Hello Reader,

Australians didn’t taste NZ apples for 90 years

Officially, it was a biosecurity measure. Fire blight was identified in NZ in 1919, and it’s not great. It’s a bacterial disease in apple trees that without management will get down to the roots and kill the tree, and it can rip through orchards. So in 1921, Australia banned imports of kiwi apples.

At the time it was probably excusable. No one really understood the transmission pathways for the disease. But by the 80s, it was pretty clear that the a mature, symptomless apple was virtually risk free. The risk was in branches, which don’t need to be imported to import apples. So starting in 1986, NZ started pushing for access.

Australia wasn’t keen. It rejected NZ’s applications in 1986, 1989, and 1995 - ostensibly for biosecurity risks, but heavily influenced by Australian apple grower lobbying. Growers estimated that NZ imports would cause them $30m/year in lost sales. They benefited from the border being closed.

But it turns out that it’s illegal to block imports from other countries arbitrarily. The World Trade Organisation manages disputes around trade, and the baseline expectation is that all countries allow the import all products. You can’t impose import bans - either on specific commodities, or on specific countries.

The carve out is health. Countries are allowed to set their own standards for imports in health and food safety (“sanitary”), and plant protection (“phytosanitary”). Together, these form the Sanitary and Phytosanitary (SPS) measures that are allowed - which includes quarantine rules, pesticide limits, import bans for diseases, and inspections that are allowed. Countries can set their own level of protection, even if it’s a way higher standard than other countries. But it has to be defensible. Measures need to be based on scientific principles, with a proper risk assessment, and you have to impact trade as little as possible to achieve the protection you’re aiming for.

Australia and New