opportunity for

exports” from New Zealand.320

c. New Zealand wrongly supposes that Australian supermarkets will

be unlikely to stock New Zealand apples

331. New Zealand claims that there is “open support” by Australian supermarkets for

Australian-grown produce,321 implying that its growers would confront hurdles in getting their

apples before Australian consumers. On this issue, New Zealand selectively quotes from a

submission made by Apple & Pear Australia Ltd (APAL)322 to an Australian Government inquiry

316 New Zealand’s first written submission, para. 4.199.317 Exhibit AUS-20: Pipfruit New Zealand, "Pipfruit Industry in Support of NZ Submission to WTO",

Media Statement of Mr Peter Beavan, 21 June 2008. 318 New Zealand’s first written submission, para. 4.199.319 Exhibit AUS-21: Innomarc Consulting Project Team (2006) Smarter, Faster, Better – Leading Niche

Player: a Development Strategy for the New Zealand Pipfruit Industry. 320 Exhibit AUS-21: Innomarc (2006) Smarter, Faster, Better – Leading Niche Player, pp. 22-23.321 New Zealand’s first written submission, para. 4.197.322 Exhibit NZ-51: Apple & Pear Australia Ltd, Public Submission to ACCC Grocery Inquiry, 11 March

2008.

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into grocery prices.323 It is correct that APAL stated that major supermarkets “openly support”

Australian produce, except when it cannot be sourced in Australia. However, APAL added that:

[I]t is believed that in closed door negotiations with local sellers they [supermarkets] use international commodity prices to push down the price of locally sourced product...324

332. In Australia’s view, the commercial position of the major supermarkets is more likely to

be reflected by the following statement by Coles Myer Ltd (one of two major supermarket chains

operating in Australia) to the Australian Government Agriculture and Food Policy Reference

Group:

Coles’ policy is to always purchase Australian products where quality, quantity and competitive price allow.325

In other words, a preference for Australian products is one of several key considerations in

deciding on the source of any product. New Zealand apples would have to compete on quality,

quantity and price, just as they would have to do in any other market.

333. Recalling the views expressed by the Chief Executive of Pipfruit New Zealand about the

high price and second rate quality of Australian apples, New Zealand is asking the Panel to

accept that Australian supermarkets would continue to sell “second rate” and “higher priced”

Australian apples in preference to “higher quality” and “lower priced” New Zealand apples.

d. New Zealand wrongly supposes that its apples entering the

Australian market will lead to large price falls

334. New Zealand’s next supposition is that, if Australian supermarkets were to stock apples

from New Zealand, any attempt by New Zealand to sell 150 million apples into the market

would lead to a large fall in prices (20% or more) which would make New Zealand exports to

Australia uneconomic.326 New Zealand seeks support for this view from a report prepared by the

323 Australian Competition and Consumer Commission inquiry into grocery prices. http://www.accc.gov.au/content/index.phtml/itemId/809228

324 Exhibit NZ-51: APAL Submission, p. 8 (response to question 53).325 Exhibit AUS-22: Coles Myer Ltd (2005) Submission to the Agriculture and Food Policy Reference

Group, Department of Agriculture, Fisheries and Forestry, p. 3. 326 New Zealand’s first written submission, para. 4.200.

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Australian Bureau of Agricultural and Resource Economics (ABARE).327 This report was taken

into account by the IRA Team.328

335. New Zealand’s reliance on the ABARE report is based on a misunderstanding of the

nature of the research and its findings. The ABARE report estimates the levels of Australian

production and consumption of apples and imports of New Zealand apples under the assumption

that opening the Australian market to New Zealand apples would cause a given price fall.

Estimates are provided for the volume of imports consistent with price falls of 5%, 10% or 20%.

In fact, rather than suggesting that Australian apple prices are very sensitive to changes in

supply, the ABARE report argues that, because Australian producers always have the option of

exporting, imports could not drive down the Australian price by very much.

336. Recent data on Australian domestic wholesale apple prices compared to New Zealand

apple export prices raises further questions as to New Zealand’s supposition. As shown in

Figure 1 below, between 2000-01 and 2006-07, New Zealand export prices have been well

below Australian domestic wholesale apple prices, and in the years 2003-04 and 2006-07, when

Australian production was significantly reduced due to drought conditions, the divergence

between prices become even more significant.329

Figure 1: Australia and New Zealand apple prices

327 Exhibit NZ-52.328 Final IRA Report, Part B, pp. 18-19.329 Sources and definitions: (1) Average of values for Sydney, Melbourne and Brisbane markets. For

Sydney and Melbourne, average of monthly values, average for all apples, TLcarton. For Brisbane, average for all apples TLcarton. Data compiled by Ausmarket Consultants, including data collected by Sydney and Melbourne Market Price Reporting Services, 14 April 2008. (2) Year ending March 31. Derived from carton prices, New Zealand MAF 2007 and earlier issues.

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Australia and New Zealand apple prices

0

500

1000

1500

2000

2500

3000

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

A$/to

nne

Australia1

NZ Exports2

e. New Zealand wrongly supposes its exporters will not divert their

apples to Australia

337. A further supposition by New Zealand is that its exporters have tied up their future

exports in long term contracts to Northern Hemisphere customers to such a point that they would

not export significant quantities of apples to Australia. This view, however, does not appear to

accord with available evidence and expected future market developments.

338. The USDA Foreign Agricultural Service observed in 2005 that “[a] large number of

exporters diverted product to the European market in 2005, following forecasts at the beginning

of the season that prices would be poor in the U.S. market”.330 Contrary to New Zealand’s

supposition, this suggests that New Zealand’s exporters would switch to the Australian market if

prices were favourable.

339. Rabobank331 has also reported that New Zealand apple producers have faced increasing

competitive pressures in the world market in recent years. The Innomarc Consulting Project

330 Exhibit AUS-23: United States Department of Agriculture Foreign Agricultural Service, "New Zealand Fresh Deciduous Fruit Annual 2006", GAIN Report Number: NZ6001, 22 December 2005, p. 6.

331 Exhibit AUS-24: Rabobank (2006), "New Zealand Apple Industry – crunch time!", Rabobank Global Focus, January 2006, p. 7.

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Team rated Chile as being a “major direct competitor” to New Zealand.332 According to

Rabobank, Chile has a strongly export-oriented industry and is a strong competitor for New

Zealand in counter-seasonal trade.333 The New Zealand Ministry of Agriculture and Forestry has

reported that it expects world apple production to increase over the next few years, mainly as a

result of expansion in China and South American countries.334 Australia submits that increased

competition can be expected to have an impact on New Zealand’s position in its existing

markets, resulting in New Zealand apple producers looking for new export opportunities.

340. Finally, Australia considers that new storage technology is another market factor which

will put pressure on New Zealand’s exports to its existing Northern Hemisphere customers. The

commercialisation of treatment of fruit with 1-methylcyclopropene, marketed as SmartFresh™,

allows producers to hold fruit at premium quality for longer periods than was previously

possible. Rabobank argues that, as a result of this new technology, the window of opportunity

for New Zealand to profit from Northern Hemisphere markets from its counter-seasonal

production has “almost closed”.335

341. In sum, Australia has demonstrated the lack of economic and commercial substance to

the suppositions underpinning New Zealand’s assertion that the IRA Team overestimated the

volume of trade that would occur. Accordingly, Australia submits that the Panel should

disregard this assertion.

v. Summary

342. Australia has demonstrated that the SPS Agreement is not prescriptive as to methodology.

Accordingly, Australia is entitled to rely on the semi-quantitative methodology applied by the

IRA Team. It is not required to use New Zealand’s methodology. Far from being flawed, as

claimed by New Zealand, the semi-quantitative methodology used by the IRA Team was sound

and applied rigorously. Therefore, what New Zealand casts as methodological error is no more

than methodological difference. It is evident that New Zealand’s criticisms are based on a

misunderstanding of the IRA Team’s methodology and the requirements of the SPS Agreement. 332 Exhibit AUS-21: Innomarc (2006), Smarter, Faster, Better – Leading Niche Player, p. 30. 333 Exhibit AUS-24: Rabobank (2006) "New Zealand Apple Industry – crunch time!" Rabobank Global

Focus, January 2006, p. 5.334 Exhibit AUS-25: Ministry of Agriculture and Forestry New Zealand (2007), Situation and outlook for

New Zealand agriculture and forestry (apples and pears). 335 Exhibit AUS-24: Rabobank (2006) "New Zealand Apple Industry – crunch time!" Rabobank Global

Focus, January 2006, p. 5.

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343. Australia has also shown that New Zealand’s arguments regarding volume of trade are

flawed and lacking in economic and commercial substance.

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C. AUSTRALIA’S MEASURES ARE CONSISTENT WITH ARTICLE 5.1, AND

ACCORDINGLY, WITH ARTICLE 2.2

344. There is substantial overlap in New Zealand’s technical and scientific arguments under

Article 2.2 and Article 5.1, therefore Australia will address them together. However, since the

question of sufficient scientific evidence under Article 2.2 can only be answered by a valid risk

assessment in this dispute, Australia will deal with all these issues according to the scenarios

analysed in the Final IRA Report.

1. The Panel should be guided by the approach in Australia – Salmon (Article 21.5)

345. New Zealand does not adequately define the legal standard that a risk assessment has to

meet in the hope that its unbalanced assessment of the evidence, which ignores the importance of

expert judgment and context, can substitute for a proper discharge of its burden of proof. It is

impossible to properly assess whether Australia has met its legal obligations under Article 5.1

unless those legal obligations are clearly spelled out.

346. The appropriate legal standard is closely related to the Panel’s standard of review.

Australia recalls that in Australia – Salmon (Article 21.5 – Canada), the panel established that an

“evaluation” will meet the requirements of Annex A(4) and Article 5.1 if it “achieve[s] a certain

level of objectivity”.336 A risk assessment will be consistent with this requirement if the

complainant fails to establish that the panel should not “have reasonable confidence in the

evaluation made, in particular in the levels of risk assigned.”337 It will not be enough for a

complainant to show that flaws or inconsistencies in the evaluation of likelihood338 may have led

to a lower level of assessed risk. New Zealand must convince the Panel that the flaws are “so

serious”339 that their absence would have led to a lower level of assessed risk.340

347. Australia submits that the reasoning in Australia – Salmon (Article 21.5 – Canada) is

persuasive and provides instructive guidance to the Panel. New Zealand cannot claim that the

IRA Team’s evaluation of risk is “seriously flawed” on the sole basis that it does not reflect New

336 Panel Report, Australia – Salmon (Article 21.5 - Canada), para. 7.48.337 Panel Report, Australia—Salmon (Article 21.5 - Canada), para. 7.51. 338 Panel Report, Australia—Salmon (Article 21.5 - Canada), para. 7.47.339 Panel Report, Australia—Salmon (Article 21.5 - Canada), para. 7.57.340 Panel Report, Australia—Salmon (Article 21.5 - Canada), para. 7.57.

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Zealand’s alternative account of the evidence. Demonstrating the existence of divergent view is

not sufficient to actually “prevent” a Panel from having reasonable confidence in the evaluation

made.

2. The IRA Team made an objective and credible evaluation of the likelihood of entry,

establishment and spread of the pests, as well as the associated potential biological and

economic consequences

348. Australia submits that New Zealand fails to establish a prima facie case that the risk

assessments for fire blight, European canker or ALCM are inconsistent with Article 5.1 and

consequently, Article 2.2. At best, New Zealand shows that if the selective evidence it tenders is

assessed in the same way New Zealand assesses it, the IRA Team may have assigned lower

likelihoods at certain steps in the pathway. The test elaborated by the panel in Australia—

Salmon (Article 21.5 – Canada) contemplates a much more serious departure from objectivity

before a Member will be found in breach of the second requirement of Annex A(4).

Accordingly, Australia will show that the Final IRA Report’s risk assessments on fire blight,

European canker and apple leaf-curling midge are objective and credible and should not be

disturbed.

3. Fire blight

349. New Zealand claims that the IRA Team’s fire blight risk assessment is inconsistent with

Article 5.1 because it fails to assess the likelihood of entry, establishment and spread of the

disease and its associated economic and biological consequences. Its central complaint is the

same in respect of the importation scenario (entry), establishment and spread scenario and

consequence assessment: that the probability values assigned at each step of the risk assessment

are “arbitrary”, “inflated” and have “no justification in science”.341

350. Australia denies this claim and submits that New Zealand has failed to identify any flaws

in the risk assessment for fire blight, let alone any flaws serious enough to prevent the Panel

from having “reasonable confidence” in the risk assessment. New Zealand bases its case on four

faulty assertions:

341 New Zealand’s first written submission, paras. 4.207 & 4.254.

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That Japan – Apples decides this case;

That the spread of fire blight to other countries via trade in apple fruit has never been demonstrated;

That the populations of E. amylovora are insufficient at every stage of the pathway to initiate infection of fire blight;

That the Roberts and Sawyer (2008)342 study provides a “correct” assessment of the risk fire blight introduction through apple fruit.

351. As these four assertions are used repeatedly by New Zealand throughout its submission

on fire blight, Australia will address them first.

(a) New Zealand makes four key errors

i. The findings in Japan – Apples are not scientific evidence

352. Australia has already demonstrated why it would be wholly inappropriate to apply the

findings in Japan – Apples to this case as if it were an alternative risk assessment or its findings

amounted to scientific evidence. Australia reaffirms those arguments and will address the

specific instances where New Zealand has relied on this case as they arise.

ii. No mode of fire blight transmission has ever been categorically

established

353. New Zealand makes two objections to the assessment of apples as a risk pathway. First,

it claims that “[t]he spread of fire blight has never been linked to trade in apple fruit”343 and

places great weight on this so-called fact throughout their submission. New Zealand points to

the “long history of trade” between exporting countries and fire blight free countries as purported

proof that “there has been no case of the introduction, establishment and spread of [fire blight]

via apple fruit”.344 In its view, this is borne out by its own experience of having “exported

billions of apple fruit without any phytosanitary measures”345 as well as the experience of the

United States “as noted by the Panel in Japan – Apples”346.

342 Exhibit NZ-29: Roberts, RG and AJ Sawyer (2008) “An updated pest risk assessment for spread of Erwinia amylovora and fire blight via commercial apple fruit” Crop Protection 27, 362-368.

343 New Zealand’s first written submission, para. 3.52. (Article 2.2)344 New Zealand’s first written submission, para. 4.27. (Article 2.2)345 New Zealand’s first written submission, para. 4.28. (Article 2.2)346 New Zealand’s first written submission, para. 4.29. (Article 2.2)

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354. New Zealand mostly relies on anecdotal evidence to support its claims, and for good

reason: there is no direct evidence which establishes that apples do not spread fire blight.347

Even Jock et al. (2002)348, which is referred to by New Zealand, simply speculates about the

causes of fire blight spread and does not make definitive findings. What New Zealand holds out

as “fact” is actually no more than belief based on inferences drawn from anecdotal evidence.

355. The Final IRA Report notes that the spread of fire blight from countries carrying the

disease to other countries has been attributed variously to movement of contaminated planting

material, wind, rain, birds, insects and fruit boxes.349 However, there is no direct evidence on

any of these modes of introduction of fire blight. A close examination of the scientific evidence

supports this view. For example, Taylor et al. (2003), a source relied on frequently by New

Zealand, openly notes that it is merely a hypothesis that fire blight was introduced into New

Zealand via infected rootstock:

It is believed that fire blight was introduced into New Zealand on either nursery or propagation material.350

356. Another example of an unexplained incursion was the fire blight outbreak in the Royal

Botanic Gardens in Melbourne, Australia. Given the location of the nearest fire blight disease is

in New Zealand, wind, rain, insects and birds were considered extremely unlikely to be the mode

of spread. The records of the Botanic Gardens clearly show that there was no introduction of

planting material of fire blight hosts that could have introduced the disease.351 Accordingly, it is

thought that the most likely mode of introduction was mechanical via visitors, fruit or some other

object. This case illustrates that the “beliefs” about spread of fire blight from country to country

do not adequately explain each case and provides support for the modes of spread identified in

the Final IRA Report.

357. Given that there is no direct evidence confirming any of the long distance modes of

spread for fire blight, the IRA Team considered that there was no reason why apple fruit could

347 New Zealand’s first written submission, para. 4.30. (Article 2.2)348 Exhibit NZ-30: Jock, S, V Donat, MM Lopez, C Bazzi, and K Geider (2002) “Following spread of fire

blight in Western, Central and Southern Europe by molecular differentiation of Erwinia amylovora strains with PFGE analysis” Environmental Microbiology 4(2), pp. 106-114.

349 Final IRA Report, Part B, p. 94.350 Exhibit NZ-28: Taylor, RK, CN Hale, FA Gunson and JW Marshall (2003a) “Survival of the fire blight

pathogen, Erwinia amylovora, in calyxes of apple fruit discarded in an orchard” Crop Protection 22, 603-608, p. 603. (emphasis added)

351 Exhibit AUS-3: Final IRA Report, Part C, p. 107.

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not equally be considered a pathway for the introduction of fire blight. While New Zealand may

assert that such a pathway is no more than a theoretical possibility,352 there is internationally

recognised research which indicates that risks may arise from apple fruit.

358. For example, Billing and Berrie (2002)353 considered the events that might have been

involved in the introduction of fire blight and subsequent spread. In particular, they focussed on

the long standing belief that fire blight may have established in England via fruit boxes

contaminated by fruit carrying E. amylovora. They note:

During a visit to the USA in 1960, J.E. Crosse (unpublished report) learnt that 1954 was a severe blight year and that post-harvest rotting of pears in storage was a problem. About that time, one or more Kent growers used boxes in which fruit had been imported from the USA (Lelliot, 1959). The possibility that contaminated wooden fruit boxes could pose a risk was further indicated when an outbreak of fire blight in England occurred in 1960 in a pear orchard 145km north of the nearest case. The disease started at a point where fruit boxes from a Kent orchard were stacked (Lelliott, 1967). If rotting pears were imported in 1955, some could have reached rubbish dumps in the south London suburbs ant [sic] the Thames Estuary area. Inoculum might then have been spread by insects or birds to host trees or shrubs nearby.354

359. These comments describe a scenario involving mechanical transmission similar to one

considered by the IRA Team.

360. Many countries do regard trade in fruit as a risk, as they have some measures for

importation of apple fruit intended to reduce the risk of transmission of fire blight. For example,

South Africa requires United States fruit to be sourced from an area where E. amylovora is not

known to occur.355 Argentina and Chile both require that New Zealand apples are treated by

immersion for one minute in 100 ppm of chlorine.356 These measures are very similar to the

substantive risk reduction measures proposed by Australia for fire blight.

352 New Zealand’s first written submission, para. 4.403. Australia notes that New Zealand have made no arguments substantiating this claim.

353 Exhibit AUS-26: Billing, E. and Berrie, A.M. (2002) “A re-examination of fire blight epidemiology in England” Acta Horticulturae 590, pp. 61-67.

354 Exhibit AUS-26: Billing and Berrie (2002), p. 62.355 Exhibit AUS-27: US Northwest Horticultural Council Export Manual, South Africa, Section E:

http://www.nwhort.org/nhcpublic/southafrica.html. Accessed 15 July 2008.356 Exhibit AUS-18: Biosecurity New Zealand Importing Countries Phytosanitary Requirements -

Argentina, 21 March 2007, Section 4.1, p. 12: http://www.biosecurity.govt.nz/files/regs/stds/icprs/argentina.pdf. Accessed 13 July 2008; Biosecurity New Zealand ICPR - Chile, 22 March 2007, Section 4.1, p. 19 (http://www.biosecurity.govt.nz/files/regs/stds/icprs/chile.pdf; accessed 13 July 2008).

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http://www.biosecurity.govt.nz/files/regs/stds/icprs/chile.pdf

http://www.biosecurity.govt.nz/files/regs/stds/icprs/argentina.pdf

http://www.nwhort.org/nhcpublic/southafrica.html


iii. The number of E. amylovora sufficient to initiate infection is not agreed

361. New Zealand’s second claim in relation to the pathway is that mature apple fruit do not

contain sufficient, viable populations of E. amylovora to initiate infection of fire blight357 and

therefore, apple fruit is not a vector for the transmission of fire blight. In its view, the IRA

Team’s failure to take this point into account at every stage of the pathway, and in particular the

importation scenario, shows that it “ignored or significantly misunderstood scientific evidence,

which throughout provides no support for the suggestion that these steps could occur”.358 On this

basis, New Zealand considers the assessment of entry to be flawed.

362. Australia agrees that the number of E. amylovora required to initiate an infection is an

important issue. However, Australia strongly disagrees that the scientific evidence

unequivocally demonstrates that there is a minimum threshold number.359 Australia will

demonstrate, at the appropriate point in the pathway (transmission),360 that there is in fact no

consensus on this point. Contrary to New Zealand’s assertion that 104 E. amylovora are

required,361 there is evidence to suggest that even one bacterium can initiate an infection.362

Accordingly, since it is well established that apples can carry E. amylovora, a fact acknowledged

by New Zealand itself363, it was open to the IRA Team to conclude that this pathway could

validly be assessed.

357 New Zealand’s first written submission, paras. 4.219, 4.224, 4.227 & 4.229.358 New Zealand’s first written submission, para. 4.236.359 Exhibit AUS-28: van der Zwet, T., Biggs, A.R., Heflebower, R. and Lightner, G.W. (1994) “Evaluation

of the MARYBLYT computer model for predicting blossom blight on apple in West Virginia and Maryland”, Plant Disease 78(3), pp. 225-230; Exhibit AUS-29: Hildebrand, E.M. (1937) “Infectivity of the fire-blight organism”, Phytopathology 27, pp. 850-852.

360 Epidemiologically significant populations of E. amylovora become relevant at the transmission stage of the pathway.

361 New Zealand’s first written submission, para. 4.244.362 Exhibit AUS-29: Hildebrand (1937), p. 851. 363 New Zealand’s first written submission, para. 4.226.

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iv. Roberts and Sawyer (2008) is not appropriate to Australia’s circumstances

363. New Zealand places considerable reliance on the paper by Roberts and Sawyer (2008)364

as providing a sound scientific analysis of “the phytosanitary risk associated with the movement

of export-quality apple fruit to countries where fire blight does not occur”.365 Although in the

title of the paper it purports to be a “risk assessment”, it does not meet the definition of a risk

assessment under Annex A(4) of the SPS Agreement or the IPPC definition of a risk

assessment366 as it fails to consider the consequences of entry, establishment and spread. As

such, it should not be regarded as equivalent in any way to the Final IRA Report.

364. Australia does not consider Roberts and Sawyer (2008) to be relevant to the

circumstances of this dispute. Australia considers the findings to be both unreliable and

inappropriate and will elaborate below why the Panel should disregard the study.

a. Roberts and Sawyer (2008) is based on scenarios which bear no

plausible relationship to the assessment of the unrestricted risks

365. Roberts et al. (1998), a previous study conducted by the same author, contains essential

detail needed to understand Roberts and Sawyer (2008). Examination of these papers shows that

the findings in Roberts and Sawyer (2008) are largely based on the circumstances relevant to

trade in apples from the United States into Japan prior to the Japan – Apples dispute.367

Critically, this means that the apples sampled for the experiments relied on by Roberts and

Sawyer (2008) were drawn from orchards that were considered to conform to various

phytosanitary measures for fire blight disease. The phytosanitary conditions required were:

buffer zones, three inspections of orchards, chlorine disinfection of bins, chlorine disinfection of

apples, inspection of containers and inspection on arrival; or only one inspection, trees should

have less than 1% fire blight strikes and apples would not be exported from infected or adjacent

trees.368 Apart from the obvious fact that New Zealand is not the United States, these conditions

bear no plausible relationship to the assessment of the unrestricted risks of fire blight that are

364 Exhibit NZ-29: Roberts and Sawyer (2008).365 New Zealand’s first written submission, para. 4.26.366 International Plant Protection Convention, International Standard for Phytosanitary Measures No. 5

Glossary of Phytosanitary Terms, 2007 defines “pest risk assessment (for quarantine pests)” as follows: “Evaluation of the probability of the introduction and spread of a pest and the magnitude of the associated potential economic consequences.” (original emphasis)

367 Exhibit NZ-22: Roberts et al. (1998), p. 24.368 Exhibit NZ-22: Roberts et al. (1998), p. 24.

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associated with the importation of apples from any area of New Zealand without any risk

management measures.

366. New Zealand makes no attempt to show why this assessment is directly relevant to trade

in apples from New Zealand to Australia. The lack of relevance to the circumstances of

Australian trade, is demonstrated by Table 1 in Roberts and Sawyer (2008).369 Information

relevant to the presence (or absence) of fire blight on mature apples is listed, drawing on six sets

of data from orchards in the United States, New Zealand and Canada. Five of these data sets

were generated in North America while only one of them was generated in New Zealand.

Neither Roberts and Sawyer (2008), nor New Zealand, provide any justification for the

assumption that conditions in North America with respect to fire blight are the same as New

Zealand.

367. Roberts and Sawyer (2008) construct three risk scenarios (S1, S2 and S3). In

constructing each scenario, they draw upon orchards with different fire blight status. The

scenario most relevant to the Final IRA Report is S3. Roberts and Sawyer (2008) state that S3 is

constructed from orchards where no phytosanitary requirements for E. amylovora are

implemented.370 However, 95% of the orchards included in S3 were considered to operate under

some degree of risk management for fire blight. For example, orchards making up 94% of the

S3 category required one pre-harvest field survey, required that there should be no more than 1%

of trees with fire blight strikes and that apples from infected or adjacent trees could not be

exported. Presumably, S3 was based on assumptions made about the proportion of different

orchards that exports would be drawn from in the United States. While this may have been a

valid assumption for exports from the United States under the old export protocols for Japan, it is

inappropriate to apply these same old assumptions to the potential trade from New Zealand.

368. New Zealand calculates, based on Roberts and Sawyer (2008) and taking into account the

IRA Team’s most likely volume of trade of 150 million apples, that “an outbreak of fire blight in

Australia caused by a New Zealand apple would be expected to occur once in 29,057 years”.371

However, New Zealand’s calculation is based on the false assumption that significant risk

management measures would be in place in 95% of New Zealand orchards. This is a curious

369 Exhibit NZ-29, Roberts and Sawyer (2008), p. 364.370 Exhibit NZ-22, Roberts et al. (1998), p. 25.371 New Zealand’s first written submission, para. 4.251.

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assumption considering that New Zealand argues throughout its submission that no risk

management measures are needed. A more appropriate and realistic assumption for New

Zealand when considering the IRA Team’s assessment of unrestricted risk (no risk management

measures required) for fire blight would be to assume that no orchards would have any risk

management in place. If the authors’ probability value for the number of apples carrying E.

amylovora of 0.0200382 for this scenario and the other values are accepted, and the volume

adjusted to reflect trade of 150 million apple fruit, the estimated likelihood becomes one event in

2,004 years, not 29,057 years as estimated by New Zealand. New Zealand has therefore

overestimated the number of years to outbreak by more than ten times.372 Accordingly, New

Zealand’s claim that Roberts and Sawyer (2008) can be relied upon to “provide statistical

support to show that the risk of importing E. amylovora on commercial apple fruit … is so small

as to be ‘insignificant’”373 cannot be sustained.

b. Roberts and Sawyer (2008) relies on flawed experimental data

369. Roberts and Sawyer (2008) also relies upon data drawn from experiments which failed to

detect E. amylovora on apples. In calculating the probability that fruit is contaminated with

E. amylovora, the study assumed that a failure to detect E. amylovora meant that there are zero

E. amylovora on fruit. It ignores the fact that many of the studies on the presence of

E. amylovora were not capable of detecting low bacterial numbers. However, even ignoring this

significant problem, the authors’ values for the probability that fruit is contaminated with

E. amylovora (0.0200382) are higher than the lower values used in the Final IRA Report. In

other words, Roberts and Sawyer concluded that, at least under some circumstances, the

probability of contamination of apples with E. amylovora fell within the range used in the Final

IRA Report. These issues are addressed in further detail in the discussion on Importation step 2,

below.

370. Despite the flaws identified above, Roberts and Sawyer (2008) does also provide support

for the conclusions in the Final IRA Report about the probability that E. amylovora transfers to a

new host and initiates infection. In the Final IRA Report, this step is referred to as exposure.374

The corresponding value in Roberts and Sawyer (2008) is determined by combining P4

372 New Zealand’s first written submission, para. 4.251.373 New Zealand’s first written submission, para. 4.251.374 Final IRA Report, Part B, pp. 85-90. These pages of the Final IRA Report discuss the factors relevant to

this step in detail.

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(probability that host is at receptive stage) and P5 (probability of E. amylovora transfer to new

host and infection occurs). Combining P4 (0.05) and P5 (0.0003786) results in a value of

0.00001893 (1.893 x 10-5).

371. It is clear that the maximum value used in the Final IRA Report (10 -6) is less than one

tenth of the value used by Roberts and Sawyer (2008) suggesting that if anything, the Final IRA

Report underestimates the probability of the transfer and infection step occurring. Similar

conclusions can be drawn about the IRA team’s probability estimate in Importation step 2.

These two examples clearly show that even if Roberts and Sawyer (2008) is applied, it tends to

support rather than detract from the conclusions reached by the IRA Team. New Zealand’s

attempt to portray the probability estimates in the Final IRA Report as unrealistically large and

inconsistent with the scientific literature therefore fails.

c. Roberts and Sawyer (2008) does not justify its use of confidence

limits

372. In estimating the input values, Roberts and Sawyer (2008) have sometimes chosen to use

the upper confidence limit of 50%. In simple terms, this means that the actual probability value

has a 50% chance of being greater that the estimated value. The confidence level chosen needs

to be appropriate to the circumstance and there is no definitive international standard in this

regard. However, it should be noted that the OIE manual relied upon by New Zealand in its

submission uses the 95%375 level in most examples, while ISPM No. 31376 provides tables for

confidence limits only from 80% to 99%.

373. There is no justification provided in Roberts and Sawyer (2008) for the use of the 50%

confidence limit. One explanation could be that they are attempting to model an “average”

situation. However, by giving less emphasis to less frequent events, the study downplays the

potential risks.

374. The choice of confidence limit has a profound impact on the estimated years to first

outbreak. The 50% confidence limit applied to obtain Roberts and Sawyer’s P5 value of

375 OIE Handbook on Import Risk Analysis for Animals and Animal Products (Volume 2: Quantitative Risk Assessment), World Organisation for Animal Health, Paris (2004).

376 Exhibit AUS-30: International Plant Protection Convention, International Standard for Phytosanitary Measures No. 31: Methodologies for sampling of consignments, 2008, from Report of the Third Session of the Commission on Phytosanitary Measures, Rome, 7-11 April 2008, pp. 14-15.

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0.0003786 leads to New Zealand’s estimate that fire blight outbreaks could only happen once

every 29,057 years. By contrast, the application of a 95% confidence limit results in a P5 value

of 0.0016 and an estimate that fire blight outbreaks could happen once every 6876 years –

approximately one quarter of New Zealand’s estimate.

375. Significantly, when the Roberts and Sawyer (2008) P5 probability of apples carrying E.

amylovora is adjusted to reflect the lack of risk management measures in New Zealand, and a

95% confidence limit is applied to the P5 value, the estimated years until the first outbreak is

474 years. Leaving aside that the IRA Team’s actual estimate, expressed in years to outbreak, is

once in 22 years, even if the 446 year figure is combined with the consequences assessment in

the Final IRA Report, the risk associated with fire blight still exceeds Australia’s ALOP.

d. Summary

376. Australia has shown that Roberts and Sawyer (2008) is not a risk assessment and is not

based on sound science. It relies on data that is experimentally flawed. It applies confidence

levels to the calculation of probability estimates which result in estimated years to first outbreak

that are grossly exaggerated. Significantly, it constructs highly inappropriate risk scenarios

based on conditions bearing no plausible relationship to the assessment of the unrestricted risks

of fire blight associated with the importation of apples from New Zealand without any risk

management measures. Australia therefore submits that the Panel should treat all of New

Zealand’s arguments based on this flawed study with a high degree of caution.

(b) The IRA Team’s analysis of the probability of entry is objective and credible

377. New Zealand argues that lower (often “negligible”) likelihoods should have been

assigned to Importation steps 2 to 7.377 However, its arguments are made on the basis of

selective evidence used to advance only one interpretation of the likelihood of entry. To

properly discharge its burden of proof, New Zealand must show that the actual likelihood values

assigned by the IRA Team on the basis of all the evidence, assessed in the context of Australia’s

circumstances, are not credible. It does not do this. Accordingly, Australia submits that the

importation scenario is a proper evaluation of “entry”.

i. Importation step 1


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378. Importation step 1 focuses on the presence or absence of E. amylovora in source orchards

in New Zealand. If E. amylovora is absent from an area, there is no likelihood that the apples

exported from orchards in that area can transmit the disease causing organism to a new area.

Since the IRA Team found that “[t]here is no scientific literature that indicates that any area of

New Zealand is free of the fire blight bacteria and MAFNZ has not provided any information in

support of freedom for any apple producing areas in New Zealand”378, it concluded that the

likelihood that E. amylovora is present is 1.

379. New Zealand misunderstands the purpose of Importation step 1. It claims that “it is

widely accepted in the scientific literature and by the scientific community that fruit from

orchards with no symptoms of fire blight do not harbour populations of E. amylovora.”379

However, Importation step 1 is not concerned with the presence of E. amylovora on fruit380, nor

is it concerned with the occurrence (or non occurrence) of disease symptoms. It is concerned

exclusively with the presence of E. amylovora in source orchards. Bacterial infestation of apple

fruit was appropriately considered under Importation step 2. The IRA Team also considered that

the scientific literature and evidence did not show that the absence of fire blight symptoms in an

orchard would indicate the absence of E. amylovora because:

Erwinia amylovora was detected in New Zealand both from orchards with fire blight symptoms (Hale et al., 1987; Clark et al., 1993) and those without symptoms (Clark et al., 1993).381

380. New Zealand claims that the IRA Team was wrong to rely on Clark et al. (1993)382 to

support the statement that E. amylovora was found in an orchard without symptoms.383 Australia

disagrees. New Zealand itself states that Clark et al. (1993) reports that E. amylovora was found

on immature fruit from two orchards with no fire blight symptoms at flowering, although

infected alternative hosts were found in close proximity to the two orchards.384 The statement

made in the Final IRA Report therefore accurately reflects Clark et al. (1993) in this regard:

E. amylovora was found in orchards without fire blight symptoms.

378 Final IRA Report, Part B, p. 54 (emphasis added).379 New Zealand’s first written submission, para. 4.210 (emphasis added).380 Bacterial infestation of apple fruit is considered under Importation step 2.381 Final IRA Report, Part B, p. 53.382 Exhibit NZ-53: Clark, RG, CN Hale and D Harte (1993) "A DNA approach to Erwinia amylovora

detection in large scale apple testing and in epidemiological studies" Acta Horticulturae 338, 59-66.383 New Zealand’s first written submission, para. 4.210.384 New Zealand’s first written submission, para. 4.210.

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381. Clark et al. (1993) states that subsequently, 60,000 fruit from orchards verified free of

fire blight symptoms were tested and E. amylovora was not found on any fruit. New Zealand

claims this shows that “fruit from orchards with no symptoms of fire blight do not harbour

populations of E. amylovora.”385 However, Australia notes that New Zealand omits reference to

the measures put in place “prior to testing to reduce the possibility of fire blight infecting

orchards”.386 The measures are outlined in the following terms:

A zone 250 metres around each orchard was required to contain no alternative hosts for fire blight, and within a 500 metre zone around orchards no infected hosts were allowed. Detailed inspections ensured that this was the case and since the introduction of these stringent measures no Erwinia amylovora has been detected in the calyxes of c. 60,000 fruit tested from the inspected orchards.387

382. Australia emphasises that the researchers had to use stringently maintained buffer zones

to keep E. amylovora out of orchards so that they could show that E. amylovora was not present

in orchards without fire blight symptoms. The use of these measures by the researchers clearly

demonstrates that the presence or absence of fire blight symptoms, on their own, are not a good

indicator of the presence or absence of E. amylovora in an orchard. The organism can be present

in orchards even if disease symptoms are not detected, or the orchard is surrounded by infected

alternative hosts. This is precisely the point made in the discussion under Importation step 1 in

the Final IRA Report.388 Accordingly, New Zealand’s claim that “fire blight is not routinely

detected in all orchards in New Zealand” because the “disease is sporadic in nature”389 is also

irrelevant because it relates entirely to the detection of disease symptoms.

383. The IRA Team did not misread the scientific literature, make incorrect assumptions or

fail to take account of scientific evidence. The IRA Team considered that relevant scientific

literature and evidence did not allow it to assess any apple producing areas of New Zealand

would be free of E. amylovora. Accordingly, Australia submits that New Zealand has not

presented any arguments or evidence that show the conclusions of the IRA Team in relation to

Importation step 1 are flawed.

ii. Importation step 2

385 New Zealand’s first written submission, para. 4.210.386 Exhibit NZ-53: Clark et al. (1993), p. 62.387 Exhibit NZ-53: Clark et al. (1993), p. 62 (emphasis added).388 Final IRA Report, Part B, pp. 53-54.389 New Zealand’s first written submission, para. 4.211.

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384. Under Importation step 2, the IRA Team considered the likelihood that picked fruit is

infested or infected with E. amylovora. As the IRA Team was undertaking the unrestricted risk

analysis, it took into account that apples could be sourced from anywhere in New Zealand

irrespective of the fire blight status of the orchards.

385. The IRA Team reviewed a significant body of scientific literature on the infection and

infestation of apple fruit.390 The IRA Team identified studies that found no evidence of the

presence of E. amylovora on mature apples and noted that some of these studies were carried out

on orchards showing symptoms of fire blight. The IRA Team also identified studies that

confirmed the presence of E. amylovora on such fruit. Given the widespread distribution of fire

blight in New Zealand and the fact that the IRA Team were considering the unrestricted risk, the

IRA Team gave “much less weight” to studies that found no evidence of E. amylovora on mature

apples.391

386. The IRA Team concluded that Importation step 2 should be represented by a triangular

distribution with a minimum value of 10-3 (0.1%), a maximum value of 5 x 10-2 (5%) and a most

likely value of 3 x 10-2 (3%). This means the IRA Team estimated that between 0.1% and 5% of

apples picked would be infested or infected with E. amylovora, with the most likely number of

apples being 3%.

387. New Zealand claims that this range is based on a “misreading or discounting of the

scientific literature”.392 In its view, “[f]ire blight bacteria are not found internally in mature apple

fruit [and]…are only rarely to be found externally”.393 New Zealand also asserts that “the IRA

does not distinguish between infestation and infection”.394 Consequently, New Zealand contends

that “the IRA assigns a probability for infection or infestation of mature fruit that is over 20

times higher than is justified by the scientific evidence”.395 Accordingly, New Zealand claims

that the IRA Team should have treated the likelihood for Importation step 2 as “negligible”.396

390 Final IRA Report, Part B, pp. 55-65.391 Final IRA Report, Part B, p. 65.392 New Zealand’s first written submission, para. 4.213.393 New Zealand’s first written submission, para. 4.16 (Article 2.2).394 New Zealand’s first written submission, para. 4.216.395 New Zealand’s first written submission, para. 4.219.396 New Zealand’s first written submission, para. 4.220.

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388. In contrast to the comprehensive analysis conducted by the IRA Team, New Zealand

refers to only a handful of scientific studies in support of its claims, and places particular reliance

on the conclusions in Roberts and Sawyer (2008).397 Australia submits that New Zealand’s

assertions are without merit, as it will show in the following analysis.

a. The IRA Team clearly distinguished between internal infection and

external infestation

389. Contrary to New Zealand’s assertion, the IRA Team drew a very clear distinction

between internal infection and external infestation of apples. The analysis of Importation step 2

in the Final IRA Report is divided by headings titled “infestation of mature fruit”,398 “no

infestation of mature fruit”,399 “infection of mature fruit”400 and “no infection of mature fruit”,401

which indicate the kind of evidence being considered in each section.402

b. The IRA Team found a paucity of evidence of internal infection

390. According to New Zealand, the “scientific evidence is clear” that internal infection of

mature, symptomless apples does not occur.403 In making this claim, New Zealand does not

acknowledge that the Final IRA Report concludes at the end of the section examining evidence

in support of internal infection that “the paucity of evidence of endophytic [internal] infection in

mature fruit suggests that if endophytic infection does take place it must be a rare event”.404 New

Zealand fails to note that the summary of Importation step 2 does not refer to the evidence

regarding internal infection at all, indicating that it was not given significant weight by the IRA

team in the assignment of the probability range for this step. This is confirmed by the

explanation of the risk scenario which states that “[t]he importation risk scenario of particular

relevance to E. amylovora is one that is associated with the epiphytic (external) infestation”.405

397 Exhibit NZ-29: Roberts and Sawyer (2008).398 Final IRA Report, Part B, p. 55.399 Final IRA Report, Part B, p. 61.400 Final IRA Report, Part B, p. 62.401 Final IRA Report, Part B, p. 64.402 Final IRA Report, Part B, p. 55.403 New Zealand’s first written submission, para. 4.11 (Article 2.2); see also para. 4.216.404 Final IRA Report, Part B, p. 64.405 Final IRA Report, Part B, p. 52.

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c. The IRA Team’s estimated distribution for Importation step 2 is

supported by scientific evidence

391. New Zealand claims that the probability distribution assigned by the IRA Team to

Importation Step 2 is an “overestimation of the rate of infestation”406 since bacteria are found

externally “only rarely”407 and “generally only … on fruit from the few orchards that are

occasionally severely affected with fire blight”.408 New Zealand seeks to impugn the IRA

Team’s distribution by first challenging two of the references it relies upon, Clark et al. (1993)409

and van der Zwet et al. (1990)410, and then drawing comparisons to a number of other studies,

especially Roberts and Sawyer (2008), which it considers support much lower levels of

infestation.411 In Australia’s view, this claim is based on a selective reading of the evidence

which, in places, misrepresents the scientific studies actually relied on by New Zealand.

392. New Zealand refers to a typographical error in Clark et al. (1993) implying that the IRA

Team should not have relied upon it.412 Australia notes that New Zealand did not make this point

in its comments on earlier drafts of the Final IRA Report. In any event, such a claim is

inconsequential as the IRA Team did not place significant weight on that aspect of the study.

393. New Zealand argues that the IRA Team could not rely on the findings of van der Zwet et

al. (1990) to support the presence of E. amylovora on the surface of mature fruit because Dr van

der Zwet advised in the context of the Japan – Apples dispute that the fruit tested were

immature.413 New Zealand takes issue with the following statement from the Final IRA Report:

In the USA, van der Zwet et al. (1990) showed that approximately 4% of apparently noninfested mature fruit sourced from a symptomless orchard developed fire blight symptoms when wounded on the surface. This indicates that bacteria were present on the external surface of the fruit.414

406 New Zealand’s first written submission, para. 4.216.407 New Zealand’s first written submission, para. 4.16 (Article 2.2). Australia notes that New Zealand does

not refer to the levels of infestation in a consistent manner. For example, at para. 4.16, infestation is considered to be “rare”, whereas in para. 4.13, infestation is only “uncommon”.

408 New Zealand’s first written submission, para. 4.13 (Article 2.2).409 Exhibit NZ-53: Clark et al. (1993).410 Exhibit AUS-31: van der Zwet T, Thomson SV, Covey RP and Bonn WG (1990) “Population of

Erwinia amylovora on external and internal apple fruit tissues”, Plant Disease 74(9): 711-716.411 New Zealand’s first written submission, paras. 4.214 – 4.219.412 New Zealand’s first written submission, para. 4.214.413 New Zealand’s first written submission, para. 4.215.414 Final IRA Report, Part B, p. 56.

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394. Australia provides van der Zwet et al. (1990) as an exhibit. Australia also provides a

copy of the declaration made by Dr van der Zwet in the context of the Japan – Apples case.415

395. It does not appear that New Zealand consulted the declaration made by Dr van der Zwet.

If New Zealand had done so, it would have discovered that the particular fruit puncture

experiment referred to by the IRA Team was not covered in Dr van der Zwet’s declaration that

immature fruit may have been used in other experiments. As such, there is no basis for New

Zealand to suggest that Dr van der Zwet’s declaration in Japan – Apples casts doubt on the

quoted reference to van der Zwet et al. (1990) in the Final IRA Report.

396. Beyond its claims in relation to Clark et al. (1993) and van der Zwet et al. (1990), New

Zealand compares the distribution applied by the IRA Team for Importation step 2 with

estimates of the likelihood of infestation in other studies. In Australia’s view, this is not a proper

discharge of New Zealand’s burden of proof. As argued above, it is not enough to show that

there is an alternative scientific account of a particular phenomenon. New Zealand has to show

that the account given in the Final IRA Report is not credible. It has not done so. Australia

submits that the Panel should reject New Zealand’s arguments on this basis alone. However,

even if the alternative assessments of likelihood are taken at face value, Australia will show that

they are nevertheless unconvincing.

397. Ignoring the fact that Importation step 2 is represented by a probability range, New

Zealand argues that the most likely value of 3% is higher than infestation rates ascertained in

previous studies,416 and higher than the maximum infestation rates reported in New Zealand.417

On this basis, it argues that “[i]nfestation rates are normally much lower than 3% or more likely

close to zero”.418 New Zealand places particular reliance on Roberts and Sawyer (2008) which

estimates the likelihood of infestation to be 0.14% and argues that the estimate of probability

assigned by the IRA Team is “20 times higher than is justified by the scientific evidence”.419

415 Exhibit AUS-32: van der Zwet, T. (2002) "Declaration of Dr Tom van der Zwet", 16 July, 2002 (provided as Exhibit US-18 in Japan-Apples).

416 New Zealand’s first written submission, para. 4.216.417 New Zealand’s first written submission, para. 4.217.418 New Zealand’s first written submission, para. 4.217.419 New Zealand’s first written submission, para. 4.219.

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398. The IRA Team assessed a substantial number of studies. Table 4 below420 summarises

the studies that have detected E. amylovora on mature apples. This table shows that the range of

values chosen for Importation step 2 in the Final IRA Report are justified based on the scientific

literature and clearly illustrate that the interpretation of the science put forward by New Zealand

to justify the claim that E. amylovora is found only rarely on mature apple fruit is highly

selective.


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Table 4: Results of studies testing for the presence of E. amylovora

Apples with E.

amylovora

Location of study Reference Comment

<1% New Zealand Hale et al. (1987)421 Detection threshold around

10,000 cells per apple

2% New Zealand Hale and Taylor (1999)422 Detection threshold around 10 –

100 per apple

2.8% United States van der Zwet et al. (1990)423 Detection threshold around


75% United States McManus and Jones (1995)424 Technique does not differentiate

between live and dead cells

4% United States van der Zwet et al. (1990)425 Detection threshold around


at least 33% Canada Sholberg et al. (1998)426 Detection threshold around


399. Australia agrees that in some seasons, for some areas in New Zealand, it is possible that

the number of fruit carrying E. amylovora may be significantly lower than 3%. On the other

hand, it is also possible that the number of fruit carrying fire blight may be significantly higher

(see Table 4 above). The IRA Team took into account the fact that fire blight disease is highly

variable depending on the season, the fruit varieties being grown, the microclimate in orchards

and the control measures undertaken in orchards.427 This is the reason why the IRA Team used

the range of values from 0.1% to 5% to estimate the number of apples carrying E. amylovora.

421 Exhibit NZ-21: Hale, CN, EM McRae and SV Thomson (1987) “Occurrence of Erwinia amylovora on apple fruit in New Zealand” Acta Horticulturae 217, 33-40.

422 Exhibit NZ-24: Hale, CN and RK Taylor (1999) “Effect of cool storage on survival of Erwinia amylovora in apple calyxes” Acta Horticulturae 489,139-143.

423 Exhibit AUS-31: van der Zwet et al. (1990).424 Exhibit AUS-33: McManus, P.S. and Jones, A.L. (1995) "Detection of Erwinia amylovora by nested

PCR and PCR-Dot-Blot and Reverse-Blot hybridizations" Phytopathology 85, pp618-623.425 Exhibit AUS-31: van der Zwet et al. (1990).426 Exhibit AUS-34: Sholberg PL, Gaunce AP and Owen GR (1988) “Occurrence of Erwinia amylovora of

pome fruit in British Columbia in 1985 and its elimination from the apple surface” Canadian Journal of Plant Pathology 10, pp. 178-182.

427 Exhibit AUS-3: Final IRA Report, Part C, pp. 108-117.

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By focussing only on the 3% most likely value, New Zealand fails to appreciate that the IRA

Team’s decision to use a range of values to represent probability was designed to reflect the

uncertainty caused by seasonal variations.

400. Indeed, Roberts and Sawyer (2008) appears to be consistent with this range. For the

group of orchards where no phytosanitary requirements were implemented, the study concluded

that the probability that a fruit is contaminated with E. amylovora was 0.0200382.428

401. Australia has shown why it does not consider Roberts and Sawyer (2008) to be reliable.

Roberts and Sawyer (2008) concludes,429 on the basis of an examination of the literature,

including Hale et al. (1987), that populations of E. amylovora associated with “apple fruit

decline during the growing season to zero or near-zero at harvest” and therefore none of the

evidence for E. amylovora on immature fruit is relevant. Australia submits that this conclusion is

unsafe. None of the studies relied upon by Roberts and Sawyer (2008) were sensitive enough to

detect very low numbers of E. amylovora on or in apple fruit.

402. Hale and Clark (1990)430 showed that the plating technique used in many of the older

experiments (for example, Hale et al. 1987431) relied upon by New Zealand and Roberts and

Sawyer (2008) may only have been capable of detecting a minimum of 10,000 cells of

E. amylovora per fruit. The DNA hybridisation technique used in Hale and Clark (1990) was

sensitive enough to detect 100 cells of E. amylovora in calyces of apples. Although this

approach is more sensitive than plating techniques, apples carrying less than 100 cells of

E. amylovora would not have been detected and would have been falsely reported as negative.

403. McManus and Jones (1995)432 also provides support for the possibility that many of the

older studies may have significantly underestimated the number of mature apples carrying

E. amylovora. Using very sensitive techniques they found that 27 to 75% of mature apples

tested positive for E. amylovora.433 428 Exhibit NZ-29: Roberts and Sawyer (2008), p. 366.429 Exhibit NZ-29: Roberts and Sawyer (2008), pp. 363-364.430 Exhibit AUS-35: Hale CN and Clark RG (1990) "Detection of Erwinia amylovora from apple tissue by

DNA hybridisation" Acta Horticulturae 273, pp. 51-55. 431 Exhibit NZ-21: Hale et al. (1987).432 Final IRA Report, Part B, p. 56; Exhibit AUS-33: McManus and Jones (1995).433 The techniques used in this work are not capable of distinguishing between live E. amylovora and dead

E. amylovora. It is not appropriate to assume, as Roberts et al. (1998) and New Zealand seem to have done, that the positive detections reported by McManus and Jones are simply the remains of dead E. amylovora still present on the mature apples and that this study can be ignored.

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404. In these older experiments, fruit with less than 10,000 cells of E. amylovora would have

been falsely treated as uninfested. Given that even one bacterium on an apple may be

epidemiologically significant, this is a serious shortcoming in Roberts and Sawyer (2008) and

undermines the reliance placed on this study by New Zealand.

405. Roberts and Sawyer (2008) also dismisses the notion that E. amylovora could enter

into a viable but non-culturable (VBNC) state on the basis that it had not been demonstrated in

mature apple fruit.434 However, studies conducted by Biosca et al. (2004)435 and Ordax et al.

(2006)436 indicate that E. amylovora can enter into a VBNC state. E. amylovora is able to

survive and remain infective for six months in sterile irrigation water and the culturability and

pathogenicity of copper-induced VBNC E. amylovora can be restored, at least under the sterile

conditions used in their experiments. Copper is frequently used as a pest control chemical in

apple orchards. More recent work submitted for publication by the same research group showed

that E. amylovora entered a VBNC state in the calyx of mature apples when treated with copper

at various concentrations. Recovery of viable, fully pathogenic cells was achieved at least up to

28 days from the start of the experiment. Although the design of these experiments did not allow

estimation of the proportion of inoculated bacteria that was able to recover, these experiments

clearly indicate that the VBNC state can exist in the calyces of mature apple fruit.437

406. Another issue not addressed in the New Zealand submission on Importation step 2 is the

potential for significant events through the growing season, such as hail storms or rainstorms, to

result in surface infestation of apples with E. amylovora. Presumably, New Zealand does not

dispute the analysis in the Final IRA Report that events such as these can lead to surface

contamination of apples with E. amylovora.438

d. Summary

434 Exhibit NZ-29: Roberts and Sawyer (2008), p. 365.435 Biosca, E.G., Marco-Noales, E., Ordax, M. and Lopez, M.M. (2004) “Long-term starvation-survival of

Erwinia amylovora in sterile irrigation water” Proceedings on the 10th International Workshop on Fire blight, Bologna, Italy, 5th-9th July 2004, Acta Hort 704, pp. 107-112.

436 Ordax, M., Marco-Noales, E., López, M.M. and Biosca, E.G. (2006) “Survival strategy of Erwinia amylovora against copper: Induction of the viable-but-nonculturable state” Applied and Environmental Microbiology 72 (5): 3482-3489.

437 Exhibit AUS-36: Ordax, M., Biosca, E.G., Wimalajeewa, S.C., Lopez, M.M., and Marco-Noales, E., “Survival of Erwinia amylovora in mature apple fruit calyces”, 2008 (submitted for publication), p. 11-14.

438 Final IRA Report, Part B, p. 56-57.

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407. Australia has shown that the IRA Team drew a very clear distinction between internal

infection and external infestation of apples in its analysis of Importation step 2. Australia has

shown that the IRA Team acknowledged the paucity of evidence of internal infection in mature

fruit. The IRA Team recognised that the importation risk scenario of particular relevance to

E. amylovora is the one associated with the external infestation of apples.

408. Australia identified New Zealand’s attempt to compare the distribution applied by the

IRA Team for Importation step 2 with estimates of the likelihood of infestation in certain studies

as a failure on its part to discharge its burden of proof.

409. Australia noted the limitations on the sensitivity of experimental techniques used in a

range of studies cited by Roberts and Sawyer (2008) and showed that they overlooked the

potential impact of VBNC E. amylovora. These facts undermine the reliance placed on the study

by New Zealand. In addition, Roberts and Sawyer (2008) is not a risk assessment and, as such,

should not be regarded as equivalent to the Final IRA Report.

410. Australia demonstrated that New Zealand’s claim that the probability range assigned by

the IRA Team to Importation step 2 is “20 times higher than is justified by the scientific

evidence”439 is without merit. It is only possible to arrive at this conclusion if the probability

assigned to Importation step 2 is limited only to the most likely value of 3%, and the “science” is

confined to the estimate provided by Roberts and Sawyer (2008) of 0.14%.440 This cannot be

supported on the facts. Importation step 2 is a represented by a distribution, not a single value.

The conclusions of Roberts and Sawyer (2008) are not incontrovertible scientific fact, but merely

one estimate of infestation based on studies using unreliable experimental techniques.

411. Accordingly, Australia submits that New Zealand’s attempts to mischaracterise both the

IRA Team’s actual estimate of probability and the scientific evidence on external infestation

should be rejected by the Panel.

iii. Importation step 3

412. Importation step 3 addresses the potential for apples being harvested and transported to

packing houses to be contaminated with E. amylovora that may be present, for example, in ooze

439 New Zealand’s first written submission, para. 4.219.440 3% is approximately twenty times the magnitude of 0.14%.

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on trees, on the hands of pickers, picking bags, bins or machinery. On the basis of the scientific

literature, the IRA Team concluded that fruit could become contaminated at picking through

wounds as well as surface contamination, especially if rain occurred during harvest.441

Accordingly, the IRA Team represented Importation step 3 as a triangular distribution with a

minimum value of 10-3 (0.1%), a maximum value of 3 x 10-2 (3%) and a most likely value of 10-2

(1%).

413. New Zealand claims that the “most likely value of 1% ... has no basis in science”. 442

Again, New Zealand fails to appreciate the range in the scientific data available in respect of the

probability of particular events occurring, with the result that it seeks to limit a probability

distribution to a single figure.

414. Two arguments underpin New Zealand’s claim. First, it claims that the only place where

E. amylovora survive are in the calyx and “thus [they are] not available to contaminate

anything”.443 Secondly, New Zealand asserts that external populations of E. amylovora on the

fruit surface and leaves will be insufficient to cause contamination.444

415. Australia agrees that bacteria in the calyx are “not available to contaminate anything”.

However, this misses the point that Importation step 3 is not focussed on bacteria from the calyx

as a direct source of contamination. The sources of contamination considered most likely by the

IRA Team were surface infestation and E. amylovora on leaves, in the orchard environment, on

the hands of pickers and on bins and machinery.445

416. The IRA Team took into account the work of Ockey and Thomson (2006). This study

showed that the leaf area covered by E. amylovora can increase from zero to 24% immediately

after rain and decline to zero again a day after rain.446 Under these conditions, the IRA Team

reasonably concluded that any picking operations carried out shortly after rain would result in a

very high level of contamination as pickers’ hands, clothing and picking bins would become

441 Final IRA Report, Part B, pp. 66-71.442 New Zealand’s first written submission, para. 4.221. Australia notes again that New Zealand

concentrates only on the most likely value and does not make arguments in relation to the actual probability distribution assigned to Importation step 3 representing a range of values.

443 New Zealand’s first written submission, para. 4.223; see also: para. 4.21 (Article 2.2).444 New Zealand’s first written submission, para. 4.222; see also: para. 4.20 (Article 2.2).445 Final IRA Report, Part B, pp. 66–70.446 Exhibit NZ-26: Ockey, SC and SV Thomson (2006) "Influence of rain on transient populations of

Erwinia amylovora on leaf surfaces" Acta Horticulturae 704, 1B-1 19, pp. 113-119.

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contaminated.447 However, the IRA Team concluded that not all orchards in all seasons would

be subject to high levels of contamination and therefore it was not appropriate to base the

estimation for Importation step 3 wholly on such circumstances.

417. New Zealand refers to a number of studi`es448 showing that E. amylovora has short

survival rates when exposed to solar radiation and is generally regarded as a poor epiphyte (i.e.

does not grow on surfaces well). It is true to say that E. amylovora does not multiply on dry

surfaces exposed to sunlight, but it clearly has the capacity to survive in the environment quite

well, rapidly multiplying and infecting wounds on apples when conditions are favourable

(Sholberg et al. 1998).449

418. The Final IRA Report acknowledges that the likelihood of contamination arising from

sources such as ooze on trees, the hands of pickers, picking bags, bins or machinery is “very

small” and the likelihood of transfer is “even lower”.450 This is why the probability range

assigned by the IRA Team is skewed to the lower end of the distribution. New Zealand has

provided no argument as to why the IRA Team’s use of such a range, designed specifically to

reflect the low probability of contamination, should be considered flawed.451

iv. Importation step 4

419. Importation step 4 considers the likelihood that E. amylovora would survive the

operations carried out in the packing house. The IRA Team considered a substantial number of

studies and information on the use of a wide range of operations in New Zealand packing houses

including, pre-cooling, washing, disinfection, brushing, sorting and grading, packaging and cool

storage.452 On this basis, the IRA Team considered that Importation step 4 should be represented

447 Final IRA Report, Part B, p. 71.448 New Zealand’s first written submission, para. 4.20 (Article 2.2); Exhibit NZ-96: Dueck, J (1974)

“Survival of E. amylovora in association with mature apple fruit” Canadian Journal of Plant Science 54, 349-351; Exhibit NZ-97: Roberts, RG, ST Reymond and RJ McLaughlin (1989) “Evaluation of mature apple fruit from Washington State for the presence of E. amylovora” Plant Disease 73, 917-921; Exhibit NZ-21: Hale et al. (1987); Exhibit NZ-20: Roberts, RG (2002) “Evaluation of Buffer Zone Size and Inspection Number Reduction on Phytosanitary Risk Associated with Fire Blight and Export of Mature Apple Fruit” Acta Horticulturae 590, 47-53; Exhibit NZ-5: Thomson, SV (2000) “Epidemiology of fire blight” in Vanneste, JL (Ed) Fire Blight: The Disease and its Causative Agent, Erwinia amylovora, CABI 'Publishing, CAB International, Wallingford, UK, 9-36; and Exhibit NZ-26: Ockey and Thomson (2006).

449 Exhibit AUS-34: Sholberg et al. (1998), p. 180.450 New Zealand’s first written submission, para. 4.222 (quoting the Final IRA Report, Part B, p. 69).451 New Zealand’s first written submission, para. 4.224.452 Final IRA Report, Part B, pp. 71-77.

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by a triangular distribution with a minimum value of 0.3 (30%), a maximum value of 0.7 (70%)

and a most likely value of 0.65 (65%). The most likely value of 65% represents an outcome

which would see the number of apples with E. amylovora reduced by 35% during processing.

The maximum value of 70% would see the number of apples with bacteria reduced by 30%

during processing and the minimum value of 30% would result in a 70% reduction of apples

carrying bacteria.

420. New Zealand argues that this distribution should be revised purely on the basis that there

is some evidence which shows that cold storage has a negative impact on the survival of

E. amylovora.453 In its view, Importation step 4 is based on an “assumption rather than on

scientific data”454 and therefore, should have been “treated as an event with a much lower

probability”455, namely, “negligible”.456 New Zealand has not made a claim concerning the

effects of brushing, waxing, sorting and grading and packaging as considered by the IRA Team,

and should not be permitted to expand its claims in relation to these issues at a later stage of

proceedings.

421. Australia denies that the probability range assigned to Importation step 4 can be reduced

to a mere “assumption”. Given the risk scenario addressed by the IRA Team, E. amylovora will

be taken to have survived this step even if only one bacterium survives routine pack house

procedures on any given apple. New Zealand seems to have relied upon the argument related to

the epidemiological significance of low bacterial numbers457 rather than directly addressing the

issue evaluated in Importation step 4. Viewed in this light, New Zealand’s arguments in relation

to cold storage actually support Australia’s position.

422. Australia agrees with New Zealand that the scientific literature indicates that the number

of E. amylovora on or in apples declines with cold storage.458 However, the scientific studies

cited by New Zealand in apparent support of its case clearly show that while bacterial

populations decline, they do not disappear.459 Even if the eventual decline in viable 453 New Zealand’s first written submission, para. 4.226; see also: paras 4.17-4.19 (Article 2.2).454 New Zealand’s first written submission, para. 4.225.455 New Zealand’s first written submission, para. 4.227.456 New Zealand’s first written submission, para. 4.225.457 See for example: New Zealand’s first written submission, para. 4.17 (Article 2.2).458 Final IRA Report, Part B, p. 109.459 New Zealand’s first written submission, para. 4.226 in which Exhibit NZ-24: Hale and Taylor (1999);

Exhibit NZ-25: Taylor, RK and CN Hale (2003) “Cold storage affects survival and growth of Erwinia amylovora on the calyx of apple” Letters in Applied Microbiology 37(4), 340-343 and Exhibit NZ-98: Temple, TN, VO

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E. amylovora to zero is taken into account, apples could be processed, shipped to Australia and

be available for retail sale before the numbers of E. amylovora on apples declined to this level.

423. Australia submits that the scientific evidence on the time course of decline in numbers

during cold storage is not as clear cut as implied by New Zealand. The IRA Team examined

data from Taylor and Hale (1999)460 which clearly indicates that E. amylovora survived in

calyces of apples for more than 25 days – significantly longer than the minimum 10 days needed

to transport apples from New Zealand to Australia by ship.

424. Two recent studies lend further weight to the conclusions in the Final IRA Report. The

first, Temple et al. (2007),461 presents data showing that bacteria survived better on fruit in cold

storage than at room temperature, and that the best survival was in controlled atmosphere

conditions as used in longer term commercial storage of apples. Cold temperatures prolong the

survival of bacteria compared to warmer temperatures as cooler temperatures slow down

metabolic activity and effectively allow bacteria to survive for long periods in a quiescent state.

Storage in cold conditions is one of the standard approaches to storing bacteria in laboratories.

425. The second study, Ordax et al. (2008),462 subjected mature apples inoculated in the calyx

with E. amylovora to storage at 26°C and 5°C. At 5°C there was less than a 10-fold decline in

bacterial numbers over 35 days – the maximum time used in these experiments. However, at

26°C there was a 1000-fold decline over 28 days although bacteria could still be detected at 35

days when apples were inoculated with 105 cells.463 This is further evidence in support of the

IRA Team’s judgment that E. amylovora on apples could survive cold storage for sufficient time

to be imported and distributed in Australia.

426. Australia has shown that the scientific evidence on the decline in numbers of

E. amylovora during cold storage is not as clear cut as implied by New Zealand. In fact, the

scientific evidence relied on by New Zealand suggests that bacteria can survive, even during

periods of cold storage. Australia has demonstrated that the probability range assigned to

Stockwell, PL Pusey and KB Johnson (2007) “Evaluation of Likelihood of Co-Occurrence of E. amylovora with Mature Fruit of Winter Peal” Phytopathology 97(10),1263-1273 are cited. Exhibit NZ-24 and Exhibit NZ-25 are also cited in New Zealand’s first written submission para. 4.18 (Article 2.2).

460 Exhibit NZ-24: Hale and Taylor (1999).461 Exhibit NZ-98: Temple et al. (2007).462 Exhibit AUS-36: Ordax et al. (submitted for publication in 2008). 463 Exhibit AUS-36: Ordax et al. (submitted for publication in 2008), pp. 7 & 9.

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Importation step 4 cannot be reduced to a mere “assumption”. Accordingly, Australia submits

that New Zealand has failed to show that the probability range assigned to Importation step 4 is

flawed.

v. Importation step 5

427. Under Importation step 5, the IRA Team assessed the likelihood that apples entering the

packing houses free of E. amylovora would become contaminated during processing. The IRA

Team considered that the most significant source of fruit contamination in the packing house is

the water in the dump tank and the wash water that apples may be exposed to through the

grading and packing process.464 In particular, if bacteria are washed off apples, bins or trash

(leaves and twigs) then the water will provide an efficient mechanism to contaminate clean apple

fruit. Contamination by this process is normally addressed by adding disinfectant at a suitable

concentration to the process water. However, data provided by New Zealand cited in the Final

IRA Report indicates that only 53% of New Zealand packing houses use some sort of

disinfectant.465 On this basis, the IRA Team decided to represent the likelihood of clean fruit

being contaminated with E. amylovora during processing as a triangular distribution, with a

minimum value of 10–3 (0.1% of fruit), a maximum value of 5 x 10–2 (5% of fruit) and a most

likely value of 2.5 x 10–2 (2.5% of fruit).

428. New Zealand offers little substantive argument in relation to Importation step 5, making

it hard to understand its complaint. Taken with its related arguments under Importation steps 3

and 7, as well as its argument under Article 2.2,466 New Zealand appears to argue that mature

apples do not carry E. amylovora and, therefore, the likelihood of fruit contamination at

Importation step 5 is even lower than at Importation step 3. However, Importation step 5

addresses the likelihood that clean fruit is contaminated by E. amylovora during processing in

the packing house. Therefore, the question that is being asked is: if apples carrying E.

amylovora are processed with apples free of E. amylovora, what is the likelihood that clean

apples will become contaminated? The presence (or absence) of E. amylovora on apples

entering the packing house is dealt with under Importation steps 2 and 3.

464 Final IRA Report, Part B, pp. 77-78.465 Final IRA Report, Part B, p. 77.466 New Zealand’s first written submission, paras. 4.20 – 4.21 (Article 2.2).

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429. Accordingly, Australia submits that New Zealand has misunderstood the intention of

Importation step 5, and how the importation steps operate together. Consequently, it fails to

establish any basis at all why the IRA Team’s judgment in relation to Importation step 5 should

be considered flawed.

vi. Importation step 6

430. Importation step 6 addresses the likelihood that E. amylovora will survive palletisation,

quality inspection, containerisation and transportation to Australia. Taking into account that

bacteria are not visible and the evidence presented at Importation step 4 that bacteria will survive

cold storage conditions, the IRA Team concluded that none of the processes at Importation step

6 are likely to directly impact on the survival of E. amylovora on fruit.

431. Accordingly, the IRA Team represented Importation step 6 as a triangular distribution

with a minimum value of 0.7 (70%), a maximum value of 1 (100%) and a most likely value of

0.8 (80%). The most likely value of 80% represents an outcome which would see the number of

apples with E. amylovora reduced by 20% during transportation. The maximum value of 100%

would see no reduction in the number of apples with the bacteria and the minimum value of 70%

would result in a 30% reduction.

432. New Zealand’s argument in respect of Importation step 6 is essentially a repetition of the

arguments it makes under Importation step 4. It again refers to Hale and Taylor (1999), Taylor

and Hale (2003) and Temple et al. (2007) in support of its claim that cold storage “significantly

reduces the viability of E. amylovora”.467 New Zealand argues that E. amylovora will not

survive in “epidemiologically significant numbers”.468 Therefore, New Zealand asserts that the

IRA Team “attributed an inflated likelihood” to this step.

433. New Zealand again misinterprets the objective of this importation step. Importation

step 6 does not test whether E. amylovora will survive in epidemiologically significant numbers.

It is concerned with the likelihood that any bacteria will survive quality controls, storage and

transport. The IRA Team acknowledged the likelihood that, at least during some of these

processes, apples will be stored at low temperatures. Australia submits that the IRA Team’s

findings in relation to cold storage are fully consistent with the scientific evidence demonstrating


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that bacteria decline in cold storage.469 However, the IRA Team also took into account the fact

that the very same evidence also demonstrates that some bacteria can survive. This evidence has

already been discussed in the context of Importation step 4. Australia submits that this evidence

applies equally to Importation step 6.

434. In Australia’s view, the evidence adduced by New Zealand in relation to Importation step

6 again supports rather than undermines the conclusions of the IRA Team. New Zealand refers

to the study conducted in Temple et al. (2007) in support of its claims. However, Figure 3470 in

this paper clearly shows that after 28 days in cold, controlled atmosphere storage approximately

90% of apples still carried E. amylovora and approximately 55% of apples stored in the cold

tested positive for E. amylovora. Control of carbon dioxide and oxygen levels combined with

cold storage are the standard commercial practices used to prolong the storage life of apples. By

contrast only 10% of apples stored at ambient conditions tested positive for E. amylovora. Given

that the minimum time for packing, transport and distribution to Australia is around 10 days,

demonstrated E. amylovora survival for greater than 28 days clearly means that E. amylovora on

apple fruit will not die before apples are imported into Australia.

435. Accordingly, Temple et al. (2007) clearly shows that, if anything, cold storage prolongs

the life of E. amylovora on apples compared to storage at ambient temperatures. In fact, on the

basis of this study, cold storage with controlled atmosphere (a common commercial practice)

was the best condition for prolonging the life of E. amylovora on fruit.471

436. Australia notes that New Zealand again relies on Roberts and Sawyer (2008)472, stating

that it estimated the probability for this step as 0.0035088, based on data from Hale and Taylor

(1999).473 As noted above, the IRA Team took into account data from Taylor and Hale (1999) in

arriving at the distribution for Importation step 6. Accordingly, Australia submits the probability

estimate in Roberts and Sawyer (2008) does not in any way support New Zealand’s claim that

the distribution assigned to Importation step 6 is “inflated”.

469 Final IRA Report, Part B, pp. 75-76 & 109. 470 Exhibit NZ-98: Temple et al. (2007), p. 1270.471 Exhibit NZ-98: Temple et al. (2007), p. 1270.472 Exhibit NZ-29: Roberts and Sawyer (2008), p. 367.473 New Zealand’s first written submission, para. 4.230.

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437. New Zealand again fails to demonstrate a proper understanding of the importation

scenario examined by the IRA Team. Much of the evidence presented in fact supports

Australia’s claim that the IRA Team was correct in its assessment of likelihood for Importation

step 6. Accordingly, Australia submits that New Zealand has failed to establish that the IRA

Team’s assessment of Importation step 6 is flawed.

vii. Importation step 7

438. Importation step 7 examines the likelihood that clean fruit is contaminated by

E. amylovora during palletisation, quality inspection, containerisation and transportation. The

IRA Team assessed that the only contamination risk under this step arose from bacterial ooze

from internally infected fruit. Given that it considered internal infection to be a “rare event”, 474

and that rotten fruit is highly likely to be discarded at harvest, at the packing line or during

quality inspection, the IRA Team considered there was little opportunity for fruit to be

contaminated at this stage.475 Accordingly, the IRA Team ascribed a triangular distribution to

this step, with a minimum value of 0, a maximum value of 10 -6 (1 in 1 million), and a most likely

value of 5 x 10-7 (1 in 2 million).476

439. New Zealand contends that this is an event “with an exceedingly small probability of

occurrence”, similar to Importation steps 3 and 5.477 New Zealand argues that Importation steps

3 and 5 should be assessed as “negligible” events.478 According to the IRA Team’s

methodology, the qualitative descriptor for “negligible” events corresponds with a probability

interval between 0 and 10-6.479 As this is precisely the probability interval assigned to

Importation step 7, New Zealand can have no complaint with Importation step 7.

474 Final IRA Report, Part B, p. 64.475 Final IRA Report, Part B, p. 79.476 Final IRA Report, Part B, p. 79.477 New Zealand’s first written submission, para. 4.232.478 See: New Zealand’s first written submission, paras. 4.221 & 4.228 respectively.479 See: Final IRA Report, Part B, Table 12, p. 43.

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viii. Importation step 8

440. New Zealand agrees with the IRA Team’s assessment that Importation step 8 should be

represented by a certain probability of 1,480 but asserts that such a figure is “hardly meaningful”

because it “depends on the assumption that a pathway exists for the transmission of E.

amylovora”.481 This argument is irrelevant to this importation step, as New Zealand agrees with

the IRA Team that it is certain that any E. amylovora present by this step will survive to the next

stage. Again, New Zealand attempts to cast its objections to the pathway being examined as

errors in the actual assessment of that pathway.

ix. Summary on entry

441. In Australia’s view, New Zealand’s arguments exhibit a flawed understanding of the kind

of risk pathway actually being assessed in respect of fire blight, and how the importation steps

combine to provide an estimate of the probability of “entry”. New Zealand has failed to adduce

sufficient evidence of any flaws in the IRA Team’s assessment of the importation steps, let alone

any flaws serious enough to prevent the Panel from having “reasonable confidence” in the risk

assessment. Much of its evidence actually supports and confirms the IRA Team’s assessment.

(c) The IRA Team’s analysis of the probability of establishment and spread is

objective and credible

442. New Zealand argues that establishment and spread of fire blight through mature apples

has never been demonstrated.482 In New Zealand’s view, each step in the sequence of events that

constitute establishment and spread are “unproven”,483 and therefore the “probability of them

occurring in the correct sequence”484 when “a host blossom is susceptible and the climate is

conducive to infection”485 has to be “very close to zero”.486 New Zealand regards the IRA

480 New Zealand’s first written submission, para. 4.233.481 New Zealand’s first written submission, para. 4.234.482 New Zealand’s first written submission, paras. 4.247, 3.52-3.53, 4.7 & 4.27-4.30.483 New Zealand’s first written submission, para. 4.246.484 New Zealand’s first written submission, para. 4.247.485 New Zealand’s first written submission, para. 4.246.486 New Zealand’s first written submission, para. 4.247.

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Team’s evaluation of establishment and spread to be “hypothetical”487 and “grossly

exaggerated”.488

443. In Australia’s view, this claim lacks merit. It is one thing to suggest that a pathway has

never been historically “proven”. It is altogether different to claim that because the occurrence

of an event has never been categorically established that it can never happen. This is an error in

logic. Historical data may be a good predictor of future expectations, but it is never

determinative, especially when trying to predict how a disease may behave in an environment

that is presently free of that very disease.

444. ISPM No. 11 recognises that scientific uncertainty is a particular challenge:

Estimation of the probability of introduction of a pest and of its economic consequences involves many uncertainties. In particular, this estimation is an extrapolation from the situation where the pest occurs to the hypothetical situation in the PRA area. It is important to document the areas of uncertainty and the degree of uncertainty in the assessment, and to indicate where expert judgement has been used. This is necessary for transparency and may also be useful for identifying and prioritizing research needs.489

445. The risk assessment techniques promulgated by the IPPC, and therefore techniques that

Australia is obliged to take into account under Article 5.1, clearly permit the exploration of

hypothetical pathways. Moreover, ISPM No.11 acknowledges that expert judgment can and

must play a key role in risk assessments, like the Final IRA Report, which are designed to test

such pathways.

446. Against this background, New Zealand’s claims pay insufficient attention to the

requirements of the international standards, and seek to unduly limit the kinds of pathway and

scientific evidence that can be considered. The Final IRA Report fully discloses that the

scenario being assessed is not a particularly likely one490 – only that when potential consequences

are taken into account, it exceeds Australia’s ALOP. However, neither the SPS Agreement nor

the international standards require a risk assessment to examine only likely pathways or conform

to only one view of the mainstream science. The SPS Agreement does not require a risk

487 New Zealand’s first written submission, para. 4.252.488 New Zealand’s first written submission, para. 4.250.489 Exhibit AUS-6: International Plant Protection Convention, International Standard for Phytosanitary

Measures No. 11: Pest risk analysis for quarantine pests including analysis of environmental risks and living modified organisms, 2004, para 2.4 (emphasis added). “PRA” refers to a Pest Risk Analysis Area.


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assessment to establish a minimum magnitude of risk and permits reliance upon a range of

scientific opinions emanating from qualified and respected sources.

447. Accordingly, Australia submits that the proper enquiry is whether the likelihoods

assigned by the IRA Team are credible and objective. Australia will demonstrate that at each

stage in the pathway relating to establishment and spread, the IRA Team made a credible

assessment on the basis of the scientific evidence and accordingly, its evaluation should stand.

i. The IRA Team’s approach to calculating establishment and spread

448. Australia submits that the following steps would need to occur in sequence in order for

fire blight to establish and spread in Australia:

mature fruit must arrive in Australia carrying viable E. amylovora (the

importation steps and probability of importation discussed above);

the mature apple must be discarded near a susceptible host (the “proximity”

analysis in the Final IRA Report);

sufficient bacteria must contaminate a suitable vector (part of the “exposure”


the bacteria must be transmitted to a susceptible host (part of the “exposure”


the environmental conditions must be suitable for infection to establish (the

“establishment” analysis in the Final IRA Report); and

the conditions must be suitable, and means must be available, for the infection to

spread (the “spread” analysis in the Final IRA Report).

449. New Zealand purports to present its own summary of the necessary steps,491 which has

significant shortcomings, including the assumptions that:

apple fruit must arrive in Australia with significant quantities of E. amylovora in

the calyx;


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browsing insects are the only vector for transmission of E. amylovora to a host;

bacteria must multiply to 106 in a short period during conducive weather

conditions.492

450. Australia will address these shortcomings below.

ii. New Zealand does not show that the proximity analysis is flawed.

451. Having established the probability distribution for imported apples with E. amylovora

(3.9% mean),493 the IRA Team then turned to its proximity analysis, assessing how apples from

New Zealand would be distributed, used and subsequently disposed of. The IRA Team

established the likelihood that major handlers and users of apples (utility points) would be

sufficiently close to pest hosts (exposure groups) for transfer of pests from apples discarded by

handlers and users to host plants to take place (likelihood given as a proximity value).

452. New Zealand asserts that, in order to support its arguments on establishment, the IRA

Team had:

… to assume that apples will arrive at certain “utility points” close enough to host plants that there can be a transfer of bacteria from the infested apples to the host plants.494

New Zealand’s use of “assume” implies that the analysis of the IRA Team was based on

theory.495 If apples from New Zealand are not going to pass through major handlers and users in

Australia, it is unclear to Australia how those apples would be distributed.

453. Clearly, imported apples that do not come close to host plants have no chance of

vectoring E. amylovora and this was an important part of the IRA Team’s analysis. For fire

blight, the highest proximity values were given for orchard wholesalers near commercial fruit

crops (100%) and consumers being near household and garden plants (1%-15%).496

492 Australia notes that elsewhere in its submission, New Zealand asserts that 104 E. amylovora are required, at minimum, to initiate an infection. (New Zealand’s first written submission, para. 4.244.)

493 Final IRA Report, Part B, p. 80.494 New Zealand’s first written submission, para. 4.240.495 New Zealand’s first written submission, para. 4.241.496 Final IRA Report, Part B, Table 19, p. 85. The IRA Team considered that all orchard wholesalers likely

to be handling New Zealand apples would be near commercial fruit crops. This is because orchard wholesalers are located, as their name suggests, in apple and pear orchards.

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454. New Zealand does not challenge any particular assignment of likelihood in the proximity

analysis, except the combination of urban retailers and commercial fruit crops. It merely makes

the vague statement that:

[Proximity v]alues are assigned in a seemingly arbitrary manner and events that have an extremely low likelihood (urban retailers in proximity to commercial fruit crops) are nevertheless assigned probability values which suggest they are likely to occur.497

455. No support is given for this statement and New Zealand makes no further argument on

this point. Australia therefore does not consider this statement to be a proper claim. However,

even if this assertion were taken at face value, New Zealand would nevertheless be incorrect.

456. The IRA Team took into account that certain areas in Australia, such as the fringe of

major cities like Melbourne and Adelaide, where suburban areas blend into commercial

orchards, and small towns surrounded by orchards, where a small number of retailers would be

near commercial fruit crops. However, given that most retailers are based in large urban centres,

the IRA Team considered that it was unlikely that urban retailers would be proximate to

commercial fruit crops and therefore reflected this assessment as a uniform probability range

from 10-4 (0.01%) to 10-2 (1%).498 Australia fails to see how such a small probability range could

be interpreted by New Zealand as “likely to occur”. Accordingly, New Zealand’s claims in

relation to the IRA Team’s proximity analysis are weak and should be dismissed.

iii. E. amylovora can survive cold storage

457. New Zealand again returns to its argument that E. amylovora will not survive cold

storage. It relies on the same evidence and arguments as it did in relation to Importation step 4

and Importation step 6. As Australia has already responded to these this claim above, 499 it

reiterates at this point that the scientific evidence clearly shows that E. amylovora can survive on

apples for periods considerably longer than needed to import, distribute and sell apples in

Australia.

iv. The minimum number of bacteria needed to start fire blight disease is very

much lower than that claimed by New Zealand

497 New Zealand’s first written submission, para. 4.241.498 Final IRA Report, Part B, p. 85.499 See submission on Importation step 4 above.

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458. In order for E. amylovora to be successfully transmitted, bacteria need to be available in

sufficient quantities to initiate infection. This number is called the “inoculum dose”.500 The IRA

Team reviewed literature on this issue and concluded that “there is no accepted threshold number

of bacteria required to initiate an infection, and this may vary with environmental and host

factors.”501 New Zealand rejects this conclusion. On the basis of only two studies502, it argues

that more than 10,000 bacterial cells of E. amylovora are required in the early stages of

flowering for successful initiation of infection of apple flowers.503 Indeed, it is this “fact” that

underpins New Zealand’s main objection to the risk scenario assessed by the IRA Team.

459. Australia rejects New Zealand’s claim. Its choice of evidence is highly selective and

ignores other available studies considered in the Final IRA Report. For example, the Final IRA

Report considers the conclusions of van der Zwet (1994)504. This study showed that five bacteria

were sufficient to cause fire blight symptoms in apple flowers in one season, and 5,000 cells

were needed in another season. Hildebrand (1937)505 found that only one bacterium was

sufficient when placed on the hypanthium.506 This is well below the minimum of 10,000 (104)

that New Zealand claims is needed to initiate infection.

460. New Zealand also only selectively refers to studies that have tested infection of apple

flowers. The IRA Team did not only consider apple trees to be at risk from fire blight.507 There

are over 100 other hosts of fire blight present in Australia that could also be exposed to E.

amylovora on imported apples.508 Little information is available about effective doses needed to

initiate disease on these hosts but, because of their impact on risk, they cannot be disregarded.

One such example is the ability of pear flowers to become infected.

500 Final IRA Report, Part B, p. 88.501 Final IRA Report, Part B, p. 88502 Exhibit NZ-54: Thomson, SV and SC Gouk (2003) “Influence of Age of Apple Flowers on growth of

Erwinia amylovora and biological control agents” Plant Disease 87(5), 502-509; Exhibit NZ-23: Taylor, RK, CN Hale, WR Henshall, JL Armstrong, and JW Marshall (2003b) “Effect of inoculum dose on infection of apple (Malus domestica) flowers by Erwinia amylovora" New Zealand Journal of Crop and Horticultural Science 31, 325-333. See: New Zealand’s first written submission, para. 4.244.

503 New Zealand’s first written submission, para. 4.244. Australia notes that New Zealand is not consistent on this point. In New Zealand’s first written submission para. 4.246, New Zealand asserts that the epidemiologically significant number is 106.

504 Exhibit AUS-28: van der Zwet et al. (1994), pp. 225-230.505 Exhibit AUS-29: Hildebrand (1937).506 “Hypanthium” is the bowl-shaped part of a flower consisting of the bottoms of the sepal, petals and

stamens stuck together. Exhibit AUS-29: Hildebrand (1937), p. 851.507 Final IRA Report, Part B, p. 89.508 Final IRA Report, Part B, p. 90-91.

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461. Cabrefiga and Montesinos (2005)509 studied the aggressiveness of a range of

E. amylovora strains. They estimated that the effective dose of bacteria needed to initiate disease

in pear flowers and immature pear slices ranged from one bacterial cell to 10,000 bacterial cells.

This confirms the conclusion reached by the IRA Team that, at least under some conditions, very

low numbers of E. amylovora are sufficient to start disease.

462. Accordingly, Australia submits that there is clear evidence that the minimum number of

E. amylovora needed to start fire blight disease is much lower than that claimed by

New Zealand. The studies referred to above support the IRA Team’s conclusion that the number

of E. amylovora needed to start infection varies greatly and is highly dependent on

environmental conditions and host factors. New Zealand has not shown that any of these studies

in the Final IRA Report are wrong or irrelevant. Therefore, the Panel should reject New

Zealand’s claims. To the extent that New Zealand relies on this claim to support its objection to

the entire risk scenario, Australia submits that this objection should be found wholly without

support.

v. E. amylovora can rapidly multiply on or in fruit

463. The ability of E. amylovora to multiply increases the chance that an effective inoculum

dose will be available. New Zealand claims that E. amylovora in the natural orchard

environment are unlikely to multiply at the rates seen under ideal laboratory conditions.510 New

Zealand takes particular issue with only one reference in the Final IRA Report, Agrios (1997) 511,

which suggests that one bacterium could multiply to one million bacteria in ten hours. New

Zealand apparently ignores the clear qualification in the Final IRA Report that this is “provided

there is no competition from other micro-organisms and nutrient, temperature, humidity, as well

as moisture levels are optimal”512. New Zealand also omits any reference to three other studies

509 Exhibit AUS-37: Cabrefiga, J. and Montesinos, E. (2005) “Analysis of Aggressiveness of Erwinia amylovora Using Disease-Dose and Time Relationships” Phytopathology 95, p. 1435.

510 New Zealand’s first written submission, para. 4.245.511 Exhibit AUS-38: Agrios, G.N. (1997) Plant Pathology (Fourth Edition), Academic Press, pp. 411-412.512 Exhibit AUS-2: Final IRA Report, Part B, p. 92.

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taken into account by the IRA Team513 which suggest that under certain conditions, bacterial

populations can increase up to between 100,000 and 10,000,000 colony forming units.514

464. There is other evidence which demonstrates that significant bacterial multiplication can

occur on or in fruit. For example, photographic evidence shows ooze being produced on fruit

infected only a few weeks before harvest.515 Ooze contains very large numbers of bacteria and

therefore could not be produced unless significant multiplication had taken place. This lends

further support to the IRA Team’s conclusion.

465. New Zealand also asserts that the IRA Team was wrong to conclude that E. amylovora

could multiply on decaying apples.516 However, New Zealand overlooks the data presented in

van der Zwet et al. (1990) which shows that apples in storage can develop fire blight.517 Data

presented in this paper shows that up to 15% of apples placed in storage develop symptoms of

fire blight. Significantly, fruit that had undergone a surface disinfection treatment exhibited a

higher level of symptoms than fruit which was not disinfected.

466. Australia has referred above to the declaration made by Dr van der Zwet relating to

various experiments reported in van der Zwet et al. (1990) in the context of the Japan – Apples

dispute. In his declaration, Dr van der Zwet states that:

While the paper speculates that the development of blight in disinfested fruit was presumably from endophytic bacteria, it is equally probable that the disinfection procedure resulted in infection of the fruit by epiphytic (surface) bacteria. The handling and disinfestation of the fruit could have resulted in nicks or small bruises that allowed surface bacteria to infect the fruit and cause blight symptoms to develop.518

467. Although Dr van der Zwet goes on to state that the fruit were not tested for the presence

of endophytic bacteria, van der Zwet et al. (1990) does state that “[r]andom sampling from the

surface of blighted fruit in storage resulted in the recovery of E. amylovora”.519 He also states

513 Exhibit AUS-39: Thomson, S.V., Wagner, A.C. and Gouk, S.C. (1999) “Rapid epiphytic colonization of apple flowers and the role of insects and rain” Acta Horticulturae 489, pp. 459-464; Exhibit AUS-40: Thomson, S.V. (1986) “The role of the stigma in fire blight infections” Phytopathology 76(5), pp. 476-482; Exhibit NZ-5: Thomson (2000).

514 Final IRA Report, Part B, p. 92.515 Exhibit AUS-42: Longstroth, M. (2007) "Horticulture: Fire Blight Symptoms" Michigan State

University College of Agriculture and Natural Resources, 2002-2007. 516 New Zealand’s first written submission, para. 4.243.517 Exhibit AUS-31: van der Zwet et al. (1990), p. 714. 518 Exhibit AUS-32: Declaration of Dr Tom van der Zwet, 16 July, 2002, p. 2 (emphasis added).519 Exhibit AUS-31: van der Zwet et al. (1990), p. 713.

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that the disinfection process may have resulted “in nicks or small bruises that allowed surface

bacteria to infect the fruit and cause symptoms to develop”.520 The clear inference is that

symptoms could not develop from surface bacteria unless those bacteria had multiplied.

468. Van der Zwet et al. (1990) clearly shows that damage, such as occurs in commercial

packing, predisposes apples to infection by E. amylovora and subsequent multiplication.

Significantly, this work provides independent support for the work of Sholberg et al. (1998)521

that showed fruit damage can lead to high levels of fire blight infestation of apple fruit.

Therefore surface infestation is a genuine concern in light of this evidence of multiplication.

469. Van der Zwet et al. (1990) also shows a good correlation between disease incidence (rot)

in storage and the proximity of the apples to fire blight symptoms before harvest. For example,

Table 2522 in van der Zwet et al. (1990) shows that fruit within 3 cm of a blighted shoot showed

15% disease incidence after storage. Fruit within 120 cm of a blighted shoot showed 8% disease

incidence. Finally, fruit collected from a tree free of fire blight showed 1% disease incidence.

470. There is also some experimental evidence that fire blight bacteria can rapidly multiply on

or in fruit. This evidence comes from the system frequently used to test for fire blight bacteria.

The test system is based on adding test solutions suspected of containing fire blight bacteria to

cut fruit surfaces. If fire blight bacteria are present they multiply rapidly and result in the

production of ooze containing very large bacterial numbers on the fruit surface.

471. Thus, there is ample scientific evidence to show that New Zealand’s claims are

unfounded. The conclusion that rapid multiplication of bacteria in the environment on or in

apple fruit can occur is substantiated, and therefore is a credible part of the risk assessment.

vi. Transmission of E. amylovora can occur

472. For disease to occur, E. amylovora must be transferred from apples to hosts. The IRA

Team identified two possible transmission modes: browsing insects and mechanical means.523

520 Exhibit AUS-32: Declaration of Dr Tom van der Zwet, 16 July, 2002, p. 2.521 Exhibit AUS-34: Sholberg et al. (1998).522 Exhibit AUS-31: van der Zwet et al. (1990), p.714.523 Final IRA Report, Part B, p. 87-88.

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473. New Zealand refers only to insects and claims that it has “[n]ever been demonstrated that

E. amylovora have been spread from apples to susceptible hosts by browsing insects”.524

Australia considers such an objection to be misplaced. Since the pathway being examined is

hypothetical, the IRA Team was not obliged to disregard a potential vector simply because it has

never been shown to “demonstrate” transmission of E. amylovora. The IRA Team were rightly

concerned with assessing the likelihood of this occurring in Australia’s circumstances.

474. The evidence available to the IRA Team demonstrated that there was a likelihood, albeit

small, that insect-vectored transmission could occur. The Final IRA Report refers to studies

which show that 77 genera of arthropods that have been associated with fire blight spread.

Australia has at least 27 of these species or closely related species.525 In particular, the Final IRA

Report notes that bees are “major vectors” for the spread of E. amylovora. Bees typically visit

moisture sites such as ooze and visit flowers to obtain sugars.526 Clearly if E. amylovora were

present then the bees would be contaminated with it and may transfer it to flowers as they search

for nectar. The Final IRA Report indicates that transfer by this vector can occur. It states,

“[m]anaged hives of honeybees are used in contract pollination of apple orchards” and bees can

“fly up to two to four kilometres to forage”.527 New Zealand’s own evidence supports this

conclusion that bees have been shown to play a very significant role in the spread of fire blight

(Thomson, 2000).528

475. Against this evidence, New Zealand relies on studies by Hale et al. (1996)529 and Taylor

et al. (2003a)530 that detected no spread of fire blight when apples contaminated with

E. amylovora were placed in orchards.531 Australia submits that there is a limit to what can be

concluded from these experiments. This is because the sample size in these experiments was

insufficient to detect rare events. In mathematical terms, 1,830 apples were tested between the

two studies combined. Using standard statistical calculations of detection efficacy,532 the

524 New Zealand’s first written submission, para. 4.243.525 Final IRA Report, Part B, p. 91.526 The Final IRA Report shows a photo of bees visiting a rotting apple: Final IRA Report, Part B, p. 87.527 Final IRA Report, Part B, p. 95.528 Exhibit NZ-5: Thomson (2000), p. 19-20.529 Exhibit NZ-27: Hale, CN, RK Taylor and RG Clark (1996) “Ecology and epidemiology of fire blight in

New Zealand” Acta Horticulturae 411, 79-85.530 Exhibit NZ-28: Taylor et al. (2003a).531 New Zealand’s first written submission, para. 4.243.532 Exhibit AUS-30: ISPM No. 31.

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likelihood of transmission would need to be approximately 0.0016 or greater for these

experiments to reliably detect transmission of E. amylovora. Given that transmission rates of

around 10-6 on a per apple basis are significant, experiments that are only likely to detect events

around 1,700 times more frequent cannot provide a sound basis for New Zealand’s claims.

476. In addition to insect-vectored spread, the IRA Team also identified mechanical processes

as a means of transmission of the disease. The Final IRA Report states:

Mechanical transmission of fire blight bacteria could also be possible. For example, packing of New Zealand fruit in packing houses closely associated with apple orchards could result in the exposure of workers and equipment to fire blight bacteria. Initiation of disease could then occur by transfer of bacteria to wounds caused by normal orchard operations such as pruning.533

Mechanical transmission of fire blight via tools, hands, machinery, etc. has been recognised as a

vector for a long time.534 New Zealand has not addressed this mode of transmission in their

submission. Accordingly, New Zealand fails to establish that the IRA Team’s conclusions on

the issue of mechanical transfer should be doubted.

vii. Conclusion on exposure

477. Australia submits that while the chain of events required for a successful exposure only

has a small chance of occurring, the scientific evidence demonstrates that such exposure events

can happen. Taking all the evidence into account, the IRA Team concluded that the exposure

value for an individual apple for all exposure group combinations was a uniform probability

range from zero to one in one million. This range was based on the IRA Team’s expert

judgment on both insect and mechanical transmission, explicitly acknowledging that “in some

circumstances the chances for exposure would be zero”.535

478. By contrast, the comparable estimate given by Roberts and Sawyer (2008) is 0.00001893

(1.893 x 10-5). This estimate is higher than the estimate given in the Final IRA Report, thereby

indicating that the IRA Team did not overestimate this likelihood or the risk.

479. Regardless, New Zealand argues that the probability of exposure should be impugned

because “it is an event that almost certainly would not occur”.536 However, if the probability 533 Final IRA Report, Part B, p. 88.534 Exhibit NZ-5: Thomson (2000), p. 17.535 Final IRA Report, Part B, p. 90.536 New Zealand’s first written submission, para. 4.248.

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ranges used by the IRA team are compared to equivalent qualitative descriptors,537 a range of

zero to one in one million is considered a “negligible” event, or an event that “would almost

certainly not occur”. New Zealand can therefore have no objection to the IRA Team’s judgment.

480. Australia notes that under New Zealand’s methodology, a “negligible” event is, in some

cases, treated as potential opportunity to discontinue the risk assessment. However, the SPS

Agreement is not prescriptive as to methodology, and Australia is under no obligation to adopt

New Zealand’s method. Thus, having estimated a probability range with which New Zealand is

in apparent agreement, New Zealand cannot argue that the Final IRA Report need do more to

validly establish a probability of exposure.

viii. Establishment

481. New Zealand does not make any claims relating to fire blight disease establishment

under Article 5.1. Australia submits that New Zealand should not be permitted to make any such

claims at a later stage in these proceedings. New Zealand makes a only a few arguments under

Article 2.2 that Australia considers relevant to establishment of fire blight and thus addresses

them here.

482. New Zealand contends that E. amylovora needs specific environmental conditions to

thrive, in particular, a mean temperature of greater than 15.6°C, a wetting event and humid

conditions (greater than 90%).538 Even accepting New Zealand’s claims on this point, the Final

IRA Report refers to studies that show that a number of major apple and pear growing areas in

Australia would have suitable conditions for the establishment of fire blight disease.539 In

addition, major cities such as Sydney have many fire blight host plants and have highly suitable

conditions for fire blight.

483. New Zealand also claims that E. amylovora has short survival rates when exposed to

solar radiation or high humidity, and that E. amylovora is a poor epiphyte usually declining

rapidly on most flower parts or leaves within a few hours or days.540 Australia agrees that

E. amylovora exhibits this behaviour under certain conditions. However, Australia has shown

537 Final IRA Report, Part B, Table 12, p. 43.538 New Zealand’s first written submission, para. 4.17.539 Final IRA Report, Part B, p. 91.540 New Zealand’s first written submission, para. 4.20.

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above why E. amylovora survival is highly variable.541 New Zealand once again incorrectly

asserts that the Final IRA Report should be judged solely against its alternative account based on

selective scientific evidence.

ix. Spread

484. New Zealand does not make any claims relating to the spread of fire blight disease under

Article 5.1. Australia submits that New Zealand should not be permitted to make any such

claims at a later stage in these proceedings.

485. To the extent that New Zealand makes arguments concerning possible modes of inter-

continental transmission of fire blight under Article 2.2, they are addressed above. Whether

apples provide a viable pathway for the introduction of fire blight is a question directed at the

nature of the risk scenario examined in the Final IRA Report. It does not relate to the specific

assessment of “spread” in the Final IRA Report. The spread analysis undertaken by the IRA

Team examined the ability of the pathogen to spread to other susceptible hosts, once the disease

has established on a host plant in Australia.542 Taking this into account, it becomes clear that

New Zealand has made no argument at all in relation to the spread analysis by the IRA Team.

(d) The IRA Team’s assessment of the probability of entry, establishment and

spread should not be disturbed

486. The IRA Team used the @RISK model to run two “apple utilisation” scenarios. The first

assumed that the majority of apples would be imported in bulk and packed in packing houses

associated with orchards. The second scenario assumed that almost all imported apples would be

packed in a form that allows direct distribution to retailers. This scenario reflects New Zealand’s

claim that most of its exports will be “retail ready”. The results under both scenarios were

similar,543 reflecting the fact that the partial probability calculation of establishment and spread is

dominated by apples discarded by consumers. Under the first scenario, the probability of entry,

establishment and spread was represented by a probability range with 9.1 x 10-3 (0.0091%) as the

5th percentile value, 4.5 x 10-2 (4.5%) as the median value, and 0.18 (18%) as the 95 th percentile

541 See, for example, the discussion under Importation step 3 and the discussion concerning the ability of E. amylovora to multiply.

542 Final IRA Report, Part B, p. 30-31. The partial probability of spread considers the expansion of the geographical distribution of the pest.

543 Final IRA Report, Part B, Table 21, p. 97.

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value. Under the second scenario, the probability of entry, establishment and spread was

represented by a probability range with 8.7 x 10-3 (0.0087%) as the 5th percentile value, 4.4 x10-2

(4.4%) as the median value, and 0.18 (18%) as the 95th percentile value.

487. New Zealand disagrees with these calculations for two reasons. First, New Zealand

claims that the probability of entry, establishment and spread is higher than the estimate provided

in Roberts and Sawyer (2008). Australia has already addressed this issue above and affirms that

the equivalent value estimated by Roberts and Sawyer (2008) is unsound. Secondly, New

Zealand refers to the findings in Japan – Apples and claims:

Nowhere does the IRA attempt to justify or explain why its assessment of the likelihood of transmission of fire blight on an annual basis is significantly higher than the Panel’s assessment in Japan – Apples of the likelihood of the same event from all trade in apples.544

New Zealand attributes this “failing” to the use of the semi-quantitative method.545 It claims

that application of this method “discounts [the] finding [in Japan – Apples] and produces a

distorted estimate of risk”.546

488. Australia is not obliged to justify why its risk assessment arrives at a different conclusion

on the likelihood of entry, establishment and spread than the findings in Japan – Apples. Those

findings are not a risk assessment or scientific facts that the Final IRA Report can be measured

against. However, even if the conclusions of Japan – Apples are treated as scientific facts,

Australia submits that its differing assessment of probability is more than adequately explained

by the differences in the treatment of critical issues and the circumstances. One significant

factor was volume of trade.

489. The IRA Team first calculated the probability of entry, establishment and spread on a per

apple basis. However, probabilities attached to a single apple are not meaningful to a risk

assessment directed at evaluating risk where apples are traded in commercial volumes.

Therefore, the IRA Team combined its result on the per apple probability of entry, establishment

and spread with the volume of trade.547 In this case, the model generated a “very low”, but

identifiable, probability of entry, establishment and spread under assumptions that as closely as

544 New Zealand’s first written submission, para. 4.171.545 New Zealand’s first written submission, para. 4.170.546 New Zealand’s first written submission, para. 4.171.547 Final IRA Report, Part B, p. 17-18.

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possible approximated realistic replication. This demonstrates that low probabilities for disease

transmission on a per apple basis can be highly significant when the volume of potential trade is

taken into account. New Zealand concedes as much by making significant arguments about how

the volume of trade affects the calculation of risk.548

490. The IRA Team’s explicit analysis of the volume of trade is a material point of difference

from Japan – Apples. Although New Zealand asserts that Japan – Apples “found that the risk of

fire blight being transmitted through trade in any number of mature, symptomless apples was

‘negligible’”549, there is nothing in the relevant reports to support this unsubstantiated claim. The

finding that New Zealand relies on550 does not refer to “any number of apples”. It is silent on the

volume of trade. Moreover, it is clear that the finding in Japan – Apples was based on

“information made available” and was therefore specific to the facts of that dispute.

491. Accordingly, Australia submits that New Zealand’s argument is fundamentally flawed.

The Panel should not accept that a comparison between the findings in Japan – Apples and the

present case is a comparison of “apples and apples”, rather it is a comparison of “apples and

oranges”.

492. Australia’s arguments on probability of entry, establishment and spread demonstrate that

New Zealand’s claims are based on a selective account of the scientific information, spurious or

irrelevant claims, a poor understanding of the methodology used in the Final IRA Report and a

poor understanding of the SPS Agreement. Australia submits that they are without merit.

Accordingly, the Panel should reject New Zealand’s claims in relation to the assessment of entry,

establishment and spread in total.

548 New Zealand’s first written submission, paras. 4.194–4.203.549 New Zealand’s first written submission, para. 4.170. (original emphasis)550 Panel Report, Japan – Apples, para. 8.176: “On the basis of the information made available to the Panel,

we conclude that there is not sufficient scientific evidence that apple fruit are likely to serve as a pathway for the entry, establishment or spread of fire blight within Japan.”

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(e) The IRA Team’s analysis of the potential consequences is objective and

credible

i. Fire blight is a destructive disease

493. Fire blight is one of the most serious diseases of pome fruit trees in the world (Schroth et

al. 1974).551 It has a direct impact on production by killing branches and damaging the

productive capacity of fruiting wood for future crops. Fire blight may kill trees or damage trees

so seriously that they have to be destroyed.552 If the trees are not replaced, there is a permanent

loss of production. If they are replaced, costs of the disease include replanting and the loss of

yield over the time it takes the new trees to reach bearing age and, later, full commercial yield.

494. Control action in orchards against fire blight would be costly, requiring expenditure on

chemical inputs, pruning and other aspects of plant hygiene. Indirect costs include ongoing

surveillance and, if an outbreak were to occur, the costs of attempting eradication, as well as

flow-on losses to other industries.

495. The cost and impact of eradication have been starkly illustrated recently in southern

Oregon in the United States where an outbreak of fire blight in pear orchards has required

orchardists to carry out an extensive programme of pruning and burning infected branches.

Australia provides, as an exhibit, an article dated 9 July 2008 from the Mail Tribune reporting in

detail on the response of orchardists and the broader impact on the community.553

ii. The IRA Team comprehensively addressed relevant factors and evidence

in evaluating consequences

496. Considering the wide range of relevant factors and the evidence available on the

experience of other countries in dealing with fire blight, the IRA Team rated the biological and

economic consequences of fire blight as “high”.554 New Zealand argues that this conclusion is

based on “selectively chosen evidence” and “assumptions that have no basis in scientific

551 Exhibit AUS-41: Schroth MN, Thomson SV, Hildebrand DC and Moller WJ (1974) “Epidemiology and control of fire blight”, Annual Review of Phytopathology 12, pp389-412; Final IRA Report, Part B, p. 98

552 Exhibit AUS-42: Longstroth, M. (2007) "Horticulture: Fire Blight Symptoms" Michigan State University College of Agriculture and Natural Resources, 2002-2007.

553 Exhibit AUS-43: Burke A, “Healing flame”, Mail Tribune, Thursday, 10 July, 2008. 554 Final IRA Report, Part B, p. 104.

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evidence or fact”.555 However, New Zealand offers no evidence that any of the conclusions

stated in the Final IRA Report are flawed. Indeed, its attempt to discredit the consequence

assessment suffers from those deficiencies that it claims affected the work of the IRA Team.

iii. New Zealand relies on selective examples to downplay potential

production losses

497. New Zealand argues that the IRA Team’s estimates for production loss from fire blight

incursions were exaggerated.556 However, instead of engaging with the substantial body of

research reviewed by the IRA Team, New Zealand offers only a few, selective examples which,

taken in isolation, misrepresent the potential impact of the disease.

iv. The IRA Team took into account reports from New Zealand and other

countries, including the United States

498. The IRA Team took into account reported losses from fire blight outbreaks in New

Zealand and other countries, in particular, the United States. As referenced in the Final IRA

Report,557 for example, Longstroth (2001) estimates that an outbreak of fire blight in south-west

Michigan in 2000 resulted in a US$10 million production loss in that season, with estimated

cumulative losses valued at nearly US$36 million in the five years it would take for yields to

recover.558 The Final IRA Report559 cites Vanneste (2000) as referring to NZ$10 million in

losses from the fire blight outbreak in Hawke’s Bay in New Zealand in 1998.560 Vanneste (2000)

also refers to an estimate of losses because of fire blight in the north-west of the United States as

US$68 million in 1998.561 Norelli et al. (2003) estimates annual losses because of fire blight and

costs of control in the United States at over US$100 million.562

555 New Zealand’s first written submission, para. 4.254.556 New Zealand’s first written submission, para. 4.255.557 Final IRA Report, Part B, pp. 98-99.558 Exhibit AUS-44: Longstroth M. (2001) “The 2000 fire blight epidemic in southwest Michigan apple

orchards”, The Compact Fruit Tree 34 (1), pp. 16-19, p. 16. 559 Final IRA Report, Part B, p. 98.560 Exhibit AUS-45: Vanneste, J.L. (2000) “What is fire blight? Who is Erwinia amylovora? How to

control it?” In: Vanneste JL (Ed) Fire blight: The disease and its causative agent, Erwinia amylovora, CABI Publishing, CAB International, pp. 1-6, p.1.

561 Exhibit AUS-45: Vanneste (2000), p. 1.562 Exhibit AUS-46: Norelli JL, Jones AL and Aldwinckle HS (2003) “Fire blight management in the

twenty-first century; using new technologies that enhance host resistance in apple”, Plant Disease 87(7), pp. 756-765, p. 757.

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v. Significant numbers of trees can be lost in a fire blight outbreak

499. There were heavy tree losses in the outbreak of fire blight which occurred in south-west

Michigan in 2000. An estimated 377,000 trees were lost in five of the counties 563 most affected

by the outbreak.564 The United States 1997 Census of Agriculture reported that between them the

five counties had 19,402 acres under apple trees.565 The United States 2002 Census of

Agriculture revealed that the number of acres had fallen to 12,932: a decline of 6,470 acres.566

vi. New Zealand ignores the range of reports considered by the IRA Team

500. The IRA Team’s consideration of the losses suffered from fire blight outbreaks in other

countries demonstrates the hollowness of New Zealand’s statement that the IRA Team’s rating

of overall consequences as “high” has “no basis in scientific evidence or fact”.567 New Zealand

ignores the reports cited above. It concentrates on only one paper of those taken into account by

the IRA Team, Roberts (1991)568, which reported that a fire blight outbreak in Australia could

cause a 50% production loss for pears and a 20% loss for apples.569

501. Roberts (1991) assessed long-term weather patterns in Australia’s apple and pear

growing regions using a predictive model (principally Billing’s model) to establish whether the

combination of temperature and rainfall in these regions would be conducive to fire blight

outbreaks. Roberts (1991) acknowledged that fire blight “severity is highly variable”.570

However, applying the predictive model, Roberts (1991) identified that certain regions had

severe ratings from season to season.571 Others had a mixture of severe and moderate ratings and

in one case there were low ratings as well. While New Zealand attacks Roberts (1991) for its

563 The counties are Allegan, Berrien, Cass, Kalamazoo and Van Buren.564 Exhibit AUS-44: Longstroth (2001), p. 17.565 Exhibit AUS-47: United States Department of Agriculture, 1997 Census of Agriculture, Michigan State

and County Data, Volume 1, Geographic Area Series, Part 22, Table 31, p. 495: http://usda.mannlib.cornell.edu/reports/census/ac97ami.pdf566 Exhibit AUS-48:.United States Department of Agriculture, 2002 Census of Agriculture, Michigan State

and County Data, Volume 1, Geographic Area Series, Part 22, Table 31, p. 467:http://www.nass.usda.gov/census/census02/volume1/mi/MIVolume104.pdf567 New Zealand’s first written submission, para. 4.254. 568 Exhibit NZ-55: Roberts, WP (1991) “Using weather records and available models to predict the severity

of fireblight should it enter and establish in Australia” EPPO Bulletin 21, pp. 623-631.569 New Zealand’s first written submission, para. 4.255.570 Exhibit NZ-55: Roberts (1991), p. 627. 571 Exhibit NZ-55: Roberts (1991), p. 628.

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statement about production losses, it offers no criticism of the methodology used or its

conclusion about the susceptibility of Australia’s apple and pear growing regions to fire blight.

502. The IRA Team clearly did not only take Roberts (1991) into account in evaluating

potential production loss. Longstroth (2001) reported that the fire blight outbreak in Michigan

would likely result in yield losses in the 20%-70% range for most apple varieties.572 Longstroth

(2001) provided an estimated production loss for the region in 2000 of 2.7 million bushels

(approx. 52,000 tonnes573) against an average annual production of 4.5 million (approx. 86,000

tonnes) – 7 million bushels (134,000 tonnes).574 2.7 million bushels represent 60% of 4.5 million

bushels and 38% of 7 million bushels.

503. The following table sets out Australian apple production (in tonnes) by State in 2006-07:

Table 5: Australian Apple Production 2006-07575

Australia

Total NSW Vic Qld SA WA Tas

Production (t) 270,476 37,384 115,584 29,521 27,529 31,932 28,523

It can be seen from this table that the production loss of more than 50,000 tonnes suffered in

south-west Michigan exceeds the total annual production in five of six Australian States.

504. The IRA Team also had before it the study in Wittwer et al. (2004) which assessed two

scenarios for a fire blight outbreak in the Goulburn Valley in Victoria, which produces most of

Australia’s pears and significant proportion of its apples.576 One scenario assesses a 50% decline

in pear production and a 20% decline in apple production because of a fire blight outbreak. The

other scenario assesses a 25% decline in pear production and a 10% decline in apple production.

572 Exhibit AUS-44: Longstroth (2001), p. 18.573 Using the 1 bushel = 19.1 kgs conversion rate provided in Exhibit AUS-X: Longstroth (2001), p. 16.574 Exhibit AUS-44: Longstroth (2001), p. 16.575 Source: Australian Bureau of Statistics “2006-07 Agricultural Commodities”, 7121.0, 28 May 2008, p.

18 (Extract): http://www.ausstats.abs.gov.au/Ausstats/subscriber.nsf/0/BC368442A5431DDECA2574560014CA50/$File/71210_2006-07.pdf. (accessed 9 July 2008)

576 Exhibit AUS-49: Wittwer G, McKirdy S. and Wilson R. (2004) “Dynamic CGE analysis of the economic effects of a fireblight outbreak in Goulburn Valley”, Monash University/Plant Health Australia, p. 3.

177

http://www.ausstats.abs.gov.au/Ausstats/subscriber.nsf/0/BC368442A5431DDECA2574560014CA50/$File/71210_2006-07.pdf

http://www.ausstats.abs.gov.au/Ausstats/subscriber.nsf/0/BC368442A5431DDECA2574560014CA50/$File/71210_2006-07.pdf


505. In the latter scenario, it is assumed that the outbreak is confined to an area of only 450

hectares on 20 orchards. It is also assumed that the affected orchards gradually recover

production over time. Wittwer et al. (2004) estimates significant regional and national economic

impacts of the outbreak with the net present value of the loss amounting to A$260 million.577

These costs include additional management costs – such as chemicals, pruning and replanting –

along with the net flow on costs to processing and other related sectors.

vii. New Zealand assumes that its own experience of fire blight will be

replicated in Australia

506. Leveraging off its attack on Roberts (1991), New Zealand seeks to build a contrasting

case on the basis of information taken almost exclusively from its own experience. First, it

suggests that the IRA Team erred by treating the impact of fire blight as severe every year.578

New Zealand does not refer to any particular element of the IRA Team’s analysis. It simply

cites the pages of the Final IRA Report recording the analysis.579 This assertion cannot be

supported when weighed against the comprehensive analysis conducted by the IRA Team.

507. Based on its own experience, New Zealand asserts that serious damage from fire blight

tends to occur once every ten years.580 Production losses are described as “inconsequential” in

“non-outbreak years”581; a view which New Zealand claims is also supported by United States

experience.582 Clearly, New Zealand was not including the severe fire blight outbreak in south-

west Michigan in its reference to the experience in the United States, as the following extract

from Longstroth (1991) shows:

The southwest Michigan apple industry will be severely affected for at least the next five years. Large portions of this year’s crop have been lost due to the death of branches and trees that supported the fruit. Many young orchards will need to be replanted. About 5 years will be required for these orchards to return to significant production. In mature orchards, 3 to 5 years will be required to grow new branches and restore production.583

577 Exhibit AUS-X: Wittwer et al. (2004), p. 3.578 New Zealand’s first written submission, para. 4.256.579 See: footnote 275 in New Zealand’s first written submission which references the Final IRA Report, Part

B, pp. 98-104.580 New Zealand’s first written submission, para. 4.256. 581 New Zealand’s first written submission, para. 4.256.582 New Zealand’s first written submission, para. 4.259. Australia notes, however, that New Zealand does

not provide any supporting evidence of the United States experience it purports to rely on.583 Exhibit AUS-44: Longstroth (2001), p. 18.

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Australia submits that there is nothing “inconsequential” about this impact on production.

viii. New Zealand discounts the Hawke’s Bay fire blight outbreak in 1998

508. New Zealand discounts the impact of the major fire blight outbreak in Hawke’s Bay in

1998. Citing Vanneste (2000)584, the IRA Team took into account an estimated loss of at least

NZ$10 million during 1998 resulting from this outbreak.585 The author cites the Hawke’s Bay

outbreak as an example of how fire blight “has caused serious losses around the world”.586 This

view of the Hawke’s Bay outbreak stands in stark contrast to New Zealand’s assertion that the

impact at the district or regional level was “minor even in a severe outbreak year”.587

509. New Zealand attempts to minimise the importance of the loss of NZ$10 million in the

Hawke’s Bay region by claiming that it corresponded to only 2.8% of New Zealand’s pipfruit

exports and 5.9% of total Hawke’s Bay pipfruit exports.588 This is misleading because it

compares the net cost of the outbreak with the gross pipfruit export revenue for New Zealand

and Hawke’s Bay.

510. New Zealand refers to 2.8% of New Zealand’s pipfruit exports as being “7.1-fold lower

than the 20% loss estimate used in Australian studies”.589 Putting aside the flaw in New

Zealand’s figures identified above, this comparison represents an attempt by New Zealand to

suggest that the only yardstick by which the consequences of fire blight can be measured is its

own. By making the comparison, New Zealand also implies that the IRA Team only took into

account the “20% loss estimate”, contrary to the IRA Team’s comprehensive review.

511. New Zealand also does not quantify the consequence of the NZ$10 million loss in terms

of lost production in subsequent years from trees damaged or killed in the outbreak. Australia

submits that, if New Zealand wishes to assert that such production losses were

“inconsequential”590, it should produce the evidence to support that assertion.

584 Exhibit AUS-45: Vanneste (2000).585 Final IRA Report, Part B, p. 98.586 Exhibit AUS-45: Vanneste (2000), p. 1. 587 New Zealand’s first written submission, para. 4.261.588 New Zealand’s first written submission, para. 4.261.589 New Zealand’s first written submission, para. 4.261.590 New Zealand’s first written submission, para. 4.260.

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512. New Zealand attributes, in part, the claimed reduction in the severity in fire blight in its

orchards to the presence of other bacteria which “aggressively compete with E. amylovora for

nutrients and space on a susceptible host”.591 Without offering any scientific evidence, New

Zealand claims that the bacteria would probably have a “similar impact on E. amylovora in

Australia”.592 The IRA Team noted the potential efficacy of biological control agents.593

However, biological control agents for E. amylovora are not registered for use in Australia. This

is yet another example of New Zealand applying only the yardstick of its experience to the

circumstances Australia would confront in dealing with fire blight. Looking at another yardstick,

Norelli et al. (2003) refers to annual losses to fire blight and costs of control in the United States

as amounting to over US$100 million per year.594

ix. New Zealand downplays control, eradication and tree replacement costs

513. New Zealand disputes the IRA Team’s assessment regarding indirect costs of eradication

and surveillance monitoring for fire blight,595 making arguments in relation to only three points

and without engaging with the IRA Team’s full analysis.

514. First, New Zealand makes arguments in relation to the fire blight incursion in the Royal

Botanic Gardens Melbourne in 1997.596 However, the point that New Zealand seeks to make is

unclear. It claims that approximately two thirds (68%) of the estimated revenue loss due to the

outbreak, reported in Rodoni et al. (2006)597, was due to “unnecessary” restrictions on the

movement of apple fruit because of “erroneous assumptions about pathways of fire blight

transmission”.598 Irrespective of New Zealand’s claims, these were actual losses due to the

outbreak. New Zealand also does not explain how the composition of total revenue loss actually

affects the reliability of the A$2.2 million expended on surveys, eradication programs,

diagnostics and publicity, which was considered by the IRA Team in its assessment of indirect

impacts of fire blight on control and eradication.

591 New Zealand’s first written submission, para. 4.257.592 New Zealand’s first written submission, para. 4.257.593 Final IRA Report, Part B, p.101.594 Exhibit AUS-46: Norelli et al. (2003), p. 757.595 New Zealand’s first written submission, para. 4.262.596 New Zealand’s first written submission, para. 4.262.597 Exhibit NZ-59: Rodoni, BC, PR Merriman, SJ McKirdy and G Wittwer (2006), “Costs associated with

fire blight incursion management and predicted costs of future incursions” Acta Horticulturae 704, pp. 55 – 61.598 New Zealand’s first written submission, para. 4.262.

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515. Secondly, New Zealand claims that the IRA Team ignored New Zealand experience in

estimating the cost of compensating growers and replanting.599 New Zealand refers to its own

experience and claims that only orchards with young pear trees of fire blight-prone varieties

might experience up to 20% tree mortality. The average pear tree loss across a district is argued

to be closer to 5%.600 New Zealand provides no support for either of these assertions.

516. These unsubstantiated claims may be contrasted to the reports from other countries on the

mortality effects of fire blight outbreaks referred to in the Final IRA Report. For example, the

fire blight outbreak in Michigan in 2000 was reported by Longstroth (2001) to involve an

estimated cost of tree loss of US$9 million.601 There have also been reports of the loss of up to

500,000 trees in Italy as a result of fire blight outbreaks.602

517. Even leaving the experience of other countries to one side, an average fire blight outbreak

mortality loss of 5% for pears, as suggested by the New Zealand experience,603 would translate

into an estimated loss of around 86,000 pear trees in the main Australian pear production region

in the Goulburn Valley in the State of Victoria. The impact could, however, be even greater than

the average New Zealand experience as pear trees in this area could be more susceptible to fire

blight given differences in temperature at flowering time in New Zealand and the Goulburn

Valley. In addition to the initial production loss, there would be the cost of replanting and

ongoing yield losses until new trees began to bear fruit, as well as management and surveillance

costs. Australia does not accept that losses of this order should be characterised as “minor”.

518. Yet again, New Zealand fails to take into account the fact that other countries can have

different experiences of fire blight to its own. It ignores the fact that the size of the pear fruit

industry in New Zealand is only around one tenth of the size of the Australian industry. New

Zealand has provided no basis for calling into question the IRA Team’s judgment on this point.

Therefore, the IRA Team’s judgment should not be displaced by New Zealand’s experience.

x. New Zealand overplays its international trade experience

599 New Zealand’s first written submission, para. 4.263.600 New Zealand’s first written submission, para. 4.263.601 Final IRA Report, Part B, pp. 98-99; Exhibit AUS-44: Longstroth (2001), p. 18.602 Exhibit AUS-45: Vanneste (2000), p. 1.603 New Zealand’s first written submission, para. 4.263.

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519. Finally, New Zealand argues that none of the 65 countries it exports apples to constrain

access due to the presence of fire blight.604 Accordingly, it claims that the IRA Team had no

basis to conclude that Australian exports of apples or pears would be constrained in any way if

fire blight became established in Australia.605

520. Significantly, Australia has experienced additional measures and delays in access to some

North Asian markets as a result of the detection of fire blight in the Royal Botanic Gardens

Melbourne incident. Despite New Zealand’s claim that other countries do not constrain access

for its apples, Australia provides the following examples to the contrary.606

521. The Argentinian authorities require a declaration that the fruit has been treated by

immersion for one minute in 100ppm of chlorine and found free from E. amylovora.607 The

Chilean authorities require a declaration that the consignment has been treated, under MAFNZ

supervision, with a chlorine solution (100 ppm of chlorine for one minute) for E. amylovora

control.608 The Indian authorities require a declaration that fruit is free from E. amylovora.609

The Chinese Taipei authorities require that phytosanitary certificates issued by the New Zealand

authorities, which accompany shipments, must include a declaration that, “Apples are thoroughly

inspected and found free from Erwinia amylovora.”610

xi. Summary on consequences

522. Australia submits, on the basis of the arguments set out above, that New Zealand’s claim

that the IRA Team failed to evaluate the potential biological and economic consequences of fire

blight in Australia is unfounded. As Australia has shown, New Zealand has systematically failed 604 New Zealand’s first written submission, para. 4.264.605 New Zealand’s first written submission, para. 4.264.606 Exhibit AUS-18: Biosecurity New Zealand, Importing Countries’ Phytosanitary Requirements

Register. Available at http://www.biosecurity.govt.nz/commercial-exports/plant-exports/icpr-register (last accessed 11 July 2008)

607 Exhibit AUS-18: Biosecurity New Zealand, Importing Countries’ Phytosanitary Requirements Register: Argentina, p. 12.. Available at http://www.biosecurity.govt.nz/files/regs/stds/icprs/argentina.pdf (last accessed 11 July 2008)

608 Exhibit AUS-18: Biosecurity New Zealand, Importing Countries’ Phytosanitary Requirements Register: Chile, p. 19. Available at http://www.biosecurity.govt.nz/files/regs/stds/icprs/chile.pdf (last accessed 11 July 2008)

609 Exhibit AUS-18: Biosecurity New Zealand, Importing Countries’ Phytosanitary Requirements Register: India, p. 16. Available at http://www.biosecurity.govt.nz/files/regs/stds/icprs/india.pdf (last accessed 11 July 2008)

610 Exhibit AUS-18: Biosecurity New Zealand, Importing Countries’ Phytosanitary Requirements Register: Taiwan, p. 28. Available at http://www.biosecurity.govt.nz/files/regs/stds/icprs/taiwan.pdf (last accessed 11 July 2008)

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http://www.biosecurity.govt.nz/files/regs/stds/icprs/taiwan.pdf

http://www.biosecurity.govt.nz/files/regs/stds/icprs/india.pdf

http://www.biosecurity.govt.nz/files/regs/stds/icprs/chile.pdf

http://www.biosecurity.govt.nz/files/regs/stds/icprs/argentina.pdf

http://www.biosecurity.govt.nz/commercial-exports/plant-exports/icpr-register


to engage with the substantial body of literature and evidence considered by the IRA Team.

Instead, it has sought to build an alternate case based almost entirely on limited and

misrepresented examples and its own experience. New Zealand ignores the fact that the

circumstances of New Zealand and Australia are quite different, and consequently, any impacts

of fire blight cannot be expected to be experienced in the same way.

523. New Zealand’s burden of proof cannot be discharged merely by offering what is, in

reality, an assumption that New Zealand’s experience of fire blight will be replicated in

Australia. Australia submits that New Zealand failed to identify any flaws in the IRA Team’s

conclusions on consequences, let alone any flaws serious enough to prevent the Panel from

having “reasonable confidence” in the risk assessment.

(f) Conclusion: New Zealand fails to discredit the IRA Team’s assessment on

fire blight

524. New Zealand has offered an alternative account of risk based on selective and often

misleading evidence in the hope that this flawed and unbalanced assessment can substitute a

proper discharge of its burden of proof. New Zealand did not engage with the very

comprehensive evidence reviewed by the IRA Team, instead deferring to the reasoning of the

panel in Japan – Apples as if this report could somehow make up for its lack of argument. In so

doing, it failed to demonstrate any flaws in the Final IRA Report, let alone flaws that were “so

serious” that it should prevent the Panel from having reasonable confidence in the evaluation

made. New Zealand’s attempts to discredit the Final IRA Report have failed.

525. In any event, Australia has demonstrated that the IRA Team properly evaluated risk and

applied its expert judgment rigorously to arrive at an objective and credible assessment for fire

blight. Accordingly, the risk assessment is consistent with Article 5.1 of the SPS Agreement.

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4. European canker

(a) The IRA Team’s analysis of the probability of entry is objective and credible

526. The IRA Team’s comprehensive and transparent analysis of the probability of

importation for European canker is detailed in the Final IRA Report.611 This discussion includes

references to the available scientific evidence supporting the likelihood assessment for each

importation step. Accordingly, contrary to New Zealand’s assertion,612 it is clear that there is an

objective or rational relationship between the scientific evidence and the probability value that is

chosen at each step of the importation scenario.

527. The Final IRA Report notes that “[w]hen these likelihoods were inserted into the risk

simulation model [@RISK], the probability of importation of [Neonectria] galligena was

estimated as being 6.8 x 10–5 (mean), 3.5 x 10–5 (5th percentile) and 10–4 (95th percentile).

Therefore, the infestation/infection rate for N. galligena was estimated to be 0.0068% (mean) of

the total proposed number of apples imported from New Zealand annually.”613

528. Australia will now address in turn New Zealand’s arguments in relation to each of the

eight importation steps for N. galligena. New Zealand does not contest Importation step 1614 or

Importation step 8615 and has limited its challenge to Importation steps 2-7. Australia submits

that New Zealand should not be permitted to expand its claims beyond these issues at a later

stage in these proceedings.


529. Importation step 2 deals with the likelihood that picked fruit is infested/infected with N.

galligena. New Zealand asserts that:

The IRA assesses the likelihood of a mature apple being infested or infected with N. galligena as a uniform distribution with a minimum value of 10-6 and a

611 Final IRA Report, Part B, pp. 118-128.612 New Zealand’s first written submission, para. 4.267.613 Final IRA Report, Part B, p. 128.614 New Zealand’s first written submission, para. 4.269.615 New Zealand’s first written submission, para. 4.298.

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maximum value of 10-3. But the IRA fails to cite any scientific or other evidence that supports this proposition.616

530. New Zealand’s assertion is wrong as it ignores the Final IRA Report’s extensive

discussion on Importation step 2 with numerous references to relevant scientific literature.617

New Zealand relies on arguments in relation to: (a) climate analysis; (b) minimal literature on

fruit rot; (c) latent infection; and (d) Braithwaite (1996).

a. New Zealand’s climate analysis is too narrow

531. New Zealand asserts, on the basis of its own selective climate analysis (Beresford and

Kim, 2008),618 that “in New Zealand, no region, not even Auckland, has weather conditions

favourable to European canker in the summer, leading to extremely low incidence of fruit

infection caused by N. galligena.”619 However, Australia has conducted its own modelling that

highlights the limitations of New Zealand’s analysis (Annex 2).

532. It is well accepted in plant pathology that disease infection is based on three key factors:

the pathogen, the host and the environment. However, New Zealand’s climate analysis is

focused solely on the environmental criteria. The environmental criteria (rainfall and

temperature) used in New Zealand’s climate analysis620 are based on a study in California by

Dubin and English (1975) and an analysis of disease incidence in Chile reported in Lolas and

Latorre (1996). The Dubin and English (1975) study correctly used all three key factors to

predict disease infection: the pathogen (conidial production), the host (leaf fall, availability of

leaf scars as infection points), and the environment (temperature and rain).621

533. New Zealand’s climate analysis622 uses two environmental characteristics, rainfall on

more than 30% of days per month and temperature between 11-16ºC for more than eight hours

per day.623 However, these requirements are not fully supported by other literature and high

616 New Zealand’s first written submission, para. 4.270 (emphasis added); also, para. 4.275.617 Final IRA Report, Part B, pp. 121-123.618 New Zealand’s first written submission, Annex 3, pp. 218-240.619 New Zealand’s first written submission, para. 4.271; also, paras. 4.53, 4.55, 4.56, 4.57 & 4.61

(Article 2.2).620 New Zealand’s first written submission, Annex 3, pp. 220, 226, 228-232.621 Exhibit NZ-12: Dubin and English (1975): pp. 543-544.622 New Zealand’s first written submission, Annex 3, pp. 218-240.623 New Zealand’s first written submission, Annex 3, p. 222; also, paras. 4.55, 4.58 & 4.90 (Article 2.2).

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infections can occur at other values of these parameters.624 Further, in Figure 1 of Beresford and

Kim625, the number of hours a day between 11-16 ºC was not significantly different for May

1993 and May 1995, the difference in infection rates between the two years being largely

explained by the differences in rainfall. Accordingly, there is no clear justification for

concluding that a temperature range of 11-16 ºC is needed for 8 hours a day. These observations

indicate that attempting to predict infection and establishment of N. galligena using

environmental parameters alone, without adequate testing, can be too simplistic. In fact, a

review of New Zealand’s climate analysis, undertaken by Australia’s Bureau of Rural

Sciences,626 concludes that the climatic parameters used by New Zealand are too restrictive

(Annex 2).

534. In Australia’s view, New Zealand’s narrow approach can lead to incorrect predictions.

New Zealand’s climate analysis predicts that the climatic conditions in New Zealand are

unsuitable for European canker development during summer (December to February) leading to

“a lack of European canker fruit infection”.627 Data provided by New Zealand and referred to in

the Final IRA Report demonstrates that of 3,300 rotted fruit tested between 1999 and 2005,

seven (0.21%) collected from Waikato were found to be infected with N. galligena in summer.628

This data confirms earlier reports of occasional detection of European canker fruit rot in New

Zealand in summer.629 This example usefully illustrates the unreliability of the predictions from

New Zealand’s climate analysis.

535. Finally, New Zealand claims that “there have been no reported incidences of fruit

infections outside of the Auckland/Waikato region in the past 15 years”.630 However, it is

unclear whether some of the European canker fruit rot occurrences recorded in New Zealand

624 Exhibit NZ-12: Dubin and English (1975); Exhibit AUS-50: Latorre, B.A., Rioja, M.E., Lillo, C. and Muñoz, M. (2002) "The effect of temperature and wetness duration on infection and a warning system for European canker (Nectria galligena) of apple in Chile" Crop Protection 21 (4), pp285-291; Exhibit NZ-7: Grove (1990).625 New Zealand’s first written submission, Annex 3, pp. 226

626 A bureau within the Australian Government’s Department of Agriculture Fisheries and Forestry.627 New Zealand’s first written submission, Annex 3, p. 222.628 Exhibit AUS-51: Ministry of Agriculture and Forestry, New Zealand (2005a) Correspondence sent

from MAFNZ to BA, 16th May 2005. See Final IRA Report, Part B, p. 122.629 Exhibit AUS-52: Atkinson, J.D. (1971) "Bacterial diseases of pip fruit" in: Diseases of tree fruits in

New Zealand. New Zealand Department of Scientific and Industrial Research, Information Series 81, pp102-106; and Exhibit AUS-53: Brook, P.J. and Bailey, F.L. (1965) "Control of European canker" The Orchardist of New Zealand 38, pp117-118; Final IRA Report, Part B, pp. 121-122.

630 New Zealand’s first written submission, para. 4.271; Annex 3, p. 219.

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Plant Protection Centre records631 were from areas other than those two areas. In fact, the IRA

Team requested this information from the relevant New Zealand authorities but it was not

provided.

b. There is literature on European canker fruit rot in New Zealand

536. New Zealand asserts that “there is very little literature on fruit rot in New Zealand”.632

However, the Final IRA Report identifies four relevant studies in relation to fruit rot caused by

N. galligena in New Zealand.633 New Zealand first written submission is noticeably silent on this

point. Instead, New Zealand selectively refers to AQIS interception data cited in the Final IRA

Report634 erroneously claiming that this is “the only relevant information that is cited in the

IRA”.635 When interpreting this data the IRA Team was conscious of the fact that latent

infection will often only express itself after it has been stored for a long period. In any event, the

small sample size (450 apples) of this AQIS interception data meant that it was given little

weight by the IRA Team in its consideration of Importation step 2.

537. Further, Australia notes that, in the context of its arguments under Article 5.5, New

Zealand draws an analogy between the fruit rot by brown rot and N. galligena,636 implicitly

acknowledging that European canker does cause fruit rots.

c. Latent infection of apples occur in New Zealand

538. New Zealand asserts that:

… the IRA presents no data or evidence to show that latent infections actually occur in New Zealand. Instead, the IRA relies primarily on scientific research about latent fruit rots in the United Kingdom and Northern Europe, where climatic conditions are more conducive to infection. No equivalent studies exist from New Zealand…637

539. Australia rejects the suggestion that there is no scientific evidence of latent infections

occurring in New Zealand. Latent infections are caused by the fungus entering the fruit through 631 Exhibit NZ -34: Braithwaite (1996).632 New Zealand’s first written submission, para. 4.271; also, paras. 4.272; 4.59 (Article 2.2).633 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook and Bailey (1965); Exhibit NZ-34:

Braithwaite (1996); Exhibit AUS-51: MAFNZ (2005a): Final IRA Report, Part B, pp. 121-123.634 Final IRA Report, Part B, p. 123.635 New Zealand’s first written submission, para. 4.274; also, para. 4.64 (Article 2.2).636 New Zealand’s first written submission, paras. 4.440-4.443.637 New Zealand’s first written submission, para. 4.272 (footnote omitted); see, also para. 4.273; also, paras.

4.52, 4.53, 4.57, 4.58, 4.61, 4.64, 4.65, 4.68, 4.73, 4.80 & 4.98 (Article 2.2).

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the calyx-end, the stem-end, insect wounds, scab lesions or lenticels638 and remain dormant until

after harvest when the fruit becomes increasingly susceptible to rot. Such infection may not

become apparent until after three to seven months in storage.639 In samples of rotted apples taken

out of storage in Northern Ireland in 1963-64, 30% of the fruit rot was confirmed as N.

galligena.640 This example demonstrates that under favourable climatic conditions, with

sufficient inoculum, and host susceptibility, late infections in summer have the potential to cause

storage rots anywhere apples are grown, a fact attested to by evidence from New Zealand.641

540. Nor does Australia accept New Zealand’s suggestion that scientific research about latent

infection in the United Kingdom and Northern Europe is irrelevant. First, as will be illustrated

later, New Zealand takes an inconsistent approach to the relevance of United Kingdom research.

541. Secondly, it is disingenuous to suggest that the IRA Team should be restricted to looking

at studies of latent fruit rot in New Zealand, and ignoring the vast body of mycological work

carried out elsewhere in the world. Risk assessors in both Australia and New Zealand frequently

draw on pest studies from around the world and take into account differences in the

circumstances when seeking to use them “out of context” – indeed it would be against the

ISPMs642 not to do so. This was part of the IRA Team’s exercise of expert scientific judgment.

Given that Australia is free of N. galligena it was completely justifiable for the IRA Team to

draw on scientific evidence from countries where the disease is present. Further, the Final IRA

Report only refers to the United Kingdom and Northern Europe research on latent infection to

demonstrate how this event is likely to occur when conditions are favourable.643 However,

information from New Zealand was used where directly relevant and available.

638 Exhibit NZ-11: Swinburne (1964), p. 493; Exhibit NZ -8: Snowdon (1990); Exhibit NZ-9: Swinburne (1975), p. 794.

639 Exhibit NZ -9: Swinburne (1975), p. 794.640 Exhibit NZ -11: Swinburne (1964). Exhibit NZ -8: Snowdon (1990).641 Exhibit NZ -34: Braithwaite (1996). Exhibit AUS-54: Ivess, R. (1996) Letter to B. Roberts from R.

Ivess, 15 July 1996, enclosing Braithwaite, M. (1996) "The occurrence of fruit rots caused by Nectria galligena (European canker) in New Zealand and a comparison of brown rot strains between New Zealand and Australia", Ministry of Agriculture and Forestry New Zealand report.

642 Exhibit AUS-6: ISPM 11, section 2.4 expressly refers to the need for “extrapolation from the situation where the pest occurs” in determining the probability of introduction of a pest.

643 The life-cycle of N. galligena is the same in both the Southern and Northern Hemispheres, although there may be some adaptation to local environmental conditions.

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542. Thirdly, Australia considers that New Zealand’s climate analysis is too narrow and its

predictions are inaccurate. Australia’s modelling identifies the potential distribution of European

canker in New Zealand (Annex 2, Figure 1).

d. New Zealand’s own research supports the IRA Team’s analysis

543. In attempting to make its case on latent infection, New Zealand tries to distance itself

from its own New Zealand Ministry of Agriculture report on the issue644, which states that:

It would be possible for European canker to be transmitted by the distribution of infected fruit. Infections can be latent and may not become apparent until after storage.645

…

Latent infections of European canker could go unnoticed at harvest or during the early part of storage. It is therefore possible that infected apples or pears, if discarded near susceptible hosts, could be a source of inoculum and give rise to infections in new areas.646

544. The New Zealand Ministry of Agriculture report also states that:

Observations indicate that where the disease is established, it becomes relatively common. During a survey of apple sites from throughout New Zealand in 1990, two percent of sites were found to be infected with N. galligena. Fruit rot occurrences have also been reported ([New Zealand Plant Protection Centre] records) and the fungus has been associated with storage rots of apples (Mike Dance Pers. comm.), which suggests that latent infections also occur in New Zealand fruit.647

545. In the covering letter to Australia which accompanied this report, the Chief Plants Officer

of the New Zealand Ministry of Agriculture explicitly stated that:

Please find attached a report addressing AQIS’s concern regarding European canker on New Zealand apple fruit. The report concludes that apple fruit are a potential pathway for the introduction of European canker, as the fruit can develop latent or storage rots. It is clear, however, that orchards that are free from symptoms are very unlikely to produce fruit infections.648

644 New Zealand’s first written submission, para. 4.273; also, paras. 4.62 & 4.63 (Article 2.2).645 Exhibit NZ-34: Braithwaite (1996), p. 1.646 Exhibit NZ-34: Braithwaite (1996), p. 4. (emphasis added)647 Exhibit NZ-34: Braithwaite (1996), p. 5. (emphasis added)648 Exhibit AUS-54: Ivess (1996), p. 2. (emphasis added)

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546. Given that Braithwaite (1996) is an official New Zealand Ministry of Agriculture report,

endorsed by the Chief Plants Officer, the claims by New Zealand in the context of this dispute

that the report is “speculative” and “not substantiated”649 are untenable.

e. Summary

547. Australia has rebutted each of the arguments that New Zealand uses in support of its

criticism of Importation step 2. In doing so, Australia has demonstrated that there is scientific

support for the IRA Team’s scientific judgment that the likelihood that picked fruit is

infested/infected with N. galligena is between 10-6 and 10-3 (uniform distribution).650 Such a

probability range reflects the fact that this likelihood is “extremely low” as transparently defined

in the Final IRA report.651 Therefore, Australia rejects New Zealand’s assertion that the IRA

Team should have treated the probability of Importation step 2 as “negligible” in accordance

with New Zealand’s view of the meaning of that term.652 Accordingly, Australia submits that

New Zealand failed to identify any flaws in the IRA Team’s conclusions on Importation step 2.


548. Importation step 3 deals with the likelihood that clean fruit is contaminated by N.

galligena during picking and transport to the packing house. New Zealand asserts that:

The IRA’s analysis of [Importation step 3] is based on the assumption that N. galligena spores could be transferred to clean fruit. This is an event that has never been recorded and that would almost certainly not occur. As acknowledged by the IRA, latently infected but symptomless fruit would not have any rot and therefore could not generate spores (Dillon-Weston 1927). Thus, there is no way for fruit contamination to occur.653

549. Australia accepts that latently infected fruit would not generate spores for contamination

of clean fruit during picking and transport to the packing house654 as such infections develop

after a period in storage.655 However, Australia does not accept New Zealand’s categorical

assertion that there is no way for fruit contamination to occur during picking and transport to the

649 New Zealand’s first written submission, para. 4.273.650 Final IRA Report, Part B, p. 123.651 Final IRA Report, Part B, Table 12, p. 43.652 New Zealand’s first written submission, para. 4.275; see also para. 4.277.653 New Zealand’s first written submission, para. 4.277 (footnotes omitted; emphasis added); also,

paras. 4.53, 4.69, 4.70, 4.73, 4.75 & 4.76 (Article 2.2).654 Final IRA Report, Part B, p. 124.655 Exhibit NZ-9: Swinburne (1975), p. 794.

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packing house. The IRA Team identified various means by which clean fruit could be

contaminated: pickers’ hands or gloves contaminated with spores through touching cankers or

infected fruit; spores carried by rain splash or wind during harvesting and transport; and trash

with actively sporulating fungus and spores making contact with fruit in bins.656

550. In support of its criticism of Importation step 3 New Zealand relies on arguments in

relation to: (a) conidia dispersal; (b) mummified fruit; and (c) alternative hosts.

a. Conidia can disperse and survive during harvest in New Zealand


… conidia (the only spores produced at harvest) are not dispersed by wind but require rainfall both to stimulate spore production and for dispersal (Munson 1939: 446, 452). Wet conditions are not typical during harvest time in major New Zealand apple-growing areas, and so conidia are both very unlikely to be produced and very unlikely to be dispersed.657

552. The Final IRA Report acknowledges that: “[c]limatic conditions typically experienced

during harvest periods in most New Zealand orchards are not conducive to spore release and

infection” but goes on to say that “in the wetter districts of Auckland and the Waikato region,

conditions favour these processes.”658 In addition, official rainfall data shows that during harvest

time (February-April)659, there is considerable rain in all New Zealand’s apple growing areas

during these months.660 Further, it is worth noting that despite criticising Australia’s reliance on

research from the United Kingdom,661 in order to support its position on spore production New

Zealand cites work carried out by Munson (1939) in United Kingdom.662

656 Final IRA Report, Part B, p. 124.657 New Zealand’s first written submission, para. 4.278; also, paras. 4.65 & 4.66 (Article 2.2).658 Final IRA Report, Part B, p. 125. (emphasis added)659 New Zealand’s first written submission, Annex 2, p. 217.660 Exhibit AUS-55: Dive T.E.C., Mean Monthly Rainfall (mm): http://homepages.ihug.co.nz/~petemes/mean_monthly_rainfall.htm. 661 New Zealand’s first written submission, paras. 4.272 & 4.273; see also para. 4.284; also, para. 4.73

(Article 2.2).662 Exhibit NZ -37: Munson (1939).

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http://homepages.ihug.co.nz/~petemes/mean_monthly_rainfall.htm


553. The Final IRA Report refers to evidence of occasional European canker fruit rot in New

Zealand due to wet conditions during harvest in the summer.663 This rotting fruit can produce

spore pustules bearing numerous conidia.664

554. New Zealand also asserts that:

… even if conidia could be dispersed by rain onto the surface of a mature apple immediately prior to or during harvest, they are sensitive to desiccation and would be unlikely to survive without continued moisture …665

555. Australia considers that this is an oversimplification. When dessert apple varieties were

monitored from the beginning of storage in November until the end of storage in April in

Romania, N. galligena was isolated from the surface, inside and even the locules of the fruit.666

556. The Final IRA Report notes that “germination falls off steadily to zero after desiccation

in the atmosphere of a laboratory for 5 to 6 days” (Munson, 1939).667 However, this research

needs to be considered in “real world” context. Infection of the fruit takes place through open

calyx, lenticels, scab lesions or wounds caused by insects.668 Conidia germinate and produce

infection in the warm temperatures of summer and only 2-6 hours of wetness is required.669 The

summer rain fall pattern in New Zealand670 can provide such conditions. Further, given that fruit

infection occurs in New Zealand671 it is clear that not all conidia deposited on the fruit in summer

are killed by desiccation (even if this may happen under laboratory conditions when spores are

held on cover glasses for 5-6 days672). Rather, some conidia survive the summer, allowing

storage rot to occur later.

557. Fruit rot commonly occurs through the calyx end of the fruit, which can remain moist for

long periods after rain. Also, moisture from mist or dew can trickle down to the calyx carrying

663 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook and Bailey (1965); Exhibit NZ-34: Braithwaite (1996); Exhibit AUS-51: MAFNZ (2005a): Final IRA Report, Part B, pp. 121-123.

664 Exhibit NZ-99: Snowdon (1990).665 New Zealand’s first written submission, paras. 4.278; also, para. 4.67 (Article 2.2).666 Exhibit AUS-56: Puia, C., Oroian, I. and Florian, V. (2004), “Effect of Ozone Exposure on

Phytopathogenic Microorganisms on Stored Apples” Journal of Agricultural Sciences, Debrecen, 2004/15, pp9-13.667 Final IRA Report, Part B, p. 124. (emphasis added)668 Exhibit NZ-9: Swinburne (1975).669 Final IRA Report, Part B, p. 120.670 Exhibit AUS-55 and Annex 2671 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook and Bailey (1965); Exhibit NZ-34:

Braithwaite (1996); Exhibit AUS-51: MAFNZ (2005a): Final IRA Report, Part B, pp. 121-123..672 Final IRA Report, Part B, p. 124. (emphasis added) Exhibit NZ-60: Dillon-Weston (1927), p454

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conidia from the rest of the fruit surface. Many apple rotting fungi are known to enter from the

calyx end, stem end and lenticils.673

b. Mummified fruit are another source of contamination


The other suggested source of spores at harvest, rotten fruit that has mummified on trees or on the orchard floor, is implausible. Mummified fruit would not be a source of contamination, as formation of perithecia takes place during winter and they are not therefore even present at harvest (Swinburne 1964: 493).674

559. There is information that shows that spores can be present at harvest. The Final IRA

Report, citing Dillon-Weston (1927), notes that “[i]nfected fruit that drops before harvest, or that

remains on trees and becomes mummified during winter can develop perithecia in spring,

producing ascospores that could contaminate other fruit.”675 This position is endorsed by

Swinburne (1975) which states that “[i]nfected apples left on a tree or on the orchard floor

become mummified and are a source of further infection.”676

c. New Zealand misunderstands the Final IRA Report regarding

alternative hosts

560. New Zealand mistakenly claims that the Final IRA Report:

… suggests that contamination from alternative hosts is possible during harvest in “the wetter districts of Auckland and the Waikato”.677

561. New Zealand’s claim in this regard appears to be based on a misunderstanding of the

relevant sentence in the Final IRA Report which is directed at the climatic conditions during

harvest in New Zealand apple orchards, rather than alternative hosts.678 In fact, the Final IRA

Report expressly acknowledges that “there is no evidence that the [N. galligena] is well

established in other hosts in New Zealand.” 679

673 Exhibit AUS-57: Combrink, J.C. and Ginsburg, L. (1973) "Core rot in Starking apples - a preliminary investigation into the origin and control" The Deciduous Fruit Grower 23, pp16-19; Exhibit AUS-58: Agarwala, R.K. and Sharma, V.C. (1968) "Storage rot diseases of apple" Indian Phytopathology 21, pp. 294-298.

674 New Zealand’s first written submission, paras. 4.279. (footnote omitted)675 Final IRA Report, Part B, p. 124.676 Exhibit NZ-9: Swinburne (1975), p. 794.677 New Zealand’s first written submission, paras. 4.280. (footnotes omitted)678 Final IRA Report, Part B, p. 125.679 Final IRA Report, Part B, p. 123.

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d. Summary

562. Australia has rebutted each of New Zealand’s arguments on Importation step 3. This is

just one of many examples where New Zealand argues that there is a “correct conclusion to draw

from the scientific literature”680, ignoring the fact that there can be more than one credible

interpretation of the evidence.

563. Australia has clearly demonstrated that there is scientific support for the IRA Team’s

expert judgment that, the likelihood that clean fruit is contaminated by N. galligena during

picking and transport to the packing house, is between 10-6 and 10-4, with a most likely value of

10-5 (triangular distribution).681 Therefore, Australia rejects New Zealand’s assertion that the

IRA Team should have treated the probability of Importation step 3 as “negligible” in

accordance with New Zealand’s view of the meaning of that term.682 Accordingly, Australia

submits that New Zealand failed to identify any flaws in the IRA Team’s conclusions on

Importation step 3.


564. Importation step 4 deals with the likelihood that N. galligena survives routine processing

procedures in the packing house. New Zealand alleges that:

The IRA’s analysis of [Importation step 4] is based on an assumption that fruit entering the packing house will be infected or infested – an event which itself has a negligible likelihood of occurring.683

565. Again New Zealand misunderstands the methodology underlying the Final IRA Report

which states that:

Each importation step has been considered conditionally on an apple arriving at the given point in the pathway. In most cases, however, the likelihoods are evaluated independently of the previous likelihoods; that is, they are fixed regardless of the pathway that is being considered.684

566. Accordingly, whatever the infection/infestation present on the fruit when they arrive,

Importation step 4 evaluates the likelihood of N. galligena surviving the routine procedures in

680 New Zealand’s first written submission, para. 4.281.681 Final IRA Report, Part B, p. 125.682 New Zealand’s first written submission, para. 4.281.683 New Zealand’s first written submission, para. 4.282; also, paras. 4.53, 4.69, 4.70, 4.73, 4.75 & 4.76

(Article 2.2).684 Final IRA Report, Part B, p. 21. (emphasis added)

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the packing house, independently of Importation steps 2 and 3. In any event, Australia rejects

New Zealand’s unsubstantiated assertion that the likelihood that fruit entering the packing house

will be infected or infested is “negligible”, in accordance with New Zealand’s view of the

meaning of that term.

567. New Zealand also alleges that:

The IRA claims that “none of the processes in the packing house are likely to substantially reduce infections”. However there is no relevant scientific evidence on which to determine this likelihood. The scientific data relied on by Australia in the IRA to support its theories are simply not applicable.685

568. New Zealand’s attempt to summarily dismiss the IRA Team’s exercise of expert

scientific judgment in relation to Importation step 4 is unsustainable. It conveniently ignores the

fact that the Final IRA Report contains detailed discussion on Importation step 4 with extensive

reference to relevant scientific literature.686 The IRA Team reached its conclusion on the basis of

a balanced assessment of the available scientific evidence. The Final IRA Report transparently

explains the IRA Team’s scientific judgment as to why each step in the packing house – pre-

cooling, washing, brushing, waxing, sorting and grading, and cold storage – is unlikely to

substantially reduce infections.

569. In support of its claims on Importation step 4, New Zealand relies on arguments in

relation to: (a) latent infection and storage rot; (b) mode of trade; and (c) washing.

a. Latent infection and storage rot occur in mature, dessert varieties

of apples

570. New Zealand rehearses its familiar argument that:

The studies referred to in the IRA on latent survival and the incidence of storage rot rely on data from the United Kingdom and Northern Europe where the climate is much more conducive to European canker and fruit rots than New Zealand.687

571. Australia clearly demonstrated in the context of Importation step 2, why scientific

research about latent infection in the United Kingdom and Northern Europe is relevant to the

importation of apples from New Zealand. Further, New Zealand argues that:

685 New Zealand’s first written submission, para. 4.283. (footnote omitted)686 Final IRA Report, Part B, pp. 125-126.687 New Zealand’s first written submission, para. 4.284; also, paras. 4.61, 4.68 & 4.73 (Article 2.2).

195


… this research [on latent survival and the incidence of storage rot] related to immature and cooking cultivars not the mature, dessert varieties typically exported by New Zealand.688

572. Australia rejects any implication that latent infection and storage rot do not occur in

mature, dessert varieties of apples. According to Swinburne (1971a): “[r]otting following

infection by N. galligena is common among dessert apples and pears”. It is well accepted that

fruit infection occurs in New Zealand689, which produces predominantly dessert varieties. It is

likely that such infections occur in dessert varieties. The same holds true for storage rots, which

have also been reported in New Zealand and are attributed to latent infection.690 Australia again

notes that the IRA Team asked New Zealand authorities to provide information on fruit rot but

this was not forthcoming. In any event, research in Romania has demonstrated the occurrence of

latent infection during storage in Jonathan, a dessert variety.691

573. Finally, New Zealand argues that:

The IRA does not provide any scientific evidence of latent survival or storage rots in relation to mature, symptomless New Zealand apples.692

574. This sweeping statement is wrong. First, the product at issue in this dispute is “mature

apple fruit free of trash, either packed or sorted and graded bulk fruit from New Zealand”, not

“mature, symptomless New Zealand apples”. Secondly, the Final IRA Report contains

numerous references to scientific literature on “latent survival or storage rots”.693

b. New Zealand’s ambivalence towards the mode of trade


Since the majority of consignments of New Zealand mature, symptomless apple fruit will be ‘retail-ready’ and ‘just-in-time’, if latently infected fruit were to develop visible rot symptoms in storage, this would be detected and

688 New Zealand’s first written submission, para. 4.284; also, para. 4.62 (Article 2.2).689 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook and Bailey (1965); Exhibit NZ-34:

Braithwaite (1996); Exhibit AUS-51: MAFNZ (2005a): Final IRA Report, Part B, pp. 121-123.690 Exhibit NZ-34: Braithwaite, 1996; Final IRA Report, Part B, pp. 122 & 123.691 Exhibit AUS-56: Puia et al. (2004).692 New Zealand’s first written submission, para. 4.284. (emphasis added) See also para 4.287.693 Exhibit AUS-59: Holmes, R.J. (1993) “Diseases causing post-harvest crop loss of apples and pears:

Epidemiology and control” PhD Thesis, LaTrobe University, Australia, pp100-166; Exhibit-NZ-37: Munson (1939); Exhibit AUS-60: Butler, E.J. (1949) “Apple canker, Nectria galligena Bres” In: Bulter, E.J. and Jones, S.G. (Eds) Plant Pathology, Macmillan, London, pp. 724-728; Exhibit NZ-39: Marsh (1940); Exhibit NZ-63: Lortie and Kuntz (1963); Exhibit AUS-61: Bondoux, P. and Bulit, J. (1959) “Sur la pourriture des pommes due au Cylindrocarpon mali (All.) Wr. Comptes Rendus de l’Academie d’Agriculture de France 45, pp. 275-277; Exhibit NZ-11: Swinburne (1964); Exhibit NZ-9: Swinburne (1975); Exhibit NZ-8: Snowdon (1990).

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removed at the time of packaging while the fruit was still in New Zealand and accordingly would not enter Australia.694

576. Any attempt by New Zealand to transform the product at issue in this dispute into

“mature symptomless apples” must be rejected by the Panel. Similarly, any attempt by New

Zealand to transform the product at issue in this dispute into “retail-ready” “just-in-time” apple

fruit695 must also be rejected. New Zealand’s use of the word “majority” in the above quote is

indicative of its continued ambivalence towards the mode of trade. Further, as discussed below,

it is unlikely that New Zealand exporters would provide fruit in the “retail ready” form required

by one of Australia’s largest supermarket chains which uses returnable plastic crates.696 Instead,

they are likely to opt for the best commercially available option, namely, shipping fruit in bulk

bins.

577. In any event, the importation of “retail-ready” “just-in-time” apple fruit from New

Zealand would mean quick export following varying periods of storage. Any latent infections

would only develop after removal from cold storage. This would reduce the likelihood of

detecting latent infections caused by N. galligena and increase the likelihood of it reaching

Australia.

c. Washing would not remove all surface spores

578. New Zealand argues that:

Concerning infestation, the IRA acknowledges that “[i]nitial washing of fruit in a dump tank and subsequent high-volume, high-pressure water washing (if available) may remove surface spores…”, but then fails to factor this into its analysis. … These processes have been shown to be highly effective in removing other external contaminants (Walker and Bradley 2006: 2).697

694 New Zealand’s first written submission, para. 4.285 (emphasis added); also, para. 4.74 (Article 2.2).695 The term is defined as follows in New Zealand’s first written submission, para. 4.74: “cold stored in

bulk in the country of origin and then packaged only a few days before shipment, ready for immediate use by retail outlets in the destination market”. The Final IRA Report notes at page 9 that New Zealand indicated to the IRA Team that it “expects to export only retail-ready, class 1 export quality fruit in a range of packaging including cartons, bags and crates and advises that this fruit will be exposed to a minimum of 10-14 days cold storage from harvest to retail sale.

696 Exhibit AUS-62: Coles Myer’s returnable plastic crate initiative: Coles Group, National Packaging Covenant Annual Report 2006/7, p. 27 (website http://www.packagingcovenant.org.au/documents/File/Coles_Group_AR_06_07_Public.pdf, accessed 9 July 2008); Coles Myer Ltd, Corporate Social Responsibility Report 2005, p. 16 (website http://www.colesgroup.com.au/library/newsmedia/20051019_corporate_social_responsibility_report.pdf, accessed 9 July 2008); Exhibit AUS-63: United States Department of Agriculture Foreign Agricultural Service, “New Zealand Fresh Deciduous Fruit Report 2007”, GAIN Report Number: NZ7033, 18 December 2007, p. 8.

697 New Zealand’s first written submission, para. 4.286 (footnotes omitted; emphasis added); also, paras. 4.71 & 4.72 (Article 2.2). (emphasis added)

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579. New Zealand’s assertion that the IRA Team did not factor into its analysis the removal of

surface spores during washing is incorrect. It is important to note that the Final IRA Report

recognises that washing “may” remove surface spores, not that it “will” do so. The IRA Team

had no published data to prove that all surface spores would be removed by washing.698 The

Walker and Bradley (2006) study699 referred to by New Zealand shows that washing has been

effective in removing mealybugs but it does not deal with fungal spores. Finally, it is worth

recalling that surface spores are only one aspect of the pathway and that washing “will have no

effect on internal infections, and the fungus will survive these procedures”.700 The 0.7 to 1

probability range for Importation step 4 illustrates that the IRA Team allowed for removal of

some surface spores, otherwise it would have assigned a probability of 1 to this step.

d. Summary


claims under Importation step 4. Australia has demonstrated that, contrary to New Zealand’s

primary allegation,701 there is scientific support for the IRA Team’s expert judgment that the

likelihood that N. galligena survives routine processing procedures in the packing house is

between 0.7 and 1, with a most likely value of 0.85 (triangular distribution).702 Accordingly,

Australia submits that New Zealand failed to identify any flaws in the IRA Team’s conclusions

on Importation step 4.

iv. Importation step 5

581. Importation step 5 deals with the likelihood that clean fruit is contaminated by

N. galligena during processing in the packing house. New Zealand argues that:

[Importation step 5], like [Importation] step 3, rests on the assumption that infested or infected mature apples – assuming they exist in the first place – would contaminate clean fruit. However, as has been pointed out already, the scientific evidence suggests that the likelihood of this happening during picking and transport is negligible. It is equally negligible during processing in the packing house.703

698 Exhibit AUS-59: Holmes (1993). Exhibit: NZ-36: Scheper et al. (2007).699 Exhibit NZ-61: Walker and Bradley (2006).700 Final IRA Report, Part B, p. 125.701 New Zealand’s first written submission, para. 4.287.702 Final IRA Report, Part B, p. 126.703 New Zealand’s first written submission, para. 4.288 (emphasis added); see also para. 4.292; paras. 4.53,

4.69, 4.70, 4.73, 4.75 & 4.76 (Article 2.2).

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582. Australia has already clearly demonstrated that New Zealand’s arguments in relation to

Importation step 3 are flawed. Similarly, Australia rejects New Zealand’s assertion that the IRA

Team should have treated the probability of Importation step 5 as “negligible” in accordance

with New Zealand’s view of the meaning of that term.

583. In support of its claims under Importation step 5, New Zealand relies upon arguments in

relation to: (a) latent fruit infection; (b) dump water; and (c) twigs in the dump tank.

a. Latent fruit infection occurs in New Zealand

584. New Zealand selectively extracts704 the following sentence from the Final IRA Report

without any explanation or elaboration as to why it considers it to be relevant to its case:

Latent fruit infections present a “minimal likelihood” of contamination in the processing pathway because spores do not develop on infected fruit until they become severely rotted or mummified.705

585. Australia assumes that New Zealand has referred to this sentence because of its fixation

with using its own qualitative method for risk assessment. However, as previously noted the

SPS Agreement is not prescriptive as to methodology. In addition, Australia has already

demonstrated that New Zealand’s focus on the descriptive likelihoods, and not the numbers, is

misplaced.

586. In any event, New Zealand conveniently ignores the fact that latent fruit rot caused by

N. galligena does occur in New Zealand.706 In fact, recent data from the New Zealand Ministry

of Agriculture suggests that the likelihood of fruit infection has increased (0.21% for Waikato

region alone).707 Presumably this is because of the greater production of apples in New Zealand

and the fact that N. galligena has not been eradicated but is still spreading.

b. Fruit can be contaminated in dump water

587. New Zealand also selectively extracts708 the following sentence from the Final IRA

Report without any explanation or elaboration as to why it considers it to be relevant to its case:

704 New Zealand’s first written submission, para. 4.289 (emphasis added); also, para. 4.70 (Article 2.2).705 Final IRA Report, Part B, p. 127. (emphasis added)706 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook and Bailey (1965); Exhibit NZ-34:

Braithwaite (1996); Final IRA Report, Part B, pp. 121-123.707 Exhibit AUS-51: MAFNZ, 2005a: Final IRA Report, Part B, p. 122.708 New Zealand’s first written submission, para. 4.290; also, paras. 4.71 & 4.72 (Article 2.2).

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… “given the extremely small likelihood of fruit being infested/infected with N. galligena, the probability of surface spores being present on fruit and contaminating the dump water is similarly extremely small.” (emphasis added)709

588. Again, Australia assumes that New Zealand has referred to this sentence because of its

fixation with using its own qualitative method for risk assessment. Again, Australia reiterates

that the SPS Agreement is not prescriptive as to methodology and New Zealand’s focus on the

descriptive likelihoods and not the numbers is misplaced.

589. In any event, it has been demonstrated that conidia from external infections of other fungi

can be washed off into the dump tank water, thereby potentially contaminating clean fruit.710 In

addition, recent data shows that, irrespective of the fungal pathogen concentration, post harvest

washing did not alter the incidence of storage rots in uninjured fruit but apples with wounds were

prone to storage rots in the presence of high fungal concentration.711

c. Fruit can be contaminated by twigs in the dump tank


The IRA also asserts a probability, albeit “extremely low”, of clean fruit becoming contaminated by twigs or by washing in the dump tank. This is unsubstantiated speculation, and is certainly not supported by the scientific evidence: contamination of clean fruit with N. galligena during processing in the packing house has never been observed to occur.712

591. Once again, New Zealand conveniently ignores the fact that the Final IRA Report

contains detailed discussion on Importation step 5 including references to relevant scientific

literature.713 Australia rejects New Zealand’s allegation that contamination through twigs in the

dump tank or through washing in the dump tank is “unsubstantiated speculation” and is “not

supported by the science”. Australia has already dealt with the issue of contamination of clean

fruit via the dump tank and will now turn to the issue of twigs in the dump tank.

592. On the basis of practical experience, the IRA Team judged that twigs are likely to enter

the dump tank. This view is supported by photographic evidence from the packing houses in

709 New Zealand’s first written submission, para. 4.290 (quoting: Final IRA Report, Part B, p. 127).710 Exhibit: AUS-59: Holmes (1993). See Final IRA Report, Part B, p. 126.711 Exhibit: NZ-36: Scheper et al. (2007), pp. 7, 9-13.712 New Zealand’s first written submission, para. 4.291 (footnotes omitted) (emphasis added); also, paras.

4.71 & 4.72 (Article 2.2).713 Final IRA Report, Part B, pp. 126-127.

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Hawke’s Bay, New Zealand which shows a lot of plant debris removed from the dump tank.714

Further, there is evidence of the development of small cankers around buds of one year old twigs

in Chile.715 The potential for such infections to develop in other apple growing countries, like

New Zealand, cannot be excluded. These infected twigs are very close to the apple fruit and

would be harvested with the fruit with some ending up as trash in the dump tank.

593. Australia accepts that, in the event of small sporulating cankers entering the dump tank,

the likelihood of clean fruit getting infected due to twigs is “extremely low”.716 In part, this is

because “there would be a very large dilution of spores in the tank and surface contamination

could be washed off in any subsequent high pressure wash.”717 The IRA Team clearly took this

into account in determining the probability range for Importation step 5.

d. Summary

594. Australia has rebutted each of New Zealand’s arguments regarding Importation step 5. In

doing so, Australia has demonstrated that there is scientific support for the IRA Team’s scientific

judgment that the likelihood that clean fruit is contaminated by N. galligena during processing in

the packing house is between 10-5 and 10-4, with a most likely value of 5 x 10-5 (triangular

distribution).718 Therefore, Australia rejects New Zealand’s assertion that the IRA Team should

have treated the probability of Importation step 5 as “negligible” in accordance with New

Zealand’s view of the meaning of that term.719 Accordingly, Australia submits that New Zealand

failed to identify any flaws in the IRA Team’s conclusions on Importation step 5.

v. Importation step 6

595. Importation step 6 deals with the likelihood that N. galligena survives palletisation,

quality inspection, containerisation and transportation. New Zealand alleges that:

… the likelihood value of “1” [for Importation step 6] is an overestimation because, even assuming that some fruit could be latently infected at the point of palletisation, a proportion of fruit with latent infection would never develop

714 Exhibit AUS-64: Photograph of trash in a dump tank from a packing house in Hawke’s Bay, New Zealand, 5/5/1999.

715 Exhibit AUS-65: Lolas, M. and Latorre, B.A. (1997), “Effecto Comparativo de Fungicidas en el control del Cancro Europeo Del Manzano Causado Por Nectria galligena”, Fitopatologia 32(2), pp131-135.

716 Final IRA Report, Part B, p. 127.717 Final IRA Report, Part B, p. 127. (emphasis added)718 Final IRA Report, Part B, p. 127.719 New Zealand’s first written submission, para. 4.292; see, also para. 4.288.

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symptoms (Biggs 19[9]5). The actual proportion of fruit with latent infection that might eventually develop symptoms would be much less than 100%.720

596. Australia does not accept New Zealand’s assertion that the likelihood value assigned to

Importation step 6 is an overestimation. First, Biggs (1995)721 does not deal with N. galligena

and in this context it is not entirely relevant. Secondly, infections in latently infected fruit will

often not manifest until after three to seven months in storage.722

597. The IRA Team considered that, “[t]he time between Importation step 4 and Importation

step 6 will not be long enough for latent infection to express itself to a significant level. Because

spores are microscopic, any remaining surface infestation will also remain undetected and

survive.”723

598. Australia rejects New Zealand’s argument that the likelihood value for Importation step 6

is “speculative”.724 There is scientific support for the IRA Team’s judgment that the likelihood

that N. galligena survives palletisation, quality inspection, containerisation and transportation is

1.725 Australia does not accept New Zealand’s bald assertion that the probability assigned to

Importation step 6 “must certainly be lower than ‘1’”.726 Accordingly, Australia submits that

New Zealand failed to identify any flaws in the IRA Team’s conclusions on Importation step 6.

vi. Importation step 7

599. Importation step 7 deals with the likelihood that clean fruit is contaminated by

N. galligena during palletisation, quality inspection, containerisation and transportation. New

Zealand asserts that:

The IRA states clear reasons why the [likelihood in relation to Importation step 7] is negligible. For example, the IRA states: “Packed fruit would be securely stored and would present a “negligible” likelihood of becoming contaminated during palletisation, quality inspection and transportation. The short period of storage and temperatures maintained during transportation would not be conducive to spore production” (emphasis added). However,

720 New Zealand’s first written submission, para. 4.294; also, paras. 4.53, 4.69, 4.70, 4.73, 4.75, 4.76 & 4.81 (Article 2.2).

721 Exhibit NZ-62: Biggs (1995).722 Exhibit NZ -9: Swinburne (1975), p. 794; Exhibit NZ -8: Snowdon (1990), p. 184; and Exhibit AUS-

61: Bondoux and Bulit (1959). Also, see Final IRA Report, Part B, p. 122.723 Final IRA Report, Part B, p. 127.724 New Zealand’s first written submission, para. 4.295.725 Final IRA Report, Part B, p. 128.726 New Zealand’s first written submission, para. 4.295.

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when the likelihoods assigned to this step are used in the Australian model, this again results in a negligible event being mischaracterised as an event that is likely to occur – approximately one in every two million apples imported from New Zealand. This ‘probability’ value has no basis in science.727

600. This is yet another example of New Zealand’s argument that Australia is not entitled to

use a semi-quantitative methodology for risk assessment. Again, the SPS Agreement is not

prescriptive as to methodology and that New Zealand’s focus on the qualitative descriptors and

not the numbers is misplaced. It is worth noting that, in the relevant paragraph of the Final IRA

Report728 referred to above by New Zealand, the word “negligible” very deliberately appears in

inverted commas as a caution against any pre-determined views about its meaning.

601. Australia rejects New Zealand’s unsubstantiated assertion that the probability range for

Importation step 7 “has no basis in science”.729 In exercising its expert judgment the IRA Team

determined that the likelihood that clean fruit is contaminated by N. galligena during

palletisation, quality inspection, containerisation and transportation is between 0 and 10-6

(uniform distribution).730 Australia has previously explained why the use of such a probability

interval is appropriate. Therefore, Australia rejects New Zealand’s assertion that the IRA Team

should have treated the probability of Importation step 7 as “negligible” in accordance with New

Zealand’s view of the meaning of that term.731 Accordingly, Australia submits that New Zealand

failed to identify any flaws in the IRA Team’s conclusions on Importation step 7.

vii. Importation step 8

602. Importation step 8 deals with the likelihood that N. galligena remains with the fruit after

on-arrival minimum border procedures. Although New Zealand does not contest this

importation step732 it asserts that:

[Importation step 8] depends on an assumption about mature, symptomless apple fruit being a pathway for the transmission of European canker for which there is no scientific evidence, and for which the likelihood has been demonstrated to be negligible.733

727 New Zealand’s first written submission, para. 4.296 (footnote omitted; original emphasis). See paras. 4.53, 4.69, 4.70, 4.73, 4.75 & 4.76 (Article 2.2).

728 Final IRA Report, Part B, p. 128.729 New Zealand’s first written submission, para. 4.296.730 Final IRA Report, Part B, p. 128.731 New Zealand’s first written submission, para. 4.296.732 New Zealand’s first written submission, para. 4.298.

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603. Australia reiterates that the product at issue in this dispute is “mature apple fruit free of

trash, either packed or sorted and graded bulk fruit from New Zealand” not “mature,

symptomless apple fruit”. In any event, New Zealand’s allegation that there is no scientific

evidence that “mature, symptomless apple fruit” are a pathway for transmission of European

canker is inconsistent with a statement to the contrary by the Chief Plants Officer of the New

Zealand Ministry of Agriculture.734 Further, New Zealand has not demonstrated that the

likelihood of “mature, symptomless, apple fruit” being such a pathway is “negligible” in

accordance with New Zealand’s view of the meaning of that term.

viii. Summary on entry

604. New Zealand’s language about “speculation” and “possibilities”735 cannot remedy its

failure to meet its burden of proof in relation to each of the challenged importation steps for

European canker. New Zealand has failed to adduce sufficient evidence of any flaws in the IRA

Team’s assessment of entry, let alone any flaws serious enough to prevent the Panel from having

“reasonable confidence” in the risk assessment.

(b) The IRA Team’s analysis of the probability of establishment and spread is

objective and credible

605. New Zealand alleges that the IRA Team failed to evaluate the likelihood of establishment

or spread of N. galligena within the meaning of Annex A(4) of the SPS Agreement.736 There are

two aspects to New Zealand’s claim. First, New Zealand asserts that the IRA’s Team’s

consideration of proximity and exposure “is based on possibilities not probabilities”.737

Secondly, New Zealand asserts that the IRA Team’s consideration of establishment and spread

“is based on possibilities not probabilities”.738

i. The IRA Team’s consideration of proximity and exposure is based on

probabilities not possibilities

733 New Zealand’s first written submission, para. 4.298 (emphasis added); see also paras. 4.268 & 4.299; also, paras. 4.52, 4.53, 4.95, 4.96, 4.97, 4.98, 4.99, 4.100, 4.104 & 4.105 (Article 2.2).

734 Exhibit AUS-54: Ivess (1996).735 New Zealand’s first written submission, paras. 4.268 & 4.300.736 New Zealand’s first written submission, para 4.301.737 New Zealand’s first written submission, paras. 4.302-4.317.738 New Zealand’s first written submission, paras. 4.318-4.325.

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Proximity

606. The IRA Team assessed the proximity of major handlers and users of apples to host

plants for N. galligena. New Zealand does not seriously address the issues raised in the

comprehensive discussion of proximity for N. galligena in the Final IRA Report.739 Instead,

New Zealand merely asserts that:

… [the proximity] values [for N. galligena] are assigned in a seemingly arbitrary manner and describe events that in reality have a very low likelihood of occurring. For example, orchard wholesalers near commercial fruit crops are assigned a proximity rating of 1 (certainty). However the text in [the Final IRA Report] describing the rationale for assigning this probability value shows that this is in fact no more than a possibility: “orchard wholesaler waste may be dumped at a site…close to landfills. Before waste is finally disposed of, it could remain exposed to the elements…near the packing house” (emphasis added).740

607. Australia rejects New Zealand’s allegation that the IRA Team used arbitrary proximity

values. All the proximity values for N. galligena are set out in Table 32 of the Final IRA

Report741 with an accompanying explanation in the text.742 Australia accepts that many of the

events in relation to proximity have a “very low” likelihood of occurring.743 In fact, some of

these events have an “extremely low” likelihood of occurring.744 Occasionally, the proximity

values are higher. Importantly, the IRA Team provided a justification for all of the proximity

ratings.745

608. New Zealand has raised a concern in relation to the proximity value assigned to orchard

wholesalers and commercial fruit crops. Unfortunately, New Zealand has selectively quoted text

from the Final IRA report, and in doing so, they have also got the quote wrong. The actual text

reads as follows:

All orchard wholesalers would be in close proximity to commercial fruit crops. Orchard wholesaler waste may be dumped at a site within the premises or in landfills close to orchards. Before waste is finally disposed of, it could remain exposed to the elements (for example, in a skip) near the packing house.746

739 Final IRA Report, Part B, pp. 129-134740 New Zealand first written submission, para. 4.302. (original emphasis)741 Final IRA Report, Part B, p. 134.742 Final IRA Report, Part B, pp. 130-133.743 Final IRA Report, Part B, Tables 12 & 32, pp. 43 & 134.744 Final IRA Report, Part B, Tables 12 & 32, pp. 43 & 134.745 Final IRA Report, Part B, pp. 130-133.746 Final IRA Report, Part B, p. 130. (emphasis added)

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609. The Final IRA Report also notes that:

The packing of New Zealand fruit from bulk bins and/or the repacking of boxes of New Zealand fruit would bring packing house workers and host trees (apples and pears) into close proximity to both New Zealand apples and apple waste.

Some stakeholders argued that not all orchard wholesalers will be near commercial fruit crops and that the use of probability 1 is incorrect. However, industry sources confirmed that the few (about seven) orchard wholesalers in Australia who are likely to repack/regrade the majority of New Zealand apples would all be near commercial orchards.747

610. Australian retail outlets often display large quantities of apples on tables or in crates,

rather than in smaller “retail ready” boxes. In 2005 the one of Australia’s largest supermarket

chains introduced a system of returnable plastic crates. These crates are sent to suppliers who

pack the fruit straight into them. They are used to display the fruit in the stores, and then

returned to the suppliers for re-use.748 It is unlikely that empty crates would be sent from

Australia to New Zealand in order for New Zealand exporters to pack their apples for Australia.

Accordingly, it is unlikely that New Zealand exporters would provide fruit in the “retail ready”

form required by one of Australia’s largest retailers. Instead, New Zealand exporters are likely

to opt for the best commercially available option, namely shipping fruit in bulk bins that could be

repacked and distributed in Australia for specific markets. The fact that orchard wholesalers

who would repack such fruit are in close proximity to commercial fruit crops is confirmed by

available aerial photographic evidence.749

611. In Australia’s view, this explanation clearly justifies that the IRA Team’s proximity

rating for commercial fruit crops and orchard wholesalers is based on probabilities not

possibilities. Given that New Zealand has not specifically challenged any other proximity rating

in the Final IRA Report, it is precluded from making further claims at a later stage of

proceedings.

Exposure

747 Final IRA Report, Part B, p. 131. (emphasis added)748 Exhibit AUS-62: Coles Myer’s returnable plastic crate initiative: Coles Group, National Packaging

Covenant Annual Report 2006/7, p. 27 (website http://www.packagingcovenant.org.au/documents/File/Coles_Group_AR_06_07_Public.pdf, accessed 9 July 2008); Coles Myer Ltd, Corporate Social Responsibility Report 2005, p. 16 (website http://www.colesgroup.com.au/library/newsmedia/20051019_corporate_social_responsibility_report.pdf, accessed 9 July 2008); Exhibit AUS-63: United States Department of Agriculture Foreign Agricultural Service, “New Zealand Fresh Deciduous Fruit Report 2007”, GAIN Report Number: NZ7033, 18 December 2007, p. 8.

749 Exhibit: AUS-66: Images of an orchard packing house near Melbourne.

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612. The IRA Team assessed the probability of transfer of N. galligena from a discarded apple

to a susceptible host plant, also known as exposure. New Zealand’s criticism of the IRA Team’s

exposure analysis is confused and repetitive. It appears that the crux of New Zealand’s

complaint is as follows:

… [the IRA Team’s assessment of exposure] assumes that a sufficient quantity of spores [conidia or ascospores] could be produced from an infected apple and dispersed under suitable climatic conditions to infect a susceptible host. However, there is no scientific evidence to show that there is any likelihood that this could occur.750

613. Australia does not accept New Zealand’s assertion. The Final IRA Report contains a

comprehensive discussion of exposure for N. galligena.751 The Final IRA Report cites several

studies which show that fruit rot caused by N. galligena does occasionally occur in New

Zealand.752 Moreover, the Chief Plants Officer of the New Zealand Ministry of Agriculture has

explicitly endorsed the fact that “apple fruit are a potential pathway for the introduction of

European canker, as the fruit can develop latent or storage rots.”753 Accordingly, there is no

doubt that some latently infected apples will arrive in Australia.

614. Further, there is no doubt that when such fruit eventually rot they will be discarded as

waste in Australia. Braithwaite (1996) notes that infected apples discarded near susceptible

hosts could be a source of inoculum and give rise to infections in new areas.754 Dillon-Weston

(1927)755 shows that infected fruit left on the orchard floor which become mummified, can

produce perithecia with mature ascospores, and are a source of further infection. Similarly,

rotting fruit can produce both conidia and perithecia with ascospores.756 In particular, the New

Zealand strain of the N. galligena is known to produce both conidia and ascospores.757 Given

that perithecia form in August (winter) in New Zealand758 there is no reason why they would not

form on discarded rotting fruit in Australia in August as it is also in the Southern Hemisphere.

750 New Zealand first written submission, paras. 4.303 (emphasis added); also, paras. 4.304, 4.309, 4.312, & 4.317; also, para. 4.78 (Article 2.2).

751 Final IRA Report, Part B, pp. 134-139.752 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook & Bailey (1965); Exhibit NZ-34:

Braithwaite (1996); Exhibit AUS-51: MAFNZ (2005a); Final IRA Report, Part B, pp. 121-123.753 Exhibit AUS-54: Ivess (1996).754 Exhibit NZ-34: Braithwaite (1996), p. 4755 Exhibit NZ-60: Dillon-Weston (1927), p. 5; Final IRA Report, Part B, p.135.756 Exhibit NZ-60: Dillon-Weston (1927), pp. 5-6.757 Exhibit AUS-53: Brook & Bailey (1965).758 Exhibit AUS-53: Brook & Bailey (1965)

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615. It is well accepted that spores are dispersed by rain splash and wind.759 Many studies

discuss this dispersal mechanism within orchards. However, such dispersal could similarly

apply to rotting fruit discarded as waste nearby a suitable host plant. For example, waste near an

orchard or a backyard compost heap close to susceptible fruit trees. In addition, birds and insects

are suspected as dispersal mechanisms of N. galligena.760 Birds feed on fruit discarded in waste

and fly on to branches of trees. They are therefore a potential agent to transfer the spores from

infected fruit, carried on their beaks or feet, to branches of hosts where the fungus is known to

establish easily.761

616. New Zealand also appears to suggest that Australia’s climate is unsuitable for exposure.

As previously indicated, Australia considers New Zealand’s climate analysis762 to be too narrow.

Australia’s climate modelling (Annex 2) indicates that the potential distribution of European

canker in Australia covers a much larger area than suggested by New Zealand’s climate analysis.

617. In support of its unjustified criticism of the IRA Team’s exposure analysis New Zealand

mounts a series of subsidiary arguments which are dealt with in turn below.

a. The product at issue is not mature, symptomless apples

618. New Zealand repeatedly refers to “mature symptomless apples”.763 As previously

mentioned, any attempt by New Zealand to transform the product at issue in this dispute into

“mature symptomless apples” must be rejected by the Panel.

b. Fruit rot after removal from cold storage has been shown

619. New Zealand cites Biggs (1995)764 to argue that:

… the [Final IRA Report] fails to take into account the fact that not all latently infected fruit would express symptoms (such as visible rot symptoms). Symptomless fruit do not produce spores. Even if symptoms were to develop, the IRA does not provide any evidence that conidia spores are produced from storage rots or rots which develop after removal from cold storage from latently infected fruit.765

759 Final IRA Report, Part B, p. 135.760 Exhibit AUS-60: Butler (1949); Exhibit AUS-38: Agrios (1997).761 Final IRA Report, Part B, p. 136.762 New Zealand’s first written submission, Annex 3, pp. 218-240.763 New Zealand’s first written submission paras. 4.304, 4.305, 4.310, 4.312, & 4.317.764 Exhibit NZ-62: Biggs (1995).

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620. However, Australia has previously pointed out Biggs (1995)766 does not deal with

N. galligena and in this context is not entirely relevant. Further, infections in latently infected

fruit are often not manifest until after three to seven months in storage.767 When a latently

infected fruit expresses symptoms depends on the suitability of the conditions. In an infected

fruit (whether latent or not), the fungus is within the host tissue and it has the potential to resume

growth at any time given suitable conditions. For example, if an infected fruit sits on a waste

dump for long periods it is likely that at some stage there would be appropriate conditions for the

fungus to grow. Naturally infected fruit, partially buried in moist peat (similar to a waste dump),

and left exposed outside during the winter, developed perithecia with mature asci in about three

months (Swinburne, 1964).768

621. The Final IRA Report states that: “Neonectaria galligena can survive at temperatures

between 2°C and 30°C (Munson, 1939; Butler, 1949) and would readily tolerate cool storage

temperatures. The ability of this pathogen to survive low temperatures is a major reason for its

ability to infect even dormant trees (Marsh, 1940)”.769 Fruit rot after removal from cold storage

has been shown for cooking770 and dessert varieties.771 Given that conidia, and even ascospores,

are produced from apples rotting in the orchard772 there is no reason why rotting fruit coming out

of cold storage would not produce spores.

c. Spores can be dispersed from mummified apples on the ground

622. New Zealand alleges that:

… although [Munson (1939) and Grove (1990)] mention ascospore release from canker infections in winter and spring, neither mentions production of perithecia from rotted, mummified apples on the ground.773

765 New Zealand first written submission, para. 4.305 (footnotes omitted); also, paras. 4.79, 4.81 & 4.82 (Article 2.2).

766 Exhibit NZ-62: Biggs (1995)767 Exhibit NZ -9: Swinburne (1975): 794; Exhibit NZ-8: Snowdon (1990), p. 184; and Exhibit AUS-61:

Bondoux and Bulit (1959). See Final IRA Report, Part B, p. 122.768 Exhibit NZ-11: Swinburne (1964) (Final IRA Report, p. 141).769 Final IRA Report, Part B, p. 126. Exhibit NZ-37: Munson (1939); Exhibit AUS-60 Butler (1949);

Exhibit NZ-39: Marsh (1940).770 Exhibit NZ-11: Swinburne, 1964771 Exhibit AUS-56: Puia et al., 2004772 Exhibit NZ-60: Dillon-Weston (1927)773 New Zealand’s first written submission paras. 4.306, 4.312 & 4.316; also, para. 4.86 (Article 2.2).

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623. However, what New Zealand fails to acknowledge is that the production of perithecia

from rotted or mummified apples on the ground has been clearly demonstrated by other studies774

and that some studies found mature ascospores in them.775 Ascospores are aerially

disseminated776 and are likely to be dispersed from mummified apples on the ground.

d. New Zealand cannot seek to impose its own methodology on other

WTO Members


… the proper inference to draw from [Swinburne (1964); McCartney (1967) and Dillon-Weston 1927:5] would have been that development of ascospores from mummified fruit is negligible, even under suitable conditions.777

625. In arguing that there is a “proper inference to draw from [the scientific literature]”, New

Zealand highlights its misunderstanding of the appropriate standard of review under Article 5.1

of the SPS Agreement. In addition, New Zealand’s use of “negligible” here fails to recognise

that the SPS Agreement is not prescriptive as to methodology. New Zealand’s focus on the

qualitative descriptors and not the numbers is misplaced.

626. In light of other requirements for successful transfer from a rotting fruit to a host, the IRA

Team assigned a lower exposure value778 than the “very low” that would have been accorded

solely on the basis of the Dillon-Weston (1927) finding that three out of 700 mummified fruit

produced perithecia with mature ascospores.779

e. Australian climatic conditions are conducive to European canker

627. Australia firmly rejects New Zealand’s assertion that the IRA Team’s “analysis of the

climate conditions conducive to infection both misconstrues the relevant literature and is

inconsistent with climatic information from countries where European canker is present.”780

774 Exhibit NZ-60: Dillon-Weston (1927) (Final IRA Report, Part B, p. 135); Exhibit NZ-11: Swinburne (1964) (Final IRA Report, p. 135); and Exhibit NZ-10: McCartney (1967).

775 Exhibit NZ-60: Dillon-Weston (1927) (Final IRA Report, Part B, p. 135).776 Exhibit NZ-64: Wilson (1966), p. 186.777 New Zealand’s first written submission para. 4.307 (emphasis added); see, also paras. 4.310 & 4.317.778 Final IRA Report, Part B, Table 12, p. 43.779 Exhibit NZ-60: Dillon-Weston (1927), p. 5.780 New Zealand’s first written submission para. 4.315 (footnote omitted); also, paras. 4.88-4.90 (Article

2.2).

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N. galligena causes infection over a range of temperatures under field conditions.781 Grove

(1990: 36) has indicated that infections can occur between 5-16ºC, although the best range is

between 10-16ºC.782 Dubin and English (1974) and Grove (1990) have indicated that a

maximum of six hours’ wetness is sufficient to cause infections.783 These combinations could

give different results to those claimed by New Zealand.

628. Nor does Australia accept that “the climatic conditions in Australia are not conducive to

European canker.”784 As previously indicated, the potential distribution of European canker in

Australia covers a much larger area than suggested by New Zealand’s climate analysis

(Annex 2).

629. In relation to ascospores specifically, New Zealand alleges that:

… production of ascospores is induced by low temperatures and is delayed by dry conditions (Munson 1939: 455); both of these climatic factors mean that under Australian conditions the likelihood of perithecia development and thus ascospore production is negligible. This is confirmed by experience in the Tasmanian European canker outbreak, where “mature asci were never found” either on tree cankers or rotten fruit (Ransom 1997: 124). In some geographic areas, ascospores play no role in the development of the disease (Annex 3, p. 224).785

630. Australia rejects New Zealand’s allegation that under Australian conditions the likelihood

of perithecia development and thus ascospore production is “negligible” in accordance with New

Zealand’s view of the meaning of that term. Again, Australia does not accept New Zealand’s

characterisation of Australian climatic conditions. Annex 2 indicates that climatic conditions in

Australia are conducive to N. galligena establishment. Under Australian conditions, conidia and

ascospores would be produced.

631. Australia notes that strains of N. galligena can be self-fertile (homothallic786), cross-

fertile (heterothallic787) or this characteristic may be variable.788 European strains of N. galligena 781 Exhibit NZ-7: Grove (1990), p. 6.782 Exhibit NZ-7: Grove (1990), p. 6.783 Exhibit AUS-67: Dubin, H.J. and English, H. (1974) "Factors affecting apple leaf scar infection by

Nectria galligena conidia" Phytopathology 64, p. 1202; Exhibit NZ-7: Grove (1990), p. 36.784 New Zealand’s first written submission para. 4.315; also para. 4.317; paras. 4.91-4.92 (Article 2.2).785 New Zealand’s first written submission para. 4.308 (emphasis added); also, paras. 4.92-4.94, 4.83 &

4.86 (Article 2.2).786 A mycelium that produces two kinds of cells, which function as male and female.787 Two forms of mycelia that interact as male and female in reproduction.788 Exhibit AUS-68: Brayford, D., Honda, B.M., Mantiri, F.R. and Samuels G.J. (2004) “Neonectria and

Cylindrocarpon: the Nectria mammoidea group and species lacking microconidia” Mycologia 96(3), pp572–597;

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are generally self-fertile789 but they are sometimes cross-fertile.790 Evidence suggests that some

strains of N. galligena in North America are also cross-fertile.791

632. During the Tasmanian outbreak, N. galligena occurred on only four properties792 and is

not known to have established on hosts other than apple trees. During this outbreak

protoperithecia793 were found on several occasions but they never contained asci or ascospores794

The absence of asci and ascospores strongly suggests that the Tasmanian strain of N. galligena

was a unique strain of N. galligena that required another mating type for sexual reproduction.

This is probably one of the reasons for the limited spread of the disease.795

f. Some surface spores survive desiccation


Surface spores are short-lived because they are prone to desiccation without continued moisture and would likely be dead well before arrival in Australia.796

634. Under Importation step 3, Australia has already shown that not all conidia present on fruit

are killed by desiccation.

g. Conidia can disperse from an infected apple on the ground


Exhibit AUS-69: Hirooka Y., Kobayashi T., Natsuaki K.T. (2005) “Neonectria castaneicola and Neo. rugulosa in Japan” Mycologia 97(5), 2005, pp. 1058–1066.

789 Exhibit AUS-70: Booth, C. (1959) Studies of Pyrenomycetes: IV Nectria (Part I), 30 December 1959, CAB, pp. 48-51; Exhibit AUS-71: Lortie, M. (1964) “Pathogenisis in cankers caused by Nectria galligena” Phytopathology 54, pp. 261-263; Exhibit AUS-72: Lacoste, L. and Dehorter, B. (1973) “Mycologie Determinisme de la Reproduction Sexuee de Nectra Galligena Bres. in Vitro” Annales des Sciences Naturelles Botanique, Paris, 12 Serie, 1973, Tome 14, pp87-91; Exhibit AUS-73: El-Gholl, N.E., Barnard, E.L., and Schroeder, R.A. (1986) “Homothallism in Neetria galligena”, Canadian Journal of Botony 64, pp. 902-903.

790 Exhibit AUS-74: Kruger, J. (1974) “Zur Genetik von Nectria galligena Bres”, Phytopathol, Z 79, pp. 320-342.

791 Exhibit AUS-75: Plante, F., Hamelin, R.C. and Bernier, L. (2002) “A comparative study of genetic diversity of populations of Nectria galligena and N. coccinea var. faginata in North America”, Mycol. Res. 106, pp. 183-193.

792 Exhibit NZ-13: Ransom (1997).793 Perithecia-like structures that do not form asci and ascospores.794 Exhibit NZ-13: Ransom (1997).795 Ascospores are required for long distance dissemination of the N. galligena: Exhibit AUS-76:

Swinburne, T.R. (1971b) “The seasonal release of spores of Nectria galligena from apple cankers in Northern Ireland”, Annals of Applied Biology 69, pp. 97-104.

796 New Zealand’s first written submission para. 4.309; also, para. 4.67 (Article 2.2).

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Any dispersal of conidia would primarily be by rain splash and would likely only be a few metres from a discarded apple [on the ground].797

636. While rain splash is the primary means of conidia dispersal (Munson, 1939), conidia are

also dispersed by wind in the absence of rain (Swinburne, 1971b).798 Further, according to

Marsh (1940) the most probable maximum distance for dispersal by rain splash is ten metres.799

Accordingly, dispersal by “a few metres” is all that would be needed for a rotting apple in

orchard wholesaler waste, or in a backyard compost heap, to transfer to a susceptible host plant.

Australia notes that birds and insects are suspected as dispersal mechanisms of N. galligena.800

h. Laboratory studies are relevant


Where the IRA discusses host plant receptivity, it fails to acknowledge that most infection studies are conducted under artificial conditions. For example, the IRA quotes Wilson 1966 that infection of leaf scars can occur up to 4 weeks post-leaf fall. However, the IRA does not mention that this study was done in laboratory climate chambers…801

638. Australia rejects the inference that laboratory studies of pathogens are somehow

irrelevant to conducting a risk assessment. The IRA Team appropriately took into account

Wilson (1966)802 as part of its broader consideration of all the relevant scientific evidence. In

exercising its expert judgment the IRA Team considered the differences in the circumstances,

including whether particular studies were conducted under laboratory conditions.

i. Discarded apples can survive and develop rots


… in the real world, a discarded apple would not survive three months in the open air. Common sense dictates that other rots, birds, foraging insects, marsupials and other mammals would consume the apple long before any rots caused by N. galligena could develop. It is also worth noting that most discarded fruit would have been consumed, leaving only the core. Such fruit is

797 New Zealand’s first written submission paras. 4.311 & 4.316; also, para. 4.85 (Article 2.2).798 Final IRA Report, Part B, p. 135; Exhibit NZ-37: Munson (1939); Exhibit NZ-9: Swinburne (1971b),

p. 98-99.799 Final IRA Report, Part B, p. 135 Exhibit NZ-39: Marsh (1940).800 Final IRA Report, Part B, p. 136; Exhibit AUS-60: Butler (1949); Exhibit AUS-38: Agrios (1997)801 New Zealand’s first written submission para. 4.313.802 Exhibit: NZ-64: Wilson (1966)

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unlikely to produce rots, as most of any infected portions would have been eaten.803

640. Australia does not accept New Zealand’s arguments for the following reasons. First, a

discarded apple could survive long enough in the “real world” to develop rot (particularly where

the rot had developed in storage). This is borne out by the fact that spore production on rotting

apples in orchards has been reported in both the United Kingdom804 and California.805 This

indicates, contrary to New Zealand’s assertion “other rots, birds, foraging insects, marsupials and

other mammals” did not consume these infected fruits before they could produce spores.

Secondly, New Zealand does not cite any evidence that other rots would develop faster than

European canker. Thirdly, New Zealand provides no evidence to support its claim that most fruit

would be consumed. Fourthly, not only the core of apples would be discarded and, in any event,

there could still be infection in the core. Puia et al. (2004) have detected N. galligena inside the

locules of the fruit (which are discarded with the core).806

j. New Zealand misrepresents the threshold number of spores

required to initiate infection


… for infection to occur, the number of spores must be at or above a certain threshold. Although the IRA acknowledges this, citing a figure of 1,000 conidia to initiate leaf scar infection, there is no connection between the quantitative data from the literature cited and the ultimate assignment of probability values for exposure.807

642. New Zealand misrepresents the threshold infection figure of 1,000 conidia in the Final

IRA Report. The Final IRA Report indicates that “the number of conidia required to initiate an

infection varies depending on environmental and host factors”.808 It also notes that “in artificial

inoculations under optimal laboratory conditions as few as 10 or 12 conidia (McCraken et al.,

2003b; Cooke, 2003) have produced infections and these numbers resemble natural situations

803 New Zealand’s first written submission, para. 4.83 (Article 2.2).804 Exhibit NZ-60: Dillon-Weston (1927).805 Exhibit NZ-10: McCartney (1967).806 Exhibit AUS-56: Puia et al (2004).807 New Zealand’s first written submission para. 4.314; also para. 4.317.808 Final IRA Report, Part B, p. 136 Exhibit AUS-77: McCracken, A.R., Berrie, A., Barbara, D.J., Locke,

T., Cooke, L.R., Phelps, K., Swinburne, T.R., Brown, A.E., Ellerker, B. and Langrell, S.R.H. (2003b) "Relative significance of nursery infections and orchard inoculum in the development and spread of apple canker (Nectria galligena) in young orchards" Plant Pathology 52 (5), pp553-566; Exhibit AUS-78: Cooke, L.R. (2003) "Nectria galligena (European canker): Questions for Drs. A. Berrie & L. Cooke: Responses from Drs. L. Cooke & A. McCracken" E-mail communication with Biosecurity Australia, pp3.

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(McCraken et al., 2003b)”.809 Further, the Final IRA Report notes “Dubin and English (1974)

found that five conidia were insufficient to initiate infection, while 50 to 500 did so readily.”810

643. Further, Australia rejects New Zealand’s unsubstantiated assertion that there is no

connection between the literature cited and the IRA Team’s assignment of exposure values. All

the exposure values for N. galligena are set out in Table 33 of the Final IRA Report811 with an

accompanying explanation.812 Most of the exposure events have a “negligible” likelihood of

occurring, but some have a higher likelihood.813 For example, the combination of orchard

wholesaler waste and commercial fruit crops, as well as the combination of consumer waste and

household and garden plants. There are sound reasons for these higher exposure values and

these are set out in the Final IRA Report. The important point is that the IRA Team provided a

justification for all of the exposure values.814

ii. Summary on exposure


claims against the IRA Team’s exposure analysis. In doing so, Australia has clearly

demonstrated that the exposure values in the Final IRA Report are supported by scientific

evidence and are therefore based on probabilities not possibilities. Accordingly, Australia rejects

New Zealand’s assertion that the IRA Team “should have treated the likelihood of exposure in

all cases as negligible” in accordance with New Zealand’s view of the meaning of that term.815

New Zealand has failed to establish any flaws.

iii. The IRA Team’s consideration of establishment and spread is based on

probabilities not possibilities

645. The IRA Team assessed the probability of N. galligena establishing on a host plant, and

the probability of it spreading to other hosts. The probabilities of establishment and spread for

809 Final IRA Report, Part B, p. 136 Exhibit AUS-77: McCraken et al. (2003); Exhibit AUS-78: Cooke (2003)

810 Final IRA Report, Part B, p. 136 Exhibit AUS-67: Dubin and English (1974).811 Final IRA Report, Part B, p. 139.812 Final IRA Report, Part B, pp. 137-138.813 Final IRA Report, Part B, Tables 12 & 33, pp. 43 & 139.814 Final IRA Report, Part B, pp. 137-138.815 New Zealand’s first written submission, para. 4.317. (emphasis added)

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N. galligena are set out in Table 34 of the Final IRA Report816 with an accompanying

explanation of each rating.817 Apart from the likelihood of spread to wild and amenity plants, all

the scenarios described have a “moderate” or “high” likelihood of occurring.818

646. New Zealand’s claims in relation to the IRA Team’s assessment of establishment and

spread are superficial. New Zealand does not seriously address the issues raised in the

comprehensive discussion of establishment and spread for N. galligena in the Final IRA

Report.819 Australia rejects the thrust of New Zealand’s complaint that the IRA Team’s

“conclusions [on the likelihood of establishment and spread] are not supported by scientific

evidence.”820

647. In respect of establishment and spread, New Zealand raises arguments on: (a) alternative

hosts; (b) Australian climatic conditions; (c) the Tasmanian outbreak; and (d) the international

trade in apples. Australia will rebut each of these arguments in turn. In doing so, Australia will

demonstrate that the IRA Team’s conclusions are supported by scientific evidence and are based

on probabilities not possibilities.

a. N. galligena affects alternative hosts in New Zealand and

elsewhere


The IRA relies on alternative hosts of N. galligena … in support of its contention for the likelihood of establishment and spread of European canker. However, the IRA’s consideration of alternative hosts for N. galligena relates to northern hemisphere hardwood forest (deciduous) trees (e.g. Birch, Beech, Oak, Elm and Maple). N. galligena is considered native to North America (Castlebury et al. 2006:1431). It has co-evolved with these northern hemisphere hosts (Flack and Swinburne 1977) in their associated climate, which is typified by moderate temperatures and distribution of rainfall over the year (see Annex 3, p. 225). It does not necessarily follow that N. galligena will cause disease in these hosts in New Zealand and Australia where climatic conditions are considerably different (see Annex 3, p. 225).821

816 Final IRA Report, Part B, p. 144.817 Final IRA Report, Part B, pp. 142-144.818 Final IRA Report, Part B, Tables 12 & 34, pp. 43 & 144.819 Final IRA Report, Part B, pp. 139-144.820 New Zealand’s first written submission, para. 4.324.821 New Zealand’s first written submission, para. 4.318 (footnotes omitted; emphasis added); also, para.

4.320; para. 4.87 (Article 2.2).

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649. It is disingenuous for New Zealand to suggest that research from the United Kingdom822,

Northern Europe and Nova Scotia823 in relation to Northern Hemisphere trees as alternative hosts

is irrelevant. Australia reiterates that, given that it is currently free from N. galligena, the IRA

Team had no option but to consider studies from other countries with the disease when assessing

establishment and spread. Australia emphasises that in exercising its judgment the IRA Team

took into account differences in the circumstances.

650. Australia does not accept that Australian climatic conditions are unsuitable for the

establishment and spread of N. galligena (Annex 2). In any event, North America, New

Zealand, Northern Europe, the United Kingdom and Australia all have similar temperate climate

regions and common plant species that are hosts to N. galligena. Given time and opportunity

(i.e. without control and eradication) the fungus would establish on alternative hosts in these

countries. In New Zealand, the fungus has been collected from plant species such as loquat,

coprosma and kowhai.824 Further, evidence shows that the N. galligena causes considerable

damage to trees in private gardens in New Zealand.825

651. New Zealand’s assertion that “[i]ncluding other hosts in arguments about risk of

establishment and spread in Australia from New Zealand apples is therefore misleading”826 is

curious given that ISPM No. 11 identifies this as the first criterion to consider in estimating the

probability of establishment.827

652. In addition, New Zealand alleges that:

In New Zealand there is no evidence of European canker causing pathogenic symptoms in other host plants. The IRA acknowledges that while there are records of N. galligena occurring on hosts other than apple or pear trees, “there is no information in the literature indicating these species are hosts…and there is no evidence that the disease has become established on these species”.828

822 Exhibit NZ-66: Flack and Swinburne (1977).823 Exhibit AUS-79: Braun, P.G. (1997) "Distribution and severity of anthracnose canker and European

canker of apple in Kings Country, Nova Scotia" Canadian Journal of Plant Pathology 19, pp78-82.824 Exhibit AUS-80: Manaaki Whenua Landcare Research, NZFUNGI - New Zealand Fungi (and

Bacteria): Collection details for PDD 31850, 32629, 32509, 32502, 32495, 30639 and 32679. All available from: http://nzfungi.landcareresearch.co.nz/html/data_collections.asp?ID=&NAMEPKey=12911

825 Exhibit AUS-52: Atkinson (1971).826 New Zealand’s first written submission, para. 4.320.827 Exhibit AUS-6: ISPM No. 11, sections 2.2.2 & 2.2.2.1.828 New Zealand’s first written submission, para. 4.319. (footnote omitted)

217


653. New Zealand’s allegation seems inconsistent with evidence which shows that

N. galligena causes considerable damage to trees in private gardens in New Zealand.829

654. New Zealand also argues that:

It is notable that European canker did not spread to alternative hosts in Spreyton, Tasmania, despite the disease being present in apple orchards there for several decades.830

655. In Australia’s view, there was a combination of factors as to why the disease did not

spread to alternative hosts during the Tasmanian outbreak. These factors are dealt with below.

b. Australian climatic conditions are conducive to European canker

656. New Zealand’s general allegation is that Australian climatic conditions are not suitable

for the establishment and spread of European canker.831 In particular, New Zealand asserts that:

… in seeking to substantiate its argument that European canker could establish and spread in Australia the IRA comments that “Australia has areas with similar environments to these countries [the USA, Europe and New Zealand]”. However, as pointed out in Annex 3, climatic conditions are in fact quite different, especially between Australian apple production areas and areas in the USA, the United Kingdom and Northern Europe where European canker is prevalent.832

657. Australia considers that New Zealand’s climate analysis833 is too narrow. In Australia’s

view, the potential distribution of European canker in Australia covers a much larger area than

suggested by New Zealand (Annex 2). Accordingly, the general statement in the Final IRA

Report that “Australia has areas with similar environments to these countries”834 is appropriate.

658. Further, New Zealand argues that:

It is significant that while the Tasmanian climatic conditions are unfavourable for European canker (which the IRA acknowledges as one reason behind the limited spread during the outbreak), the conditions in Northern Tasmania where the outbreak occurred are comparatively more conducive to European canker than other parts of Australia (Annex 3, p. 225).835

829 Exhibit AUS-52: Atkinson (1971); Final IRA Report, Part B, p. 146.830 New Zealand’s first written submission, para. 4.320; also para. 4.323; para. 4.93 (Article 2.2).831 New Zealand’s first written submission, para. 4.320 & 4.323; also, paras. 4.91-4.92 (Article 2.2).832 New Zealand’s first written submission, para. 4.321 (footnote omitted; emphasis added); also,

paras. 4.57, 4.58, 4.73 & 4.87 (Article 2.2).833 New Zealand first written submission, Annex 3, pp. 218-240.834 Final IRA Report, Part B, p. 141.

218


659. This argument has no merit. Australia’s climate modelling (Annex 2) demonstrates that,

in addition to Tasmania, there are a large number of areas in Australia which are conducive to

establishment of European canker.

c. There are a range of reasons for the limited scope of the

Tasmanian outbreak

660. In relation to the Tasmanian outbreak of European canker New Zealand alleges that:

… the IRA overestimates the significance of the eradication program when it claims that one reason European canker did not spread far “can be attributed to the eradication programme which began within two years of confirmation of the disease (Ransom 1997)”. It fails to take into account that the disease was probably present for more than 20 years before the eradication program began (Ransom 1997: 121).836

661. The IRA Team did not overestimate the significance of the eradication program.

N. galligena was identified in three orchards, on two Spreyton properties in 1954. The initial

source of infection was unknown.837

662. At the commencement of the eradication program in 1954-55, six orchard blocks within

four orchards were affected by the disease. Two of these blocks were severely infected

indicating that conditions were conducive for the disease. Researchers in Tasmania had

observed collapse of diseased wood after infection and suggested that the disease would have

established in the region if not controlled. The disease was not detected outside of these infected

orchard blocks.

663. The eradication program, as described in Ransom (1997), involved stringent measures

including regular inspection, spraying with fungicides, removal of limbs, and removal and

burning of more than 200 trees.838 Any suggestion that this rigorous eradication program was

somehow irrelevant to restricting the spread of the disease lacks credibility. The final survey,

carried out in 1991, confirmed the absence of N. galligena, although there was evidence that

disease spread had stopped by 1978.

835 New Zealand’s first written submission, para. 4.323 (footnote omitted); also, paras. 4.91-4.92 (Article 2.2).

836 New Zealand’s first written submission, para. 4.322 (footnote omitted); also, para. 4.93 (Article 2.2).837 Exhibit NZ-13: Ransom (1997).838 Exhibit NZ-13: Ransom (1997), p. 121; Final IRA Report p. 146.

219


664. Another important factor in relation to the scope of the Tasmanian outbreak was that

conidia were the only mechanism for disease spread, in the absence of sexually produced

ascospores. Conidia are dispersed mainly by rain splash839 and the maximum distance to which

these spores can spread under normal circumstance is ten metres (Taylor and Byrde, 1954).840

Ascospores are better adapted to long-distance dispersal than conidia.841 These factors were also

likely to have contributed significantly to the limited spread of N. galligena in Tasmania.842 In

addition, as described above, Australia considers that the Tasmanian outbreak was likely to have

been a unique strain of N. galligena that required another mating type for reproduction.

665. Further, Australia emphasizes that Ransom 1997 merely states that the disease “may”

have been present for almost 20 years but does not provide any information to support this

suggestion.843 In addition, Ransom 1997 states that the eradication program began immediately

after the proper identification of the disease.844

666. New Zealand also alleges that:

… the primary reasons European canker did not spread into other apple growing regions or alternative hosts within Tasmania or onto the Australian mainland during the outbreak, despite unrestricted movement of fruit from the affected orchards, is that fruit are not a pathway for the disease under New Zealand and Australian conditions … 845

667. New Zealand points out, as acknowledged in the Final IRA Report,846 that during the

period of the Tasmanian outbreak, there were no restrictions on the movement of apple fruit.

However, New Zealand then misrepresents the nature of interstate trade in apples at the time.847

While there may have been significant interstate trade in Tasmanian apples during the outbreak,

this does not equate to a significant interstate trade in Spreyton apples.848

839 Exhibit NZ-7: Grove (1990a).840 Exhibit NZ-40: Taylor and Byrde (1954)841 Exhibit AUS-76: Swinburne (1971b)842 Exhibit NZ-13: Ransom (1997).843 Exhibit NZ-13: Ransom (1997), p. 121.844 Exhibit NZ-13: Ransom (1997), p. 122.845 New Zealand’s first written submission, para. 4.323 (footnotes omitted; emphasis added); also, paras.

4.52, 4.53, 4.77, 4.84, 4.94, 4.95, 4.96, 4.97, 4.98, 4.99, 4.100, 4.104 & 4.105 (Article 2.2).846 Final IRA Report, Part B, p. 155.847 New Zealand’s first written submission, para. 4.94 (Article 2.2).848 Final IRA Report, Part B, p. 155

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668. Australia’s view is borne out by the unverified data which New Zealand has produced on

Spreyton apple production.849 According to this data, each year during the period 1970-1976, an

average of 151 tonnes of Spreyton apples were shipped to the mainland – that is less than 0.04%

of annual production in Spreyton. It is also worth noting that fruit infection was not reported

during the Tasmanian outbreak.

669. Therefore, the Tasmanian outbreak is not probative as to the suitability of the climate of

the Australian mainland for the establishment and spread of N. galligena. Moreover, the fact

that during the Tasmanian outbreak some trees were severely infected indicates that climatic

conditions were suitable. This is confirmed by Australia’s Annex 2.

670. Finally, New Zealand’s assertion that “fruit are not a pathway for the disease” is

inconsistent with an explicit statement to the contrary by the Chief Plants Officer of the New

Zealand Ministry of Agriculture.850

d. New Zealand’s claim regarding the international trade in apples is

hollow

671. New Zealand’s claim851 that the export trade over the last 15 years provides no evidence

for spread of European canker is hollow, given that the vast majority of New Zealand’s exports

have been to countries that already have the disease.

iv. Summary on establishment and spread

672. New Zealand’s language about “speculation” and “the remotest of possibilities”852 cannot

remedy its failure to meet its burden of proof in relation to the establishment and spread of

European canker. Australia submits that New Zealand has failed to identify any flaws in the IRA

Team’s assessment of establishment and spread, let alone any flaws serious enough to prevent

the Panel from having “reasonable confidence” in the risk assessment.

849 New Zealand’s first written submission, Annex 5, Table 4, p. 249. Australia has been unable to verify the accuracy of the data contained in Table 4 and would be grateful if New Zealand could provide copies of the relevant production cards from Tasmanian Archives.

850 Exhibit AUS-54: Ivess (1996).851 New Zealand’s first written submission, para. 4.95 (Article 2.2).852 New Zealand’s first written submission, para. 4.325.

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(c) The IRA Team’s analysis of the potential consequences of European canker

is objective and credible

673. New Zealand’s claims in respect of the consequences of N. galligena are both superficial

and confused. New Zealand does not seriously address the issues raised in the comprehensive

discussion on consequences contained in the Final IRA Report.853 The crux of New Zealand’s

claims is that “the IRA’s assessment of the overall consequences [of N. galligena] as moderate is

a significant overestimation.”854

674. In terms of the direct impact of N. galligena, New Zealand appears to be challenging the

IRA Team’s conclusion about the following: (a) plant life or health; and (b) other aspects of the

environment. In terms of the indirect impact, New Zealand appears to challenge the IRA Team’s

conclusions about the following: (a) control and eradication; (b) international trade; (c)

environment; and (d) communities.

i. Direct impact

675. New Zealand alleges that “[t]he IRA’s rating for the direct impact of European canker is

… a significant overestimate.”855 New Zealand misunderstands the assessment of consequences,

as there is no single rating for the direct impact; there are only ratings for individual direct

impact criteria. In any event, Australia will demonstrate below that the rating assigned to each

of the relevant direct impact criteria by the IRA Team was credible.

a. Plant life or health

676. The IRA Team considered that the direct consequences on plant life would be minor at

the national level, significant at the regional level and highly significant at the district level, as

explained in the Final IRA Report.856


The IRA asserts that the Australian climate is favourable for European canker development based on its climatic comparisons with other parts of the world where European canker exists … New Zealand has shown that the IRA vastly

853 Final IRA Report, Part B, pp. 145-150.854 New Zealand first written submission, para. 4.332.855 New Zealand’s first written submission, para. 4.326; see, also para. 4.329.856 Final IRA Report, Part B, pp. 146-147.

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overestimates the risk of establishment or spread of European canker in Australia …857

678. The Final IRA Report does not baldly assert that “the Australian climate is favourable to

European Canker development”. Rather it states that: “[c]limatic conditions in approximately

40% of Australian commercial fruit growing areas are conducive to infection. The Adelaide

hills, Perth and Manjimup areas have annual mean rainfalls greater than 1000 mm, and Orange

and Batlow in New South Wales have annual mean rainfalls close to 1000mm.”858

679. Australia has already demonstrated that the IRA Team’s analysis is a credible evaluation

of the likelihood of the establishment or spread of European canker. Accordingly, Australia

rejects New Zealand’s allegation that “the IRA vastly overestimates the [likelihood] of

establishment or spread of European canker in Australia”.859

680. New Zealand goes on to argue that:

All of the IRA’s examples of serious impacts of European canker apply only to the cool temperate conditions of Europe and North America and to the plants and apple varieties commonly grown there, rather than to Australian conditions. The climate data provided by New Zealand [Annex 3] suggests that the direct impact of European canker on plant life or health in Australia would be at most minor, even at the local level. 860

681. Australia considers that New Zealand’s climate analysis861 is too narrow to accurately

predict the establishment of European canker. Australia’s modelling (Annex 2) indicates that the

potential distribution of European canker in Australia covers a much larger area than suggested

by New Zealand’s climate analysis, showing that the direct impact of European canker on plant

life or health in Australia would be more than “minor”, even at the local level.

682. Further, it is incorrect to infer that all of the examples in the Final IRA Report, regarding

the “serious impacts” to plant life or health, only relate to Europe and North America and to the

plants and apple varieties grown there. The Final IRA Report also cites material dealing with

both Tasmania862 and New Zealand863 which indicates that the disease, where established, has

857 New Zealand’s first written submission, para. 4.326.858 Final IRA Report, Part B, p. 146.859 New Zealand first written submission, para. 4.326.860 New Zealand first written submission, para. 4.327; also, para. 4.329.861 New Zealand first written submission, Annex 3, pp. 218-240.862 Exhibit NZ-13: Ransome (1997).863 Exhibit AUS-52: Atkinson (1971). See also Exhibit AUS-53: Brook and Bailey (1965)

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serious consequences. In Chile, another Southern Hemisphere country, the disease, where

established, has become critical causing high incidence and high severity.864 In any event, given

that Australia is currently free from N. galligena, in assessing consequences the IRA Team had

no option but to draw on the experiences of other countries with the disease.

683. In addition, some popular varieties grown in Europe and North America are similar to

those grown in Australia and New Zealand, so New Zealand’s claim in regard to differences in

varieties is wrong.865

684. Recent reports coming out of New Zealand support the IRA Team’s rating of the direct

impact of N. galligena on plant life or health. For example, the Hawke’s Bay Emergency

Management Group considers European canker to be one of the diseases that can cause severe

damage and production losses in that area.866 Another example is the Auckland and Waikato

areas where N. galligena has had a significant impact on plants in apple orchards and nurseries

for many years867 and has acted as a source of spread to other areas like Nelson. Both these

examples support the IRA Team’s assessment of consequences.

685. Finally, New Zealand ignores the fact that the IRA Team considered that there were a

large number of other host species of N. galligena, in addition to apples and pears.868

686. In the preceding paragraphs, Australia has rebutted each of New Zealand’s arguments in

respect of the direct impact of N. galligena on plant life or health. In doing so, Australia has

demonstrated that the rating assigned to this criterion by the IRA Team was credible.

b. Other aspects of the environment

864 Exhibit AUS-81: Lolas, M. and Latorre, B.A. (1996) “Importancia y control del cancro europeo del manzano” Rev.Fruiticola (Chile) 17, pp23-27 (English translation also included); Exhibit AUS-65: Lolas and Latorre (1997).

865 Exhibit AUS-21: Innomarc (2006).866 Exhibit AUS-82: Hawkes Bay Emergency Management Group, Pest or Diseases affecting Agriculture,

Forestry or Horticulture. Website:http://www.hbemergency.govt.nz/Search/SearchResult_IDL=6_IDT=496_ID=1837_.html867 Exhibit AUS-83: Hortwatch (2002) Post-harvest Clean Up Sprays. Website: http://www.hortwatch.com/library/post-harvest-clean.html868 Final IRA Report, Part B, pp. 117, 146-147; Exhibit AUS-84: Commonwealth Agricultural Bureaux

International (2003) Crop Protection Compendium - Global Module, CAB International.

224


687. The IRA Team considered that the direct consequences on other aspects of the

environment would be minor at the regional level, significant at the district level and highly

significant locally, as explained in the Final IRA Report.869


Relying on data from areas where climate and flora are significantly different from most parts of Australia, [the Final IRA Report] concludes that European canker could establish and spread in many parts of the country, ignoring the actual experience from the Tasmanian outbreak. The IRA states “the most likely reason why the disease did not spread to environmental species in Spreyton is because of the eradication program …”. But this eradication programme began in 1954, more than 20 years after the probable establishment of the disease in Spreyton, and continued until 1978, with eradication declared in 1991 (Ransom 1997).870

689. Australia has already demonstrated that the IRA Team’s analysis of the probability of

establishment and spread of European canker is a credible evaluation of the likelihood of the

establishment and spread of the disease. Given that Australia is free from N. galligena, the IRA

Team had to consider studies from other countries with the disease. Australia again emphasises

that in exercising its expert judgment the IRA Team took into account differences in the

circumstances between Australia and other countries, including climate and flora.

690. Australia rejects New Zealand’s allegation the IRA Team ignored the “actual experience”

from the outbreak of European canker in Tasmania. Ransom (1997) merely states that the

disease “may” have been present for almost 20 years but does not provide any information to

support this suggestion.871 In addition, Ransom (1997) states that the eradication program began

immediately after the proper identification of the disease.872 The Tasmanian eradication program

involved stringent measures including regular inspection, spraying, removal of limbs, and

removal and burning of more than 200 trees.873 It is disingenuous for New Zealand to argue that

this rigorous eradication program was somehow irrelevant to restricting the spread of the disease.

691. The limited spread of N. galligena in Tasmania was also assisted by the absence of

airborne ascospores874 which are better suited to long-distance dispersal than conidia. The New

869 Final IRA Report, Part B, pp. 147-148.870 New Zealand first written submission, para. 4.328. (footnote omitted)871 Exhibit NZ-13: Ransom (1997), p. 121.872 Exhibit NZ-13: Ransom (1997), p. 122.873 Exhibit NZ-13: Ransom (1997), p. 121; Final IRA Report, Part B, p. 146.874 Exhibit NZ-13: Ransom (1997), p. 124.

225


Zealand strain of N. galligena produces ascospores875 and therefore if it established in Australia

the impact would be much more severe than in Tasmania. Even in the absence of ascospores,

limited spread among apple trees within and between orchards in Tasmania occurred through

rain splashed conidia.876 In addition, as described above, Australia considers that the Tasmanian

outbreak was likely to have involved an unique strain of N. galligena that required another

mating type for reproduction.

692. New Zealand also asserts that:

N. galligena is not known worldwide to cause damaging diseases of amenity plants. For example, when the disease occurred in Tasmania, there were no reports of it affecting forest, household or garden plants (Ransom 1997).877

693. New Zealand’s assertion that N. galligena does not impact on amenity plants is wrong.

Evidence shows that the disease causes considerable damage to trees in private gardens in New

Zealand.878 In addition, it is well accepted that common hosts of the fungus include maple, birch,

beech, ash, oak, willow and elm trees.879 New Zealand itself concedes that beech, birch, elm,

maple and oak trees are “primary hosts”.880 Many of these trees are amenity plants in

Australia.881 The Final IRA Report notes that N. galligena is responsible for damage to many

non-rosaceous hosts including those used for timber.882 Further, the Final IRA Report indicates

that the most likely reason why the disease did not spread to forest, household or garden plants

during the Tasmanian outbreak is because of the rigorous eradication program.883 Australia has

already set out a number of other reasons why the Tasmanian outbreak was limited.

694. Australia has rebutted each of New Zealand’s arguments in respect of the direct impact of

N. galligena on other aspects of the environment. In doing so, Australia has demonstrated that

the rating assigned to this criterion by the IRA Team was credible.

ii. Indirect impact

875 Exhibit AUS-53: Brook & Bailey (1965).876 Exhibit NZ-13: Ransom (1997), p. 124.877 New Zealand’s first written submission, para. 4.330.878 Exhibit AUS-52: Atkinson (1971).879 Final IRA Report, Part B, p. 117. Exhibit AUS-84: CABI (2003).880 New Zealand’s first written submission, para. 3.56.881 Final IRA Report, Part B, p. 147.882 Final IRA Report, Part B, p. 146. Exhibit NZ-66: Flack and Swinburne (1977).883 Final IRA Report, Part B, pp. 147-148.

226


695. New Zealand alleges that “[t]he IRA’s approach to the analysis of indirect impact of

European canker exaggerates the predicted overall effect that European canker would have on

Australia.”884 Australia rejects this allegation and will demonstrate below that the rating assigned

to each of the relevant indirect impact criteria by the IRA Team was credible.

a. Control and eradication

696. As explained in the Final IRA Report, the indirect impact of control and eradication

would be minor at the regional level, significant at the district level and highly significant

locally.885


… climate data presented by New Zealand [Annex 3] suggests that any outbreak is likely to be highly localised, as in Tasmania where only six orchards were affected in a 40-plus year period (Ransom 1997: 121). Consequently, the costs of eradication are not likely to be high. Experience in New Zealand suggests that routine orchard control of the disease is possible as part of routine controls of other apple diseases already present in Australia, such as apple scab.886

698. Australia considers New Zealand’s climate analysis887 to be too narrow. Australia’s

climate modelling (Annex 2) indicates that the potential distribution of European canker in

Australia covers a much larger area than suggested by New Zealand. Accordingly, Australia

does not accept that “any outbreak [of N. galligena] is likely to be highly localised”.

699. Further, Australia rejects New Zealand’s attempt to downplay the costs of eradication.

European canker is both difficult and expensive to eradicate once established.888 Australia and

the Republic of Korea are the only countries which have been able to eradicate it. Even in

Tasmania where the outbreak was restricted to four orchards, the eradication process took nearly

40 years. General control methods for European canker include fungicide sprays, paints applied

to pruning cuts, cultural control, improving host plant resistance and the prevention of fruit rot.889

Implementing these measures would be costly.

884 New Zealand’s first written submission, para. 4.330.885 Final IRA Report, Part B, p. 148.886 New Zealand first written submission, para. 4.331.887 New Zealand first written submission, Annex 3, pp. 218-240.888 Final IRA Report, Part B, p. 148.889 Exhibit AUS-84: CABI (2003).

227


700. The Final IRA Report acknowledges that “cultural practices and chemical measures used

to control apple scab … in most Australian apple growing regions (except Western Australia)

would assist in controlling European canker”.890 However it goes on to note that “spray

treatments alone cannot eradicate existing infections and must be supplemented by removing

cankers and treating wounds with an effective paint”.891 Notwithstanding routine orchard

controls for apple scab in New Zealand, European canker is still spreading.

701. The outbreak of European canker in Tasmania usefully illustrates the appropriateness of

the IRA Team’s rating for the indirect impact of control and eradication: it had no impact

nationally, a minor impact in Tasmania, a significant impact on Spreyton, and a highly

significant impact on the affected orchards. This is exactly the same rating that the IRA Team

gave to the indirect impact for control and eradication should European canker become

established through the importation of New Zealand apples.

702. Australia has rebutted each of New Zealand’s arguments in respect of the indirect impact

of control and eradication. In doing so, Australia has demonstrated that the rating assigned to

this criterion by the IRA Team is credible.

b. International trade

703. As explained in the Final IRA Report, the indirect consequences on international trade

would be minor locally.892

704. New Zealand makes the unsubstantiated assertion that:

With regard to international trade, New Zealand’s experience is that the presence of N. galligena has not constrained its trade in apples, with countries other than Australia.893

705. New Zealand presupposes that Australia’s export markets are exactly the same as New

Zealand’s. Australia notes that New Zealand’s major export markets already have European

canker. New Zealand has failed to substantiate its claim, and therefore there is no basis for

questioning the rating assigned by the IRA Team.

890 Final IRA Report, Part B, p. 148. (emphasis added)891 Final IRA Report, Part B, p. 148; Exhibit AUS-85: Cooke, L.R. (1999) "The influence of fungicide

sprays on infection of apple cv. Bramley's seedling by Nectria galligena" European Journal of Plant Pathology 105, pp783-790.

892 Final IRA Report, Part B, p. 149.893 New Zealand’s first written submission, para. 4.332.

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c. Environment

706. As explained in the Final IRA Report, the indirect consequences on the environment

would be minor at the district level and significant at the local level. The Final IRA Report

provides a transparent explanation of this rating.894


… the experience of Tasmania, New Zealand and all other apple-producing countries where N. galligena is or has been present, shows that its impact on the environment … is negligible.895

708. New Zealand’s reference to a “negligible” impact on the environment ignores the

methodology used by the IRA Team in the assessment of consequences. This is yet another

example of New Zealand attempting to conduct its own risk assessment according to its own

methodology. The SPS Agreement is not prescriptive as to methodology.

709. The IRA Team considered that establishment of N. galligena in Australia “could

necessitate increased chemical usage in some situations and this may have undesirable effects on

the local environment as well as significantly impacting on the future placement of plant species

(for example, elm trees) at the local level.”896 In fact, this is usefully illustrated by the

Tasmanian outbreak described in Ransom (1997)897 during which the quarantining of the area

and the use of mercury-based and copper-based fungicides had a minor district level impact and

significant local/orchard level impact on the environment indirectly.

710. Australia has rebutted New Zealand’s arguments in respect of the indirect impact on the

environment. In doing so, Australia has demonstrated that the rating assigned to this criterion by

the IRA Team was credible.

894 Final IRA Report, Part B, p. 149.895 New Zealand’s first written submission, para. 4.332. (emphasis added)896 Final IRA Report, Part B, p. 149.897 Exhibit NZ-13: Ransom (1997), p. 124.

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d. Communities

711. As explained in the Final IRA Report, the indirect consequences would be of minor

significance at the district level and significant at the local level.898


… the experience of Tasmania, New Zealand and all other apple-producing countries where N. galligena is or has been present, shows that its impact on … communities is negligible. In particular, there is no basis for the IRA’s suggestion that European canker disease in the elm tree population of Melbourne could have indirect flow-on effects for tourism.899

713. Again, New Zealand’s reference to a “negligible” impact on the environment ignores the

methodology used by the IRA Team in the assessment of consequences. Again, Australia

emphasises that New Zealand is not entitled to impose its methodology on Australia.

714. The Final IRA Report states that:

Sustainability of communities in the nine or so major apple growing areas across Australia is significant to the local economy. Tourism in these areas, especially during harvesting periods, can be significant and depends on the health of the fruit crop. In the event of establishment and spread of the disease in Melbourne’s elm tree population, there could be indirect significant flow-on effects for tourism. There could be significant social impacts at a local level if several orchards were affected by European canker, owing to reduced crop yields and potential quarantine restrictions.

715. Again, the position is usefully illustrated by the Tasmanian outbreak described in

Ransom (1997)900 during which the quarantining of the area, effects on the livelihood of local

people, and effects on tourism had a minor district level impact and significant local/orchard

level impact on the community indirectly.

716. Finally, New Zealand’s complaint regarding the indirect impact on tourism of European

Canker establishment in the elm tree population of Melbourne is misguided. The City of

Melbourne values its street and park trees at a total of A$500 million, an average of A$10,000

per tree.901 Melbourne has 6,300 elm trees. Stands of Dutch and English elms are integral parts

898 Final IRA Report, Part B, p. 150.899 New Zealand’s first written submission, para. 4.332. (footnote omitted)900 Exhibit NZ-13: Ransom (1997).901 Exhibit AUS-86: City of Melbourne (2005) "Tree management/replacement program, impact and

implications" Planning and Environment Committee Report, 31 May 2005: http://www.melbourne.vic.gov.au/opm/bc/CTEE/meetings/PaE_53_20050531.pdf.

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http://www.melbourne.vic.gov.au/opm/bc/CTEE/meetings/PaE_53_20050531.pdf


of the World Heritage listed Royal Exhibition Building and Carlton Gardens site.902 Sites such as

Carlton Gardens and other city parks are likely to be important to tourism in Melbourne.

717. Australia has rebutted New Zealand’s arguments in respect of the indirect impact of

communities. In doing so, Australia has demonstrated that the rating assigned to this criterion by

the IRA Team is credible.

iii. Summary on consequences

718. New Zealand’s language about “exaggeration”903 and “significant overestimation”904

cannot remedy its failure to meet its burden of proof in relation the assessment of consequences

for European canker. Australia submits that New Zealand has failed to establish any flaws with

the IRA Team’s assessment of consequences.

(d) Conclusion: New Zealand fails to discredit the IRA Team’s assessment on

European canker

719. Australia submits that the IRA Team properly evaluated the likelihood of entry,

establishment and spread of European canker, as well as the potential biological and economic

consequences. New Zealand has therefore failed to demonstrate any flaws in the Final IRA

Report, let alone flaws that were “so serious” that it should prevent the Panel from having

reasonable confidence in the evaluation made. In any event, Australia has demonstrated that the

IRA Team properly evaluated risk and applied its expert judgment rigorously to arrive at an

objective and credible assessment for European canker. Accordingly, the risk assessment is

consistent with Article 5.1 of the SPS Agreement.

902 Exhibit AUS-87: National Trust (2008), Royal Exhibition Building: http://www.nattrust.com.au/trust_register/search_the_register/royal_exhibition_building903 New Zealand’s first written submission, para. 4.330.904 New Zealand’s first written submission, paras. 4.326, 4.329, 4.332.

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http://www.nattrust.com.au/trust_register/search_the_register/royal_exhibition_building


5. Apple leafcurling midge

720. New Zealand challenges the IRA Team’s risk assessment in respect of ALCM, claiming

that:

The IRA has failed to evaluate the “likelihood” of entry, establishment and spread of ALCM, as well as the potential biological and economic consequences within the meaning of paragraph 4 of Annex A. Accordingly, Australia has failed to comply with its obligations under Article 5.1 of the SPS Agreement.905

721. In respect of Article 2.2, New Zealand claims that “[t]he Australian contention … that

mature, symptomless apples provide a pathway for the transmission and establishment of ALCM

… is not supported by scientific evidence.”906

722. Australia submits that New Zealand has failed to identify any flaws in the risk assessment

for ALCM, let alone any flaws serious enough to prevent the Panel from having “reasonable

confidence” in the risk assessment.907 New Zealand consistently fails to appreciate the range in

the scientific data available in respect of the probability of particular events occurring, and has

repeatedly tried to limit a probability to a single value based on a single piece of evidence,

without addressing the breadth of evidence available. Biology is variable and scientific evidence

is continuously evolving.

(a) The IRA Team’s analysis of the probability of entry is objective and credible

723. New Zealand challenges the IRA Team’s assessment of the likelihood of entry of ALCM,

as follows:

[T]here is frequently no objective and rational relationship between the scientific evidence that is cited for a step [in the Final IRA Report] and the probability value that is chosen. Indeed, frequently a value is chosen in the absence of sufficient scientific support. As a result, the IRA’s analysis [of ALCM] is not an analysis of likelihood at all, it is speculation, and does not conform to the obligation under Article 5.1.908

724. Australia will show below that the IRA Team properly assessed the probability of entry

of ALCM by first estimating the probability that ALCM would be imported with New Zealand

905 New Zealand’s first written submission, para. 4.378.906 New Zealand’s first written submission, para. 4.106.907 See: Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.57.908 New Zealand’s first written submission, para. 4.335.

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apples, and then evaluating the potential distribution of apples infested with ALCM to various

utility points within Australia. In Australia’s view, New Zealand has failed to substantiate its

allegations that the IRA Team failed to take into account certain evidence or that it drew

inappropriate conclusions from the evidence available. A number of New Zealand’s claims arise

because of its failure to understand either the relevant evidence or the methodology applied by

the IRA Team to its risk assessment of ALCM.

725. In respect of the eight importation steps for ALCM examined by the IRA Team, Australia

notes that New Zealand has limited its challenge to Importation steps 2, 3 and 8. Australia

submits that New Zealand should not be permitted to expand its claims beyond these issues at a

later stage in these proceedings.909


726. The IRA Team evaluated the likelihood that apple fruit picked from relevant New

Zealand orchards would be infested with ALCM under Importation step 2.910 As they exit their

leafrolls to fall to the ground to pupate, a small proportion of ALCM larvae can fall onto fruit

and then spin their cocoon in the stem or calyx region of the apple. It is likely that cocoons

containing viable ALCM will remain with some apples when picked and exported.

727. New Zealand claims that the IRA Team did not conduct a proper assessment of

Importation step 2.911 In support of its claim, New Zealand argues that: the IRA Team focussed

only on the presence of ALCM cocoons on apples, regardless of whether they contained live

insects; that the level of infestation of New Zealand apples is not biologically significant; and

that the IRA Team’s conclusions are based on data from two minor apple producing regions in

New Zealand. Australia will demonstrate below that New Zealand’s assertions are without basis.

Although New Zealand asserts that the probability value assigned to this step by the IRA Team

is “not supported by scientific evidence”912, New Zealand does not show how any alleged flaws

would have led to a different outcome.

909 New Zealand is equally silent in respect of the IRA Team’s assessment of the pest, garden featherfoot, that relies upon the same modelling methodology as that for ALCM. See: Final IRA Report, Part B, pp. 193-211

910 Final IRA Report, Part B, pp. 159-160.911 See: New Zealand’s first written submission, paras. 4.336-4.338; also, paras. 4.107-4.111 (Article 2.2). 912 New Zealand’s first written submission, para. 4.337.

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a. The IRA Team took into account all the evidence referred to by

New Zealand in respect of the viability of ALCM in cocoons

728. New Zealand alleges that the IRA Team “ignored the scientific evidence available on the

viability of cocoons found on New Zealand apples and focussed only on presence of cocoons,

regardless of whether they contain live ALCM.”913 However, New Zealand has not

demonstrated how any evidence was allegedly ignored or demonstrated any flaws with the IRA

Team’s analysis.

729. Australia agrees with New Zealand914 that ALCM cocoons themselves are not an issue;

according to the Final IRA Report, the concern is “mature larvae and pupae on apple fruit”.915 It

is clear from the Final IRA Report that the IRA Team did not consider cocoons themselves to be

a risk factor, based on an evaluation of the evidence916 on viability of ALCM cocoons in

Tomkins et al. (1994)917, Rogers et al. (2006)918, Lowe (1993)919 and HortResearch (MAFNZ,

2005).920 On the basis of that evidence, the IRA Team decided to use a triangular distribution for

Importation step 2, which factored in the relatively low viability rate of cocoons by skewing the

distribution towards the lower likelihood end and thereby giving less weight to the maximum

value.921

913 New Zealand’s first written submission, para. 4.111 (Article 2.2). Also: para. 4.337. 914 See: New Zealand’s first written submission, paras. 4.111 & 4.337.915 Final IRA Report, Part B, p. 158.916 See: Final IRA Report, Part B, pp. 159-160. 917 Exhibit NZ-43: Tomkins AR, Wilson DJ, Hutchings SO & June S (1994) “A survey of apple

leafcurling midge (Dasyneura mali) management in Waikato orchards”, Proceedings of the 47th New Zealand Plant Protection Conference.

918 Exhibit NZ-17: Rogers DJ, Walker JTS & Cole LM (2006), “Apple leafcurling midge cocoons on apple: pupal occupancy and mortality”.

919 Lowe, S (1993) “Apple leafcurling midge”, New Zealand Apple and Pear Marketing Board: Pipmark Technical Bulletin. Australia is not in a position to provide this document to the Panel as an exhibit. Australia notes that this paper was produced by the New Zealand industry (Pipfruit NZ) on the ALCM infestation of New Zealand apples to Japan. Australia understands that the Pipmark bulletins are not in the public domain, being available to New Zealand apple growers only (see: Exhibit AUS-88: Stewart TM & Mumford J (1995), “Pest and disease management in Hawke’s Bay, New Zealand apple orchards: results of an ‘advice-givers’ survey”, New Zealand Journal of Crop and Horticultural Science 23: 257-265, p. 264). However, Australia expects that New Zealand should be able to obtain and provide a copy of the paper to the Panel and to Australia.

920 Exhibit AUS-51: MAFNZ (2005).921 Final IRA Report, Part B, p. 160.

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b. New Zealand has misinterpreted the findings of Rogers et al.

(2006)

730. New Zealand relies on a study by Rogers et al. (2006) to claim that “only approximately

15% of cocoons on New Zealand apples contain viable pupae.”922 New Zealand asserts that:

Another more recent study found that 37-42% (giving a mean of approximately 40%) of cocoons found on apples were empty (Rogers et al. 2006: 3). The same study found that only 25% of occupied cocoons contained live pupae. The authors of that study stated that these figures were “representative of viability or otherwise of cocoons found on unwashed New Zealand apples” (Rogers et al. 2006: 3). Those figures indicate that only approximately 15% of cocoons on New Zealand apples contain viable pupae.923

731. Examination of the study shows that New Zealand has misinterpreted the results as to the

proportion of cocoons on New Zealand apples containing viable ALCM. Australia agrees that

the study claims to have found that around 40% of cocoons attached to apples were unoccupied,

however Australia challenges New Zealand’s claim that “approximately 15% of cocoons on New

Zealand apples contain viable pupae.”924 The study “sought to quantify the proportion of

unoccupied ALCM cocoons and the mortality status of pre-pupal ALCM in remaining cocoons

… Of those cocoons that were occupied pre-pupae were recorded as live or dead”.925 The

assessment of the mortality rate of cocoons that was conducted by the authors was limited to

those cocoons that were occupied. Sixty percent of the total cocoons were occupied. Of these, a

mean of 59% contained immobile pupae926, so that around 25% of the total number of cocoons

found in the sample of apples contained viable ALCM – not 15% as New Zealand claims.927

732. It is notable that Rogers et al. (2006) expressed the view that their results are

“representative of viability or otherwise of cocoons found on unwashed New Zealand apples.”928

922 New Zealand’s first written submission, para. 4.107 (Article 2.2); also, see: para. 4.337.923 New Zealand’s first written submission, paras. 4.107 (Article 2.2), 4.337.924 New Zealand’s first written submission, paras. 4.107 (Article 2.2), 4.337.925 Exhibit NZ-17: Rogers DJ, Walker JTS & Cole LM (2006), “Apple leafcurling midge cocoons on

apple: pupal occupancy and mortality”, p. 1. 926 The IRA Team took into account the Rogers et al. (2006) findings that 36.5-42.2% of ALCM cocoons

were unoccupied and 34.1%-87.1% of cocoons that contained dead midge pupae: Final IRA Report, Part B, p. 160.927 59% (dead pupae) x 60% (occupied cocoons) = 35% (proportion of total cocoons containing dead

pupae). 100 – 40 – 35 = 25% (cocoons containing viable ALCM). 928 Exhibit NZ-17: Rogers et al. (2006), p. 2.

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733. Furthermore, the IRA Team considered that the Rogers et al. (2006) study may have

underestimated the number of viable cocoons in the sample tested. According to the authors of

the study, “[o]f those cocoons that were occupied pre-pupae were recorded as live or dead, with

death characterised as failure to move when prodded.”929 As the insect goes through three life

stages within a cocoon (larvae, pre-pupae and pupae930), it is unclear why the authors assumed

that all the occupants of the cocoons tested were pre-pupae. If the insect inside a cocoon tested

was in the pupal stage, prodding the occupant with a needle would not necessarily result in any

movement. Therefore, the findings by Rogers et al. (2006) that 25% of cocoons contained viable

ALCM was probably an underestimation. The most reliable method would have been to observe

the proportion of occupants that emerged as adults.

734. It is clear that New Zealand relied heavily on its faulty interpretation of the findings in

Rogers et al. (2006) throughout its calculation of probability of entry, establishment and spread

for ALCM. New Zealand relies upon Rogers et al. (2006) for a viable infestation rate of 15% to

assert that “in order to have three live ALCM, 20 apples with cocoons would have to be

discarded close together”,931 which it then uses to justify its claim that:

The standard AQIS fruit inspection regime involving a 600 fruit sample inspection would provide 95% confidence that no more than 0.5% (1 in 200) fruit have cocoons. On this assumption, at least 4,000 fruit would need to be deposited in one place at the same time to obtain three apples with three live ALCM.932

735. If New Zealand’s example is adjusted to reflect the correct Rogers et al. (2006)

infestation rate of 25%, then only 2,400 fruit (not 4,000) would be needed to obtain three apples

with three live ALCM together,933 but possibly even less than this taking into account the

probable underestimation of the viable infestation rate. Furthermore, New Zealand’s example

factors in the possibility of a 600-unit inspection measure by AQIS, and therefore it does not

reflect the unrestricted risk assessed by the IRA Team.

929 Exhibit NZ-17: Rogers et al. (2006), p. 1. (emphasis added)930 Exhibit AUS-89: Tomkins AR (1998), “Apple leaf-curling midge life cycle”, HortFACT, (Horticulture

and Food Research Institute of New Zealand Ltd).931 New Zealand’s first written submission, para. 4.126.932 New Zealand’s first written submission, para. 4.127 (footnote omitted) (Article 2.2). New Zealand also

relies on its flawed calculations to support its claims under other provisions of the SPS Agreement: see: New Zealand’s first written submission, paras. 4.360, 4.362 & 4.517.

933 If the infestation rate is only 0.13%, as suggested by New Zealand (New Zealand’s first written submission, para. 4.128 (Article 2.2)), then 9,231 apples would be needed together to obtain three apples with three live ALCM (not 15,000 fruit, as claimed by New Zealand).

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736. Australia considers that New Zealand’s faulty estimations of the level of viable ALCM

infestation of New Zealand apples has irredeemably tainted its estimations of likelihood of entry,

establishment and spread, and consequently its assertion as to the level of risk and the efficacy of

particular measures to reduce the risk to achieve Australia’s ALOP.

c. The IRA Team took into account the relevant data available for

different areas of New Zealand

737. New Zealand erroneously claims that the IRA Team’s conclusion on Importation step 2

in the Final IRA Report “is based [only] on historical data from two minor apple producing

regions, Waikato and Bay of Plenty, both of which have warm wet climates more conducive to

ALCM than the major apple export production area in New Zealand (Hawke’s Bay), and which

have very little role in growing apples for export.”934 It is clear from the Final IRA Report that

the information from the Waikato region and the Bay of Plenty referred to by New Zealand

(from Tomkins et al. 1994), together with available data from Nelson and Hawke’s Bay orchards

was taken into account (Rogers et al. 2006, HortResearch (MAFNZ 2005b)).935 New Zealand

has not identified any alternative source of reliable data which the IRA Team did not take into

account. Furthermore, New Zealand as a whole was the pest risk area under examination (rather

than any specific region); as there are no controls on the movement of apples around New

Zealand, data collected even from a minor apple producing region is valid.

d. Summary

738. Australia submits that it is clear that the IRA Team took into account all the evidence

identified by New Zealand in its consideration of Importation step 2 and that New Zealand has

failed to demonstrate any flaws in its assessment.


739. The IRA Team considered that infested leaves and trash may sometimes collect in the

picking bags or ground bins at Importation step 3.936 Apples are picked by hand into picking

934 New Zealand’s first written submission, para. 4.336 (footnote omitted); also, see: para. 4.107 (Article 2.2).

935 Final IRA Report, Part B, pp. 159-160.936 Final IRA Report, Part B, p. 161.

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bags, and then typically transferred into bins kept on the ground in the orchard before

transportation to the packing house.

740. New Zealand erroneously claims that the IRA Team overestimated the likelihood that

clean fruit may be contaminated during picking and transport to the packing house937, on the

basis that: leaves prone to ALCM infestation would not be harvested with fruit; and that any

leaves mistakenly harvested with fruit would not likely be infested with ALCM during the

harvest period. The IRA Team considered that the potential for viable ALCM larvae or pupae to

be associated with trash after harvesting and transport would be small but not zero (and

represented the likelihood as a uniform distribution between 0.1% and 5%).938 The IRA Team

took into account the likelihood that most of this trash and contamination would be removed in

routine packing house procedures under Importation step 4,939 which is not acknowledged by

New Zealand.

a. Leaves accidentally harvested would not necessarily be those

directly adjacent to apples picked

741. New Zealand argues that “the young soft leaves on which ALCM lay their eggs are

spatially separate from the parts of the trees where fruit development occurs (the previous year’s

wood). That such leaves would be harvested with fruit is highly improbable.”940

742. However, the main area of concern for the IRA Team was not the chance of

contamination by ALCM cocoons and leaves directly adjacent to the fruit harvested. New

Zealand has not reflected the practical reality that fruit-picking requires pickers to reach in and

around trees and branches to pick individual pieces of fruit without bruising them. It is quite

probable that pickers will brush against leaves or branches of other parts of trees which may

sometimes harbour ALCM leaf rolls, occasionally causing ALCM larvae to fall from elsewhere

on the tree into a picking bag or bins on the ground.

937 New Zealand’s first written submission, paras. 4.339 & 4.115 (Article 2.2).938 Final IRA Report, Part B, p. 161.939 Final IRA Report, Part B, pp. 162-163.940 New Zealand’s first written submission, para. 4.340; also, see: paras. 4.112-4.113 (Article 2.2).

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b. A certain level of ALCM infestation of apple trees continues

through harvest time

743. New Zealand also argues that, “even if young branch shoot leaves could somehow

mistakenly be harvested with apple fruit, they would be very unlikely to be infested as, by

harvest, ALCM infestation levels are low due to the declining availability of new shoot

growth”.941

744. The IRA Team considered that there would be sufficient flushes of leaf growth at harvest

suitable for ALCM infestation.942 Flushes of leaf growth occur in association with branch and

twig growth, and water shoots may be stimulated by earlier pruning. These later growth flushes

may be stimulated by irrigation or wet seasonal conditions. Todd (1959)943 observed that rainfall

appears to have a definite effect on the degree of infestation by influencing the amount of new

growth. The greatest degree of infestation of particular leaves occurs when there has been strong

competition for appropriate sites to lay eggs by female ALCM, resulting in a concentration of

eggs on the available leaves944 – such as late in the season when harvest occurs.

745. Throughout the season, there is likely to be a ready supply of uncurled or partially

uncurled leaves suitable for ALCM (Barnes, 1948945), which accounts for the ability of the insect

to go through seven generations in wet seasons and to have mature larvae that can infest the fruit

during harvest (Tomkins, 1998946).

c. Summary

746. New Zealand has failed to establish any flaw with the probability range as judged by the

IRA Team for Importation step 3.

941 New Zealand’s first written submission, paras. 4.342; also: para. 4.114 (Article 2.2). 942 See: Final IRA Report, Part B, p. 161.943 Exhibit NZ-44: Todd DH (1959).944 Exhibit NZ-44: Todd DH (1959), p. 868.945 Exhibit NZ-18: Barnes HF (1948), p. 36.946 Exhibit AUS-89: Tomkins AR (1998), “Apple leaf-curling midge life cycle”, HortFACT, (Horticulture

and Food Research Institute of New Zealand Ltd).

239



747. The IRA Team evaluated the likelihood that ALCM would survive and remain with the

apple fruit after on-arrival minimum border procedures under Importation step 8.947

748. New Zealand makes no claims in respect of Importation step 8 under Article 2.2. In

relation to its claims under Article 5.1, New Zealand makes two allegations in respect of

Importation step 8. First, that “the IRA failed to take into account the 2001-2004 data provided

by New Zealand to Australia which provide a real world data-based value for the infestation

level in a consignment prior to presentation to AQIS for inspection.”948 Secondly, that the “IRA

also disregarded … the effect of AQIS inspection procedures at the border … [such as] the

traditional sample size inspected by AQIS at the border, a 600-unit inspection”.949 Both claims

exhibit New Zealand’s failure to understand the nature of the evaluation undertaken at

Importation step 8 when evaluating unrestricted risk.

a. The potential infestation rate is irrelevant at Importation step 8

749. It is not relevant to take into account potential infestation rates at Importation step 8,

because this step involves the likelihood that ALCM survives and remains with the fruit after on-

arrival minimum border procedures, rather than the proportion of apples infested with cocoons or

viable ALCM upon arrival. The relatively high likelihood value given to this step by the IRA

Team merely emphasises that minimum on-arrival border procedures would not be effective in

detecting or destroying any viable ALCM. However, the 2001-2004 data950 (referred to by New

Zealand) confirms that a certain level of viable ALCM could survive packing house, quality

inspection and export processes, and could arrive in Australia even if measures for fruit

inspection are applied.

947 See: Final IRA Report, Part B, p. 165. 948 New Zealand’s first written submission, para. 4.345. 949 New Zealand’s first written submission, para. 4.346. 950 Exhibit AUS-90: Pipfruit NZ (2005), Correspondence sent from Pipfruit NZ to Biosecurity Australia, 3

August 2005.

240


b. It is inappropriate to factor in an inspection when assessing the

unrestricted risk of importation

750. At Importation step 8, the IRA Team assessed only the unrestricted risk of ALCM

associated with New Zealand apples. The Final IRA Report clearly explained the underlying

assumptions, as follows:

The factors considered here relate only to the minimum border procedures used by relevant government agencies. There is some AQIS inspection, such as verification of the commodity as described in the shipping documents, verifying external and internal contamination of containers and their packaging. Possible AQIS on-arrival inspection for quarantine pests associated with apples is not considered in the assessment of unrestricted risk.951

751. Accordingly, it would have been inappropriate for the IRA Team to factor in a potential

600-unit AQIS inspection at this step of the analysis, as submitted by New Zealand, because that

inspection would constitute a measure and the risk assessed would no longer be the

“unrestricted” risk. The efficacy of a 600-unit inspection was properly assessed in the risk

management stage of the ALCM analysis in the Final IRA Report.952

c. Summary

752. New Zealand has failed to demonstrate any flaws with the IRA Team’s assessment of

Importation step 8.

iv. The IRA Team’s conclusions on importation

753. On the basis of its analysis of the eight importation steps and the use of the risk

simulation model to combine the various likelihoods, the IRA Team concluded that around 4.1%

(mean) of apples imported from New Zealand annually would be infested with viable ALCM.953

754. In August 2005, New Zealand provided some data to the IRA Team generated from end-

point inspections of New Zealand apples exported to the United States in the period 2001-2004

951 Final IRA Report, Part B, p. 23. 952 See: Final IRA Report, Part B, pp. 188-192. 953 Final IRA Report, Part B, p. 165.

241


(August 2005 data).954 This data is set out in Table 40 of the Final IRA Report.955 The data was

received only after many earlier requests for such information by the IRA Team.956

755. The IRA Team recognised that the August 2005 data indicated the level of ALCM

infestation of export quality New Zealand apples destined for the United States (which gave a

range of 0.1%-0.38%). However, as that data reflected a level of importation where risk

mitigation measures were already applied, and therefore not unrestricted risk, the IRA Team

chose to use both its original figures (mean of 4.1%) as well as the August 2005 data to continue

its analysis of the probability of entry, establishment and spread and potential risk

management.957

v. Distribution

756. Having evaluated the likelihood that ALCM could be imported with New Zealand apple

fruit, the IRA Team then considered the issue of distribution. Probability of entry, establishment

or spread of the pest in Australia relies on the probability that ALCM would be distributed in a

viable state to an endangered area in Australia, transferred to a suitable host, where it could

propagate on or in that host and disperse from there to other populations of susceptible hosts.

These assessments are based primarily on biological considerations, and involve a complex set

of interacting factors.

757. The IRA Team considered the proportion of utility points958 near susceptible hosts959,

estimations of the number of infested fruit that could arrive at each utility point, and how the

insects could be transferred to susceptible hosts. Apple (all varieties) is the only susceptible host

to ALCM (Todd, 1959; Tomkins, 1998).960

954 Exhibit AUS-90: Pipfruit NZ (2005), Correspondence sent from Pipfruit NZ to Biosecurity Australia, 3 August 2005.

955 Final IRA Report, Part B, p. 166. 956 Exhibit AUS-90: Pipfruit NZ (2005), Correspondence sent from Pipfruit NZ to Biosecurity Australia, 3

August 2005. 957 See: Final IRA Report, pp. 166, 172-174, 178-183, 190-192.958 The “utility points” considered by the IRA Team were divided into five categories: orchard wholesalers,

urban wholesalers, retailers, food services, and consumers. 959 Susceptible host plants were divided into four “exposure groups”: commercial fruit crops, nursery

plants, household and garden plants, wild and amenity plants. 960 Exhibit NZ-44: Todd DH (1959); Exhibit AUS-89: Tomkins AR (1998), “Apple leaf-curling midge

life cycle”, HortFACT, (Horticulture and Food Research Institute of New Zealand Ltd).

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758. The IRA Team adapted its methodology for ALCM because the likelihood of ALCM

entry, establishment and spread would depend on the number of viable ALCM that might reach a

particular location at around the same time, to enable a mating pair to establish a population.961

759. Also, unlike the model used for fire blight and European canker where the main focus

was fruit discarded as waste, the model used by the IRA Team for ALCM factored in the

potential for the pest to escape from utility points (because it is mobile).962 New Zealand is

fixated on waste963 and fails to appreciate the significance of ALCM’s biological difference from

E. amylovora and N. galligena because it does not acknowledge the potential for adult ALCM to

escape from imported New Zealand apples from any point in Australia to which they are

distributed, and not only from apples that are dumped as waste.

760. The Final IRA Report states:

If mature larvae or pupae survive cold storage or controlled atmosphere storage, adults could emerge from the pupal stage after the apples have been taken out of storage, or wherever the cold chain is broken such as at unpacking and repacking facilities or retailers and during the transportation of purchased apples from retailers to households or with fruit that is dumped.964

Therefore, adult ALCM may emerge at any point from when the “cold chain is broken”,

assuming they have survived storage.

761. ALCM typically diapause (a form of hibernation) in cocoons over winter and emerge in

the spring, meaning that they may survive the cold conditions of transportation and storage. The

IRA Team reasoned that, “adults could emerge from the pupal stage after the apples have been

taken out of storage, or wherever the cold chain is broken such as at unpacking and repacking

facilities and during the transportation of purchased apples from retailers to households or with

fruit that is dumped.”965

762. New Zealand claims that the IRA Team’s evaluation was flawed because:

[It] is based on incorrect assumptions, including about the likelihood of apples being discarded in close proximity to susceptible host apple trees, the

961 This differs from fire blight and European canker where the likelihoods can be assessed on an individual apple basis. Final IRA Report, Part B, pp. 33, 166-167.

962 See: Final IRA Report, Part B, p. 33. 963 See: New Zealand’s first written submission, paras. 4.119, 4.126, 4.129-4.132 (Article 2.2), 4.352-4.353,

4.361. 964 Final IRA Report, Part B, p. 171.965 Final IRA Report, Part B, p. 171.

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circumstances under which live pupae will emerge from cocoons, the flight range of ALCM, and the likelihood that mating can successfully occur.966

763. In relation to these claims, Australia will show below that New Zealand has failed to

establish any flaws with the IRA Team’s reasoning and use of the available evidence.

a. Conditions could favour ALCM emergence in Australia

764. New Zealand claims that most New Zealand apples will be consumed or decay before

ALCM emergence can take place, on the basis that:

New Zealand fruit would arrive in the Australian market in autumn and winter. By spring, most of this fruit will have been sold and consumed, or … disposed of. And, even if ALCM emerged in this period, there would be no young, actively growing apple leaves available on which to lay eggs.967

765. New Zealand argues that “[a]dult emergence from diapause is synchronised to occur in

spring when environmental conditions change”968, and therefore that “only viable pupae on New

Zealand apples removed from temperature controls in spring would be able to emerge from

diapause.”969

766. New Zealand recognises that “[a]dult emergence from diapause is synchronised to occur

… when environmental conditions change”.970 Therefore, if the cool chain is broken and day

length and temperature replicate spring (for example, in a controlled environment such as a

supermarket or packing house, or in some more northern areas of Australia), then adult

emergence from diapause may take place in seasons other than spring.

767. New Zealand claims:

[A]ny ALCM emerging during the likely period of import – that is, autumn and winter (March to September) – could not go on to infest new hosts even if a male and female did emerge close enough to find each other and successfully mate, because there are no new leaf shoots in autumn and winter. Only a small proportion of New Zealand apples would remain in cold storage unsold until spring.971

966 New Zealand’s first written submission, para. 4.352; also, see: para. 4.116 (Article 2.2). 967 New Zealand’s first written submission, para. 4.119 (Article 2.2); also, see: paras. 4.358-4.359. 968 New Zealand’s first written submission, para. 4.118. 969 New Zealand’s first written submission, para. 4.358. 970 New Zealand’s first written submission, para. 4.118. 971 New Zealand’s first written submission, para. 4.359. Also, see: paras. 4.119-4.120 (Article 2.2).

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768. Australia notes that New Zealand offers no evidence in support of its biological

assertions, nor for its assertion that there would be only a “small proportion” of New Zealand

apples remaining in Australia in the spring. New Zealand is also silent on the fate of viable

pupae that remain on waste such as culled fruit and apple cores that are discarded on the ground

prior to spring at orchard wholesalers and retailers. This incorrectly implies that this infested

fruit is no longer a concern.

769. Given the Australian apple harvest takes place around the same time as New Zealand’s,

Australian apples would also supply the domestic market over at least autumn and winter.

Accordingly, the IRA Team judged it unlikely that all of the imported New Zealand apples

would be consumed as soon as they were imported. There is considerable capacity for apples to

be kept in storage in Australia for sale over time.972

770. Furthermore, imports of New Zealand apples may continue into September in any year973,

as acknowledged by New Zealand974, coinciding with the beginning of spring in Australia and

the appropriate environmental conditions for both the emergence of adult ALCM and new tree

growth. In fact, apples from New Zealand may be imported even later than September. Cold

stored and controlled atmosphere stored apples are released for retail sale in Australia up to the

time or beyond the next harvest of each variety. New Zealand itself acknowledges that “one

sixth of the amount imported” would still be in Australia during spring975, which Australia

considers would be more than sufficient given the estimate volume of annual trade. The IRA

Team relied upon the report by Tomkins et al. (2006)976 that emergence in New Zealand of

overwintered adult ALCM occurred from mid-September to mid-November.977

771. Furthermore, the IRA Team reasoned that even if apples are consumed, they are often not

completely destroyed because people do not usually eat apple cores. Apple cores, potentially

infested with ALCM at stem end or calyx, could be thrown into a garden or an orchard near a

potential host. Pupation typically takes place inside cocoons beneath the surface of the ground 972 Exhibit AUS-91: Australian Bureau of Statistics, “Agricultural Survey: Apples and Pears Australia

2006-07”, 7121.0.55.002, 18 December 2007, p. 6. 973 Exhibit AUS-63: United States Department of Agriculture Foreign Agricultural Service, “New Zealand

Fresh Deciduous Fruit Report 2007”, GAIN Report Number: NZ7033, 18 December 2007, p. 7.974 New Zealand’s first written submission, para. 4.359. Also, see: paras. 4.119-4.120 (Article 2.2).975 New Zealand’s first written submission, para. 4.120 (Article 2.2). 976 Exhibit AUS-92: Tomkins AR, Bradley SJ, Walker JTS, Gibbs AR, Marsha1l R, Shaw PW, Thomson

C, Burnip G, Wearing CH & Wilson DJ (2006), “Spring emergence of apple leafcurling midge in New Zealand”.977 Final IRA Report, Part B, p. 171.

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(Tomkins, 1998)978, where the insects can wait until favourable environmental conditions occur

for their emergence.

b. More than enough infested apples may arrive at orchard packing

houses to permit sufficient numbers of adult ALCM to emerge and

reproduce

772. New Zealand claims that:

The only place where significant numbers of apple fruit could be removed simultaneously from cold storage, in close proximity to apple trees, is if the fruit were sent to an orchard wholesaler.979

773. New Zealand argues that the IRA Team overestimated the quantities of apples that will

be sent to orchard wholesalers,980 on the basis that most of its product will be imported “retail

ready” and that “[t]he primary market for this fruit will be in the major urban centres and for

commercial reasons the fruit would be stored nearby. The proportion requiring repackaging

would be very small and readily handled by urban facilities.”981

774. The IRA Team considered the varying views as to how apples might be distributed

within Australia in light of whether the apples would come in as bulk produce that need to be

repacked or whether they would come in market ready boxes and sent directly to urban

wholesalers for distribution.982 Two possible scenarios were considered by the IRA Team:

One scenario was based on 0.1%-5% of imported apples being distributed to orchard packing houses and the remainder (95%-99.9%) being distributed to urban wholesalers [Scenario 1]. The other scenario was based on 70%-100% of imported apples being distributed to orchard packing houses and the remainder (0-30%) being distributed to urban wholesalers [Scenario 2].983

775. The IRA Team considered the distribution to orchard-based facilities, as follows:

The number of orchard based facilities is particularly important for pests such as insects where clustering may be significant. For example, risks may be greater where large volumes of apples are present in one facility at one time

978 Exhibit AUS-89: Tomkins (1998).979 New Zealand’s first written submission, para. 4.361; also, see: para. 4.129 (Article 2.2). 980 New Zealand’s first written submission, paras. 4.129, 4.357, 4.361.981 New Zealand’s first written submission, para. 4.357.982 Final IRA Report, Part B, pp. 171-172.983 Final IRA Report, Part B, p. 172.

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and therefore there is a greater chance of a mating pair. This would be dependent on the number of orchard based facilities.984

776. The IRA Team assumed that there would be seven orchard wholesalers and six urban

wholesalers within Australia that might repack imported fruit. Applying the two scenarios in

relation to apple distribution referred to above (referred to as Scenario 1 and Scenario 2 in the

table below), and the two potential rates of infestation of New Zealand apples, the IRA Team

calculated the estimated number of infested fruit distributed to individual utility points on the

basis that fruit would be imported over a 26-week period.985 Tables 42 and 43 in the Final IRA

Report set out the weekly estimates.986

777. In respect of orchard wholesalers, the results set out in the Final IRA Report987 can be

summarised as follows:

Table 6: Numbers of infested apples predicted to arrive at orchard wholesalers

Level of infestation Split between orchard

wholesalers & urban

packinghouses

Predicted weekly number of infested fruit to each

individual orchard wholesaler (mean)

4.2% (mean) Scenario 1 995

Scenario 2 33204

August 2005 data

(min 0.1%, most likely

0.13%, max 0.38%)

Scenario 1 50

Scenario 2 1661

778. Therefore, even assuming the lower infestation rate as suggested by the August 2005 data

provided by New Zealand, and assuming that only 0.1%-5% of imported apples are distributed to

orchard packing houses (Scenario 1), the IRA Team calculated that around 50 apples infested

with viable ALCM would arrive at an individual orchard packing house each week (on average

across a 26 week period). If the majority of New Zealand apples are sent to orchard packing

houses (Scenario 2) – which Australia considers most probable – then at least 1661 infested

984 Final IRA Report, Part B, p. 34. (emphasis added)985 Final IRA Report, Part B, pp. 33-34, 171-174.986 Final IRA Report, Part B, pp. 173-174.987 See: Final IRA Report, Part B, pp. 173-174.

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apples may arrive at each orchard packing house each week. On the basis of New Zealand’s

argument that at least three adult ALCM insects would be required to mate and start a

population988, it is clear this quantity of infested apples would be sufficient.

779. New Zealand also disputes the proximity values used in the Final IRA Report in respect

to the proportion of retailers and the Australian population that live near commercial fruit

crops989, and also in respect to nursery plants which may be near utility points.990 New Zealand

has not provided any evidence in support of its assertions, nor does it explain what impact its

assertion would have had on the conclusions of the Final IRA Report if correct. In any event, it

is clear from the Final IRA Report that the likelihood values assigned to these aspects of the

assessment were very small and would have had minimal impact on the outcome.991

c. New Zealand’s claim that its apple exports will arrive “retail

ready” and therefore require little repacking in Australia is

unsubstantiated

780. New Zealand claims that, “New Zealand fruit is very unlikely to be sent to an orchard

wholesaler for re-packing given the “retail ready” and “just in time” nature of New Zealand’s

apple exports.”992 However, there were good reasons for the IRA Team to doubt New Zealand’s

claim that the majority of its fruit would be “retail ready” and require little repacking in

Australia. New Zealand has failed to support its assertion in respect of the Australian market

with any data or other evidence. New Zealand also ignores its previous refusal to rule out modes

of trade other than “retail ready” or “just in time” during the IRA process.993 It was appropriate

for the IRA Team to take into account the other potential modes of trade by which New Zealand

apples may arrive in Australia.

781. Furthermore, Australia submits that the requirements and demands of Australian

importers and buyers will ultimately influence the type of product exported from New Zealand.

In Australian retail outlets, large quantities of apples are often displayed on tables or sold from

crates, rather than being displayed in smaller “retail ready” boxes.

988 New Zealand’s first written submission, para. 4.126. 989 New Zealand’s first written submission, para. 4.354. 990 New Zealand’s first written submission, para. 4.355. 991 Final IRA Report, Part B, p. 179. 992 New Zealand’s first written submission, para. 4.361; also, see: para. 4.129 (Article 2.2). 993 See: Final IRA Report, Part B, pp. 9-10.

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782. For example, one of the largest retailers of fresh fruit in Australia is the supermarket

chain Coles. In 2005, Coles introduced a system of returnable plastic crates, whereby the crates

are sent to Coles’ suppliers who then pack the fruit straight into them. The crates are used to

display the fruit in the stores, and then returned to the suppliers for re-use.994 Australia considers

it highly unlikely that empty crates would be sent from Australia to New Zealand on a regular

basis in order for New Zealand exporters to pack their apples for Australia in the required form

for Coles. Therefore, it seems infeasible for New Zealand exporters to provide fruit in the “retail

ready” form required by one of Australia’s largest retailers. The IRA Team considered that New

Zealand exporters would opt for the best commercial option available, and, as Australia imposes

no requirement as to the particular mode of trade, New Zealand exporters could ship fruit in bulk

bins that could be repacked and distributed in Australia for specific markets.

783. New Zealand’s claim that the majority of its apple exports to Australia will be in the

“retail ready” form required by Australian retailers is unsubstantiated. In any event, it is clear

from the IRA Team’s analysis that even if only 0.1%-5% of imported apples were distributed to

orchard packing houses, around 50 apples infested with ALCM would arrive at seven individual

orchard packing houses each week.995

d. New Zealand makes flawed assumptions about fruit fly

management in Australia

784. New Zealand claims that “large quantities of apples would not be discarded uncovered

near apple trees at an orchard wholesaler”, because “in a country such as Australia, where

removal of discarded fruit from orchards is essential for good fruit fly management, it would be

contrary to good operational practice for commercial packing house operators, or even nearby

orchardists, to leave any discarded fruit uncovered and exposed to pests.”996

785. However, New Zealand fails to acknowledge that practices to manage fruit fly are only

mandated in fruit fly free areas and are not implemented unless there is actually an outbreak of 994 Exhibit AUS-62: Coles Myer’s returnable plastic crate initiative: Coles Group, National Packaging

Covenant Annual Report 2006/7, p. 27 (website http://www.packagingcovenant.org.au/documents/File/Coles_Group_AR_06_07_Public.pdf, accessed 9 July 2008); Coles Myer Ltd, Corporate Social Responsibility Report 2005, p. 16 (website http://www.colesgroup.com.au/library/newsmedia/20051019_corporate_social_responsibility_report.pdf, accessed 9 July 2008); Exhibit AUS-63: United States Department of Agriculture Foreign Agricultural Service, “New Zealand Fresh Deciduous Fruit Report 2007”, GAIN Report Number: NZ7033, 18 December 2007, p. 8.

995 Final IRA Report, Part B, pp. 173-174.996 New Zealand’s first written submission, para. 4.130 (Article 2.2). Also, see: paras. 4.361, 4.362.

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fruit fly in a particular area.997 If there is no fruit fly outbreak in the fruit fly free areas, then

there is no need to take steps to manage this issue. When there is an outbreak, fruit fly

management is targeted at the production aspect and at uncovered fruit and waste in specified

proximity zones to the outbreak through the use of fruit fly specific sprays.998 In any event, the

bulk of relevant apple handling facilities in Australia occur in apple production regions that are

not those specifically intended as fruit fly free areas, or are areas where fruit flies are not

historically an issue for apple production. New Zealand has failed to provide any evidence to

suggest otherwise.

e. The scenario of 4000 apples being left uncovered together

somewhere is not improbable


[T]he likelihood of an Australian buyer of New Zealand apples disposing of at least 4,000 of those apples uncovered, at a single site within 30m of apple trees with new shoots is negligible.999

787. Australia has already explained why New Zealand’s assumptions as to waste being the

only scenario worth considering and the management of apple waste in Australia are without

basis.

788. In coming to a figure of 4000 apples, New Zealand has relied on the infestation level that

would result from apples passing an AQIS inspection of 600 units per lot.1000 As previously

explained, it is not appropriate to factor in such a potential inspection when assessing the

unrestricted risk. Furthermore, New Zealand’s figure of 4000 apples is derived from its flawed

interpretation of the findings in Rogers et al. (2006), as explained above. Based on the data from

Rogers et al. (2006), only 2,400 apples or less would be sufficient to provide three infested

apples.

789. In any event, the figure of 4000 apples together at the same location at the same time is

small given the potential millions of New Zealand apples that may be imported to Australia. As

997 See: Exhibit AUS-93: Extract from AQIS Plant Programs Section (2008), Australia – New Zealand Bilateral Quarantine Arrangement: Systems Operation Manual 7, February 2008, pp. 26-28.

998 See, for example: Exhibit AUS-94: Standing Committee on Agriculture and Resource Management, Code of Practice for Management of Queensland Fruit Fly, (Interstate Plant Health Working Group, Australia), September 1996, Sections 3 & 4.

999 New Zealand’s first written submission, para. 4.362. 1000 See: New Zealand’s first written submission, paras. 4.127-4.128 (Article 2.2), 4.360.

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explained above, the IRA Team estimated that between 50 and 1661 infested apples could arrive

at an orchard packing house in any single week.1001

f. Summary

790. New Zealand has failed to demonstrate any flaws in the IRA Team’s estimations of the

quantities of infested apples that would be distributed to a suitable utility point located near

potential hosts, such as orchard packing houses, in suitable environmental conditions to enable

adult ALCM to emerge.

vi. Conclusion on entry

791. Australia submits that New Zealand has failed to establish any flaws in the IRA Team’s

assessment of entry for ALCM.

(b) The IRA Team’s analysis of probability of establishment is objective and

credible

792. The IRA Team judged that a population of ALCM could start in Australia from a small

group of viable eggs laid by a single female. A mated female lays several eggs on each selected

leaf, with each female laying up to 200 eggs over about three days.1002

793. New Zealand has challenged the IRA Team’s assessment of the likelihood of a sufficient

quantity of adult ALCM emerging and mating within sufficient proximity to potential hosts.1003

As Australia will demonstrate below, New Zealand has failed to establish any flaws in the IRA

Team’s appreciation of the evidence; nor has New Zealand shown how the level of risk assessed

by the IRA Team would have been different had they agreed with New Zealand’s assessment of

the evidence. New Zealand focusses on specific timeframes and distances without appreciating

the range of data available on the relevant issues.

794. Australia notes that New Zealand fails to challenge the establishment stage for ALCM,

which relates to what happens after a sufficient number of eggs have been successfully laid,

comprising the first colonising generation. New Zealand effectively only challenges the

probability of whether a first generation of eggs will be successfully laid in Australia. 1001 See: Final IRA Report, Part B, pp. 173-174.1002 Final IRA Report, Part B, p. 176; Exhibit AUS-89: Tomkins (1998).1003 See: New Zealand’s first written submission, paras. 4.125, 4.131 (Article 2.2), 4.359.

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i. Time required to break diapause


ALCM will not emerge from fruit as soon as it is removed from cold storage. It first has to break diapause and complete pupation, which takes 13-18 days (Barnes 1948: 36).1004

796. However, the IRA Team considered that not all viable ALCM infesting New Zealand

apples would need 13-18 days to emerge as adults after being removed from cold storage.

ALCM undergo complete metamorphosis from larvae (maggots) to adult (winged stage). There

is a series of active, feeding larval developmental stages which progress through a quiescent

prepupal stage before a single pupal stage, which finally moults into the adult. The onset of

pupation marks the beginning of a process that results in the destruction of larval organs and

tissues, accompanied by a rapid equivalent differentiation of adult structures. These processes

continue through the pupal stage and are often not completed until after the adult has emerged.

During diapause, these processes are suspended or progress at very reduced rates until more

favourable environmental conditions return and metamorphosis can be completed.1005

797. New Zealand seems to assume that the insects in the cocoons on imported New Zealand

apples will all be at exactly the same stage of development; that is, the prepupal stage prior to

metamorphosis of the pupal stage. However, the IRA Team considered it more likely that at the

end of the New Zealand growing season when harvest occurs, various ALCM present in cocoons

will be at different stages of development (Tomkins, 1998).1006 It is probable that some larvae

will have progressed beyond the prepupal stage to the pupal stage and will be ready to emerge as

adults as soon as the appropriate environmental triggers are encountered by the pupa, rather than

wait the 13-18 days as recorded by Barnes (1948).1007

798. In New Zealand, the insect stays within its protective cocoon in the soil in a dormant state

(diapause) during the winter period and emerges from dormancy when the conditions are

favourable for its development. Cocoons on apples held in cold storage would be subject to the

same processes. Any insect kept in cold storage could remain within its cocoon until the

1004 New Zealand’s first written submission, para. 4.131 (Article 2.2); also, see: para. 4.361. 1005 For general information on metamorphosis, see: Richards OW, Davies RG (1994), “Structure,

Physiology and Development”, Imms’ General Textbook of Entomology, Volume 1(Chapman and Hall: London), 10th edition.

1006 Exhibit AUS-89: Tomkins (1998).1007 Exhibit NZ-18: Barnes (1948).

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environmental conditions are favourable or its internal development has been completed. Spring

conditions can be mimicked by lighting and air-conditioning in warehouses and supermarkets.

ii. Little time is required for reproduction by ALCM


Even if pupae did enter Australia and successfully emerge, the short adult life span and limited flying distances of ALCM mean that there is virtually no chance of male and female emerging from cocoons on individual apples in close enough proximity to find each other and successfully mate.1008

800. Adult ALCM do not need to live for long periods in order to reproduce. According to

one source, mating behaviour of the males commences about half to one hour after their

emergence; on average, females call for males within 20 minutes of emergence, mate within 40

minutes and lay their eggs later that day (HortResearch, 19991009). Another source states that

females start calling around two hours after emergence, mate thereafter, and start to lay eggs by

the end of the day (Suckling et al. 20071010). Virgin females produce a sex pheromone that

attracts males, and swarming of males has been observed around these females (Harris et al.,

1996). It is likely that male dispersal is strongly affected by the location of females. Multiple

mating by males is common (Suckling et al. 2007), and so a single male can mate with several

females that may emerge together. Each female may lay up to 200 eggs (HortResearch, 1999).

801. This scientific evidence makes it clear that there is ample time for the requisite number of

adult ALCM to emerge and mate within their short life time. The IRA Team’s consideration was

based on the reasonable premise that large quantities of apples would be transported to utility

points in proximity to host apple trees, such as orchard packing houses, and that it was plausible

that a sufficient number of male and female adults would emerge together. A population of

ALCM could feasibly start from eggs laid by a single female.

iii. ALCM will not need to fly far from orchard packing houses to find a

suitable host

1008 New Zealand’s first written submission, para. 4.121 (Article 2.2); also, see: para. 4.351. 1009 Exhibit AUS-95: HortResearch (1999), “Apple leafcurling midge” in: BugKey; Insects and mites of

pipfruit and stonefruit. Website: http://www.hortnet.co.nz/key/pipfruit.htm (accessed 31 May 2004). 1010 Exhibit NZ-15: Suckling DM, Walker JTS, Shaw PW, Manning L, Lo P, Wallis R, Bell V,

Sandanayaka WRM, Hall DR, Cross JV & El-Sayed AM (2007), “Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples”, Journal of Economic Entomology 100(3), p. 746.

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802. In relation to potential ALCM flying distances, New Zealand claims that “the IRA

ignored those findings [of Suckling et al. (2007)] in its evaluation of the proximity of ‘utility

points’ to available hosts.”1011 New Zealand relies on Suckling et al. (2007) to assert that male

ALCM can fly only 30 metres, and mated females even less.1012 New Zealand suggests that the

IRA Team “appear[ed] to base its calculations on a flight range for ALCM of up to 200

metres”.1013

803. However, although the Final IRA Report does refer to the fact that “[ALCM] were

detected in a block of newly established apple trees at 200 metres from the source (the furthest

distance tested)”1014, the IRA Team did not place much weight on this figure, reflected by the fact

it is not referred to in their main discussion of adult flight distances.1015 The IRA Team relied

upon evidence from Cross (2005), Suckling et al. (2007)1016 and HortResearch (1999b).1017

804. In any event, the figure of 30 metres drawn from Suckling et al. (2007) is based on shoot

infestation of new apple trees adjacent to a mature infested block. The shoot infestation rate

declines rapidly over the first 30 metres into the new block but there is still an underlying rate of

infestation up to 200 metres into the new block which the authors put down to ALCM being

moved into the new block on new trees and their associated soil. However, the IRA Team

reasoned that it is also likely that some of the shoot infestations up to 200 metres were caused by

immigrants from the adjacent infected orchard block. Information from Cross (2005)1018 claimed

that significant numbers of male ALCM were caught at all distances up to 50 metres when

testing sex pheromone traps. Indeed, the numbers caught at 50 metres were still significant

(several per day); the distances beyond 50 metres were not investigated, suggesting that 50

metres was not a maximum distance.

1011 New Zealand’s first written submission, para. 4.353. 1012 New Zealand’s first written submission, paras. 4.123, 4.353. 1013 New Zealand’s first written submission, para. 4.353. 1014 Final IRA Report, Part B, p. 168.1015 Final IRA Report, Part B, p. 171.1016 Although the Final IRA Report refers to “Suckling et al. (2006)”, this is the same research as that

referred to by New Zealand (Exhibit NZ-15: Suckling DM, Walker JTS, Shaw PW, Manning L, Lo P, Wallis R, Bell V, Sandanayaka WRM, Hall DR, Cross JV & El-Sayed AM (2007), “Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples”, Journal of Economic Entomology 100(3)). The IRA Team was provided with an advance copy of the material before it was published.

1017 See: Final IRA Report, Part B, p. 171.1018 Exhibit AUS-96: Cross, J. (2005) Personal communication from Jerry Cross of East Malling Research,

Kent, UK on apple leaf curling midge, 30 March 2005.

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805. In any event, it is ultimately female flight that matters for establishment once mating has

occurred. If a sufficient number of adult ALCM emerge at about the same time from the same

collection of apples, then little flight may be required in order for mating to occur. Females are

attracted to the volatile chemicals released by actively growing apple shoots on which to lay their

eggs.

806. New Zealand’s claim is predicated on the basis that ALCM has to physically fly the

distance to locate hosts but the IRA Team considered that it is equally probable that a gust of

wind or other mechanical means can give the ALCM a further boost to its flight range.

HortResearch (1999) notes that “some researchers consider them strong fliers able to disperse

well in wind, and [ALCM] has a history of rapid spread when introduced to new areas.”1019

807. An extreme example of how insects can be blown long distances is a recent establishment

of lettuce aphid in Tasmania from New Zealand. According to media reports, the establishment

of lettuce aphids was attributed to unusual weather patterns. The aphids travelled a distance of

over 2,600 kilometres from New Zealand to Tasmania on an easterly air stream.1020

808. In any event, a flight range of 30-50 metres for a mated female ALCM would be ample in

many cases between an orchard packing house co-located within an apple orchard. New Zealand

has provided no evidence to demonstrate that such a flight distance would be insufficient for

adult ALCM to travel from their point of escape at a utility point to a host.

iv. Conclusion on establishment

809. New Zealand has failed to show that the IRA Team did not properly evaluate the

scientific evidence available in respect to the limitations imposed on the potential establishment

of ALCM in Australia by its limited life span and flight range or that the probability values

chosen by the IRA Team were without sufficient basis. New Zealand has failed to establish any

flaws in the IRA Team’s assessment on establishment.

(c) The IRA Team’s analysis of probability of spread is objective and credible

1019 Exhibit AUS-95: Hortresearch (1999).1020 Exhibit AUS-97: Courtney P (2005), “Scientist battles lettuce aphid” (Landline, ABC), at website:

http://www.abc.net.au/landline/content/2005/s1493620.htm (accessed 9 July 2008); ABC Rural News (2004), at website: http://www.abc.net.au/rural/news/stories/s1179390.htm (accessed 9 July 2008).

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http://www.abc.net.au/landline/content/2005/s1493620.htm


810. The IRA Team considered factors relevant to the movement of the pest from a point of

establishment on an exposed plant, or group of plants, to susceptible plants in other parts of

Australia.1021 The IRA Team noted that ALCM would not require a vector for its spread because

it is capable of independent flight.1022 Australia notes that New Zealand does not challenge the

IRA Team’s evaluation of spread under Article 2.2.

811. Under Article 5.1, New Zealand claims:

Even if ALCM were to establish in Australia, the likelihood of spread is remote. ALCM distribution and pest status appears to be limited to cooler wetter climatic conditions, such as those found in temperate coastal regions (Rogers 2006: 1).1023

812. It is clear that the IRA Team took into account climate-related issues for spread. In its

assessment of spread, the IRA Team considered that:

Apple leafcurling midge has spread all over New Zealand since its accidental introduction in about 1950. There are similar environments in Australia that would be suitable for its spread.1024

813. Australian states such as Victoria, Tasmania and New South Wales have the types of cool

climate suited to the establishment and spread of ALCM, and a considerable proportion of

Australia’s commercial apple producing regions are situated in such regions.

814. New Zealand further claims that “it is highly unlikely that [ALCM] would become

successfully established in all of the areas where apples are grown commercially and where

apple trees are grown in domestic gardens.”1025 The IRA Team’s assessment of the probability of

spread did not assume that ALCM would necessarily spread to all apple growing areas and

gardens of Australia, nor should it have done. “Spread” will have been achieved if the pest

spreads beyond its place of establishment to any other part of Australia.

815. New Zealand has failed to establish any flaws in the IRA Team’s assessment of the

likelihood of spread of ALCM in Australia.

1021 Final IRA Report, Part B, pp. 177-178.1022 Final IRA Report, Part B, pp. 177-178.1023 New Zealand’s first written submission, para. 4.3641024 Final IRA Report, Part B, p. 177.1025 New Zealand’s first written submission, para. 4.365. (emphasis added)

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i. The general plausibility of the scenario of entry, establishment & spread

of ALCM

a. New Zealand’s claim that the scenario could not happen in the

real world ignores available precedents in the international

spread of pests via trade


Even if apples infested with live pupae were to enter Australia, the live pupae would need to develop and emerge from cocoons simultaneously in sufficient numbers near enough to each other for the males readily to locate females and mate. Further, the mated female, with a limited flight range, would need to find young actively growing apples leaves on which to lay its eggs. This would all need to occur in the very short life span of an adult ALCM (approximately 3-4 days under laboratory conditions: Barnes 1948: 36). There is no scientific evidence that this has ever occurred, or could occur in the real world.1026

817. New Zealand’s claim that such events have never occurred, nor could they occur in the

real world, begs the question how New Zealand accounts for ALCM clearly managing to

reproduce and survive since it first evolved and spread across the world.

818. A recent example of how insects can be spread to other countries via apples from New

Zealand was the discovery that wheat bug (Nysius huttoni) had established in the Netherlands

and Belgium (Aukema et al. 20051027). Wheat bug is native to New Zealand, and had not

previously been reported outside New Zealand. Although wheat bug is not a pest of apple fruit

or trees, it is a potential hitchhiker or contaminant pest insect of exported commodities.1028 It has

occasionally been detected in shipments of stone fruit from New Zealand to Australia.1029

According to the alert issued by the European and Mediterranean Plant Protection Organization,

“N. huttoni is reported as being a contaminating pest often found on apple fruit packages

exported from New Zealand” and “[i]t may have to be recognised that it will be difficult to

prevent its further spread, as N. huttoni is polyphagous, spreading naturally and is most likely a

1026 New Zealand’s first written submission, para. 4.116 (Article 2.2). Also, see: para. 4.351.1027 Exhibit AUS-98: Aukema B, Bruers JM & Viskens G, (2005) “A New Zealand endemic Nysius

established in the Netherlands and Belgium (Heteroptera: Lygaeidae), Belgian Journal of Entomology 7, pp. 37-43.1028 See: Final IRA Report, Part B, p. 323. 1029 Exhibit AUS-99: Australian Quarantine & Inspection Service (2008), Data extracted from the AQIS

Pest and Disease Interception database and provided by the Senior Entomologist, AQIS Operational Science Program (9 July 2008).

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contaminant of many traded products.”1030 The fact that other insects, such as wheat bug, can be

imported via fruit from New Zealand supports the view of the IRA Team that the unrestricted

importation of New Zealand apples to Australia poses a legitimate risk that ALCM will enter,

establish and spread in Australia.

b. New Zealand’s Chinese Taipei example is irrelevant

819. New Zealand has relied upon the history of its apple exports to Chinese Taipei in support

of its claim the ALCM would not enter, establish or spread in Australia from New Zealand

apples. New Zealand claims that:

New Zealand has, over the last 18 years, exported over 800 million apples, sourced from throughout the country, to Chinese Taipei, with no special measures for ALCM. Chinese Taipei remains free of this pest.1031

820. New Zealand’s assertion is unsupported by any evidence or explanation as to why certain

conclusions as to pest risks should be drawn from this trading history. Nor has New Zealand

explained how the New Zealand-Australia scenario might be comparable to the New Zealand-

Chinese Taipei situation. As is clear from the complexity of the IRA Team’s analysis of

exposure and proximity likelihoods, there are a large number of environmental, geographic,

climatic, commercial production and other factors (such as the availability of suitable hosts)

which are specific to the importing country, that may go to explaining any failure of ALCM to

establish and spread in that country. New Zealand has offered no analysis of these factors in

respect of Chinese Taipei.

821. Australia submits that the failure of ALCM to establish is most likely due to Chinese

Taipei’s climatic conditions not being suitable for this pest’s establishment, rather than because

there may be insufficient numbers of ALCM infesting New Zealand apples. Chinese Taipei has

an oceanic and subtropical monsoon climate. The average lowland temperature in January is

16°C in the north and 20°C in the south; the average July temperature is 28°C in both the north

and south.1032 ALCM is a pest of cool climates.1033 Indeed, New Zealand uses a similar argument

1030 Exhibit AUS-100: European and Mediterranean Plant Protection Organization (2006), “First report of Nysius huttoni in the Netherlands and Belgium: addition to the EPPO Alert List”, EPPO RS 2006/030, February 2006: http://archives.eppo.org/EPPOReporting/2006/Rse-0602.pdf (accessed 9 July 2008).

1031 New Zealand’s first written submission, para. 4.133. (footnote omitted)1032 See, website: http://www.nationsencyclopedia.com/Asia-and-Oceania/Taiwan-CLIMATE.html

(accessed 10 July 2008). 1033 See: New Zealand’s first written submission, para. 4.364.

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to say that it is highly unlikely that ALCM would establish or have any pest status in the areas of

Australia which may not have suitable climatic conditions.1034 Chinese Taipei is located around

the Tropic of Cancer; comparable southern latitudes to this would lie somewhere between

Mackay and Bundaberg in Queensland (Tropic of Capricorn) – which are much further north

than where apples are grown commercially in Australia.

822. New Zealand has even failed to provide the basis for its assertion that Chinese Taipei is

“free of this pest”. New Zealand has not advised whether Chinese Taipei authorities conduct

surveys or otherwise have mechanisms that would be likely to detect ALCM. Australia

understands that ALCM is not specified as a “quarantine pest” in Chinese Taipei.

ii. Conclusion on entry, establishment and spread

823. New Zealand’s attempt to undermine the IRA Team’s assessment of the likelihood that

ALCM may enter, establish and spread in Australia by declaring that certain events are

impossible or could never occur is clearly divorced from the reality that ALCM has successfully

done so in many areas of the world.

824. New Zealand has not established either that the IRA Team failed to take into account

particular relevant evidence or that its reasoning was flawed in relation to any stage of its

analysis. Far from establishing that the risk is “negligible”1035 (in accordance with New

Zealand’s meaning of the term), New Zealand has demonstrated its own failure to correctly

interpret the scientific evidence or to understand the methodology applied by the IRA Team to its

assessment of the unrestricted risk.1036 Australia submits that New Zealand has failed to

establish any flaws, let alone any flaws serious enough to prevent the Panel from having

“reasonable confidence” in the Final IRA Report.

(d) The IRA Team’s analysis of potential consequences is objective and credible

825. Under Article 5.1, New Zealand has also challenged certain aspects of the IRA Team’s

assessment of the potential biological and economic consequences of an ALCM incursion.

Australia notes that New Zealand has not challenged the issue of consequences under Article 2.2.1034 New Zealand’s first written submission, para. 4.365.1035 New Zealand’s first written submission, paras. 4.132 & 4.517. 1036 An example of this is New Zealand’s repeated factoring in of a potential 600-unit inspection risk

management measure: New Zealand’s first written submission, paras. 4.127-4.132, 4.137 (Article 2.2), 4.346, 4.360 & 4.517.

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… Australia’s purported analysis of the “associated potential biological and economic consequences” of ALCM constitutes nothing more than a listing of unsubstantiated assumptions. It is not an evaluation of those consequences within the meaning of the SPS Agreement.1037

827. New Zealand relies heavily on the paper by Rogers et al. (2006) in support of a large

number of its assertions in respect of consequences.1038 New Zealand relies on the paper in

respect of the effects of the integrated fruit production programme on ALCM in New Zealand,

pest severity on young trees and chemical control of ALCM.1039 But the Rogers et al. (2006)

study focussed on the proportion of unoccupied cocoons on apples and the mortality status of

pre-pupal ALCM in remaining cocoons.1040 It is clearly not a primary source of evidence for the

assertions made by New Zealand in respect of consequences. Accordingly, the Panel should

attribute little weight to the evidence presented by New Zealand on these issues.

828. Australia also notes that New Zealand does not challenge any of the “impact scores”

allocated by the IRA Team to potential consequences. In fact, it is quite unclear what aspect(s)

of the IRA Team’s analysis New Zealand is actually challenging. New Zealand appears to blur

the different aspects of the IRA Team’s methodological approach to the consequences analysis

for ALCM. New Zealand’s claim that “there is simply no evidence that the consequences

foreseen by the IRA would occur”1041 fails to address the evidence relied upon in the Final IRA

Report.

i. Plant life or health

829. New Zealand claims that “the data used by Australia to assess the impact of ACLM [sic]

on plant life and health is now over ten years old and has no validity under today’s protection

practices.”1042 However, New Zealand criticises the reliance upon Smith and Chapman (1995) in

this context,1043 even though the IRA Team took into account at least two other sources.1044

1037 New Zealand’s first written submission, para. 4.377. 1038 New Zealand’s first written submission, paras. 4.367-4.368 & 4.371. 1039 See: New Zealand’s first written submission, paras. 4.367-4.371.1040 Exhibit NZ-17: Rogers et al. (2006).1041 New Zealand’s first written submission, para. 4.373.1042 New Zealand’s first written submission, para. 4.367. 1043 See: New Zealand’s first written submission, para. 4.367. 1044 See: Final IRA Report, Part B, pp. 184-185.

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830. Smith and Chapman (1995) conducted a survey of 30 apple orchards in the Nelson area

of New Zealand in order to rank the most important arthropod pests and measure perceptions of

the relative importance of ALCM. The results indicated that 33% of growers ranked ALCM

alone, 17% ranked ALCM and mites together, and 17% ranked ALCM, leafroller and mites

altogether as being the most serious arthropod pests, with 63% of growers considering that

ALCM adversely affects plant health.1045 This indicates that ALCM was indeed a serious pest

for New Zealand apple growers, at least in the 1990s. New Zealand has failed to provide any

actual evidence that New Zealand growers would assign different impact rankings in respect to

ALCM today compared to those ascertained by Smith and Chapman (1995).

831. New Zealand refers to the introduction in New Zealand of the integrated fruit production

programme as being a reason that the significance of ALCM may have decreased since the study

by Smith and Chapman (1995).1046 However, no such programme for ALCM exists in Australia,

and so the Smith and Chapman (1995) results remain relevant for the Australian situation.

832. New Zealand relies heavily on Rogers et al. (2006) in support of most of its assertions,

including that “[g]rowers would be very unlikely to assign the same impact rankings to ALCM

today”, compared to those ratings reflected in the Smith and Chapman (1995) report, and that

“[i]n New Zealand ALCM is an important pest solely in respect of young apple trees”.1047

Australia has explained above why the Rogers et al. (2006) provides inadequate support for New

Zealand’s assertions. In any event, the Rogers et al. (2006) paper refers to “Nelson orchards

with uncharacteristically high levels of ALCM during 2005”1048, which indicates that New

Zealand continues to have problems with high levels of ALCM in New Zealand even since the

introduction of the integrated fruit production programme.

833. It is clear that the IRA Team were primarily focussed on consequences for young trees:

[ALCM] is a specialist herbivore restricted to apple trees. It affects crown formation of young apple trees in the first stages of development, but mature trees are able to tolerate normal population levels. Damage to young leaves would provide opportunities for entry of plant pathogens.1049

1045 Exhibit AUS-101: Smith, J.T. and Chapman, R.B. (1995) “A survey of apple leafcurling midge (Dasyneura mali) in the Nelson District”, Proceedings of the 48th New Zealand Plant Protection Conference, pp. 117-120.

1046 New Zealand’s first written submission, paras. 4.367-4.368.1047 See: New Zealand’s first written submission, paras. 4.367-4.368.1048 Exhibit NZ-17: Rogers et al. (2006), p. 1.1049 Final IRA Report, Part B, p. 184.

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834. New Zealand has failed to provide any evidence or argument to suggest that ALCM

would not become a major problem in Australian orchards should it become established, just as

it was a major problem when ALCM first arrived in New Zealand.

ii. Impact across Australia

835. New Zealand claims that, “[b]ecause of the limited climatic range of ALCM, the IRA is

incorrect in its use of the concept of ‘all of Australia’ when referring to the impact on regions

where apples may be grown either commercially or domestically.”1050 It is unclear to Australia

to what New Zealand is referring. The consequences analysis for ALCM in the Final IRA

Report does not refer to “all of Australia” anywhere.1051 In fact, it is clear from the Final IRA

Report that the IRA Team did not consider the potential consequences would be “discernible at a

national level”, but would only have significance at the regional and local levels.1052

836. New Zealand further asserts that, “ALCM establishment in Australia will be limited by

geographical and climatic barriers.”1053 New Zealand fails to establish the relevance of its

assertion, or its reference to the alleged failure of ALCM to establish in certain parts of the

United States1054, in the context of the IRA Team’s consequences analysis.

837. In any event, in the consequences analysis, the IRA Team clearly did not assume that

ALCM would necessarily become successfully established in all of the areas where apples are

grown commercially in Australia.

iii. Use of insecticides & other production-related consequences


The IRA claims that an indirect consequence of the establishment of ALCM would be an increase in the use of insecticides, disruption of existing pest management programs, increases in control measures and increased costs to

1050 New Zealand’s first written submission, para. 4.369. 1051 Australia acknowledges that, on page 168 of the Final IRA Report, in the discussion on proximity

(relating to the probability of entry, establishment and spread), the IRA Team referred to taking an “average for all of Australia”. However, this reference is quite distinct from the IRA Team’s analysis of the consequences of an ALCM incursion.

1052 See: Final IRA Report, Part B, pp. 184-187.1053 New Zealand’s first written submission, para. 4.375.1054 New Zealand’s first written submission, para. 4.375.

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producers. Once again, the IRA fails to look at actual experience in dealing with ALCM.1055

839. According to the Final IRA Report, the IRA Team considered that “an increase in the use

of insecticides for control of [ALCM] because of difficulties involved in estimating optimum

times for insecticide application” may be an indirect consequence in relation to the eradication or

control of ALCM in Australia.1056 The basis for New Zealand’s claim is that, “[i]n New Zealand,

chemical control of ALCM is required only on nursery stock or recently planted apple trees

(Rogers et al. 2006)”, and that “[t]here is no industry requirement for insecticidal controls for

[ALCM] on producing trees.”1057

840. Australia has already explained why New Zealand’s reliance upon the report by Rogers et

al. (2006) in this context is misplaced. In any event, it is inappropriate for New Zealand to

attempt to draw a direct analogy between New Zealand’s current and well-established practices

for managing ALCM, and the management practices that may have to be newly implemented in

Australia if ALCM was to establish. New Zealand has been managing ALCM since the 1950s.

A more appropriate analogy would be New Zealand’s practices early in the period that ALCM

was first introduced. It is clear that chemical control programs have been used to control ALCM

in New Zealand, particularly early on.1058 Furthermore, it is commonly accepted that invasive

species do not necessarily behave in the same way when they are introduced to different parts of

the world, which may necessitate different approaches to eradication or control in different

situations.

841. Australia submits that New Zealand’s assertion that there would be no increase in the use

of insecticides in Australia is contradicted by the information supplied on the website of the

Horticulture and Food Research Institute of New Zealand Ltd, which states:

Since the 1960s, chemical control of apple leafcurling midge has been based on the use of organophosphates. These highly toxic chemicals have provided effective control of apple leafcurling midge and other pests but they have had the disadvantage of toxicity to many natural enemies. More recently, insect growth regulator compounds have been developed for insect control. These are more selective chemicals usually allowing survival of many natural enemies. Unfortunately, there is no insect growth regulator yet developed which is effective against apple leafcurling midge, and chemical control still relies on

1055 New Zealand’s first written submission, para. 4.370.1056 Final IRA Report, Part B, p. 185.1057 New Zealand’s first written submission, para. 4.371. 1058 Exhibit NZ-43: Tomkins et al. (1994); Exhibit NZ-44: Todd (1959).

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http://www.hortnet.co.nz/key/keys/info/control/almcontr/almchem2.htm


organophosphates. The apple leafcurling midge parasite, Playgaster demades, is so important for control of this pest in IFP [integrated fruit production] and organic production that every effort is now being made to eliminate the use of chemical control, and to rely instead on biological control for this pest.1059

842. Furthermore, it would not be appropriate to compare the costs of ALCM control in New

Zealand, where it has been established for over 55 years, to the potential control costs that

Australia would need to mount in the event that ALCM became established. The costs of trying

to eradicate an ALCM incursion in the first instance in Australia could be significant. Australia

notes that New Zealand has incurred significant costs as a result of trying to manage incursions

of exotic pests, for example painted apple moth and Asian gypsy moth.1060

iv. Use of biological predators to contribute to effective biological control

843. New Zealand claims that potential predators of ALCM occur in Australia that could

contribute to the biological control of ALCM if it became established.1061

844. Australia notes that the known natural enemies of ALCM in New Zealand include birds,

European earwig, a predatory mirid bug and a predatory mite,1062 all of which are present in

Australia.1063 However, it was not possible for the IRA Team to assess the degree to which these

potential predators present in Australia would prove effective against ALCM under Australian

conditions. New Zealand suggests that they “probably contribute to existing biological control

programmes”,1064 but provides no evidence in support of its assertion or its assertion that they

will be effective as biological control agents against ALCM in Australia.

845. The anthocorid bug (pirate bug) and a parasitoid wasp Platygaster demades (Walker) are

both predators of ALCM that are present in New Zealand, but not in Australia.1065

846. Australia notes that the main biological control agent of ALCM in New Zealand, the

parasitoid wasp P. demades, has a restricted degree of effectiveness. Todd (1959) observed that 1059 See, website: http://www.hortnet.co.nz/key/keys/info/control/almcontr/alm-chem.htm (accessed 10 July

2008). 1060 See, websites: http://www.cbd.int/doc/submissions/ias/ias-nz-moth-2007-en.pdf;

http://www.biosecurity.govt.nz/pests/plants/investigation-moth-spraying-qa; http://www.peoplesinquiry.co.nz/content/view/1/1/.

1061 New Zealand’s first written submission, para. 4.372. 1062 http://www.hortnet.co.nz/key/keys/info/enemies/alm-enem.htm. 1063 See: Final IRA Report, Part C, pp. 48, 62 & 86.1064 New Zealand’s first written submission, para. 4.372.1065 See: Final IRA Report, Part C, pp. 57 & 68.

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http://www.hortnet.co.nz/key/keys/info/enemies/alm-enem/almpara1.htm


P. demades fails to check the second generation of ALCM in New Zealand which restricts its

effectiveness as a controlling agent. 1066 This failure to control the second generation of ALCM

was investigated more recently by Shaw et al. (2005).1067 Peak parasitoid trap-catches coincided

with ALCM egg-laying peaks in generations one, three and four. However, second generation

parasitoid numbers were very low. This would seem to indicate that P. demades is not a good

controlling agent. Shaw et al. (2005) concluded that, “these results indicate that despite

considerable levels of parasitism, ALCM populations can remain high and bio-control by

P. demades is compromised by the asynchrony of host and parasitoid populations during the

second generation.”1068

v. Impact on trade


The presence of ALCM in New Zealand has no major impact on apples exports. New Zealand regularly exports apples to ALCM sensitive markets, e.g. China, Chinese Taipei, India, and California. When ALCM is detected the consignment is fumigated; New Zealand apple consignments have never been rejected because of the presence of ALCM.1069

848. However, New Zealand has not specified the nature of the “sensitivity” of other markets

to ALCM, or how New Zealand addresses those sensitivities. For example, in simply making

reference to “California”, New Zealand has not been explicit about the fact that there is an

extensive and intensive regulatory program required by the United States authorities for its apple

exports1070, reflected in the detailed official guidance provided to New Zealand apple

exporters.1071 Additionally, the documentation that accompanies New Zealand apple shipments

must include a “statement [that] will cite whether midges were found during inspection.”1072

1066 Exhibit NZ-44: Todd (1959).1067 Exhibit NZ-16: Shaw (2005).1068 Exhibit NZ-16: Shaw (2005).1069 New Zealand’s first written submission, para. 4.376. 1070 See: Exhibit AUS-102: United States Department of Agriculture, Fresh Fruits and Vegetables Import

Manual, 06/2008-35, 06/2008-48, pp. 2.36-2.37, 2.49, 3.216-3.217. The manual is available in full from the website: http://www.aphis.usda.gov/import_export/plants/manuals/ports/downloads/fv.pdf (accessed 10 July 2008).

1071 United States Department of Agriculture & New Zealand Ministry of Agriculture and Forestry (2007), Technical work plan for the USDA pre-export inspection of New Zealand pipfruit (apples, European pears & nashi) exported to the United States of America, February 2007; available at website: http://www.biosecurity.govt.nz/commercial-exports/plant-exports/compliance-programmes/usda-pipfruit (accessed 10 July 2008).

1072 See: Exhibit AUS-102: United States Department of Agriculture, Fresh Fruits and Vegetables Import Manual, 06/2008-35, pp. 2-36.

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http://www.aphis.usda.gov/import_export/plants/manuals/ports/downloads/fv.pdf


849. The IRA Team relied upon information from the export program for New Zealand apple

exports to the United States, as well as the technical information available from Lowe (1993),1073

that suggested that New Zealand fruit may be rejected for pre-clearance export to Japan if found

to be infested with ALCM.1074 The report by Suckling et al. (2007) also refers to the impact the

presence of [ALCM] cocoons on fruit can have on restricting market access1075, and Tomkins

(1998)1076 notes that fruit contaminated by pupal cocoons may be rejected for export.

vi. Conclusion on consequences

850. New Zealand’s challenge to the IRA Team’s evaluation of the biological and economic

consequences of an ALCM incursion in Australia is imprecise and unsubstantiated. Once again,

New Zealand has failed to appreciate the methodology used by the IRA Team to make its

assessment. New Zealand has failed to identify any evidence that the IRA Team did not take

into account or that there were any flaws in its evaluation.

(e) Conclusion: New Zealand fails to discredit the IRA Team’s assessment on

ALCM

851. Australia submits that the IRA Team properly evaluated the likelihood of entry,

establishment and spread of ALCM, as well as the potential biological and economic

consequences. New Zealand has therefore failed to demonstrate any flaws in the Final IRA

Report, let alone flaws that were “so serious” that it should prevent the Panel from having

reasonable confidence in the evaluation made. In any event, Australia has demonstrated that the

IRA Team properly evaluated risk and applied its expert judgment rigorously to arrive at an

1073 Lowe, S (1993) “Apple leafcurling midge”, New Zealand Apple and Pear Marketing Board: Pipmark Technical Bulletin. As explained above, Australia is not in a position to provide this document to the Panel as an exhibit. However, Australia notes that the findings of Lowe (1993) have been referred to in a number of other scientific papers, including: Exhibit AUS-103: Harris MO, Foster SP, Agee K & Dhana S, (1996) “Sex pheromone communication in the apple leafcurling midge (Dasineura mali)”, Proceedings of the 49th New Zealand Plant Protection Conference 1996, p. 52; Exhibit NZ-43: Tomkins AR, Wilson DJ, Hutchings SO & June S (1994) “A survey of apple leafcurling midge (Dasyneura mali) management in Waikato orchards”, Proceedings of the 47th New Zealand Plant Protection Conference, 346; Exhibit NZ-17: Rogers DJ, Walker JTS & Cole LM (2006), “Apple leafcurling midge cocoons on apple: pupal occupancy and mortality”.

1074 Final IRA Report, Part B, p. 186. The IRA Team also relied upon: Exhibit AUS-104: Anonymous (2002)

1075 Exhibit NZ-15: Suckling DM, Walker JTS, Shaw PW, Manning L, Lo P, Wallis R, Bell V, Sandanayaka WRM, Hall DR, Cross JV & El-Sayed AM (2007), “Trapping Dasineura mali (Diptera: Cecidomyiidae) in Apples”, Journal of Economic Entomology 100(3), p. 745.

1076 Exhibit AUS-89: Tomkins AR (1998), “Apple leaf-curling midge life cycle”, HortFACT, (Horticulture and Food Research Institute of New Zealand Ltd).

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objective and credible assessment for ALCM. Accordingly, the risk assessment is consistent

with Article 5.1 of the SPS Agreement.

267


6. The IRA Team made an objective and credible evaluation of the likelihood of entry,

establishment and spread according to the SPS measures which might be applied

(a) New Zealand has failed to show that any measures not evaluated are SPS

measures

852. New Zealand claims that the risk assessment relied upon by Australia failed to evaluate

the likelihood of entry, establishment or spread “according to the [SPS] measures which might

be applied” (Annex A(4)).1077 According to New Zealand:

While the IRA identifies various different risk reduction factors for the three pests at issue, it only provides “some” evaluation of the extent to which these factors could reduce risk, particularly in relation to fire blight. Further, the IRA fails to provide any evaluation of a particular measure proposed by New Zealand. Accordingly, it is not an evaluation of the likelihood of entry, establishment or spread of the three pests according to the SPS measures which might be applied within the meaning of Article 5.1.1078

853. Australia submits that the IRA Team clearly evaluated the scientific and technical

efficacy of the principal measures recommended to reduce the risks of the relevant pests to

achieve Australia’s ALOP, along with evaluating a number of other potential risk management

alternatives.1079

854. At the outset, Australia notes that the obligation at issue only relates to the evaluation of

SPS measures. New Zealand must show that any “measures” allegedly not evaluated are indeed

SPS measures. Australia submits that New Zealand has failed to establish that any of the

“measures” allegedly not evaluated are “SPS measures” within the meaning of Annex A(1) of

the SPS Agreement.

(b) The IRA Team correctly evaluated the risk reduction measures

i. Only measures which reduce risk need to be substantively evaluated

855. On the basis of the definition of “risk assessment” provided in Annex A(4), the Appellate

Body explained that a valid risk assessment must:

1077 New Zealand’s first written submission, paras. 4.158, 4.383.1078 New Zealand’s first written submission, para. 4.383. 1079 This is acknowledged by New Zealand at: New Zealand’s first written submission, paras. 4.385 &

4.394.

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… evaluate the likelihood of entry, establishment or spread of [the relevant pest or disease] according to the SPS measures which might be applied.1080

856. New Zealand refers to the Appellate Body’s reasoning in Australia – Salmon and its

finding that, although the risk assessment in question examined a large number of potential risk

reduction measures, the consideration of the SPS measures which might be applied was

inadequate in that case because there was only “some” evaluation of the extent to which those

factors could reduce the risk.1081 New Zealand seems to assert that the IRA Team’s alleged

failure to evaluate certain of the requirements for fire blight, European canker and some general

requirements is analogous to the situation in Australia – Salmon.1082

857. However, Australia submits that the Appellate Body’s reasoning does not imply that

there is an obligation to evaluate every single requirement that is actually imposed, whether it is

a principal measure or merely an ancillary requirement. In its reasoning, the Appellate Body

focussed on whether the risk reduction measures at issue were evaluated for their effectiveness in

reducing the “total risk”.1083 The panel had found that “the 1996 Final Report identifies such

measures but does not, in any substantial way, evaluate or assess their relative effectiveness in

reducing the overall disease risk.”1084

858. It is clear that the panel, and therefore the Appellate Body, was referring to the principal

risk reduction measures (those that are to reduce risk) for the product at issue1085, and not merely

any ancillary requirements to support, verify or operationalise the principal risk reduction

measures. Therefore, Australia submits that the Appellate Body’s reasoning is limited to

whether principal risk reduction measures are evaluated in a sufficiently substantial way in a risk

assessment. New Zealand has not alleged that any of the principal risk reduction measures

applied by Australia were not properly evaluated by the IRA Team.

1080 Appellate Body Report, Australia – Salmon, para. 121. (original emphasis)1081 Appellate Body Report, Australia – Salmon, paras. 132-134. (Referred to by New Zealand at para.

4.380 of its first written submission; however, Australia notes that New Zealand has misquoted the Appellate Body in its para. 4.380.)

1082 New Zealand’s first written submission, paras. 4.380-4.383.1083 Appellate Body Report, Australia – Salmon, para. 133.1084 Appellate Body Report, Australia – Salmon, para. 133 (quoting Panel Report, Australia – Salmon, para.

8.90). (footnote omitted; emphasis removed)1085 The panel referred to the following “risk reduction factors”: “restricting zone of origin, species of

origin, life cycle stage; pre and post shipping quarantine; product testing with tests having high sensitivity; processing, maturation and storage for specified time and temperature; treatments, (e.g., heating, disinfection); restricting the destination; vaccination; and certification.” (Panel Report, Australia – Salmon, para. 8.89.)

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859. Australia’s view is supported by the Appellate Body’s statement that, “[w]e agree with

the Panel that the measures which might be applied are those which reduce the risks of

concern”.1086 Thus, the measures which are required to be examined are those which actively

reduce the risks of concern – i.e. the principal risk reduction measures – rather than those

measures which do not actually reduce the risks themselves, but are required simply to support,

verify and operationalise the principal risk reduction measures.

ii. Evaluation should not be limited to those measures already in place

860. New Zealand also refers1087 to the Appellate Body’s statement in Japan – Apples that “a

risk assessment should not be limited to an examination of the measure already in place or

favoured by the importing Member.”1088 Australia notes that the Appellate Body made this

statement in the context of agreeing with the panel that “it would [not] be sufficient … to simply

consider the particular measures that are already in place, to the exclusion of other possible

alternatives”1089, on the basis that:

[T]he evaluation contemplated … should not be distorted by preconceived views on the nature and the content of the measure to be taken; nor should it develop into an exercise tailored to and carried out for the purpose of justifying decisions ex post facto.1090

861. Although New Zealand alleges that Australia failed to evaluate a particular measure

proposed by New Zealand1091, it does not suggest that the IRA Team’s evaluation was limited to

a specific set of pre-determined measures or those already in place. It is clear from the Final

IRA Report that a range of potential alternative risk reduction measures was evaluated for each

of the pests at issue in this dispute.1092

(c) New Zealand’s claims are without basis

862. New Zealand makes two principal claims in relation to whether the Final IRA Report

evaluated the likelihood of entry, establishment and spread according to the SPS measures which

1086 Appellate Body Report, Australia – Salmon, para. 132. (emphasis added)1087 New Zealand’s first written submission, para. 4.382.1088 Appellate Body Report, Japan – Apples, para. 208. 1089 Panel Report, Japan – Apples, para. 8.283. (emphasis added)1090 Appellate Body Report, Japan – Apples, para. 208.1091 See: New Zealand’s first written submission, paras. 4.383, 4.397-4.399.1092 See: Final IRA Report, Part B, pp. 105-116 (fire blight), 150-155 (European canker), 188-192 (ALCM),

& 313-325.

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might be applied: (i) that there was only “some” evaluation of certain requirements imposed by

Australia; and (ii) that certain measures proposed by New Zealand were not evaluated.1093

i. Those requirements not evaluated by the IRA Team are not risk reduction

measures

863. The substance of New Zealand’s first claim rests on the alleged lack of evaluation by the

IRA Team of the ancillary requirements which act to support, verify and operationalise the

principal risk reduction measures in the Final IRA Report.

864. New Zealand asserts that the IRA Team did not evaluate the following requirements for

fire blight:

a. The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of fire blight.

b. The requirement that all grading and packing equipment that comes in direct contact with apples be cleaned and disinfected (using an approved disinfectant) immediately before each Australian packing run.

c. The requirement that packing houses registered for export of apples process only fruit sourced from registered orchards.1094

865. None of these requirements “operates in some concrete way in its own right”1095 to reduce

the risks associated with fire blight. Each of the requirements is imposed to support, verify and

operationalise the principal risk management measures imposed pursuant to the systems

approach for fire blight (i.e. orchards free from symptoms plus disinfection treatment).

866. In respect of the measures for European canker, New Zealand challenges:

a. The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of European canker.

b. The requirement that all new planting stock be intensively examined and treated for European canker.1096

1093 New Zealand’s first written submission, para. 4.383. 1094 New Zealand’s first written submission, para. 4.386. (footnotes omitted)1095 Panel Report, US – Export Restraints, para. 8.85.1096 New Zealand’s first written submission, para. 4.395.

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867. As previously explained, Australia does not impose the requirement (a) identified by

New Zealand. The second requirement is imposed to support, verify and operationalise

Australia’s principal measure for European canker that fruit be sourced only from pest free

places of production.

868. In respect of the general measures, New Zealand challenges:

a. The requirement that Australian Quarantine and Inspection Service officers be involved in orchard inspections for European canker and fire blight, in direct verification of packing house procedures, and in fruit inspection and treatment.

b. The requirement that New Zealand ensure that all orchards registered for export to Australia operate under standard commercial practices.

c. The requirement that packing houses provide details of the layout of premises.1097

869. As previously explained, these are ancillary requirements which support, verify and

operationalise the principal risk management measures, rather than operate “in some concrete

way in [their] own right”1098 to reduce risk.

ii. There is no obligation to evaluate any and every potential measure

870. New Zealand also points to the IRA Team’s discussion of “other potential risk

management measures” for fire blight, which included irradiation and fumigation, arguing that

the risk assessment failed “to evaluate the relative effectiveness in reducing the overall disease

risk of any of these identified measures.”1099 Australia considers New Zealand’s argument to be

rather perplexing. The IRA Team made it clear that “[t]here was insufficient data relevant to fire

blight for the IRA Team to adequately assess the efficacy of these alternatives”, and that “the

proposed measures are always open to review if additional relevant information is

forthcoming”.1100

1097 New Zealand’s first written submission, para. 4.400. (footnotes omitted)1098 Panel Report, US – Export Restraints, para. 8.85.1099 New Zealand’s first written submission, paras. 4.388-4.391.1100 Final IRA Report, Part B, p. 113 (quoted in New Zealand’s first written submission, para. 4.389). The

Final IRA Report also notes more generally that “[i]t is recommended that Biosecurity Australia and AQIS in consultation with MAFNZ, will review the import requirements after the first year of trade”: Final IRA Report, Part B, p. 325.

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871. New Zealand does not challenge the IRA Team’s opinion that there was insufficient data

available or identify any particular source of data that the IRA Team should have referred to.

Instead, it asserts that:

[T]he IRA’s dismissal of certain measures on the basis that there was “insufficient data relevant” to “adequately assess the efficacy of these alternatives” is, itself, inadequate. As noted by the Appellate Body in Australia – Salmon, the existence of unknown and uncertain elements does not justify a departure from the requirements of Article 5.1. Australia cannot rely on “insufficient data” to excuse itself from its obligation to evaluate the likelihood of entry, establishment or spread of fire blight according to the SPS measures which might be applied.1101

872. The IRA Team could not have evaluated the suitability of these potential measures in the

absence of relevant evidence, while complying with its obligation to evaluate measures on the

basis of scientific evidence and principles at the same time. New Zealand’s argument therefore

lacks any merit. In any event, the SPS Agreement does not impose an obligation to evaluate any

and every measure that may potentially reduce a particular risk. The IRA Team clearly

evaluated a range of potential risk reduction measures for fire blight and did not confine its

evaluation to only those measures that were eventually recommended.1102

873. Finally, New Zealand asserts that the Final IRA Report failed to properly evaluate the

likelihood of entry, establishment and spread if imports were restricted to “retail ready” apples in

respect of fire blight, European canker and ALCM.1103 The SPS Agreement does not impose any

obligation to evaluate any measures proposed by an exporting country. New Zealand has not

identified any source of such an obligation. For each of the pests at issue, the IRA Team

evaluated a range of potential risk reduction measures that extended beyond those measures

ultimately recommended to achieve Australia’s ALOP.1104

(d) Conclusion: The IRA Team objectively and credibly evaluated the measures

which reduce risk

874. Australia submits that the Final IRA Report clearly met the requirement to evaluate the

likelihood of entry, establishment or spread according to the SPS measures which might be

1101 New Zealand’s first written submission, para. 4.392. (footnote omitted)1102 See: Final IRA Report, Part B, pp. 105-116.1103 New Zealand’s first written submission, paras. 4.397-4.399. 1104 See: Final IRA Report, Part B, pp. 105-116, 150-155, 188-192, 313-325.

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applied to reduce the risks of concern.1105 New Zealand has failed to establish that there is an

obligation for a risk assessment to evaluate any and every potential SPS measure which might be

applied. Such a requirement would be impossible for any Member to satisfy. Accordingly, New

Zealand has not established that the Final IRA Report fails to satisfy the third requirement of a

valid risk assessment under the SPS Agreement.

7. Australia has demonstrated that the Final IRA Report is consistent with Article 5.1

and the third requirement of Article 2.2

875. Australia submits that the Final IRA Report is a valid risk assessment within the meaning

of Article 5.1 and related provisions of the SPS Agreement. New Zealand has failed to satisfy its

burden to show that those elements of the Final IRA Report relating to the three pests in question

are not objective and credible, that the IRA Team failed to take into account evidence that would

have led to a lower level of assessed risk had it done so, or that any flaws identified are so

serious as to prevent the Panel from having reasonable confidence in the evaluation made.1106

876. Australia notes that New Zealand does not claim that Australia’s measures are not “based

on” the risk assessment relied upon by Australia. Therefore, given that the Final IRA Report is a

valid risk assessment, Australia submits that the Panel must find that Australia’s measures are

consistent with Article 5.1 of the SPS Agreement and accordingly with the third requirement of

Article 2.2.

1105 See: Appellate Body Report, Australia – Salmon, paras. 121, 132.1106 See: Panel Report, Australia – Salmon (Article 21.5 – Canada), paras. 7.51 & 7.57.

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D. AUSTRALIA HAS ACTED CONSISTENTLY WITH ARTICLE 5.2

1. New Zealand inappropriately seeks to alter the legal obligation

877. Article 5.2 of the SPS Agreement elaborates on the factors to be considered in a risk

assessment for the purposes of Article 5.1. Article 5.2 applies to all risk assessments and

identifies seven technical factors that Members must take into account.

878. According to the panel in US – Continued Suspension:

… taking available scientific evidence into account does not require that a Member conform its actions to a particular conclusion in a particular scientific study. The available scientific information may contain a multiplicity of views and data on a particular topic … the requirement in Article 5.2 is to ensure that a Member, when assessing risk with the aim of formulating an appropriate SPS measure, has as wide a range as possible of scientific information before it to ensure that its measure will be based on sufficient scientific data and supported by scientific principles.1107

879. New Zealand quotes part of this passage in apparent agreement1108, yet it argues that the

phrase “to take into account” is equivalent in meaning to the phrase “to give genuine

consideration”.1109 The term to “give genuine consideration” does not appear in Article 5.2 or in

any of the related provisions that form part of its interpretive context. New Zealand’s

interpretation of the obligation under Article 5.21110 is not grounded in the text of the

SPS Agreement. Australia is concerned by New Zealand’s attempt to convert Article 5.2 into an

obligation that Australia and the IRA Team should have effectively agreed with New Zealand’s

own view of the relevant technical factors listed in the provision.

880. New Zealand’s position is at odds with the panel’s statement in US – Continued

Suspension that “taking available scientific evidence into account does not require that a Member

conform its actions to a particular conclusion in a particular scientific study.”1111 Moreover, New

Zealand fails to acknowledge that Article 5.2 is directed at ensuring that a sufficiently wide

range of scientific and other technical information is taken into account in the assessment of

1107 Panel Report, US – Continued Suspension, para. 7.480. (emphasis added)1108 See: New Zealand’s first written submission, para. 4.408.1109 See: New Zealand’s first written submission, paras. 4.411, 4.428. 1110 New Zealand’s first written submission, paras. 4.409-4.411.1111 Panel Report, US – Continued Suspension, para. 7.480. (emphasis added)

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risks. Article 5.2 is not a vehicle to rehearse arguments about what New Zealand considers to be

sufficient scientific evidence that it should properly have made under Article 2.2 and Article 5.1.

881. New Zealand claims that the IRA Team failed to take into account the following factors

under Article 5.2: available scientific evidence; relevant processes and production methods;

relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; and

relevant ecological and environmental conditions.1112 On this basis New Zealand asserts that

Australia is in breach of Article 5.2.1113

882. Australia rejects New Zealand’s assertion that it has acted inconsistently with Article 5.2.

There can be no question that the IRA Team’s comprehensive scientific risk assessment, set out

in the Final IRA Report, is consistent with this obligation as it draws on a wealth of available

scientific and technical information that reflects a wide range of perspectives.1114 Furthermore,

the IRA Team took into account each of factors raised by New Zealand under Article 5.2, as set

out below.

2. The IRA Team took into account available scientific evidence

883. New Zealand alleges that the IRA Team “fail[ed] to take into account available scientific

evidence in relation to all three of the pests at issue.”1115 However, New Zealand only cites

examples of this alleged failure in relation to fire blight and European canker. Accordingly,

Australia considers that New Zealand does not contest this issue in relation to ALCM, and it

should not be permitted to expand its claims at a later stage in these proceedings.

i. Fire blight

884. New Zealand claims that the Final IRA Report fails to take into account the “scientific

evidence that mature, symptomless apple fruit do not provide a pathway for the transmission of

fire blight”.1116 The sole basis of this claim is as follows:

1112 New Zealand’s first written submission, para. 4.411.1113 New Zealand’s first written submission, paras. 4.411, 4.416, 4.421, 4.422, 4.423 & 4.427.1114 In considering the content of the obligation under Article 5.2, Australia suggests the Panel have regard

to the discussion by the panel in EC – Biotech Products in the context of Article 10.1 of the SPS Agreement: Panel Report, EC – Biotech Products, paras. 7.1620-7.1627.


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The fact that the IRA makes no reference to the Panel’s conclusion in Japan – Apples or to its thorough review of the scientific literature, is a clear indication that the IRA did not give genuine consideration to the lack of scientific evidence that mature symptomless apples provide a pathway for the transmission of fire blight.1117

885. In Australia’s view, an alleged failure by the IRA Team to refer to the panel’s conclusion

in Japan – Apples1118 does not amount to a failure to consider scientific evidence that mature

apples do not provide a pathway for the transmission of fire blight. The Final IRA Report does

not evaluate the findings of Japan – Apples, or its review of the scientific literature, because this

panel report and its findings are not scientific evidence. This does not mean that the IRA Team

did not consider all the scientific evidence available to it.

886. New Zealand’s suggestion that a failure to take account of the findings in Japan – Apples

means that “the IRA did not give genuine consideration to the … scientific evidence [in relation

to whether] mature symptomless apples provide a pathway for the transmission of fire blight”1119,

is clearly incorrect. The IRA Team considered a wide range of scientific material from many

sources in its fire blight risk assessment, many of which were also considered by the panel in the

Japan – Apples dispute. Some of those references supported the conclusion that the pathway

was unlikely to be completed. Others supported a contrasting view. Both sets of evidence were

taken into account by the IRA Team.1120

887. Australia submits that the IRA Team conducted a comprehensive and balanced review of

the scientific literature. Indeed, if it had omitted to do this and relied simply on the conclusions

of Japan – Apples as New Zealand suggests, Australia certainly could not claim to have taken

the available evidence into account. Accordingly, the IRA Team properly took into account the

available scientific evidence on fire blight, consistent with Article 5.2.

1117 New Zealand’s first written submission, para. 4.414. 1118 The Panel Report in Japan – Apples is referenced in the Final IRA Report. 1119 New Zealand’s first written submission, para. 4.414. 1120 For example, in considering whether E. amylovora would be present in or on apple fruit under

Importation step 2, the IRA Team assessed evidence which supported epiphytic infestation and endophytic infection, and that evidence which did not. This is clearly demonstrated by the fact that the section of the Final IRA Report addressing Importation step 2 is divided into four parts titled with headings describing the kind of evidence considered. These are: “infestation of mature fruit”, “no infestation of mature fruit”, “infection of mature fruit” and “no infection of mature fruit”. (Final IRA Report, Part B, p. 55.)

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ii. European canker

888. New Zealand refers to the outbreak of European canker in Tasmania and asserts that:

The IRA considers this incident minimally at most and proceeds on the basis of assumptions about interstate and international trade in apples from Tasmania that are not based on fact. The IRA fails to take account of the relevant fact that, despite significant interstate trade in Tasmanian apples, transmission of the disease to the Australian mainland did not occur.1121

889. It is simply untrue to suggest that the IRA Team considered the Tasmanian outbreak of

European canker “minimally at most”. On the contrary, the European canker chapter in the Final

IRA Report contains 16 separate references to this incident.1122 The IRA Team also considered a

substantive study by Ransom (1997) specifically dealing with the Tasmanian outbreak.1123

890. The likely reasons for the limited spread of N. galligena during the Tasmanian outbreak

are explained in the Final IRA Report. First, Tasmania implemented a robust program to

eradicate the disease which was ultimately successful.1124 Secondly, in the Tasmanian strain of

the disease there were no ascospores, which are better suited to long distance dispersal than

conidia.1125 Thirdly, the local climatic conditions during the relevant time period in Spreyton,

Tasmania may have been unfavourable to that particular strain of the disease.1126 Fourthly,

chemicals being used to control apple scab may have had an impact.1127 Finally, as previously

mentioned, Australia considers that the Tasmanian outbreak was likely to have been a unique

strain of N. galligena that required another mating type for reproduction.

891. The Final IRA Report acknowledges that during the Tasmanian outbreak of European

canker, Australia did not prohibit the movement of fruit out of the area.1128 While there may

have been “significant interstate trade in Tasmanian apples”, as New Zealand asserts1129, during

the outbreak, this does not equate to a significant interstate trade in Spreyton apples. In fact, the

Final IRA Report suggests that it was unlikely there was significant movement of fruit out of

1121 New Zealand’s first written submission, para. 4.415. (emphasis added)1122 See: Final IRA Report, Part B, pp. 117, 141, 143, 144, 146, 147, 148, 149, 154 & 155.1123 Exhibit NZ-13: Ransom (1997). See Final IRA Report, Part B, p. 368.1124 Final IRA Report, Part B, pp. 117, 143, 144, 146, 149 & 154.1125 Final IRA Report, Part B, pp. 141 & 147.1126 Final IRA Report, Part B, pp. 141, 144 & 147.1127 Final IRA Report, Part B, p. 141.1128 Final IRA Report, Part B, p. 155.1129 New Zealand’s first written submission, para. 4.415.

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Spreyton at the time. The IRA Team considered that the quarantine authorities at the time may

have concluded that the small volume of fruit that would be moved out of the Spreyton area did

not constitute an unacceptable risk.1130 This view is actually borne out by the unverified data

which New Zealand has collected on Spreyton apple production.1131 According to this data, each

year during the period 1970-1976 an average of 151 tonnes of Spreyton apples were shipped to

the mainland – that is less than 0.04% of annual production in Spreyton. It is also worth noting

that fruit infection was not reported during the Tasmanian outbreak.

892. In light of the preceding discussion it is clear that the IRA Team took into account the

available scientific evidence in relation to the outbreak of European canker in Tasmania. New

Zealand has therefore failed to establish that the IRA Team did not take into account the

available scientific evidence.

3. The IRA Team took into account relevant processes and production methods

893. New Zealand alleges that the IRA Team “failed … to take into account relevant New

Zealand practices with respect to the export of apples, and has failed to take into account the

practices of its own packing industry. This failure affects Australia’s assessment of the risk of

entry, establishment and spread of fire blight, European canker and ALCM.”1132 Australia will

show that all such matters were taken into account by the IRA Team.

894. In relation to fire blight, European canker and ALCM, New Zealand argues that the IRA

Team should not have assumed that “apple fruit from New Zealand will be repacked at rural

packing houses in close proximity to orchards”.1133 This argument rests on New Zealand’s

contention that “in line with commercial requirements, New Zealand increasingly exports apple

fruit … as ‘just-in-time’ consignments in ‘retail-ready’ packs.”1134

895. As previously mentioned, any attempt by New Zealand to transform the product at issue

in this dispute into “retail-ready” “just-in-time” apple fruit should be rejected by the Panel. New 1130 Final IRA Report, Part B, p. 155. At present, 90% of the Tasmanian apple crop comes from the Huon

Valley, the remaining 10% coming from the Tamar Valley and Spreyton in the north. The current production in Spreyton can be estimated as approximately 5-7% of the Tasmanian crop.

1131 New Zealand’s first written submission, Annex 5, Table 4, p. 249. Australia has been unable to verify the accuracy of the data contained in Table 4 and would be grateful if New Zealand could provide copies of the relevant production cards from Tasmanian Archives.

1132 New Zealand’s first written submission, para. 4.417.1133 New Zealand’s first written submission, para. 4.418. 1134 New Zealand’s first written submission, para. 4.418. (emphasis added)

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Zealand refused to limit its apple exports to “retail ready” during the IRA process. 1135 New

Zealand’s use of the word “increasingly” in the above quote is indicative of its continued

ambivalence towards the mode of trade.

896. As explained above in relation to Australia’s arguments on ALCM under Article 5.1, the

requirements and demands of Australian importers and buyers will ultimately influence the type

of product exported from New Zealand.1136 One of Australia’s largest retailers of fresh fruit,

Coles, provides returnable plastic crates to suppliers for fruit to be packed and delivered to Coles

retail outlets for sale,1137 which Australia doubts will be shipped empty to New Zealand to permit

New Zealand exporters to pack “retail ready” for the Australian market.

897. In respect of New Zealand’s argument that most of its exports would be “retail ready”

and therefore require little repacking in Australian orchard-based packing houses, Australia notes

that the IRA Team considered two possible scenarios in respect of ALCM, as follows:

One scenario was based on 0.1%-5% of imported apples being distributed to orchard packing houses and the remainder (95%-99.9%) being distributed to urban wholesalers. The other scenario was based on 70%-100% of imported apples being distributed to orchard packing houses and the remainder (0-30%) being distributed to urban wholesalers.1138

898. In relation to fire blight, European canker and ALCM, New Zealand also claims that

Australia “failed to take into account Australian domestic packing house practices and

standards” on the basis of New Zealand’s argument that “[n]o country with a fruit fly problem

like that of Australia would permit packing houses to leave waste exposed to the elements.”1139

899. As explained above in relation to Australia’s arguments under Article 5.1, New Zealand

fails to acknowledge that practices to manage fruit fly are only mandated in fruit fly free areas

and are not implemented unless there is actually an outbreak of fruit fly in a particular area in

1135 See: Final IRA Report, Part B, pp. 9-10.1136 Exhibit AUS-63: United States Department of Agriculture Foreign Agricultural Service, “New Zealand

Fresh Deciduous Fruit Report 2007”, GAIN Report Number: NZ7033, 18 December 2007, p. 8.1137 Exhibit AUS-62: Coles Myer’s returnable plastic crate initiative: Coles Group, National Packaging

Covenant Annual Report 2006/7, p. 27 (website http://www.packagingcovenant.org.au/documents/File/Coles_Group_AR_06_07_Public.pdf, accessed 9 July 2008); Coles Myer Ltd, Corporate Social Responsibility Report 2005, p. 16 (website http://www.colesgroup.com.au/library/newsmedia/20051019_corporate_social_responsibility_report.pdf, accessed 9 July 2008).

1138 Final IRA Report, Part B, p. 172. 1139 New Zealand’s first written submission, paras. 4.419-4.420.

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Australia.1140 When there is an outbreak, fruit fly management is targeted at the production

aspect and on uncovered fruit and waste in specified proximity zones to the outbreak through the

use of fruit fly specific sprays.1141 In any event, the bulk of relevant apple handling facilities in

Australia occur in apple production regions that are not those specifically intended as fruit fly

free areas, or are areas where fruit flies are not historically an issue for apple production. New

Zealand has failed to provide any evidence to suggest otherwise.

900. New Zealand has therefore failed to establish that the IRA Team did not take into account

the relevant processes and production methods.

4. The IRA Team took into account relevant inspection, sampling and testing methods

901. New Zealand does not contest this issue in relation to either fire blight or European

canker. New Zealand claims in respect of ALCM that “Australia ignores the inspection that

would take place by AQIS officials on the entry of apples into Australia. The standard AQIS

protocol is a 600 unit inspection, which is applied to virtually all of the many hundreds of plant

products imported into Australia.”1142

902. Presumably New Zealand is referring to its argument that the IRA Team failed to take

into account a 600-unit inspection by AQIS in its assessment of Importation step 8. 1143 At

Importation step 8, the IRA Team evaluated the likelihood that any ALCM on imported New

Zealand fruit survives minimum border procedures in Australia. As previously explained,

Importation step 8 only takes into account minimum on-arrival border procedures1144, rather than

any potential additional measures, such as a 600 fruit inspection by AQIS. The IRA Team was

assessing the unrestricted risk. The efficacy of a 600 unit AQIS inspection to address the risks

associated with ALCM was assessed by the IRA Team when it evaluated what measures could

be applied to mitigate the risks.1145

1140 See: Exhibit AUS-93: Extract from AQIS Plant Programs Section (2008), Australia – New Zealand Bilateral Quarantine Arrangement: Systems Operation Manual 7, February 2008, pp. 26-28.

1141 See, for example: Exhibit AUS-94: Standing Committee on Agriculture and Resource Management, Code of Practice for Management of Queensland Fruit Fly, (Interstate Plant Health Working Group, Australia), September 1996, Sections 3 & 4.

1142 New Zealand’s first written submission, para. 4.422. 1143 See: New Zealand’s first written submission, para. 4.346. 1144 Final IRA Report, Part B, page 23. 1145 See: Final IRA Report, Part B, pages 188-192.

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the relevant inspection, sampling and testing methods.

5. The IRA Team took into account the prevalence of specific diseases or pests

904. New Zealand does not contest this issue in relation to either fire blight or European

canker, and it should not be permitted to expand its claims at a later stage in the proceedings.

New Zealand claims that, “[i]n assessing the likelihood that apples will be infested with ALCM,

Australia failed to take into account the actual prevalence of viable ALCM pupae, rather than

just cocoons which are in many cases empty.”1146 New Zealand appears to be referring to the

IRA Team’s analysis at Importation step 2 for ALCM, at which it assessed the likelihood that

picked apples would be infested with viable ALCM.1147 New Zealand asserts that the IRA Team

reached its conclusions on Importation step 2 on the basis of a study by Tomkins et al. (1994)

only. As explained above, the IRA Team clearly took into account the Rogers et al. (2006)

paper identified by New Zealand.1148 New Zealand’s claim that that study “indicates that only

approximately 15% of cocoons contain viable pupae”1149 is erroneous, as previously explained.

The IRA Team clearly evaluated the evidence on viability of ALCM cocoons provided by

Tomkins et al. (1994), Rogers et al. (2006), Lowe (1993) and HortResearch (MAFNZ, 2005).1150


the prevalence of specific diseases or pests.

6. The IRA Team took into account relevant ecological and environmental conditions

906. New Zealand does not contest this issue in relation to either fire blight or ALCM, and

should not be permitted to expand its claims at a later stage in these proceedings. New Zealand

asserts, in relation to European canker, that the IRA Team:

… failed … to take into account relevant environmental conditions, by ignoring climatic conditions. The climatic conditions Australia has ignored have a bearing both on the likelihood of infection in New Zealand and on the likelihood that European canker would establish and spread in Australia.1151

1146 New Zealand’s first written submission, para. 4.423.1147 See: Final IRA Report, Part B, pages 159-160. 1148 New Zealand’s first written submission, para. 4.423.1149 New Zealand’s first written submission, para. 4.423.1150 See: Final IRA Report, Part B, pages 159-160. 1151 New Zealand’s first written submission, para. 4.424. See also paras. 4.425-4.426.

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907. Australia rejects New Zealand’s assertion in this regard. The European canker chapter in

the Final IRA Report contains four separate sections dedicated specifically to discussion of

relevant environmental conditions, including climate.1152

908. Further, as previously indicated, Australia considers that New Zealand’s climate analysis

is too narrow.1153 Australia’s modelling demonstrates that the area of potential European canker

establishment and spread in Australia covers a much larger area than suggested by New Zealand

(Figures 1 & 2, Annex 2). In addition, contrary to what New Zealand suggests,1154 these climatic

conditions are present in the major pome fruit regions of Australia (Figure 3, Annex 2).

909. Australia also does not accept that “no region in New Zealand has climatic conditions

suitable for fruit infections in summer”.1155 On the contrary, the Final IRA Report refers to

evidence of occasional N. galligena fruit rot in New Zealand due to wet conditions during

harvest in the summer.1156 In addition, Australia’s modelling (Annex 2) confirms the incidence

of European canker in New Zealand.

910. In light of the preceding discussion it is clear that the IRA Team did take into account

relevant climatic conditions in relation to European canker. New Zealand has therefore failed to

establish that the IRA Team did not take into account the relevant ecological and environmental

conditions.

7. Conclusion: New Zealand has failed to demonstrate that Australia has acted

inconsistently with Article 5.2

911. Australia has demonstrated that the IRA Team took into account all the factors

challenged by New Zealand under Article 5.2. New Zealand has failed to demonstrate

otherwise. Australia has accordingly acted consistently with its obligations under Article 5.2 of

the SPS Agreement.

1152 Final IRA Report, Part B, pp. 119, 137, 140, & 141.1153 New Zealand first written submission, Annex 3, pp. 218-240.1154 New Zealand first written submission, para. 4.425.1155 New Zealand first written submission, para. 4.425.1156 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook and Bailey, (1965); Exhibit NZ-34:

Braithwaite (1996); and Exhibit AUS-51: MAFNZ, 2005a: Final IRA Report, Part B, pp 121-123.

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E. ALTERNATIVELY, AUSTRALIA’S MEASURES ARE NONETHELESS CONSISTENT

WITH ARTICLE 2.2

912. Article 2.2 of the SPS Agreement requires that SPS measures must be based on scientific

principles (second requirement) and that SPS measures must not be maintained without

sufficient scientific evidence (third requirement), inter alia.1157

1. New Zealand’s approach to Article 2.2 is confused and inconsistent

913. In Australia’s view, New Zealand’s approach to Article 2.2 is confused and inconsistent.

914. First, New Zealand does not substantively deal with Article 2.2 second requirement in its

analysis of Article 2.2 third requirement. Instead, New Zealand treats Article 2.2 second

requirement differently and deals with it in a cursory fashion under its analysis of Article 5.1.1158

This approach appears to be inconsistent with the panel’s view in EC – Biotech Products which

suggests that “[i]t is appropriate to analyse separately the first requirement [of Article 2.2], on

the one hand, and the second and third requirements [of Article 2.2], on the other hand.”1159

Presumably, the panel in EC – Biotech Products took this view because it considered that

whether SPS measures are based on scientific principles “may be useful in understanding the

extent of [the respondent’s] obligations under that Article”.1160

915. Secondly, New Zealand addresses its arguments on Article 2.2 third requirement in

complete isolation from Article 5.1.1161 But then New Zealand subsequently baldly asserts in its

conclusion on Article 5.1 that because Australia’s measures are not based on a risk assessment,

the measures are also in breach of the third requirement of Article 2.2.1162 New Zealand’s

approach is inconsistent. On the one hand, New Zealand wants to deal with Article 2.2 in

isolation from Article 5.1. On the other hand, when it is convenient, New Zealand invokes the

close relationship between Article 2.2 and Article 5.1.

1157 See Panel Report, EC – Biotech Products, para. 7.47 (sub-para. 82 of preliminary ruling) and paras. 7.1424 & 7.3392.

1158 New Zealand’s first written submission, paras. 4.6, 4.150 & 4.405.1159 See Panel Report, EC – Biotech Products, para. 7.3392.1160 Panel Report, Japan – Apples, para. 8.77.1161 New Zealand’s first written submission, paras. 4.3-4.150.1162 New Zealand’s first written submission, para. 4.405. New Zealand also makes a similar claim in

relation to Article 5.2 of the SPS Agreement: see New Zealand’s first written submission, para. 4.429.

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2. New Zealand has abandoned is claim in relation to Article 2.2 second requirement

916. New Zealand devotes only two sentences in its entire first written submission in support

of its claim that Australia’s measures are inconsistent with the second requirement of Article

2.2.1163

917. In Australia’s view, the lack of substantive argumentation by New Zealand under the

second requirement of Article 2.2 suggests that New Zealand has abandoned its claim.1164

Accordingly, the Panel should refrain from considering the matter.

918. In any event, Australia has shown that its measures are based on scientific principles and

are therefore consistent with Article 2.2 second requirement. Scientific method is central to the

second requirement of Article 2.2. As demonstrated above, the Final IRA Report was prepared

by qualified and respected scientific experts, the IRA Team, on the basis of scientific method.

Given that the measures at issue in this dispute are derived from the Final IRA Report, they are

clearly based on scientific principles. New Zealand has failed to establish otherwise.

Accordingly, there is no basis for a finding that Australia’s measures are inconsistent with the

second requirement.

3. A rational and objective relationship between the SPS measure and the scientific

evidence is required

919. Australia’s primary submission is that, given the special nature of the legal relationship

between Article 2.2 third requirement and Article 5.1, consistency with Article 5.1 establishes

consistency with Article 2.2 third requirement. If the Panel does not accept Australia’s primary

submission, Australia submits that New Zealand has nevertheless failed to establish that

Australia’s measures are inconsistent with Article 2.2 third requirement.

920. Australia considers that the Panel should apply the following test set out by the Appellate

Body in Japan – Agricultural Products II in relation to Article 2.2 third requirement:

The ordinary meaning of “sufficient” is “of a quantity, extent, or scope adequate to a certain purpose or object”. From this, we can conclude that “sufficiency” is a relational concept. “Sufficiency” requires the existence of a

1163 New Zealand’s first written submission, paras. 4.405, 4.429.1164 The Appellate Body has recognised that complainants may abandon certain claims during the course of

proceedings: see, Appellate Body Report, Japan – Apples, para. 136.

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sufficient or adequate relationship between two elements, in casu , between the SPS measure and the scientific evidence.1165

921. Accordingly, the question for the Panel is whether there is a sufficient or adequate

relationship between Australia’s phytosanitary measures and the scientific evidence. The

Appellate Body further reasoned that:

[T]he obligation in Article 2.2 that an SPS measure not be maintained without sufficient scientific evidence requires that there be a rational or objective relationship between the SPS measure and the scientific evidence.1166

922. In undertaking this assessment, the Panel must be constantly mindful of the following

points. First, consistency with Article 2.2 third requirement “is to be determined on a case-by-

case basis and will depend upon the particular circumstances of the case, including the

characteristics of the measure at issue and the quality and quantity of the scientific evidence”.1167

Second, the term “scientific evidence” has a broad meaning and includes both “direct”” and

“indirect” evidence.1168 Third, “responsible and representative governments may act in good

faith on the basis of what, at a given time, may be a divergent opinion coming from qualified and

respected sources.”1169 Fourth, the consequences of the entry, establishment and spread of a

particular pest or disease within the territory of the importing Member may be serious and

irreversible, and in such circumstances “responsible, representative governments commonly act

from a perspective of prudence and precaution”.1170 Fifth, there may be a range of possible SPS

measures open to an importing Member which will be consistent with the SPS Agreement.1171

i. New Zealand should not apply a scientific justification “test”

923. In Australia’s view, New Zealand erroneously applies a scientific justification “test” in

arguing its case under Article 2.2 third requirement, the assertion being that the measures at issue

are not “justified” by scientific evidence.1172 Article 2.2 imposes no such test. New Zealand

would have the Panel believe that there is only one “correct” view of the scientific evidence

1165 Appellate Body Report, Japan – Agricultural Products II, para. 73 (footnotes omitted; emphasis added).1166 Appellate Body Report, Japan – Agricultural Products II, para. 84. (emphasis added)1167 Appellate Body Report, Japan – Agricultural Products II, para. 84.1168 Panel Report, Japan – Apples, para. 8.98.1169 Appellate Body Report, Japan – Agricultural Products II, para. 77. See also Panel Report, Japan –

Apples (Article 21.5 – US), para. 8.146.1170 Panel Report, Japan – Apples, para. 8.105.1171 Panel Report, EC – Biotech Products, para. 7.1525.1172 New Zealand’s first written submission, paras. 4.43, 4.44, 4.47, 4.142, 4.123, 4.146, 4.147, 4.148, &

4.149.

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available, illustrated by its claim that, “[Australia’s] measures have been imposed in the absence

of scientific evidence or in the face of scientific evidence to the contrary”.1173 New Zealand’s

scientific justification “test” ignores the fact that the Appellate Body has explicitly recognised

that Members may rely on divergent scientific opinion.1174

ii. The appropriate burden of proof under Article 2.2 third requirement

924. In Australia’s view, the negative (rather than positive) formulation of the obligation (i.e.

not to maintain SPS measures without sufficient scientific evidence) in the third requirement of

Article 2.2 has implications for the burden of proof. It requires the complainant to show the

insufficiency of the scientific evidence relied upon by the respondent in relation to a particular

measure at issue.

925. Accordingly, the burden is on New Zealand to show that the scientific evidence relied

upon by Australia, as evaluated by the IRA Team in the risk assessment, is insufficient for there

to be a rational and objective relationship with the measures at issue. It is not enough for New

Zealand to simply assert its own narrative as to the scientific evidence – New Zealand must

actually show that the IRA Team’s evaluation of the scientific evidence was not objective and

credible. The next section demonstrates that New Zealand has failed to do so.

4. Australia’s measures for fire blight are not maintained without sufficient scientific

evidence

926. New Zealand makes the following claim in relation to all eight fire blight measures:

As the Panel and Appellate Body have concluded in Japan – Apples, there is no such evidence supporting measures such as those imposed by Australia in relation to fire blight. Even if Australia’s assumptions about the presence and spread of fire blight bacteria on mature apples during picking, processing and transport were supported by science, there is no scientific support for the contention that such bacteria will transfer to susceptible hosts and infection will occur.

Since mature, symptomless apple fruit do not provide a pathway for fire blight to be transmitted to Australia, none of the following measures imposed by Australia has a “rational or objective relationship” with scientific evidence.1175

1173 New Zealand’s first written submission, para. 4.6. (emphasis added)1174 Appellate Body Report, Japan – Agricultural Products II, para. 77; see, also: Panel Report, Japan –

Apples (Article 21.5 – US), para. 8.146.1175 New Zealand’s first written submission, paras. 4.31-4.32. New Zealand’s reference to “Japan –

Apples” in this quoted passage is taken by Australia as a reference to the compliance panel’s decision in Japan –

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927. The compliance panel in Japan – Apples (Article 21.5 – US) relied substantially on the

original panel’s finding that apples are unlikely to provide a pathway for fire blight to conclude

that Japan’s revised measures were inconsistent with Article 2.2. Australia has already provided

cogent and extensive reasons why the Panel should not rely on the findings in the Japan – Apples

dispute. Accordingly, the findings in Japan – Apples (Article 21.5 – US) equally cannot be

relied up. Once again, New Zealand attempts to escape from establishing a proper basis for its

claim by outsourcing its entire argument to the Japan – Apples (Article 21.5 – US) findings that

were neither a risk assessment nor scientific evidence.

928. New Zealand’s almost exclusive reliance on this panel report – and its consequent failure

to adduce evidence relevance to this case – should be sufficient for the Panel to find that New

Zealand has not met its burden of proof. In case the Panel disagrees with this view, Australia

will show that its measures for fire blight are not maintained without sufficient scientific

evidence.

i. Australia’s principal risk management measures are supported by

sufficient scientific evidence

929. Australia recalls that its principal risk management measures for fire blight were adopted

as part of a systems approach to achieve Australia’s ALOP. This decision was based on the

detailed analysis of risk management measures in the Final IRA Report1176 which New Zealand

fails to acknowledge. Australia therefore submits that individually and taken together, the

measures are supported by sound scientific evidence.

930. Australia recalls that the principal risk reduction measures for fire blight are:

New Zealand apples to be sourced from orchards free from symptoms of fire blight, requiring orchards to be visually inspected (once annually) at an intensity that would, at a 95% confidence level, detect visible symptoms if shown by 1% of the trees, with the inspection to take place between 4 to 7 weeks after flowering (when conditions for fire blight disease development are likely to be optimal); the detection of any visible symptoms of fire blight will result in the suspension of the orchard/block for the season; and

the use of disinfection treatment (for example complete immersion in a water solution containing a minimum of 100ppm available chlorine for a minimum

Apples (Article 21.5 – US) as it is the latter decision that New Zealand consistently relies on in the substance of its claims which follow (eg. paras. 4.34, 4.36, 4.42, 4.44, 4.49, 4.50).


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of one minute) in the packing house to remove existing surface contamination with fire blight bacteria and prevent further contamination.1177

931. New Zealand argues that there is no scientific evidence demonstrating that mature apples,

even from severely blighted orchards, contain E. amylovora in quantities of epidemiological

significance to the establishment and spread of fire blight. On this basis alone, it argues that the

principal risk reduction measures are not supported by sufficient scientific evidence.1178

932. This rehearses the same arguments New Zealand made under Importation steps 1, 2 and

4, and the exposure analysis. Australia has already rebutted these claims above and submits that

the Panel should consider those arguments applicable here.

933. Australia has shown that the IRA Team assessed a substantial body of evidence and

concluded that there is no accepted minimum number of bacteria needed to initiate infection.

Consequently, it concluded that apples with any number of E. amylovora increase the potential

risk of fire blight transmission. The IRA Team considered evidence that reported reduced

infestation of apples with E. amylovora when sourced from orchards with few or no visible

symptoms.1179 As New Zealand has referred to the findings of these very same studies, it

presumably accepts their veracity.

934. On the basis of the scientific evidence available to it, the IRA Team concluded that

“freedom from visible symptoms” provided a firm basis for risk reduction.1180 The IRA Team

acknowledged that it would be extremely difficult to confirm absolute freedom from symptoms

using visual inspection of orchards. Therefore they concluded that:

… a practical inspection regime should be specified as free from visual symptoms at an inspection intensity that would, at a 95% confidence level, detect visual symptoms if shown by 1% of the trees. This inspection should take place between 4 to 7 weeks after flowering when conditions for fire blight disease development are likely to be optimal.1181

935. The IRA Team also considered disinfection as an alternative risk reduction measure.

There was substantial evidence demonstrating that chlorine has biocidal properties.1182 The IRA 1177 See: Final IRA Report, Part A, p. 15; Part B, p. 318.1178 New Zealand’s first written submission, paras. 4.33, 4.35, 4.41 & 4.43.1179 Exhibit NZ-22: Roberts et al. (1998); Exhibit NZ-53: Clark et al. (1993). Exhibit AUS-2: Final IRA

Report, Part B, pp. 106-107.1180 Exhibit AUS-2: Final IRA Report, Part B, p. 106.1181 Final IRA Report, Part B, p. 106.1182 Dychdala, G.R. (1991) Chlorine and chlorine compounds. In: Block, S.S. (Ed) Disinfection,

sterilization and preservation. Lea & Febiger, Philadelphia, London. pp 131-151. The IRA Team also noted that

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Team recognised that chlorine has poor penetrating power and loses effectiveness where there

are high organic matter loads (such as in apple floatation tanks). However, evidence also

demonstrated that 10 to 100-fold reductions in the levels of bacterial could be expected if pH

levels were correctly maintained. Accordingly, the IRA Team concluded that a chlorine

treatment could reduce the risk of E. amylovora being present on apples if chlorine was added to

floatation tanks and maintained at 100 ppm.1183

936. When the impact of each of these alternative measures on the unrestricted risk was tested

individually, the IRA Team found that they were insufficient on their own to reduce the risk to

Australia’s ALOP.1184 However, when the measures were taken together as a systems approach,

the IRA Team demonstrated that their combined effect was sufficient to reduce the level of risk

to Australia’s ALOP.1185

937. New Zealand does not make any claims about analysis of these measures, the

calculations undertaken by the IRA Team, or the effectiveness of the measures as a systems

approach. Accordingly, Australia submits that New Zealand has failed to establish that the

principal risk reduction measures, either individually or taken as whole, are not supported by

sufficient scientific evidence.

938. New Zealand argues “the requirement that an orchard/block be suspended for the season

on the basis of detection of any visual symptoms of fire blight”, “appears to be consequent on the

inspection requirement”.1186 Since it considers that the inspection requirement lacks scientific

support, it claims that block suspension if symptoms are detected “equally lacks scientific

support”.1187 Australia has demonstrated that the principal risk reduction requirements are

supported by sufficient scientific evidence. New Zealand has adduced no evidence to suggest

that the suspension requirement is not a valid measure for ensuring compliance with the principal

risk reduction requirement of freedom from fire blight symptoms. Therefore, there is no basis

for finding the suspension requirements are not supported by sufficient scientific evidence.

939. New Zealand also challenges:

chlorine was already used in 37% of New Zealand packing houses: Final IRA Report, Part B, p. 107.1183 Final IRA Report, Part B, p. 108.1184 Final IRA Report, Part B, Table 24, p. 107.1185 Final IRA Report, Part B, Table 27, p. 111.1186 New Zealand’s first written submission, para. 4.40.1187 New Zealand’s first written submission, para. 4.40.

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The requirement that an orchard/block inspection methodology be developed and approved that addresses issues such as visibility of symptoms in the tops of trees, the inspection time needed and the number of trees to be inspected to meet the efficacy level, and training and certification of inspectors.

The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of fire blight.

The requirement that all grading and packing equipment that comes in direct contact with apples be cleaned and disinfected (using an approved disinfectant) immediately before each Australian packing run.

The requirement that packing houses registered for export of apples process only fruit sourced from registered orchards.1188

940. Australia explained previously that these four requirements challenged by New Zealand

are ancillary measures that support, verify and operationalise the principal risk reduction

measures. They do not “operate in some concrete way in [their] own right”1189 and therefore

cannot individually give rise to a violation of WTO obligations. Accordingly, their consistency

with Article 2.2 depends on whether the principal risk reduction measures are consistent with

Article 2.2. Australia submits that since New Zealand has failed to show that the principal risk

reduction requirements above are not supported by sufficient scientific evidence, the Panel

should also find the ancillary measures to be scientifically supported.

5. Australia’s measures for European canker are not maintained without sufficient

scientific evidence

i. New Zealand’s claim

941. The crux of New Zealand’s complaint in relation to the measures for European canker is

that:

All of the Australian measures … are based on the contention that mature, symptomless apple fruit provide a pathway for transmitting European canker. However, as demonstrated above, there is no scientific evidence that such a pathway exists.

…[accordingly] there can be no “rational or objective relationship” between the measures that Australia has imposed for mature apple fruit from New Zealand in respect of European canker, and the scientific evidence. Hence,

1188 New Zealand’s first written submission, para. 3.83 (original formatting omitted); New Zealand’s panel request, pp. 1 & 2.

1189 Panel Report, US – Export Restraints, para. 8.85.

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Australia’s measures are maintained without “sufficient scientific evidence” and are inconsistent with Australia’s obligations under Article 2.2.1190

942. New Zealand’s allegation that there is no scientific evidence that “mature, symptomless

apple fruit” are a pathway for transmission of European canker is inconsistent with the explicit

statement to the contrary by the Chief Plants Officer of the New Zealand Ministry of

Agriculture.1191 According to the Chief Plants Officer, “apple fruit are a potential pathway for

the introduction of European canker, as the fruit can develop latent or storage rots.”1192

943. The Final IRA Report contains a comprehensive analysis of the risk of N. galligena being

introduced intro Australia through the importation of New Zealand apples.1193 The Final IRA

Report also cites several studies which show that fruit rot caused by N. galligena does

occasionally occur in New Zealand.1194 On the basis of this analysis the IRA Team concluded

that the unrestricted risk for N. galligena exceeds Australia’s ALOP and therefore risk

management measures were required.1195

944. Australia has already demonstrated above that the IRA Team rigorously evaluated risk

and applied its expert judgment to arrive at an objective and credible assessment for European

canker. Further, New Zealand has failed to demonstrate any flaws in the Final IRA Report.

ii. The measures at issue

945. The risk management measures for European canker were adopted on the basis of a

detailed analysis of risk management meaures in the Final IRA Report.1196 Australia’s principal

risk management measure for European canker is as follows:

… to allow export only from pest free places of production. Pest freedom would require a winter inspection of orchards before pruning of trees to confirm freedom.1197

1190 New Zealand’s first written submission, paras. 4.96-4.97. (emphasis added) See also: paras. 4.98, 4.99, 4.100 & 4.104.

1191 Exhibit AUS-54: Ivess (1996).1192 Exhibit AUS-54: Ivess (1996), p. 2. 1193 Final IRA Report, pp. 117-150.1194 Exhibit AUS-52: Atkinson (1971); Exhibit AUS-53: Brook & Bailey (1965); Exhibit NZ-34:

Braithwaite (1996); Exhibit AUS-51: MAFNZ (2005a); Final IRA Report, Part B, pp. 121-123.1195 Final IRA Report, p. 150.1196 Final IRA Report, pp. 150-155.1197 See: Final IRA Report, Part A, p. 15; Final IRA Report, Part B, pp. 153-155, 316.

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946. The IRA Team determined that “the use of areas free from disease symptoms for

sourcing export apples would be an effective risk management measure for N. galligena.”1198

The validity of such a risk mitigation measure is recognised by ISPM No. 10. Table 39 in the

Final IRA Report clearly shows that the effect of requiring pest free places of production is to

reduce unrestricted risk from “low” to “very low” and thereby achieve Australia’s ALOP.1199

947. The IRA Team also considered that, in order to verify orchard freedom from European

canker, it would be necessary to “conduct[] growing season inspections for European canker

symptoms… All trees in the export orchard would be visually inspected annually in winter, after

leaf fall and before winter pruning.”1200 More precisely, the IRA Team recommended that:

All trees in the export orchard would be inspected annually in winter, after leaf fall and before winter pruning. In areas where climatic conditions are less favourable for disease establishment and spread …, orchard freedom from European canker would be assessed by walking down every row and visually examining all trees on both sides of each row for symptoms. … In areas where environmental conditions are more conducive to disease establishment and spread … the use of ladders to inspect tree limbs, combined with the inter-row inspections would be necessary.1201

948. The IRA Team noted that “the proposed winter inspection approach ha[d] proven to be

highly effective during the eradication efforts in Spreyton, Tasmania.”1202 The Final IRA Report

explains that, “[t]he purpose of winter inspection before pruning is to detect if the disease has

established in the orchard during the previous spring, summer and autumn. If it has not, there

will be no inoculum for infection in the next growing season.”1203

949. The IRA Team also recommended that:

All new planting stock must be intensively examined, and appropriate cultural practices and fungicide sprays used to minimise the likelihood of canker infections.1204

1198 Final IRA Report, p. 153.1199 Final IRA Report, p. 153.1200 Final IRA Report, Part B, p. 153.1201 Final IRA Report, Part B, pp. 153-154.1202 Final IRA Report, Part B, p. 154. See also Exhibit NZ-13: Ransom, 1997.1203 Final IRA Report, Part B, p. 154.1204 Final IRA Report, Part B, p. 154.

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It explicitly noted that “infected nursery stock presents a pathway for the establishment and

spread of European canker in places of production”1205 within New Zealand, citing the following

evidence in support of this view:

Recent detections in Nelson (Murdoch, 2002) and previous reports in Hawke’s Bay (Wilton, 2002b) are considered to have occurred as a result of this pathway. Studies in the United Kingdom have confirmed that infection entering orchards through nursery stock can remain symptomless for up to four years (Lovelidge, 2003; McCraken et al., 2003b).1206

On this basis, the IRA Team determined that “[a]ll new planting stock must be intensively

examined”.1207

950. Australia has previously explained that it does not impose the following requirement:

The requirement that an orchard/block be suspended for the season on the basis that any evidence of pruning or other activities carried out before the inspection could constitute an attempt to remove or hide symptoms of European canker.

Accordingly, there can be no findings in relation to such a measure.

951. The IRA Team recommended that:

Detection of European canker would result in suspension of exports in that orchard/block for the coming season. Reinstatement would require eradication of the disease, confirmed by inspection.1208

The IRA Team considered that if European canker were detected during an inspection “the

orchard would be ineligible to export fruit during the following season. To be eligible for re-

registration, cankers must be removed and follow-up fungicides applied, followed by

reinspection of the orchard for canker symptoms the following season.”1209 This is an ancillary

requirement recommended to enforce the integrity of orchard freedom, the principal risk

mitigation measure.

iii. Summary

1205 Final IRA Report, Part B, p. 154.1206 Final IRA Report, Part B, p. 152. Exhibit AUS-105: Murdoch, H. (2002) "Apple disease spreads", The

Nelson Mail, 27 August 2002; Exhibit AUS-106: Wilton, J. (2002b) "Recognising European canker symptoms" Fencepost.com; Exhibit AUS-107: Lovelidge, B. (2003) "Closing in on canker" Grower 139 (3), pp22-23; Exhibit AUS-77: McCraken et al, 2003.

1207 Final IRA Report, Part B, p. 154.1208 Final IRA Report, Part B, p. 316.1209 Final IRA Report, Part B, p. 154.

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952. In light of the preceding analysis, as well as relevant rebuttal points made in the context

of Article 5.1, it is clear that New Zealand has failed to establish that Australia’s measures for

European canker are maintained without sufficient scientific evidence.

6. Australia’s measures for apple leafcurling midge are not maintained without

sufficient scientific evidence

953. New Zealand challenges the basis for Australia’s measures in respect of ALCM under

Article 2.2, as follows:

The low number of viable cocoons on New Zealand apples combined with the biology of the ALCM, both factors which Australia has ignored, render highly improbable the sequence of events on which Australia relies to support its measures. There is no scientific evidence demonstrating that such a sequence of events has ever occurred or could occur. Thus, the measures maintained by Australia are without sufficient scientific evidence.1210

954. Australia has provided for two risk management options for ALCM:

inspection of a 3000-apple random sample of all export lots in New Zealand; application of a suitable treatment (e.g. fumigation) or rejection of any relevant lots will be required where ALCM is found; or

treatment of all lots with a suitable treatment (e.g. fumigation) for ALCM, together with a standard inspection of 600-units per lot.1211

955. Australia has shown above (under Article 5.1) that New Zealand’s claims as to the IRA

Team’s evaluation the scientific evidence available in relation to ALCM are unsubstantiated.

New Zealand has failed to establish that the IRA Team ignored any scientific evidence or other

relevant material in respect of its assessment of the risks associated with ALCM. Nor has New

Zealand established any flaws in the reasoning of or conclusions drawn by the IRA Team. Many

of New Zealand’s arguments are unsupported by any evidence, and its claims generally are

undermined by its failure to adequately comprehend the biology of ALCM, the scientific

evidence available, the methodology employed by the IRA Team to assess the risk, and

Australia’s particular circumstances.

956. New Zealand claims that “[a] 600 unit sample on its own is more than sufficient to meet

the risk, and is not itself objectionable since it is commonly undertaken for a range of quarantine

1210 New Zealand’s first written submission, para. 4.134. 1211 New Zealand has acknowledged that an inspection of 600-units per lot is a standard quarantine

requirement to which they do not object: “A 600 unit sample … is not itself objectionable since it is commonly undertaken for a range of quarantine pests.” (New Zealand’s first written submission, para. 4.138.)

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pests.”1212 However, the IRA Team assessed the efficacy of a 600-unit inspection and found that

it would not achieve Australia’s ALOP without further measures (that is, mandatory treatment).

The IRA Team found that either a 3000-unit inspection alone, or alternatively a 600-unit

inspection plus mandatory treatment, would achieve Australia’s ALOP.1213

957. As New Zealand has failed to establish that the Panel should not have reasonable

confidence in the IRA Team’s evaluation of the scientific evidence and consequent assessment

of the level of risk, there can be no basis for the Panel to find that the measures assessed

necessary by the IRA Team and by Australia, in order to achieve Australia’s ALOP, are

maintained without sufficient scientific evidence.

7. Australia’s general measures are not maintained without sufficient scientific

evidence


Since mature, symptomless apple fruit are not a pathway for fire blight or European canker to be transmitted to Australia, and since there is no scientific evidence that entry, establishment and spread of ALCM could occur at the levels of infestation reported on New Zealand apples, there is also insufficient scientific evidence for Australia to maintain its additional measures applicable to all three pests.1214

959. Australia disagrees. These ancillary requirements imposed by Australia seek to support,

verify and operationalise the principal measures adopted by Australia for the reduction of risks

associated with specific pests to achieve Australia’s ALOP. Australia has demonstrated that its

principal risk reduction requirements are supported by sufficient scientific evidence (both

directly above and under Article 5.1). New Zealand has adduced no evidence to suggest that the

ancillary requirements are not valid requirements for ensuring verification and support of the

principal measures. Therefore, there is no basis for finding the ancillary requirements are not

supported by sufficient scientific evidence.


The requirement that Australian Quarantine and Inspection Service [AQIS] officers be involved in orchard inspections for European canker and fire blight,

1212 New Zealand’s first written submission, para. 4.138. 1213 See: Final IRA Report, Part B, pp. 188-192. 1214 New Zealand’s first written submission, para. 4.141.

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in direct verification of packing house procedures, and in fruit inspection and treatment.


961. Australia has previously clarified the nature of its requirements. Australia will now

explain the basis for imposing such requirements.

962. Australia requires AQIS officers to be involved in a standard pre-clearance arrangement

for New Zealand apples1216 because New Zealand apples will otherwise be untested during initial

trade. It is common practice for AQIS to conduct pre-clearance processes and on-site

verification that the required packing house, treatment and inspection procedures are being

followed by relevant producers. Therefore, AQIS involvement in New Zealand orchard and fruit

inspections and verification of packing house procedures, as part of the pre-clearance process,

will help to ensure that non-conforming consignments of New Zealand apples will not enter

Australia. Other countries such as the United States and Japan have similar arrangements that

are either mandated or voluntary.1217

963. Australia requires packing houses to provide a basic map of the layout of their premises

in order to support the verification of packing house procedures by AQIS officers. As previously

explained, provision of such a map in advance will enable AQIS to identify areas of potential

risk in particular packing houses.

964. New Zealand also challenges:

The requirement that New Zealand ensure that all orchards registered for export to Australia operate under standard commercial practices.

965. The basis for Australia’s requirement that “all orchards registered for export to Australia

are operating under standard commercial practices”1218 is that an underlying assumption of the

IRA Team during the IRA process was that all orchards that would produce apples for export to 1215 New Zealand’s first written submission, para. 3.83.1216 Final IRA Report, Part B, p. 314.1217 See, for example: New Zealand apples and pears exported to the United States (Biosecurity New

Zealand, Importing Countries Phytosanitary Requirements: United States of America (24 November 1999), pages 40 & 42: http://www.biosecurity.govt.nz/files/regs/stds/icprs/united-states-of-america.pdf); cut-flowers to Japan (http://www.pps.go.jp/english/faq/import/seeds.html); a list of countries for which the United States Department of Agriculture (USDA) Animal & Plant Health Inspection Service (APHIS) conducts commodity pre-clearance programs and the commodity (ies) involved at:

http://www.aphis.usda.gov/import_export/plants/plant_imports/downloads/preclearance_chart.pdf. 1218 Final IRA Report, Part B, p. 315.

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Australia would operate under such practices, as advised by Biosecurity New Zealand.1219

Therefore, by asking that the IRA Team to take into account that commercial growers would

operate under standard commercial practices, New Zealand effectively limited the scope of the

IRA Team’s analysis as to the nature of the product that would be exported.

966. In order to ensure that the nature of the product exported will be as assumed by the IRA

Team, Australia requires MAFNZ to verify that New Zealand growers continue to operate under

standard commercial practices. For if all growers do not operate under standard commercial

practices, the underlying premise for the IRA Team’s assessment of risk would be invalid.

967. New Zealand has not adduced any evidence in support of its claim that “New Zealand

apples are processed according to standard commercial practice”,1220 or why Australia or the

Panel should feel confident that all orchards registered for export will continue to operate under

standard commercial practices.

968. New Zealand also claims that “Australia does not, to New Zealand’s knowledge, impose

such a requirement with regard to any other plant product imported into Australia.”1221 This is

incorrect. Australia requires the operation of standard commercial practices in relation to fruit

imports from a number of other countries, for example: table grapes from Chile1222; longans and

lychees from China and Thailand1223; and mangoes from India (draft recommended measures

only).1224

969. In light of the preceding discussion, it is clear that New Zealand has failed to establish

that Australia’s general measures are maintained without sufficient scientific evidence.

1219 See: Exhibit AUS-51: MAFNZ (2005a), Correspondence sent from MAFNZ to Biosecurity Australia, 16 May 2005.

1220 New Zealand’s first written submission, para. 4.146. 1221 New Zealand’s first written submission, para. 4.145. 1222 See: Biosecurity Australia, Final Report: Import Risk Analysis for Table Grapes from Chile (September

2005), page 11 (executive summary), available from: http://www.daff.gov.au/__data/assets/word_doc/0016/11581/table_grapes_chile_final_IRA.doc. 1223 See: Biosecurity Australia, Final Import Risk Analysis Report: Longan and lychee fruit from the

People’s Republic of China and Thailand (February 2004), Part A, pages 40, 47, 101, 107, 135 & 136:http://www.daff.gov.au/__data/assets/pdf_file/0014/164003/ll_final_a.pdf1224 According to the Provisional Final Import Risk Analysis Report for Fresh Mango Fruit from India:

“The existing commercial production practice of a post-harvest fungicidal dip, as advised by India to support its market access application, is an underlying requirement for export to Australia.” Biosecurity Australia, Provisional Final Import Risk Analysis Report for Fresh Mango Fruit from India (May 2008), page 7:

http://www.daff.gov.au/__data/assets/pdf_file/0004/672403/Final_IRA_-_Mangoes_from_India.pdf

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8. Conclusion: New Zealand has failed to demonstrate that Australia’s measures are

inconsistent with Article 2.2

970. Australia submits that New Zealand has failed to establish that Australia’s measures are

maintained without sufficient scientific evidence. In any event, Australia’s measures are based

on the IRA Team’s objective and credible analysis of the available scientific evidence and are

therefore consistent with Article 2.2 third requirement.

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F. AUSTRALIA’S MEASURES ARE CONSISTENT WITH ARTICLE 5.5

1. Australia has had limited time to prepare its defence

971. New Zealand argues that “nashi pears imported from Japan to Australia [is] an

illustration of a situation in which Australia has a level of protection that shows arbitrary and

unjustified distinctions in treatment resulting in discrimination and a disguised restriction on

trade.”1225

972. Australia applies its ALOP consistently, including with respect to New Zealand apples

and Japanese nashi pears. Australia will show that there are differences in the risk associated

with the importation of New Zealand apples when compared with Japanese nashi pears, and that

the measures required to meet Australia’s ALOP therefore differ.

973. Australia notes that New Zealand’s first written submission was the first occasion on

which Australia was made aware of the basis for New Zealand’s claim under Article 5.5. This

factor has prejudiced the preparation of Australia’s defence.

2. New Zealand must satisfy the three distinct elements of Article 5.5

974. Article 5.5 commences by setting out its objective to “achieve consistency in the

application of the concept of appropriate level of sanitary or phytosanitary protection” (ALOP).

This objective itself does not impose any legal obligation on Members.1226 The Appellate Body

recognised in this regard:

… that the goal set is not absolute or perfect consistency, since governments establish their appropriate levels of protection frequently on an ad hoc basis and over time, as different risks present themselves at different times. It is only arbitrary or unjustifiable inconsistencies that are to be avoided.1227

975. In order to make a finding that a Member has acted inconsistently with Article 5.5, the

Appellate Body recognised that three elements need to be present:

the Member concerned adopts different appropriate levels of sanitary protection

in several “different situations”;

1225 New Zealand’s first written submission, para. 4.435.1226 Appellate Body Report, EC – Hormones, para. 213.1227 Appellate Body Report, EC – Hormones, para. 213.

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those levels of protection exhibit differences which are “arbitrary or

unjustifiable”; and

the measure embodying those differences results in “discrimination or a disguised

restriction on international trade”.1228

976. These elements are cumulative. As such, New Zealand is required to show that all three

elements are present if it is to establish its claim in relation to Article 5.5.

3. Australia applies a consistent level of protection

977. The first element of the first sentence of Article 5.5 requires a complainant to establish

that the respondent Member applies distinctions in the “levels” of its appropriate level of sanitary

or phytosanitary protection in different situations.

(a) Australia’s ALOP is consistent with respect to New Zealand apples and

Japanese nashi pears

978. Australia submits that a panel’s assessment of a Member’s consistency with its obligation

under Article 5.5 is facilitated where a Member has explicitly stated its ALOP with precision, as

Australia has done. Australia notes that few other Members have provided explicit transparent

statements of ALOP – for example, there is no explicit expression of New Zealand’s ALOP

publicly available. Australia’s ALOP is expressed as providing a high level of sanitary and

phytosanitary protection, aimed at reducing risk to a very low level, but not zero.1229 This ALOP

applies equally to the importation of apples from New Zealand1230 and nashi pears from Japan.1231

1228 Appellate Body Report, Australia – Salmon, para. 140.1229 Exhibit AUS-10: Commonwealth of Australia 2003, Import Risk Analysis Handbook 2003, p.5;

Commonwealth of Australia 2003, Import Risk Analysis Handbook 2007, p.8.1230 In relation to New Zealand apples, the Final IRA Report (Part B) states that Australia’s ALOP is

“aimed at reducing risk to a very low level, but not to zero” (p.4), and that the recommended quarantine conditions for New Zealand apples ensure “that Australia’s ALOP would be met and are commensurate with the identified risks” (p.313).

1231 Biosecurity Australia conducted a review of the import conditions applying to nashi pears from Japan in 2003. After having revised the relevant import conditions, Biosecurity Australia concluded that the revised measures would “effectively achieve Australia’s appropriate level of protection.” Australia’s stated ALOP at the time of the review was “expressed as providing a high level of sanitary or phytosanitary protection aimed at reducing risk to a very low level, but not to zero.” (See Exhibit AUS-108: Biosecurity Australia (2003) Review of the Australian Requirement for Petal Testing and Flower Cluster Examination at Blossoming for Pome Fruit from Japan, The Republic of Korea and The People’s Republic of China (“BA (2003) Pome fruit review”), p.11 and Exhibit AUS-10: Biosecurity Australia (2003) Import Risk Analysis Handbook, Canberra, p.5).

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979. Accordingly, to demonstrate inconsistency with the first element of Article 5.5, New

Zealand will need to discharge the heavy evidentiary burden of establishing that there is in fact a

de facto distinction in ALOP being applied by Australia. Australia contends that on the basis of

the Japanese nashi pears comparison, New Zealand fails to do so. Australia demonstrates this

below.

(b) The applied level of protection is a result of the measures applied to the

unrestricted risk

980. In order to make its case that there are de facto distinctions in ALOP being applied by

Australia, New Zealand needs to establish what those levels of protection actually are.1232

981. Australia recalls that risk management measures are implemented in order to achieve a

particular level of protection.1233 To determine the intensity of the measures required to achieve

ALOP, the gap between a Member’s ALOP and the risk associated with the importation of a

particular product is examined, and the measures formulated to bridge any gap between the two.

Therefore, differences in measures alone do not indicate the application of a different level of

protection. Such an extrapolation ignores the difference in levels of risk.

982. The concept of ALOP is also known as “acceptable level of risk”.1234 The risk in relation

to a pest or disease is determined by combining the likelihood of entry, establishment and spread

with the associated consequences (including biological and economic). Accordingly, Australia

submits that any analysis and comparison of acceptable level of risk, or ALOP, must necessarily

involve a consideration of both likelihood and consequences. This is the first part of the analysis

required. The second part of the analysis involves assessing whether the measures applied

reduce the risk to a consistent level of protection.

983. New Zealand argues that a difference in measures indicates that Australia has accepted a

higher level of risk in relation to Japanese nashi pears.1235 The reason for this, New Zealand

argues, is that Japanese Erwinia and fire blight present the same or similar risk, and that weaker

measures indicate that Australia applies a lower ALOP. Australia disagrees.1232 In Australia’s view, New Zealand has failed to identify how a level of protection applied is ascertained

in any given situation, and has failed to identify any particular level of protection applied by Australia. 1233 SPS Agreement, Article 5.6.1234 SPS Agreement, Annex A(5).1235 See, for example, New Zealand’s first written submission, paras. 4.439 (last sentence), 4.443 (last

sentence) and 4.480.

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984. Australia will instead demonstrate that there are differences in the likelihood and

consequences (together, risk) as between Japanese Erwinia and fire blight on the one hand, and

brown rot and European canker on the other, and that the measures required to meet ALOP

therefore differ. As the Panel will see, the risk profile for Japanese nashi pears is not, as New

Zealand inconsistently asserts, “comparable”1236 or “higher”1237.

985. Notwithstanding Australia’s view that New Zealand has failed to properly compare the

levels of protection applying to New Zealand apples and Japanese nashi pears, Australia will, in

the interests of assisting the Panel, analyse the relevant levels of protection. Australia will firstly

examine the risk associated with each disease (and the associated product), followed by the

relevant measures applied to achieve ALOP.

(c) There is a lower likelihood of entry, establishment and spread for Japanese

nashi pears compared to New Zealand apples

986. New Zealand states that the importation of Japanese nashi pears involves a “risk of entry,

establishment and spread” of Japanese Erwinia and brown rot.1238 New Zealand does not,

however, engage in any analysis of the likelihood of entry, establishment and spread, or what

that likelihood might be in comparison with diseases associated with New Zealand apples.

987. Australia proceeds to demonstrate that key points of difference separate the assessment of

the likelihood of entry, establishment and spread between diseases associated with New Zealand

apples and Japanese nashi pears, including with respect to the presence of the diseases and the

volume of trade.

1236 New Zealand’s first written submission, para. 4.445.1237 New Zealand’s first written submission, paras. 4.443, 4.459.Australia notes that New Zealand asserts in its written submission that “no IRA for Japanese nashi pears

has been released by Australia.” (paras. 4.439, 4.443) New Zealand apparently seeks to imply that no risk analysis for Japanese nashi pears has ever actually been conducted. This is not the case. A pest risk analysis (PRA) for nashi pears was conducted from 1988-1989 after Australia was approached by nashi pear growers from Tottori Prefecture. The PRA was conducted on the basis that imports of nashi pears would be limited to Tottori prefecture. No other prefectures requested market access for nashi pears to Australia. See Exhibit AUS-109: Department of Primary Industries and Energy (1989) Quarantine Circular Memorandum (Plants) 1989/34: Importation of Nashi Pears from Japan, 11 May 1989.

As part of the PRA, Australia assessed the operational standards in the field and in packing houses, and concluded that Japan MAFF had an effective system in place (the system had been designed to meet USDA/APHIS/Plant Protection & Quarantine standards). The PRA was circulated to the Chief Quarantine Officer (Plants) in all states and the Northern Territory for comment. Based on the PRA, a trial shipment was pre-cleared in September 1989.

1238 New Zealand’s first written submission, paras. 4.436, 4.440.

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i. The absence of Japanese Erwinia in export areas in Japan reduces the

associated likelihood of entry, establishment and spread

988. As New Zealand correctly notes, Japanese Erwinia is restricted to Hokkaido island,

Japan.1239 However, New Zealand fails to note that Australia has only ever imported nashi pears

from Tottori prefecture on Honshu island, which is free from Japanese Erwinia and remote

geographically from Hokkaido. Australia has never imported nashi pears from Hokkaido, and

the import conditions are based on the assumption that pears would be sourced only from

Tottori.1240

989. In any event, Japan notified to the IPPC the eradication of Japanese Erwinia from

Hokkaido in 2003.1241 Since then, Australia has received no notice of any new Japanese Erwinia

outbreaks in Japan (as required under the Australia’s import protocols).1242 Accordingly,

Australia submits that if the disease is no longer present in Hokkaido, and Australia only imports

nashi pears from Tottori prefecture, the basis for a comparison of the likelihood of entry,

establishment and spread (along with the basis of comparison of risk) disappears.

990. By comparison, fire blight is widely distributed in the apple-growing areas of New

Zealand, and New Zealand has not provided evidence to confirm that it has procedures in place

to establish, maintain and verify areas free from the disease.

991. Australia contends that for a comparison of situations under Article 5.5 to occur, the

situations must be current. In Australia’s view, it is not possible to compare a current situation

with a past situation for the simple reason that the plant health status of Members changes over

time, as do trade volumes and risk management procedures. 1239 New Zealand’s first written submission, para. 4.436. See also, Exhibit AUS-110: Ministry of

Agriculture, Forestry and Fisheries of Japan (2003) Report on Free Status of the Bacterial Shoot Blight of Pear, 28 March 2003 (“MAF Japan (2003)”), which indicates that Japanese Erwinia was further confined to only Asahikawa-shi, Iwamizawa-shi, Kurisawa-cho and Mashike-cho in Hokkaido.

1240 Exhibit AUS-108: BA (2003) Pome fruit review, p26. In reviewing the quarantine measures applying to Japanese nashi pears in 2003, Biosecurity Australia recognised that the nashi pears were “to be sourced only from registered orchards in designated export areas of Tottori prefecture.” While Australia acknowledges that this particular measure applies to brown rot, the effect is the same: nashi pears are not sourced from anywhere outside of Tottori Prefecture.

1241 Exhibit AUS-110: MAF Japan (2003). In 1995, following identification of the disease in Hokkaido, Japan implemented emergency controls. The controls consisted of designated control areas, a prohibition on the movement of apple and pear plants and apple and pear fruit out of those control areas, cutting down and incinerating or burying diseased pear trees and pear fruit within a radius of 40m from the diseased trees, and chemical control of pear and apple trees within a radius of 500m. The controls ended in 1999. The disease was not detected from 1996-2002, during which time regular monitoring occurred.

1242 Exhibit AUS-108: BA (2003) Pome fruit review, p.63.

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ii. The absence of brown rot in export areas in Japan reduces the associated

likelihood of entry, establishment and spread

992. Japan has established that export areas in Tottori prefecture are free from brown rot and

has procedures in place to maintain and verify freedom from the disease.1243 Area freedom was

originally recognised by Australia in 1989 following the provision of survey, petal and flower

testing data by Japan.1244 Australia only imports Japanese nashi pears from Tottori Prefecture.

993. By comparison, European canker is reported in several districts of New Zealand where

apple export orchards are located. New Zealand has not provided any data to demonstrate that it

has procedures in place to establish, maintain and verify either area freedom or areas of low pest

prevalence in relation to European canker and it expects Australia to import apples from areas

where European canker is prevalent.

iii. The volume of trade in Japanese nashi pears is very much lower than the

likely trade in New Zealand apples

994. The 1998 New Zealand apples IRA recognised that trade in nashi pears from Japan was

broadly comparable to trade in New Zealand apples in that it involved a susceptible host product

(i.e. nashi pears) from a country with a disease similar to fire blight (i.e. Japanese Erwinia).1245

However, it recognised several fundamental differences between the two situations, one of which

was the potential volume of trade.

995. Logically, if there is no trade in a product, there is no risk that a pest or disease will gain

entry into a Member’s territory via trade in that product. Equally, the greater the volume of trade

in a product, the greater the risk that an associated pest or disease will gain entry (assuming that

the pest or disease is present in the source area to begin with).

1243 Exhibit AUS-108: BA (2003) Pome fruit review, p.61. 1244 Exhibit AUS-111: Department of Primary Industries and Energy (1989) Quarantine Circular

memorandum (Plants) 1989/63: Fourth Australia – Japan Plant Quarantine Technical Discussions, 15 September 1989. Japan’s survey methodology was audited and verified by AQIS prior to the commencement of trade, and since 1989, Japan has provided Australia with over ten years of survey, petal and flower testing data.

1245 Exhibit AUS-112: Australian Quarantine and Inspection Service (1998) Final Import Risk Analysis of the New Zealand Request for the Access of Apples (Malus pumila Miller var. domestica Schneider) into Australia , p27. Japanese nashi pears were addressed in the 1998 New Zealand apples IRA as a result of the Japanese Erwinia outbreak in 1995. As eradication of Japanese Erwinia was notified in 2003, it wasn’t an issue that required addressing in the 2006 New Zealand apples IRA.

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996. Taking this into account, there has been no trade in Japanese nashi pears between

Australia and Japan since 2003, when 36 tonnes were imported by Australia.1246 Prior to 2003,

the maximum volume imported in any one year since 1994 was 86 tonnes.1247

997. By comparison, the most likely volume of trade in New Zealand apples estimated in the

Final IRA Report is 150 million apples per year, or approximately 27,000 tonnes.1248 Even New

Zealand’s more conservative estimate of 50 million apples1249 (approximately 9,000 tonnes) per

year dwarfs the past, and now non-existent, volume of trade in Japanese nashi pears. Again,

Australia reminds the Panel that to reasonably compare situations, those situations must be

current.

iv. Summary

998. Based on the above, Australia submits that the likelihood of entry, establishment and

spread of diseases associated with Japanese nashi pears (i.e. Japanese Erwinia and brown rot) is

much lower than the likelihood of those diseases associated with New Zealand apples (i.e. fire

blight and European canker). New Zealand has failed to establish otherwise.

(d) The potential consequences associated with Japanese nashi pears are much

lower compared with New Zealand apples

999. New Zealand argues that Japanese Erwinia “involves comparable biological and

economic consequences for Australia” to fire blight.1250 Australia disagrees, and will

demonstrate below that, in Australia’s particular circumstances, this is incorrect.

i. In Australia’s circumstances, the consequences associated with Japanese

Erwinia are lower than those for fire blight

1246 Exhibit AUS-113: Australian Quarantine and Inspection Service, Summary of Importation Statistics for nashi pears from Japan, 1996-2003.

1247 Exhibit AUS-113: Australian Quarantine and Inspection Service, Summary of Importation Statistics for nashi pears from Japan, 1996-2003.

1248 This figure is based on the Final IRA Report’s assumption that an average carton of 100 apples weighs 18kg: Final IRA Report, Part B, p.18.

1249 Exhibit NZ-56: New Zealand Ministry of Agriculture and Forestry, Comments by the Government of New Zealand on Biosecurity Australia’s Revised Draft Import Risk Analysis Report for Apples from New Zealand, December 2005, p1.


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1000. Australia accepts that Japanese Erwinia is a strain of bacterium similar and with similar

symptoms to Erwinia amylovora.1251 However, as New Zealand also notes, “in the field,

Japanese Erwinia has only been recorded on pears.”1252 This fact alone immediately

differentiates the potential consequences of Japanese Erwinia from fire blight. Given that the

Australian industry produces roughly half as many pears as apples, the difference in potential

economic consequences is obvious. Australia notes that New Zealand has failed to submit any

evidence in relation to the potential economic or biological consequences of Japanese Erwinia.

ii. In Australia’s circumstances, the consequences of Monilinia fructigena are

lower than those for European canker

1001. New Zealand states that brown rot is a “fungal disease which is similar in many respects

to the European canker.”1253 Australia accepts that European canker and brown rot are similar

only to the extent that both are fungal diseases which can produce spores on fruit.

1002. New Zealand also contends that “the establishment and spread of Monilinia fructigena

into Australia involves comparable biological and economic consequences for Australia” as to

those of European canker.1254 In Australia’s view, New Zealand has failed to take into account

Australia’s particular circumstances.

1003. First, Jones and Aldwinkle (1990) note that brown rot (including M. fructigena) as a

disease of apple and pear “rarely cause[s] economic losses of apple and pear”.1255

1004. Secondly, Australia notes that brown rot, caused by M. fructigena, is only one particular

species of brown rot. Other species of brown rot are already present in Australia (for example,

Monilinia laxa and Monilinia fructicola)1256 and Australian industry already has controls in place

1251 New Zealand’s first written submission, paras. 4.436-4.437.1252 New Zealand’s first written submission, para. 4.437. Australia notes that Japanese Erwinia has been

closely identified with Erwinia pyrifoliae, a disease “demonstrably distinct” from E. amylovora (See Exhibit AUS-114: Maxson-Stein K., McGhee G.C., Smith J.J., Jones A.L. and Sundin G.W. (2003) "Genetic analysis of a pathogenic Erwinia sp. from pear in Japan" Phytopathology 93). Both E. pyrifoliae and Japanese Erwinia reportedly “have a narrow host range, causing shoot blight only in pear trees” (See Exhibit NZ-68: Kim et al (2001) “Molecular comparison of pathogenic bacteria from pear trees in Japan and the fire blight pathogen Erwinia amylovora”, Microbiology 147, p.1023).

1253 New Zealand’s first written submission, para. 4.440.1254 New Zealand’s first written submission, paras. 4.441-4.442. 1255 Exhibit AUS-115: Jones, A.L. and Aldwinckle, H.S. (1990) "Compendium of Apple and Pear

Diseases" The American Phytopathological Society, St. Paul, Minnesota, p.32.1256 Exhibit AUS-116: Commonwealth Agricultural Bureaux International (CABI), Crop Protection

Compendium: Monilinia fructicola; Monilinia laxa , 2007 Edition.

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for these diseases that would also be effective for M. fructigena. As shown above, this is not the

case for European canker. Accordingly, the economic impact for the Australian apple and pear

industry would be lower if M. fructigena were to establish in Australia than if European canker

were to establish in Australia.1257

iii. Summary

1005. Based on the above, Australia submits that the consequences of the diseases associated

with Japanese nashi pears are lower than those associated with New Zealand apples. New

Zealand has failed to establish otherwise.

(e) The resulting risk associated with Japanese nashi pears is much lower than

the risk associated with New Zealand apples

1006. Australia first submits that it has clearly demonstrated above that the likelihoods of entry,

establishment and spread into Australia in relation to both Japanese Erwinia and brown rot are

much lower than the associated likelihoods in relation to fire blight and European canker.

Secondly, Australia submits that the consequences associated with Japanese Erwinia and brown

rot becoming established in Australia are also lower than those associated with fire blight and

European canker. Accordingly, the risk associated with Japanese nashi pears is much lower than

the risk associated with New Zealand apples.

(f) The measures applied for Japanese nashi pears demonstrate that Australia’s

ALOP is consistently applied

1007. The second stage of determining the level of protection actually applied requires an

examination of the measures applied in order to manage the risks associated with that product.

Here, those risks relate to Japanese Erwinia, fire blight, brown rot and European canker.

1008. New Zealand states that “Australia applies less restrictive measures regarding brown rot”

than European canker, “notwithstanding the higher risk profile for Japanese nashi pears.”1258

New Zealand also states with respect to Japanese Erwinia that the “substantial difference in 1257 This notion is reflected by the Australian National Apple and Pear Industry Biosecurity Plan, which

assesses the consequences of European canker (Neonectria galligena) as “Moderate-High”, and consequences of brown rot (Monilinia fructigena) as “Low”. The rating of “Low” is given because M. fructigena, if it were to become established in Australia, could be treated with the same controls as currently used by industry for the other species of brown rot already present in Australia.


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sanitary measures applied by Australia to nashi pears from Japan is evidence of a clear difference

in the level of protection applied when compared with apples from New Zealand.”1259

1009. Australia applies different measures to the two products because there are different risks

associated with them. As argued above, New Zealand has failed to properly take into account

the elements of risk, as relevant to Australia’s circumstances.

1010. To complete the second stage of analysis, Australia will briefly compare the measures

applying to each product.

i. Measures in relation to freedom from disease or disease symptoms, as

verified by orchard inspections

1011. One of the measures applied by Australia to manage the risks of fire blight and European

canker in relation to apples from New Zealand is orchard freedom from visible symptoms of the

disease, as verified by orchard inspections. The detection of symptoms of either disease in an

export orchard would result in the suspension of exports from that orchard for the coming

season.

1012. In the case of brown rot, one of the measures that Australia applies to Japanese nashi

pears to manage the risk of brown rot is area freedom in Tottori Prefecture. Area freedom is

certified by Japanese authorities, but AQIS officials are required to inspect a sample from export

orchards to confirm registration arrangements; hygiene and pest control; bagging of fruit; and the

absence of pests and diseases of quarantine concern.1260

1013. In the case of Japanese Erwinia, New Zealand claims that “Australia applies no measures

specifically relating to Japanese Erwinia other than a requirement to report its presence if

detected in a production area”.1261 This statement overlooks the fact that area freedom from

Japanese Erwinia is an ongoing requirement in relation to the importation of Japanese nashi

pears to Australia. Japan has demonstrated its ability to ensure that area freedom is

maintained.1262

1259 New Zealand’s first written submission, para. 4.439.1260 Exhibit AUS-108: BA (2003) Pome fruit review, p.61.1261 New Zealand’s first written submission, para. 4.439.1262 See earlier footnote regarding MAF Japan’s emergency controls in reaction to the Hokkaido outbreak.

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ii. Measures in relation to surface contamination

1014. A second measure applied to manage the risk of fire blight is surface disinfection of

apples with chlorine or an equivalent treatment in the packing house. In the case of brown rot,

Australia requires fruit bagging.1263

iii. General import requirements

1015. General import operational procedures required by Australia for New Zealand apples

include registration of export orchards and packhouses; notification of symptoms to AQIS; AQIS

systems audits of orchard inspections and packhouse procedures (at least for initial trade);

operation of orchards through standard commercial practice (including maintenance of details of

spray programs); secure storage; appropriate labelling; phytosanitary certification; and

notification of non-compliance to AQIS.

1016. For Japanese nashi pears, general import operational procedures include registration of

orchards; notification of brown rot (or unusual weather conditions resulting in brown rot) in

Tottori prefecture and Japanese Erwinia in Japan;1264 AQIS inspections of export orchards to

confirm registration arrangements; hygiene and pest control; bagging of fruit; and the absence of

pests and diseases of quarantine concern;1265 AQIS inspection of pack houses before and after

harvest; provision of details of spray programs; secure storage; appropriate marking and sealing

of packages; and phytosanitary certification.1266

1017. Australia submits that the general operational procedures applying to each product are

not dissimilar.

1263 Exhibit AUS-108: BA (2003) Pome fruit review, p61. Australia notes that the risk of latent infection from external infection sources is addressed by using bags to cover developing export fruits; the bags act as an effective barrier to infection. Accordingly, New Zealand’s argument that fruit latently infected with M. fructigena can produce spores after removal from cold storage becomes an irrelevant technical issue in the particular circumstances.

1264 Exhibit AUS-108: BA (2003) Pome fruit review, p63. 1265 Exhibit AUS-108: BA (2003) Pome fruit review, p61. 1266 Exhibit AUS-108: BA (2003) Pome fruit review, pp35, 61-63. When trade first commenced in 1989,

the measures applying to Japanese nashi pears also included a requirement that Japan provide the results of petal tests and flower examination to Biosecurity Australia each year for the purpose of assessing and confirming that Tottori Prefecture was free from brown rot, black spot and scab diseases. However, in 2003, Biosecurity Australia reviewed this requirement and concluded that orchard inspections, pesticide programs and contemporary management practices were sufficient so allow the requirement for petal and flower examination to be removed.

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(g) Conclusion: New Zealand has failed to establish a distinction in Australia’s

ALOP

1018. Australia has demonstrated above that the likelihood and consequences associated with

Japanese nashi pears is lower than the likelihood and consequences associated with New Zealand

apples. Accordingly, the risk associated with the importation of Japanese nashi pears is lower

than that in relation to New Zealand apples. As a result of this lower risk, different measures are

required in order to achieve Australia’s ALOP. New Zealand ignores these important points, and

thereby fails to establish that Australia’s ALOP is not applied consistently.

1019. Australia finally notes that the Final IRA Report provides for a review of the import

conditions applying to New Zealand apples after one year of trade.1267 A similar review of the

import conditions applying to Japanese nashi pears occurred after taking into account surveys or

export orchards, the history of trade and visits by Australian plant pathologists.

4. Australia’s ALOP does not exhibit arbitrary or unjustifiable distinctions in its

treatment of different situations

1020. The second element of the first sentence of Article 5.5 requires a complainant to establish

that distinctions in the levels of protection applied by the respondent Member are arbitrary or

unjustifiable.

1021. If, contrary to Australia’s submissions above, the Panel finds that there is a distinction in

ALOP applied by Australia, the Panel should examine the rationale behind that distinction to

determine whether it is arbitrary or unjustifiable.

1022. Treaty texts are to be interpreted in accordance with their ordinary meaning.1268

According to the ordinary meaning of “arbitrary” and “unjustifiable”, Australia submits that the

phrase “arbitrary or unjustifiable distinctions” in levels of protection means distinctions which

lack a reasoned basis or are unsupported by evidence.1269

1267 Final IRA Report, Part B, p.325.1268 Article 31(1) of the Vienna Convention on the Law of Treaties.1269 The word “arbitrary” means, inter alia, “capricious” or “unreasonable”. The word “justify” means,

inter alia, to “confirm or support by evidence”. Accordingly, the word “unjustifiable” could be interpreted to mean “unconfirmed or unsupported by evidence”. See: Brown, L (ed.), The New Shorter Oxford English Dictionary (1993), Volume 1: A-M.

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1023. Australia applies its ALOP consistently with respect to apples from New Zealand and

nashi pears from Japan, and accordingly, there can be no finding of Australia adopting arbitrary

or unjustifiable distinctions in its treatment of different situations.

1024. Australia re-emphasises that different risks require different measures, and that different

measures alone are not a reasonable basis on which to find that different levels of protection are

being applied. Australia considers that it has sufficiently shown that the reasons for the

differences in the measures applied in relation to Japanese nashi pears and New Zealand apples

relate to the different risks.

1025. In Australia’s view, New Zealand appears to have confused a difference in measures for

a difference in ALOP, and that by doing so, it has failed to prove that any de facto distinction in

ALOP exists. Nevertheless, New Zealand has raised several arguments under the second

element, which Australia will proceed to address.

1026. New Zealand complains that, “prior to standard winter pruning, all trees in all rows of all

orchards/blocks registered for export to Australia need to be inspected (using ladders if needed)

for symptoms of European canker”, and that the “inspection requirements for brown rot in pears

from Japan are much less prescriptive”.1270 Again, Australia notes that Japan offers area freedom

in relation to brown rot. New Zealand offers no area freedom in relation to European canker.

1027. New Zealand also complains that “Australia also requires that AQIS officials be involved

in all such inspections.”1271 New Zealand has misunderstood this requirement. AQIS

involvement in orchard inspections and packing house procedures is limited to AQIS conducting

systems audits only.

1028. New Zealand finally complains about a requirement that “orchard/block[s] be suspended

for the season on the basis that any evidence of pruning or other activities carried out before the

inspection could constitute an attempt to remove or hide symptoms of European canker.”1272 As

Australia has noted previously, Australia imposes no such requirement.

5. The application of Australia’s ALOP in different situations does not result in

discrimination or a disguised restriction on international trade.1270 New Zealand’s first written submission, para. 4.446.1271 New Zealand’s first written submission, para. 4.447. (original emphasis)1272 New Zealand’s first written submission, para. 4.448.

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1029. The third element of the first sentence of Article 5.5 requires a complainant to establish

that arbitrary or unjustifiable distinctions in the ALOP applied by the respondent Member result

in discrimination or a disguised restriction on international trade.

1030. The Appellate Body stated in EC – Hormones that:

The third element must … be demonstrably present: the implementing measure must be shown to be applied in such a manner as to result in discrimination or a disguised restriction on international trade. The presence of the second element -- the arbitrary or unjustifiable character of differences in levels of protection considered by a Member as appropriate in differing situations -- may in practical effect operate as a “warning” signal that the implementing measure in its application might be a discriminatory measure or might be a restriction on international trade disguised as an SPS measure for the protection of human life or health.1273

1031. The Appellate Body’s statement makes it clear that establishing the second element of

Article 5.5 is not sufficient to satisfy the third element.

1032. Again, as Australia has demonstrated above, Australia is consistent in the application of

its ALOP. As the risks of the diseases associated with the importation of New Zealand apples

and Japanese nashi pears differ, the measures required to manage those risks also differ. The

differences in treatment are neither arbitrary nor unjustifiable, nor do they lead to any

discrimination or disguised restriction on trade. Nevertheless, Australia will address New

Zealand’s arguments under the third element of Article 5.5 as follows.

(a) New Zealand has failed to distinguish between discrimination and a

disguised restriction on trade

1033. New Zealand has failed to distinguish between the concepts of “discrimination” and

“disguised restriction on trade” in its claim in relation to Article 5.5. Nor has it identified which

of the two limbs it believes Australia to have contravened. This ambiguity makes it difficult for

Australia to respond.

1034. Australia draws the Panel’s attention to the framing of New Zealand’s arguments under

the third element. New Zealand begins by noting that the Australia – Salmon dispute recognised

a number of warning signals and other factors that “led to the conclusion that the levels of

1273 Appellate Body Report, EC – Hormones, para. 215. Also, note: Appellate Body Report, Australia – Salmon, para. 169.

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protection imposed by Australia in that case resulted in a disguised restriction on trade.”1274

New Zealand then goes on to argue that many of the warning signals and other factors identified

in Australia – Salmon are also present in the present dispute, all of which “cumulatively show

that the distinctions in levels of protection imposed by Australia in this case result in a disguised

restriction on trade.”1275 Any mention of discrimination is notably absent.

1035. Then, throughout its discussion of the warning signals and other factors, New Zealand

refers to the first and third warning signals as indicating that a disguised restriction on trade is

present,1276 the first additional factor as initially indicating discrimination and a disguised

restriction on trade before later saying that it indicates a disguised restriction on trade,1277 and the

second additional factor indicating discrimination and a disguised restriction on trade.1278

Australia notes that New Zealand does not indicate the purposes for which the second warning

signal or third additional factor operate.

1036. New Zealand concludes its discussions by stating that distinctions in ALOP result in “a

discrimination or disguised restriction on trade”, followed by “discrimination and a disguised

restriction on trade.”1279

1037. Accordingly, it is unclear to Australia which of New Zealand’s arguments relate to which

limb of the third element. Given this, the Panel should only consider those warning signals and

additional factors which New Zealand has clearly indicated relate to the relevant limb.

(b) Discrimination must be arbitrary or unjustifiable between countries where

identical or similar conditions prevail

1038. Australia submits that, in order to make a finding of discrimination, such discrimination

must be arbitrary or unjustifiable between countries where identical or similar conditions prevail.

Australia will explain this by examining the relationship between Articles 5.5 and 2.3.

1039. In EC – Hormones, the Appellate Body identified that Article 2.3 is an important part of

the context for the interpretation of the obligations in Article 5.5, and that “Article 5.5 may be 1274 New Zealand’s first written submission, para. 4.452. (emphasis added)1275 New Zealand’s first written submission, para. 4.453. (emphasis added)1276 New Zealand’s first written submission, paras. 4.455, 4.462.1277 New Zealand’s first written submission, paras. 4.463, 4.471.1278 New Zealand’s first written submission, para. 4.474.1279 New Zealand’s first written submission, paras. 4.480, 4.481. (emphasis added)

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seen to be marking out and elaborating a particular route leading to the same destination set out

in Article 2.3.”1280 Further, in Australia – Salmon, the panel held that a violation of Article 2.3

can be presumed where a violation of Article 5.5 has been established.1281 If, as the Appellate

Body has indicated, this relationship of implied violation exists, the related elements in Article

2.3 and Article 5.5 need to be interpreted consistently.

1040. Article 2.3 only disciplines discrimination that is arbitrary or unjustifiable between

Members where identical or similar conditions prevail. In order for the scope of each provision

to be applied consistently, the same limitation should apply to Article 5.5; that is,

“discrimination” under Article 5.5 cannot logically have a broader scope than “discrimination”

under Article 2.3. Accordingly, in Australia’s view, to demonstrate “discrimination” alone is

insufficient.1282

1041. Australia therefore submits that, in relation to the third element of Article 5.5, New

Zealand is required to show arbitrary or unjustifiable discrimination between Members where

identical or similar situations prevail. New Zealand has not done so.

(c) There is no disguised restriction on international trade

1042. The panel in EC – Asbestos noted that the dictionary definition of “to disguise” implies

an intention.1283 The Oxford Dictionary defines “disguise” as referring to: “a means of

concealment or deception; a false appearance; concealment of reality under a false

appearance.”1284 Therefore, a focus on intention accords with the ordinary meaning of that term.

1043. In the present circumstances, Australia’s intention is to manage the risks associated with

importing New Zealand apples in accordance with its rights under the SPS Agreement. The

measures required by Australia reflect the risks arising from pests associated with New Zealand

apples. If New Zealand did not have fire blight, for example, Australia would not require the

same level of measures.1280 Appellate Body Report, EC – Hormones, para. 212.1281 Panel Report, Australia – Salmon, para. 8.109.1282 To explain, there are a larger number of subsets of discrimination within the broader notion of

“discrimination” than there are in the somewhat narrower notion of “arbitrary or unjustifiable discrimination”. “Arbitrary or unjustifiable discrimination” is clearly a subset of “discrimination”. However, “justifiable discrimination” (for example), while still being a subset of “discrimination”, is not a subset of “arbitrary or unjustifiable discrimination”.

1283 Panel Report, EC – Asbestos, para. 8.236.1284 Brown, L (ed.), The New Shorter Oxford English Dictionary (1993), Volume 1: A-M.

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(d) The warning signals and additional factors proposed by New Zealand do not

support a finding of discrimination or a disguised restriction on trade

1044. The Appellate Body has acknowledged that the arbitrary or unjustifiable character of

differences in levels of protection may operate as a “warning” signal in relation to the third

element, but no more. Given that there is no mention of “warning signals” in the text of the SPS

Agreement, Australia questions the status of these so-called “warning signals”. Australia

encourages caution in considering what weight to give any alleged signals that New Zealand has

identified. Australia also notes that the “other factors” referred to by the Appellate Body in

Australia – Salmon equally have no textual basis in the SPS Agreement.

1045. The Appellate Body has also recognised that these “warning signals” and “other factors”

are to be considered cumulatively.1285 Accordingly, any flaws in the “warning signals” and

“other factors” presented by New Zealand should lead the Panel to a finding that New Zealand

has failed to establish a prima facie case in relation to the third element of Article 5.5. Australia

will demonstrate such flaws as follows.

i. Warning Signal 1 – “Arbitrary and unjustifiable character of differences in

the level of protection”

1046. New Zealand argues that the arbitrary or unjustifiable character of differences in levels of

protection may act as a warning signal.1286

1047. As Australia has demonstrated, Australia is consistent in the application of its stated

ALOP. The “distinction” that New Zealand alleges in fact relates to the different risk profiles of

New Zealand apples and Japanese nashi pears, and the measures required to manage those

different risks to a level that accords with Australia’s consistently applied ALOP. New Zealand

has therefore failed to substantiate “Warning Signal 1”.

ii. Warning Signal 2 – “Extent of the difference in levels of protection”

1048. New Zealand argues that the extent of differences in levels of protection may act as a

warning signal.1287

1285 Appellate Body Report, Australia – Salmon, para. 177.1286 New Zealand’s first written submission, para. 4.454.1287 New Zealand’s first written submission, para. 4.456.

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1049. Australia reiterates its arguments in relation to “Warning Signal 1”, and notes that as

there are no distinctions in relation to Australia’s ALOP, the extent of any difference in levels of

protection cannot be considered. New Zealand has therefore failed to substantiate “Warning

Signal 2”.

iii. Warning Signal 3 – “Inconsistency of the measures at issue with Article

5.1 of the SPS Agreement ”

1050. New Zealand argues that the inconsistency of a Member’s measures with Article 5.1 may

operate as a warning signal.1288

1051. As Australia has demonstrated, the Final IRA Report is a valid risk assessment within the

meaning of Annex A, and Australia has accordingly acted in compliance with Article 5.1.

1052. New Zealand has therefore failed to substantiate “Warning Signal 3”.

iv. Additional factor 1 – Level of “politicisation” in the New Zealand apples

IRA process

1053. New Zealand argues that an alleged “politicisation” of the IRA process operates as an

additional factor to take into account when determining discrimination or a disguised restriction

on trade.1289

1054. As previously noted, New Zealand’s claims of “politicisation” are spurious, unsupported

by evidence and should be disregarded by the Panel. Australia nonetheless reserves its right to

rebut these allegations in more detail at a later stage in these proceedings if necessary.

1055. New Zealand has failed to substantiate “Additional factor 1”.

v. Additional factor 2 – “Undue delay”

1056. New Zealand argues that an alleged undue delay of the IRA process operates as an

additional factor to take into account.1290


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1057. As Australia will demonstrate below, New Zealand’s undue delay claim under Article 8

and Annex C(1)(a) is outside the scope of the Panel’s terms of reference. Accordingly, the Panel

should not take this “additional factor” into account.

1058. Nevertheless, Australia wishes to draw the Panel’s attention to Annex 1, which sets out a

timeline for the IRA process from the dates of New Zealand’s market access request in 1999, to

the Director of Animal and Plant Quarantine’s Final Policy Determination for the importation of

apples from New Zealand in March 2007. As the Panel will see, Annex 1 fills in many of the

gaps visible in Annex 1 of New Zealand’s first written submission. Australia notes that the

continued references by New Zealand to the Australian Senate Committee are irrelevant because

the Committee was not part of the IRA process.

1059. New Zealand has therefore failed to substantiate “Additional factor 2”.

vi. Additional factor 3 – Absence of controls on the internal movement of

apples

1060. New Zealand argues that the absence of controls on the internal movement of apple fruit

during an outbreak of European canker in Spreyton, Tasmania, operates as an additional factor to

be taken into account.1291

1061. In Australia’s view, the outbreak in Spreyton is entirely irrelevant. First, New Zealand

has cited Japanese nashi pears as the point of comparison for the purposes of Article 5.5. The

outbreak of European canker in Spreyton is completely unconnected to trade in Japanese nashi

pears. Hence, New Zealand has not made the correct comparison, which needs to be between the

respective products from Japan and New Zealand.

1062. Secondly, the outbreak of European canker in Spreyton precedes the SPS Agreement. A

comparison of how a disease outbreak was managed pre-SPS Agreement is inappropriate.

1063. Thirdly, Australia submits that Article 5.5 logically requires that the alleged

discrimination or disguised restriction on trade be current (i.e. that any alleged discrimination

between New Zealand apples and Spreyton apples be occurring at present). As stated

previously, it is not possible to compare a current situation with a past situation for the simple

reason that the plant health status of each Member changes over time, as do trade volumes and 1291 New Zealand’s first written submission, para. 4.475-4.476.

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risk management procedures. In the present case, the methods of fruit storage and distribution

have also changed significantly since the 1950s.

1064. Fourthly, even if there were no restrictions on the movement of fruit from Tasmania, the

controls in place were equivalent to those proposed for New Zealand. In Spreyton, orchards

were regularly surveyed for diseases symptoms and affected trees were removed.

1065. New Zealand has therefore failed to substantiate “Additional factor 3”.

6. Conclusion: New Zealand has failed to demonstrate that Australia applies its ALOP

inconsistently with Article 5.5

1066. Australia is consistent in the application of its stated ALOP. Any perceived differences

in treatment between New Zealand apples and Japanese nashi pears arise as a result of the

different risk profiles of the associated diseases and the markedly different volumes of trade.

Further, the “warning signals” and “additional factors” that New Zealand has presented to

evidence discrimination or a disguised restriction on trade are unsubstantiated.

1067. Accordingly, the argument that there are arbitrary or unjustifiable distinctions in the

application of Australia’s ALOP, and that those arbitrary or unjustifiable distinctions result in

discrimination or a disguised restriction on trade, does not bear fruit. New Zealand has failed to

establish otherwise and therefore there can be no finding of inconsistency with Article 5.5.

G. NEW ZEALAND HAS ABANDONED ITS CLAIM UNDER ARTICLE 2.3

1068. As New Zealand has failed to establish a violation of Article 5.5, its consequential claims

in relation to Article 2.3 must also fail.

1069. In this regard, New Zealand has not provided any separate arguments in relation to its

claims under Article 2.3. Australia accordingly considers that New Zealand has, in effect,

abandoned its claims in relation to Article 2.3. In Australia’s view, the Panel should not rule on

Article 2.3.

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H. AUSTRALIA’S MEASURES ARE CONSISTENT WITH ARTICLE 5.6

1070. New Zealand claims that alternative measures for the importation of New Zealand apples

are reasonably available to achieve Australia’s ALOP in respect of the risks associated with fire

blight, European canker and ALCM. The basis for New Zealand’s claim rests solely on its

contention that the unrestricted risks associated with the importation of New Zealand apples to

Australia are lower than the levels established in the Final IRA Report.

1071. On the basis of the risk assessment in the Final IRA Report, Australia disputes New

Zealand’s claim that the “alternative measures” it has identified would achieve Australia’s

ALOP. Accordingly, Australia’s measures are consistent with its obligations under Article 5.6.

1072. In addition, New Zealand’s misinterpretation of the three measures generally applicable

to the risk management for New Zealand apples, means that its challenge under Article 5.6 is

without basis.

1. New Zealand must satisfy the three distinct elements of Article 5.6

1073. It is clear from the text of Article 5.6 and footnote 3 of the SPS Agreement that three

elements must be satisfied in order to establish a violation of Article 5.6. The complainant must

identify an alternative measure (or measures) which:

is reasonably available taking into account technical and economic feasibility;

achieves the Member’s appropriate level of SPS protection (ALOP); and

is significantly less restrictive to trade than the SPS measure(s) contested.1292

1074. These three elements are cumulative, so that failure to satisfy any one of the elements

means that the complainant’s claim under Article 5.6 must fail.1293 All three elements of Article

5.6 must be satisfied in relation to a particular alternative measure and cannot be satisfied

simply by “another measure” in the abstract.

1292 Appellate Body Report, Australia – Salmon, para. 194; Appellate Body Report, Japan – Agricultural Products II, para. 95.

1293 Appellate Body Report, Australia – Salmon, para. 194; Appellate Body Report, Japan – Agricultural Products II, para. 95.

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(a) Any alternative measure must meet the importing Member’s ALOP

1075. In Australia’s view, the most logical starting point of the Panel’s analysis should be the

second element identified above, namely an assessment of whether the purported “alternative”

measures identified by New Zealand would actually achieve Australia’s ALOP. A comparison

of particular measures’ relative trade-restrictiveness or reasonable availability is meaningless

without a determination that the particular alternative measure would achieve the ALOP.

Australia’s ALOP is not reviewable by a WTO panel or the Appellate Body.1294

1076. The Panel will therefore need to assess the capability of any “alternative” measure

identified by New Zealand to reduce the risks associated with the importation of New Zealand

apples to Australia, to a level that achieves Australia’s ALOP.1295

(b) Any alternative measure must be reasonably available, taking into account

technical and economic feasibility

1077. Australia submits that the requirement that an alternative measure be “reasonably

available taking into account technical and economic feasibility”, pursuant to footnote 3 of

Article 5.6, highlights the need for such alternative measure to be a measure that a respondent

could reasonably implement in practice. The technical and economic feasibility of a proposed

alternative measure is a fundamental element for determining whether such measure should be

considered “reasonably available”. This requires technical and economic feasibility to be

assessed “in the real world.”1296 Further, Australia considers that “the risk of incorrect

enforcement [of a measure] is part of the technical feasibility of a measure.”1297

(c) Any alternative measure must be significantly less restrictive to trade

1078. It is clear that Article 5.6 does not require Members to adopt the least trade-restrictive

measure that is both reasonably available and would achieve a Member’s ALOP. Footnote 3 to

Article 5.6 explicitly states that “a measure is not more trade-restrictive than required unless

there is another measure … [that is] significantly less restrictive to trade.”

1294 In Australia – Salmon, the Appellate Body recognised that: “The determination of the appropriate level of protection, a notion defined in paragraph 5 of Annex A, … is a prerogative of the Member concerned and not of a panel or of the Appellate Body.” (Appellate Body Report, Australia – Salmon, para. 199; original emphasis)

1295 See: Appellate Body Report, Australia – Salmon, paras. 204 & 208.1296 Panel Report, Japan – Apples (Article 21.5 – US), para. 8.171.1297 Panel Report, Japan – Apples (Article 21.5 – US), para. 8.171.

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1079. This requires a direct comparison between the disputed measure(s) and any alternative

measure, as to their relative trade-restrictiveness. The inclusion of “significantly” before the

words “less restrictive to trade” in footnote 3, means that it is not sufficient for a complainant to

identify an alternative measure that is merely less restrictive to trade than the existing

measure(s). The alternative measure must be significantly less trade-restrictive than the existing

measure(s) in order to find a violation of Article 5.6. Australia submits that the ordinary

meaning of the word “significant” is “important, notable, consequential”.1298 Thus, an alternative

measure would need to be less restrictive to trade by a degree which is important, notable or

consequential. Comparison of relative trade-restrictiveness of particular measures needs to be

undertaken by a panel on a case-by-case basis.

1080. As the panel in EC – Biotech Products acknowledged, as a result of potential

uncertainties in the result and conclusion of the relevant risk assessment:

… a given risk assessment may well support a range of possible measures. Within this range, a Member is at liberty to choose the one which provides the best protection of human health and/or the environment, taking account of its appropriate level of protection, provided that the measure chosen is reasonably supported by the risk assessment and not inconsistent with other applicable provisions of the SPS Agreement, such as Article 5.6.1299

1081. Therefore, a panel must respect a Member’s right to choose its preferred measure, unless

there is another measure that is significantly less restrictive to trade.

2. The alternative measures identified by New Zealand for fire blight and European

canker would not achieve Australia’s ALOP

1082. New Zealand claims that a “restriction of imports to apple fruit that are mature and

symptomless”1300 is a reasonably available alternative measure to address the risks associated

with fire blight and European canker on the basis that it would achieve Australia’s ALOP.

1083. Essentially, New Zealand’s claim is based on its view that the risk associated with

Australia importing “mature, symptomless apples” is “negligible” (in accordance with New

Zealand’s meaning of the term) in relation to both fire blight and European canker. New

Zealand argues that no additional risk management measures are required to achieve Australia’s

1298 Brown, L (ed.), The New Shorter Oxford English Dictionary (1993, Clarendon Press: Oxford).1299 Panel Report, EC – Biotech Products, para. 7.1525.1300 New Zealand’s first written submission, para. 4.489.

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ALOP. Therefore, New Zealand’s argument under Article 5.6 rests on its opinion that the levels

of unrestricted risk determined in the Final IRA Report are false. New Zealand has not

substantiated its claim that the “alternative” measure would actually mitigate any risks associated

with fire blight or European canker.

1084. Australia recalls that the Final IRA Report found the unrestricted risk associated with

both fire blight and European canker to be “low”.1301 Even though the IRA Team limited its

analysis to “mature apple fruit free of trash”,1302 it also considered the potential for “presence of

fire blight bacteria on mature symptomless apple fruit.”1303 As the IRA Team noted,

“E. amylovora cannot be detected by visual inspection.”1304 Similarly with European canker, the

IRA Team considered that “[t]he risk pathway of greatest concern to export with regard to

European canker is symptomless infection and infestation of fruit that cannot be detected by

inspection.”1305 Therefore, New Zealand’s proposed “alternative” measure – that imports be

limited to mature, symptomless apples – has already been factored in to the assessment in the

Final IRA Report for both fire blight and European canker, which nevertheless concluded that

the risk was “low” and in excess of Australia’s ALOP of “very low”.1306

1085. As the Final IRA Report is a valid risk assessment within the meaning of Article 5.1.

Australia is entitled to rely upon the Final IRA Report’s findings as to the unrestricted risks

associated with fire blight and European canker and the measures that should be taken to reduce

those risks to achieve Australia’s ALOP.

1086. Accordingly, the Panel must find that a requirement to limit imports to mature,

symptomless apple fruit would not achieve Australia’s ALOP without further risk management

measures. This would mean that New Zealand has failed to demonstrate that the “alternative”

measure it has identified would achieve Australia’s ALOP, and therefore that New Zealand has

failed to show that Australia’s measures are inconsistent with its obligations under Article 5.6.

1301 Final IRA Report, Part B, pp. 104 & 150.1302 Final IRA Report, Part B, p. 9.1303 Final IRA Report, Part B, p. 52. (emphasis added)1304 Final IRA Report, Part B, p. 52. 1305 Final IRA Report, Part B, p. 150. (emphasis added)1306 See: Final IRA Report, Part B, pp. 104-105, 150.

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1087. Australia notes that New Zealand has also made the ambit claim that a requirement for

cold storage or a limitation to “retail-ready packaged fruit” would serve as “alternative”

measures for fire blight.1307 Also, in relation to European canker, New Zealand stated:

[A]lternative measures that would … be reasonably available, be less trade restrictive and achieve Australia’s ALOP include restricting imports of apples to those that are sourced from “pest-free places of production”, to be determined by a single inspection of each exporting orchard and maintained through controls on the subsequent movement of nursery stock, or limiting imports to apples sourced from areas of “low pest prevalence” to be determined by inspection of a sample of orchards.1308

1088. However, New Zealand explicitly chose not to substantiate its assertions in respect of

these “alternative” measures1309, and therefore the Panel should not consider these “measures” as

genuine “alternatives” under Article 5.6. Therefore, Australia submits that New Zealand has

failed to show that Australia’s measures for fire blight and European canker are more trade-

restrictive than required, on the basis that it has failed to identify a significantly less trade-

restrictive alternative measure that would achieve Australia’s ALOP.

3. The alternative measure identified by New Zealand for apple leafcurling midge

would not achieve Australia’s ALOP or be significantly less trade restrictive

1089. New Zealand claims that Australia’s measures in regard to ALCM are inconsistent with

Article 5.6 on the basis of its argument that an inspection of a 600-fruit sample from each import

lot alone1310, is a reasonably available alternative measure that would achieve Australia’s ALOP

and is significantly less restrictive to trade. Once again, New Zealand’s claim rests on its flawed

opinion that the level of unrestricted “risk” determined in the Final IRA Report is false in respect

of ALCM. Furthermore, New Zealand has not shown that its “alternative” measure would be

significantly less restrictive to trade than Australia’s current measures for ALCM.

1307 New Zealand’s first written submission, para. 4.490.1308 New Zealand’s first written submission, para. 4.491. 1309 New Zealand declared that it would “restrict its consideration to the alternative measure of restricting

imports to mature, symptomless apple fruit”: New Zealand’s first written submission, paras. 4.490 & 4.491. 1310 New Zealand’s first written submission, para. 4.513.

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(a) New Zealand’s alternative measure would not achieve Australia’s ALOP

1090. Australia has provided for two risk management options for ALCM:

inspection of a 3000-apple random sample of all export lots in New Zealand; application of a suitable treatment (e.g. fumigation) or rejection of any relevant lots will be required where ALCM is found; or

treatment of all lots with a suitable treatment (e.g. fumigation) for ALCM, together with a standard inspection of 600-units per lot.1311

1091. New Zealand claims that an inspection of 600 fruit per lot would achieve Australia’s

ALOP on the basis that application of this measure would reduce the risk to “negligible”1312 (in

accordance with New Zealand’s meaning of the term), which is below Australia’s ALOP. But

New Zealand has not demonstrated that its “alternative” measure for ALCM would achieve

Australia’s ALOP on the basis of the level of risk calculated by the IRA Team. New Zealand

has assumed that the level of unrestricted “risk” for ALCM determined in the Final IRA Report

is false.

1092. Australia based its measures on the findings in the Final IRA Report, which indicate that

the unrestricted risk for ALCM is “low”1313, and therefore exceeds Australia’s ALOP. The IRA

Team assessed the “alternative” measure proposed by New Zealand, but found that a 600-unit

inspection system alone would not reduce the risks associated with ALCM sufficiently to

achieve Australia’s ALOP.1314 As New Zealand has failed to show that the Final IRA Report is

not valid, the Panel should find that New Zealand’s claim under Article 5.6 has not been made

out.

i. The IRA Team’s statistical analysis of the measures for ALCM

1093. The IRA Team considered whether a 600-unit inspection alone would achieve Australia’s

ALOP for ALCM, but found that it did not.1315 In doing so, the IRA Team employed statistical

analysis to assess the rate of inspection that would be required to achieve Australia’s ALOP for

ALCM, short of visually inspecting every single apple. The IRA Team took into account both

1311 New Zealand has acknowledged that an inspection of 600-units per lot is a standard quarantine requirement to which it does not object: “A 600 unit sample … is not itself objectionable since it is commonly undertaken for a range of quarantine pests.” (New Zealand’s first written submission, para. 4.138.)

1312 New Zealand’s first written submission, paras. 4.517-4.518.1313 Final IRA Report, Part B, p. 187.1314 Final IRA Report, Part B, pp. 188-190.1315 Final IRA Report, Part B, pp. 188-190.

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its estimate that the unrestricted infestation rate for ALCM would be 4.1% (mean) of the total

proposed number of apples imported from New Zealand annually1316, and the August 2005 data

provided by New Zealand that the infestation rate of the varieties of New Zealand apples

exported to the United States (by the methods deployed) were between 0.1% and 0.38%.1317

1094. Alternative inspection rates of 600 units per lot and 3,000 units per lot were considered.

The IRA Team reasoned that the probability that ALCM would be detected in a lot of apples

which contains ALCM above a particular infestation level is more likely where there is a

relatively high infestation rate. For example, where a 600-unit sample is used, the probability of

at least 0.5% of apples in a lot being infested and therefore ALCM being detected, is higher

where the overall level of infestation of the lot is 0.5% or greater, depending on certain statistical

assumptions. Conversely, the 600-unit inspection rate would be less effective where the overall

infestation rate of lots is uniformly lower than 0.5%.1318

1095. The IRA Team found that “[a] 600 unit inspection is very effective in detecting lots

carrying pests” at an infestation rate of 4.1%.1319 However, the IRA Team’s analysis concluded

that if the infestation rate is as low as New Zealand’s information suggested it may be (i.e.

0.17%), then a 600-unit inspection system would not detect infestation in a certain proportion of

lots. At this rate, a 600-unit inspection system would allow lots to pass without treatment

resulting in a final importation rate of ALCM for the total imports of around 0.06%. When

placed in the model by the IRA Team this importation rate resulted in a restricted risk estimate

that exceeded Australia’s ALOP, indicating that, at least for infestation levels below 0.5%, an

inspection/treatment system based on a 600 fruit sample would not be adequate to manage the

risk for ALCM.1320

1096. A predicted ALCM infestation rate of 0.17% falls into the range of August 2005 data on

infestation rates (0.1%–0.38%) provided by New Zealand. The IRA Team explored the

relationship between sample sizes and the number of ALCM that could be imported for

infestation rates between 0.1% and 0.38% using standard statistical techniques.1321 The IRA

Team concluded that, at infestation rates between 0.1% and 0.38%, a 3,000-unit inspection 1316 See: Final IRA Report, Part B, p. 165.1317 See: Final IRA Report, Part B, p. 166.1318 New Zealand acknowledged in its written submission that an infestation rate of 0.5% “is greater than

the cocoon infestation level recorded on New Zealand apples”: New Zealand’s first written submission, para. 4.517.1319 Final IRA Report, Part B, p. 190.1320 Final IRA Report, Part B, p. 190.

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system would result in a potential final importation rate for total imports of 0.005%, which

would achieve Australia’s ALOP. Lots that failed this inspection would either need to be

fumigated or withdrawn from export.1322

1097. An alternative measure for ALCM proposed in the Final IRA Report is the routine use of

a mandatory treatment such as fumigation for all lots, in addition to a standard 600-unit

inspection, which was also found would achieve Australia’s ALOP.1323

ii. Limitations imposed by the appropriate standard of review

1098. As Australia argued above, application of the appropriate standard of review precludes a

panel from conducting a de novo review of whether a particular “alternative” measure would

achieve a Member’s ALOP, where the efficacy of such measure has previously been evaluated as

part of a risk assessment. It is clear that the IRA Team assessed the suitability of a 600-unit

inspection system to address the risks associated with ALCM, and found that it would not alone

be adequate to achieve Australia’s ALOP. Unless New Zealand can establish that the Final IRA

Report is not a valid risk assessment, the Panel should accept the IRA Team’s conclusion.

(b) New Zealand’s alternative measure would not be significantly less trade-

restrictive

1099. Furthermore, New Zealand has failed to show that its “alternative” measure of a 600-unit

inspection for ALCM would be significantly less restrictive to trade than Australia’s current

measures.

1100. While Australia acknowledges that a 600-unit inspection requirement may be less

restrictive than Australia’s current measures, Australia submits that such a requirement would

not be significantly less restrictive to trade than the current measures.

1101. If the ALCM infestation rate of New Zealand apples is around 4.1%, then the IRA Team

found that with a 600-unit inspection rate, “apple leafcurling midge will be detected in

practically every lot and therefore [practically] every lot will be fumigated”, which would result

1321 Australia refers the Panel to the tables of minimum sampling sizes to achieve particular confidence levels that are set out in: Exhibit AUS-30: ISPM No. 31 (2008) Methodologies for sampling consignments.

1322 Final IRA Report, Part B, pp. 190-192.1323 See: Final IRA Report, Part B, pp. 191-192.

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in a high degree of risk reduction.1324 Therefore, if the infestation rate is 4.1%, and a 600-unit

inspection results in detection of ALCM in most lots, requiring remedial treatment, then such a

measure would hardly be more trade-restrictive than Australia’s current option of a 600-unit

inspection plus mandatory treatment. If the ALCM infestation rate is around 4.1%, then New

Zealand’s proposed “alternative” measure would clearly not be significantly less restrictive to

trade than the existing measure.

1102. Furthermore, Australia is flexible about how the 3000-unit inspection measure could be

operationalised. Australia understands that New Zealand packing houses typically conduct a

600-unit pest inspection of each grower lot that is received by a packing house. Multiple grower

lots may be received in a day or processed in a single packing run, and go on to comprise a

single consignment. The 600-unit inspections per grower lot could be aggregated for the single

consignment, towards achieving the required 3000-unit inspection. In effect, this means that in

many cases there would be no additional requirement to that which New Zealand packing houses

already apply, and therefore minimal trade-restrictive effects.

1103. Australia notes that multiple units of inspection is not unusual for trade between Australia

and New Zealand.1325 For example, in respect of fresh fruit exports from Australia that pose a

risk of providing a vector for fruit fly, New Zealand requires each grower lot in a consignment to

be subject to a 600-unit inspection by a delegated inspector, followed by a further 600-unit

inspection of the consignment by AQIS, followed by mandatory treatment (dimethoate or methyl

bromide). Australia also understands that under some circumstances New Zealand apple exports

to the United States are already subjected to much higher inspection rates (up to 20,000 apples)

than that required by Australia.

1104. Indeed, New Zealand appears to acknowledge in its written submission that its proposed

alternative measure is merely “less” restrictive to trade, rather than “significantly less”

restrictive.1326

1105. New Zealand has failed to establish that its proposed “alternative” measure for ALCM

would be significantly less restrictive to trade than Australia’s current risk management options.

1324 Final IRA Report, Part B, p. 190.1325 See: Exhibit AUS-93: Australia-New Zealand Bilateral Quarantine Arrangement: Systems Operation

Manual 7, February 2008.1326 New Zealand’s first written submission, para. 4.522.

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4. New Zealand has not identified any alternatives to the general measures

1106. New Zealand has asserted that there is “an alternative, less trade restrictive measure

reasonably available”1327 for “the requirements: (i) that AQIS officers be involved in inspection

for European canker and fire blight, in direct verification of packing house procedures, and in

fruit inspection and treatment; (ii) for verification of compliance with standard commercial

practices; and (iii) that packing houses provide details of the layout of their premises.”1328

However, New Zealand has failed to identify any genuine “alternative” or different measure to

those which Australia currently requires.

1107. New Zealand argues that an “alternative” to the first-mentioned requirement would be the

“simple auditing by AQIS officers of New Zealand systems applicable to the import apples to

Australia from New Zealand.”1329 As discussed above, New Zealand has misunderstood the

requirement in relation to the involvement of AQIS officers, to mean that it “require[s] the

involvement of AQIS officials in all inspections.”1330 However, as previously clarified,

Australia’s requirement in respect of AQIS officers is that they will conduct systems audits

only.1331 New Zealand’s description of potential AQIS systems audits accords with Australia’s

view of its requirement.1332 Therefore, New Zealand has not identified an “alternative” measure

because it is in fact the same requirement as that which Australia imposes.

1108. Furthermore, New Zealand has only attempted to identify a potential “alternative” in

relation to one of the three requirements – that is, the requirement of “AQIS involvement” – and

has failed to demonstrate how any “alternative” measure could replace the other two general

requirements. In particular, Australia’s requirement that “MAFNZ will ensure that all orchards

registered for export to Australia are operating under standard commercial practices”1333, is not

related to New Zealand’s concern with “AQIS involvement” in inspections, etc. The measure as

challenged by New Zealand is:

1327 New Zealand’s first written submission, para. 4.525. 1328 New Zealand’s first written submission, para. 4.524.1329 New Zealand’s first written submission, para. 4.525.1330 New Zealand’s first written submission, para. 4.459. (original emphasis)1331 Final IRA Report, Part B, p. 314.1332 New Zealand’s first written submission, para. 4.527.1333 Final IRA Report, Part B, p. 315.

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The requirement that New Zealand ensure that all orchards registered for export to Australia operate under standard commercial practices.1334

1109. Thus, the measure at issue is not any AQIS verification of this requirement – rather, the

challenge is against the substantive requirement that orchards must operate under standard

commercial practices. Thus, an “alternative” to the “AQIS involvement” requirement is not an

alternative to the standard commercial practice requirement.

1110. New Zealand has alleged that “Australia does not provide any justification” for its

requirement in respect of standard commercial practice.1335 This is clearly incorrect, as the Final

IRA Report makes it clear that the IRA Team assumed that New Zealand exporters would

operate under standard commercial practice throughout its assessment of the unrestricted risk

associated with importing New Zealand apples,1336 and therefore assurance was required that all

orchards registered for export to Australia would be operating under standard commercial

practices.1337

1111. New Zealand also challenges the justification for the requirement that packing houses

provide details of the layout of premises.1338 As explained above, a basic map of packing houses

is sought in order that AQIS officers can identify areas of potential risk in the packing houses in

preparation for the required packing house audits.

1112. So, while New Zealand argues that Australia has not explained the basis for imposing the

two requirements, New Zealand has not actually identified any alternative measure for these

requirements and therefore has failed to support its claim under Article 5.6.

5. Conclusion: New Zealand has failed to demonstrate that Australia’s measures are

inconsistent with Article 5.6

1113. Australia submits that New Zealand has failed to identify “another measure, reasonably

available taking into account technical and economic feasibility, that achieves the appropriate

1334 New Zealand’s first written submission, para. 3.83; New Zealand’s panel request, p. 3. Australia notes that New Zealand altered its expression of the “measure at issue” under Article 5.6 in its

written submission, referring to it as “verification of compliance with standard commercial practices”. (New Zealand’s first written submission, para. 4.524.)

1335 New Zealand’s first written submission, para. 4.537.1336 See, for example: Final IRA Report, Part B, pp. 54, 105, 114, 314. 1337 Final IRA Report, Part B, p. 315.1338 New Zealand’s first written submission, para. 4.537.

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level of [SPS] protection and is significantly less restrictive to trade”1339 for any of the measures

at issue in this dispute. Accordingly, New Zealand has failed to discharge its burden of proof

and accordingly there can be no finding of inconsistency with Article 5.6.

6. New Zealand has abandoned its claim under the first requirement of Article 2.2

1114. New Zealand has devoted only a single paragraph in its first written submission in

support of any claim that Australia’s measures are inconsistent with the first requirement of

Article 2.2, which states: “Members shall ensure that any [SPS] measure is applied only to the

extent necessary to protect human, animal or plant life or health”. New Zealand’s argument is a

postscript to its arguments in relation to Article 5.6, stating:

… because [Australia’s measures] are more trade restrictive than required, the measures also breach the requirement in Article 2.2 that measures be “applied only to the extent necessary to protect human, animal or plant life or health.” Australia has also, therefore, again, acted inconsistently with Article 2.2.1340

1115. New Zealand has failed to provide any explanation or argument as to why a finding under

Article 5.6 that measures are “more trade restrictive than required” should automatically lead to a

certain finding under Article 2.2. Australia notes that there has been no guidance provided by

previous panels or the Appellate Body on this question1341, and the respective texts of Article 2.2

and Article 5.6 make no mention of the other provision. It is clear that New Zealand is not

seriously pursuing its claim under the first requirement of Article 2.2. Accordingly, Australia

considers that, in the absence of any substantive argument, it appears that New Zealand has

effectively abandoned any claim1342 under the first requirement of Article 2.2 and the Panel

should refrain from considering the matter further.

1116. In any event, any outstanding claim in respect of the first requirement of Article 2.2 is

clearly dependent on the outcome of its claims in respect of Article 5.6. As Australia has shown,

New Zealand has failed to discharge its burden of proof in respect of Article 5.6, and has

accordingly also failed to make such a case in respect of the first requirement of Article 2.2.

1339 Footnote 3 to Article 5.6, SPS Agreement.1340 New Zealand’s first written submission, para. 4.540. (footnote omitted)1341 Previous panels have opined simply that the first element of Article 2.2 is relevant context for

interpreting the obligation in Article 5.6: Panel Report, Japan – Agricultural Products II, para. 8.71; Panel Report, Australia – Salmon, para. 8.165; Panel Report, EC – Biotech Products, para. 7.1433.

1342 The Appellate Body has recognised that complainants may abandon certain claims during the course of proceedings: see, Appellate Body Report, Japan – Apples, para. 136.

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I. NEW ZEALAND’S CLAIM THAT THE IRA PROCESS IS INCONSISTENT WITH

ARTICLE 8 AND ANNEX C(1)(A) FALLS OUTSIDE THE PANEL’S TERMS OF

REFERENCE

1117. New Zealand claims that Australia is in violation of its obligations under Article 8 and

Annex C(1)(a) of the SPS Agreement because it failed to “undertake and complete the IRA

process without undue delay”.1343 However, the “IRA process” is not a measure at issue and is

therefore outside the scope of this dispute. Accordingly, the Panel should dismiss New

Zealand’s claim.

1. New Zealand has disregarded the Panel’s preliminary ruling

1118. Australia recalls the Panel’s preliminary ruling,1344 in which the Panel clearly limited the

scope of the measures at issue in the dispute, finding that, inter alia:

New Zealand’s panel request does not identify with sufficient precision any measures contained in Australia’s [Final import risk analysis report for apples from New Zealand], other than the 17 specific items identified through bullet points. Accordingly, any such other measures are not part of this Panel’s terms of reference.1345

1119. Australia fails to see how the “process for considering New Zealand’s request for access

for New Zealand apples to the Australian market”,1346 also referred to by New Zealand as the

“IRA process,”1347 falls within the scope of “the 17 specific items identified through bullet

points”. In Australia’s view, no possible characterisation of the 17 measures could encapsulate

the IRA process.

1120. Australia also notes that in limiting the scope of New Zealand’s panel request, the Panel

thus rejected the following statement from New Zealand’s preliminary written submission:

New Zealand considers that the Final IRA as a whole is inconsistent with Australia’s obligations under the SPS Agreement. That is the essence of New Zealand’s Article 8 and Annex C(1)(a) claim.1348

1343 New Zealand’s first written submission, para. 4.546.1344 Preliminary Ruling of the Panel, Australia – Apples, 6 June 2008, WT/DS367/7.1345 Preliminary Ruling of the Panel, Australia – Apples, 6 June 2008, WT/DS367/7, para. 13(b). (emphasis

added)1346 New Zealand’s first written submission, para. 4.541. (emphasis added)1347 For example, see New Zealand’s first written submission, para. 4.546. (emphasis added)

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1121. Taking into account the above, Australia submits that New Zealand has disregarded the

Panel’s preliminary ruling by pursuing its undue delay claim under Article 8 and Annex C(1)(a).

2. In any event, New Zealand’s panel request does not refer to the “IRA process”

1122. Notwithstanding the Panel’s preliminary ruling, Australia notes that nowhere in its panel

request does New Zealand refer to a “process for considering New Zealand’s request for access

for New Zealand apples to the Australian market” or the “IRA process”.1349 Consequently, as the

IRA process does not fall within the scope of New Zealand’s panel request, nor the terms of

reference of the Panel as clarified by the Panel, it equally cannot fall within the scope of an

undue delay claim. Accordingly, Australia submits that the Panel should reject New Zealand’s

claim under Article 8 and Annex C(1)(a).

3. New Zealand has not made a case of undue delay in relation to any of the measures

at issue

1123. In Australia’s view, any claim of undue delay which New Zealand may have sought to

make would have to have been made in relation to the 17 measures. However, New Zealand has

not argued that any of the 17 measures are subject to a claim of undue delay. Rather, New

Zealand has framed its claim of undue delay with respect to the IRA process only.

1124. In any event, New Zealand has failed to discharge the burden of establishing a prima

facie case that the 17 measures are approval procedures within the meaning of Annex C(1). This

is yet a further reason for the Panel to dismiss New Zealand’s claim.

4. New Zealand’s factual allegations are therefore irrelevant

1125. Given the deficiencies in New Zealand’s undue delay claim, Australia does not believe it

necessary to address the factual aspects of New Zealand’s claim. However, for the record,

Australia does not accept any of New Zealand’s factual assertions with respect to its undue delay

claim, and reserves its right to address these assertions at a later time if necessary. Australia

1348 Written Submission of New Zealand, Request for a preliminary procedural ruling in relation to the consistency of New Zealand’s panel request with Article 6.2 of the DSU , WT/DS367, 7 April 2008, para. 2.9. (emphasis added)

1349 New Zealand, Request for the Establishment of a Panel by New Zealand, WT/DS367/5 (7 December 2007) (“New Zealand’s panel request”), p.1. (emphasis added)

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repeats its view that New Zealand’s allegations of “politicisation” of the IRA process are

spurious and unsupported by evidence.

5. Conclusion: New Zealand has not made a case under Article 8 and Annex C(1)(a)

1126. Neither the scope of New Zealand’s panel request, nor the Panel’s preliminary ruling on

New Zealand’s panel request, allow New Zealand to make a claim of undue delay in relation to

the IRA process. The Panel should therefore dismiss New Zealand’s claim of undue delay.

VII. CONCLUSION

1127. For the reasons set out in this submission, Australia requests the Panel to find that New

Zealand has not established a prima facie case that Australia’s measures are inconsistent with its

obligations under the SPS Agreement. Alternatively, if the Panel considers New Zealand has

established a prima facie case in respect of one or more measures, then Australia requests the

Panel find that it has rebutted that case on the basis of its evidence and legal argument.

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ANNEX 1

TIMELINE FOR THE NEW ZEALAND APPLES IRA PROCESS

1999 :

13 January: New Zealand lodges request for access of fresh apple fruit to Australia.

4 February: Technical discussions with New Zealand on the approach to the Import Risk Analysis for New Zealand apples (IRA).

8 February: New Zealand lodges revised request for access of fresh apple fruit to Australia.

25 February: Notification to stakeholders of commencement of IRA.

26 February: Further technical discussions between New Zealand Ministry of Agriculture (MAFNZ) and AQIS.

15 April: AQIS invites stakeholder comments on proposed IRA process. Comment period until 17 May.

2-7 May: AQIS visit to major production areas in New Zealand (Hawkes Bay and Nelson/Blenheim)

28 June: AQIS advises stakeholders that IRA to follow normal risk analysis process in the IRA Handbook 1998.

1-5 November: AQIS visits New Zealand.

17 December: AQIS and MAFNZ discuss IRA progress.

2000 :

13 March: AQIS notifies stakeholders of delay in releasing draft IRA, as awaiting further technical information.

25 July: AQIS advises stakeholders that technical work on the draft is substantially complete with an anticipated release date in August, followed by a sixty day comment period.

6 October: Biosecurity Australia (BA) established with responsibility for import risk analysis.

11 October: First draft IRA released (215 pages) – BA advises comments period open until 11 December.

11 December: BA receives New Zealand’s comments on the draft IRA.

19 December: BA meets with New Zealand to discuss its comments.

20 December: Comments period extended until 28 February to allow all interested parties an opportunity to respond (100 submissions received at 11 December).

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2001 : 28 February: Comments period on the 2001 draft IRA closes (142 submissions

received).

13-16 May: BA visit apple and pear growing areas in New Zealand information gathering on New Zealand management of fire blight and other quarantine pests.

2 July: BA releases a draft inventory of issues raised by stakeholders in response to the draft IRA for thirty day comment period.

6 August: BA receives New Zealand comments on the draft inventory of issues raised by stakeholders in response to the draft IRA.

28 September: BA releases draft Guidelines for Import Risk Analysis for comments by 15 November - to address the need for increased transparency and stakeholder consultation in the IRA process within the bounds of Australia’s international obligations, government policy objectives, scientific rigour, administrative efficiency and effectiveness and practicability.

8 October: BA notifies stakeholders of the proposed membership of the Risk Analysis Panel for New Zealand apples and of the process to appeal this membership.

20 November: BA releases final inventory of issues raised by stakeholders in response to the 2000 draft IRA, taking into account comments on the draft inventory (11 submissions received on draft inventory).

2002 :

Nine Risk Analysis Panel meetings held (outcomes of these meeting publicly available on BA website).

Three Arthropod Technical Working Group and three Fungal Technical Working Group meetings held.

10 January: BA advises Risk Assessment Panel membership.

4 July: BA publicly releases Scientific Review Paper to ensure transparency in the IRA process and assist stakeholder contributions to ensure that the final IRA covers all major scientific issues thoroughly and is based on the best available scientific evidence. Also advice on stakeholder workshop.

22-23 July: Stakeholder workshop held in Melbourne to explain Scientific Review Paper, New Zealand Government officials among the attendees.

9-10 September: Two Risk Assessment Panel members visit New Zealand apple growers/packers.

2003 :

Seven Risk Assessment Panel meetings held –considering extensive stakeholder comments on the 2000 draft IRA and reviewing relevant scientific evidence. (summaries of these meeting publicly available on BA website).

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2003: Ongoing Fungal Technical Working Group and Anthropod Technical Working Group meetings.

2004 :

Eight Import Risk Analysis Team (formerly Risk Assessment Panel) meetings held.

19 February: BA releases revised draft IRA (722 pages).

31 March: BA releases the risk estimation methodology used in the revised draft IRA 2004 (publicly available on its website).

23 June: Comments period closes on revised draft IRA (comments period extended twice to ensure sufficient time for stakeholders to review the scientific content and provide meaningful feedback, taking into account key stakeholder involvement in apple harvest). (around 200 submissions received).

16 August: Eminent Scientists Group established to independently examine all final draft IRAs before their release and ensure Import Risk Analysis Teams have adequately considered all technical submissions received from stakeholders.

1 December: BA established as a prescribed agency (financially independent from the Department of Agriculture, Fisheries and Forestry). BA to review all IRAs in process and reissue them as revised drafts for further comment.

2005 :

Nine Import Risk Analysis Team meetings held.

Ten meetings held with stakeholders in major apple growing areas in Australia to clarify issues raised in their submissions on the revised draft IRA.

12 April: BA meets with New Zealand MAFNZ to clarify issues raised in its submission on the revised draft IRA.

2 June: BA meets with New Zealand to further discuss issues raised.

1 December: Draft IRA (371 pages) reissued for comments for 120 days to ensure stakeholders have sufficient time to absorb and comment on the very substantial and detailed material contained in it.

2006 :

Five Import Risk Analysis Team meetings held.

1 February: BA releases the risk estimation methodology used in the revised 2005 draft IRA (publicly available on BA website).

9 March: BA meets with New Zealand government and industry in Wellington to assist MAFNZ to prepare its submission on the 2005 draft IRA.

30 March: Comments period closes on 2005 draft IRA (34 submissions received).

7 June: BA meets with New Zealand to clarify some issues arising from New Zealand’s submission to the 2005 draft IRA.

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1 August: BA advises that the draft final IRA has been referred to the Eminent Scientists Group for review.

October: Eminent Scientists Group report – concluding stakeholder comments properly considered - provided to Australia’s Director of Animal and Plant Quarantine.

30 November: BA releases Final IRA for apples from New Zealand.

1 December: BA met with New Zealand to outline the measures in the final IRA in Wellington.

2007 :

12 January: Appeal period closes for the final IRA (3 appeals lodged – New Zealand did not appeal).

31 January: BA meets with New Zealand to discuss technical details of the final IRA 2006.

26 February: Appeals considered and disallowed.

26 March: Australia’s Director of Animal and Plant Quarantine issues a Final Policy Determination for importation of apples from New Zealand.

21-22 June: AQIS visit to New Zealand to take part in New Zealand workshop on its certification systems and procedures and inspection of New Zealand orchards and pack-houses.

31 August: New Zealand request consultations with Australia under Article 4 of the DSU.

4 October: Consultations with Australia held, the United States and the European Communities attend as third parties.

6 December: New Zealand request establishment of a panel under Article 6.1 of the DSU.

2008 :

21 January: Panel established.

11-12 February: BA and New Zealand technical discussions to clarify the import operational procedures for New Zealand apples .

12 March: Director-General composes panel at New Zealand’s request, Chile, Chinese Taipei, European Communities, Japan, Pakistan and the United States reserve their rights to participate as third parties.

March 2008, AQIS advises New Zealand that the draft operational framework to give effect to the IRA requirements - Standard operating procedure (SOP) and work plan – could be finalised, subject to a few minor amendments by New Zealand.

20 June: New Zealand lodges its first written submission in the WTO dispute.

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15 July: New Zealand advises AQIS that it is not in a position to agree to the draft SOP and work plan.

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ANNEX 2

AUSTRALIA’S REVIEW OF ANNEX 3 OF NEW ZEALAND'S FIRST WRITTEN SUBMISSION

Bureau of Rural Sciences11 July 2008

Summary

In response to a request from Biosecurity Australia, the Bureau of Rural Sciences (BRS) conducted a preliminary review of Beresford and Kim’s ‘An analysis of climate requirements for establishment of European canker’ (2008; Annex 3 of the New Zealand WTO submission WT/DS367).

The BRS analysis is restricted to climatic and host factors influencing the potential for European canker to establish in Australia. It is based on a search of the data available within a limited time and there is scope, with more time, to refine the analysis further and investigate other aspects of the Beresford and Kim paper. The main findings of this preliminary analysis are:

BRS CLIMATE mapping based on the Beresford and Kim climatic parameters indicates a much larger area of potential canker establishment in Australia than their analysis suggests. A recent CLIMEX® model output – based on a more complex set of biogeographic parameters than CLIMATE provides – indicates an even larger area of potential establishment in Australia.

Analysis of long-term temperature and rainfall averages shows that specific Australian locations (e.g. Melbourne and Sydney) are within the climatic limits for canker suggested by Beresford and Kim – for example, Melbourne has a very close match to Nelson in New Zealand.

Furthermore, the climatic parameters used by Beresford and Kim are considered to be too restrictive based on: the establishment and persistence of European canker in Tasmania between 1950 and 1974; and their not taking into account the entire global distribution of European canker.


CLIMEX and CLIMATE modelling

CLIMEX®, developed by CSIRO, can be used for matching general climate zones where a species can establish. The potential distribution of European canker in Australia was predicted based on published records of European canker occurring outside Australia and New Zealand and the regional match climate function available in CLIMEX® (Figure 1). The regional match climate function provides a comparison of climates in different regions for maximum and minimum temperature cycles and rainfall patterns with Australian and New Zealand long-term weather data. The climate match prediction in Figure 1 is similar to that determined by Edwards et al (2007; Appendix 1) and indicates that European canker could even establish in the coastal regions of northern sub-tropical and tropical eastern Australia and the establishment potential is similar to that of New Zealand regions that are known to have European canker.

Figure 1. The potential distribution of European canker in Australia and New Zealand (not to scale) predicted using the Regional Match Climate function in CLIMEX® Version 3. Circles indicate average of climatic indices where establishment can occur. Red circles indicate more suitable climates.

Beresford and Kim (2008) acknowledge that European canker occurs in south-eastern England (Kent), where the rainfall is only around 600 – 700 mm. This indicates the potential for a wider distribution than in the earlier import risk analysis (IRA) undertaken by Biosecurity Australia (Biosecurity Australia 2006), which suggested a minimum of 1000 mm annual rainfall is required for establishment. Using the limited geographical data reported by Beresford and Kim and excluding the Australian points – because European canker is not currently in Australia – it is possible to determine which Australian regions match the Beresford and Kim data points (n = 8 records) using CLIMATE software developed by the Bureau of Rural Sciences. The climate match (Figure 2) produced from this restricted dataset indicates a significant climatic overlap with the major commercial pome fruit regions in Australia (Figure 3) and was a very close match with the CLIMEX® model produced in Figure 1.


Figure 2. Australian and New Zealand regions (not to scale) matching the climatic requirements of European canker with the climatic conditions of overseas locations identified as having European canker present (analysis completed with CLIMATE software; red indicating the regions of greater suitability, green and blue less suitable). Approximate location of Nelson (New Zealand) and Melbourne (Australia) are indicated.

Figure 3. Major pome fruit regions of Australia (Australian Natural Resource Atlas 2007).

Hawke’s BayNelson

Gisborne

Melbourne


Factors influencing the establishment of European canker

Beresford and Kim (2008) indicate that establishment of European canker requires 30% of days to have rain during leaf-fall and temperatures of between 11oC and 16 oC for more than 8 hours. Peripheral cankers can occur when rainfall is lower indicating latent infection and records for East Malling (England) indicate that October (mid-autumn in Northern Hemisphere), when temperatures are relatively warm and rainfall occurs on 27% of days, is also conducive to infection.

The Beresford and Kim analysis recognises that regions with rainfall as low as 650 mm per annum have the potential for infection. Therefore the IRA, which included Australian regions with rainfall greater than 1000 mm, should be broadened to include regions with lower rainfall and/or overhead irrigation occurring in months with suitable temperature ranges for infection.

Historical evidence for persistence of canker in Australia

Beresford and Kim reported that an outbreak of European canker persisted ‘without any signs of spread’ in Spreyton, Tasmania for more than 20 years between 1950 and 1974 despite the macroclimatic conditions being apparently unsuitable for European canker. They go on to suggest that this means the climatological criteria (>30% of days with rainfall and temperatures of between 11oC and 16 oC for more than 8 hours per day) used to predict suitable infestation sites would over-predict the risk. In fact the persistence of European canker in this region for so long despite an intensive eradication campaign actually indicates that the climatic criteria used by Beresford and Kim are too limited for accurate prediction of establishment and that the microclimatic conditions are not adequately accounted for and appear to be a significant determinant of establishment potential. It should also be noted that Spreyton was not a major apple producing region of Tasmania in the 1950s and was relatively isolated from other regions (Figure 4). Spread was likely to have been limited in this instance as a result of the intensive eradication campaign rather than inherent climatic unsuitability, because the CLIMATE analysis presented in Figure 2 indicates substantial areas of climatic suitability in Tasmania.


Figure 4. Location of Spreyton, site of the Tasmanian European canker outbreak (source: Ransom 1997) and the major apple production areas in Tasmania in 1950 (Ashton 1950).

Global distribution

The climatic data used by Beresford and Kim (2008) included a restricted number of weather stations with many of the stations being in close geographical proximity (e.g. two weather stations from East Malling in England). Beresford and Kim’s climatic data was reduced by BRS to eight location references when the Australian weather stations were removed for the CLIMATE analysis in Figure 2. Apart from its distribution within Europe, European canker has been reported to occur in areas of South Africa, Canada, the USA, South America and Asia (Figure 5). A literature review undertaken by Edwards et al (2007) reported that European canker had also been found in Indonesia (Java), USA (Florida, Louisiana) and in arid regions, such as Saudi Arabia, Syria and Afghanistan, as well as in sub-artic regions such as Iceland, Sweden and Canada (Nova Scotia). Predicting the distribution of European canker in Australia should consider the global distribution identified through CABI records and the locations identified by Edwards et al (2007) data for these regions in addition to the New Zealand, east England and Chilean data cited by Beresford and Kim. Additional data on the global distribution could also be revealed if a detailed search for records using the historical synonyms for European canker were undertaken (Appendix 2).

Spreyton


Figure 5. Countries where European canker has been reported as occurring indicated by yellow circles; green circles indicate countries with historical records of European canker but assume successful eradication has occurred. Colours indicate regions of climatic similarity (source: CABI).

Comparison of weather patterns for Nelson (New Zealand) and Melbourne (Australia)

Although Beresford and Kim suggest that predicting European canker establishment on climate alone is not adequate, it is important to note that in the vicinity of Nelson (New Zealand) it has not been possible to eradicate European canker to date, and there are many regions in Australia with climatic conditions similar to that of Nelson. Using the most recent Bureau of Meteorology data for Melbourne (July 2007 to June 2008, which was a warm, dry period occurring during a protracted drought) and the wettest year for Nelson (2004; National Climate Database, New Zealand) a comparison of the frequency of days with similar temperatures, rainfall and humidity shows similar patterns for the pome harvest period, January to April (Figures 6 – 9). A more detailed representation of this data showing these daily climate parameters sequentially is provided at Appendix 3.

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Figure 6. Comparison of the frequency (days) of minimum temperatures in Melbourne, Australia and Nelson, New Zealand for January to April inclusive.


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Figure 7. Comparison of the frequency (days) of maximum temperatures in Melbourne, Australia and Nelson, New Zealand for January to April inclusive.

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1 25 50 75 100Rainfall (mm)

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Figure 8. Comparison of the frequency (days) of rainfall volumes for Melbourne, Australia and Nelson, New Zealand for January to April inclusive.

Figure 9. Comparison of the frequency (days) with relative humidity levels for Melbourne, Australia and Nelson, New Zealand for January to April inclusive.

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Melbourne2008Nelson 2004

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The data provided for Nelson in Annex 3 of the New Zealand submission and the most recent data from the Australian Bureau of Meteorology for Melbourne and Sydney was used to examine these sites in relation to the climatic criteria used by Beresford and Kim – i.e. 8 hours of temperature between 11–16oC and 30% of days with rain. The results of this analysis (Figure 10) indicate the seasonal similarity of these regions. Based on these criteria, Melbourne, with many of its backyards containing pome fruit trees or alternate hosts, is an example of just one potential establishment site in Australia for European canker. Further, based on long-term averages, Sydney, a major entry point for pome imports, is warmer and has more summer rainfall; but all months have over 30% of days with rainfall events of 1 mm or more and several months would have periods where establishment is possible.

A. Spring

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Figure 10. Climatic suitability for European canker establishment in Melbourne, Sydney and Nelson using the rainfall and temperature criteria cited by Beresford and Kim (derived from

Dubin and English 1975). The first three letters of each plotted point represent the locality name (Mel = Melbourne, Syd = Sydney, Nel = Nelson) and the numeric postfix represents the month

of the year (where January is ‘1’) for: A. Spring; B. Summer; C. Autumn; and D. Winter.


Non-commercial hosts of European canker (host list from www.cabicompendium.org.cpc)

Another factor not considered in the Beresford and Kim analysis is the availability of alternate hosts. European canker has an extensive host range of more than 60 species in 20 genera and many of these plants are used as amenity plantings or occur in gardens in Australia.

Primary hostsCABI compendium (CABI) identifies four primary hosts of European canker (Nectria galligena): the commercially-grown fruiting apple (Malus domesticus) and pear (Pyrus communis) and the ornamental trees sugar maple (Acer saccharum) and yellow birch (Betula alleghaniensis). The non-pome primary hosts are sold for ornamental plantings in Australia but information on the full extent of their range is not readily available. CABI returns host information only where European canker has been recorded on a host; hence it is likely that other ornamental species (e.g. Pyrus spp. such as Manchurian pear—Pyrus ussuriensis and callery pear—Pyrus calleryana; Acer spp. including box elder—Acer negundo and Japanese maple—Acer palmatum) prevalent in street tree plantings in Sydney and Melbourne and grown extensively in private and public gardens, are potential hosts.

Secondary hostsForty-eight secondary hosts were identified and of these, the white willow (Salix alba) is widely planted in Australia according to Australian Virtual Herbarium geographic records (Figure 11). The tulip tree (Liriodendron tulipifera) is prevalent in street tree plantings in Sydney (City of Sydney 2006) and the scarlet oak (Quercus coccinea) in Melbourne street tree plantings (City of Melbourne n.d.). Other widely planted potential hosts within genera listed as secondary hosts include cherries (Prunus spp., Figure 12) and willows (Salix spp., Figure 13) – both grown extensively in ornamental plantings. Poplars (e.g. secondary host Populus tremuliodes) are also prevalent in private gardens.

Figure 11. Map of Australian Virtual Herbarium collection records of Salix alba.


Figure 12. Map of Australian Virtual Herbarium collection records of Prunus spp.

Figure 13. Map of Australian Virtual Herbarium collection records of Salix spp.


Conclusions

BRS analysis indicates that conditions exist in a wide range of geographical locations within Australia to present a substantial risk of establishment of European canker in Australia, even when based on the Beresford and Kim climatic parameters (>30 days of rainfall and temperatures of between 11–16 oC for more than 8 hours per day) which BRS consider to be too restrictive.

Detailed comparisons of Nelson (a vicinity in which it is known that European canker exists) with Melbourne and Sydney also demonstrate a similarity in climatic conditions – even when deliberately conservative data are used (e.g. comparing a wet year in Nelson with a dry, warm year in Melbourne).

The New Zealand assertion that the failure of the former Tasmanian European canker infection to spread to the mainland indicates that there is no risk of permanent establishment in Australia is not considered valid. European canker persisted in Tasmania for more than 20 years and its containment and removal was most likely due to an extensive eradication campaign and the isolation of the original outbreak (i.e. non-contiguous distribution of primary hosts into surrounding regions) rather than unsuitability of the local climate.

Maps and graphs presented in this analysis show a considerable degree of overlap between regions of climatic suitability for European canker in Australia with commercial pome production areas and potential pome import ports in Australia.

In addition, a wide range of alternative hosts for European canker, which could facilitate the spread of any initial canker establishment into commercial pome production areas, occur in Australian urban and peri-urban locations.


References

Ashton L.G. (1950) The Tasmanian Apple and Pear Industry. Bulletin 6, Bureau of Agricultural Economics, Canberra.

Australian Natural Resource Atlas (2007) Agriculture - National Horticulture Industry Profiles - Pome Fruit. http://www.anra.gov.au/topics/agriculture/pubs/national/pome_fruit.html, accessed 27 June 2008.

Australian Virtual Herbarium: (AVH) data http://www.anbg.gov.au/cgi-bin/avhxml.cgi Accessed 2 July 2008.

Beresford R. and Kim K.S. (2008) Annex 3 An analysis of climate requirements for establishment of European canker. In :First written submission from New Zealand Australia – Measures Affecting the Importation of Apples from New Zealand (WT/DS367).

Biosecurity Australia (2006) Final import risk analysis report for apples from New Zealand Part B, Biosecurity Australia, Canberra, 376 pp.

City of Melbourne (N.D.) Local area tree planting plans http://www.melbourne.vic.gov.au/info.cfm?top=26&pa=642&pg=644 Accessed 3 July 2008.

City of Sydney (2006) Street tree master plan Sydney http://www.cityofsydney.nsw.gov.au/Council/documents/policies/StreetTreeManagement/StreetTreeManagementPolicy/MasterplanVolume3PartD.pdf Accessed 3 July 2008.

Climatic Research Unit (CRU) (2007) High-resolution gridded datasets, Climatic Research Unit and the Tyndall Centre, Norwich: http://www.cru.uea.ac.uk/cru/data/hrg.htm Accessed 10 July 2008.

Dubin H.J. and English H. (1975) Epidemiology of European canker in California. Phytopathology 64: 1201 – 1203.

Garden centres of Australia list of members: http://www.gardencentresaust.com.au/members.htm.

Edwards J., Villalta O.N. and Powney R. (2007) Predicting the potential distribution of Neonectria galligena (European canker) in Australia using the models CLIMATE and CLIMEX®. 16th Biennial Australasian Plant Pathology Society Conference Back to Basics: Managing Plant Disease incorporating the 9th Annual Australasian Mycological Society Meeting. Adelaide Convention Centre South Australia 24-27 September 2007.

Ransom L.M. (1997) The eradication of Nectria galligena from apple trees in Tasmania, 1954 – 1991. Australasian Plant Pathology 26: 121 – 125.


Appendix 1: Potential distribution of Neonectria galligena using climate modeling software (Edwards et al 2007)


Appendix 2: Confirmed synonyms for European canker

1. Cylindrocarpon heteronema 2. Cylindrocarpon mali3. Dialonectria galligena4. Dialonectria galligena var. major5. Fusarium heteronemum6. Fusarium mali7. Nectria galligena var. major8. Neonectria galligena 9. Ramularia heteronema


Appendix 3: Weather data for Melbourne, Australia and Nelson, New Zealand, January to April inclusive

Nelson: daily maximum and minimum temperatures, 1 Jan 2004 to 30 April 2004 (wet year)

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Melbourne rainfall (mm) 1 Jan 2008 to 30 Apr 2008

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Melbourne: daily maximum and minimum temperatures, 1 Jan 2008 to 30 Apr 2008

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Table 1. Percentage of days in the month with rainfall events greater or equal to 1 mm. The Australian data is for the last 12 months and represents a dry, warm cycle. The years 2000 and 2004 are the two wettest seasons for Nelson in the last decade.

% rain days per month

Melbourne Nelson

2008 2000 2004January 13.3 43.3 38.7February 41.3 28.5 72.4

March 16.1 16.1 19.4April 30.0 46.7 36.7

Data sources: Australian Bureau of Meteorology and the National Climate Database, New Zealand.

Documents

I · Web viewThe apple industry consists of approximately 1,200 apple growers with 9.9 million apple trees producing, on average, 306,000 tonnes per year over the last ten years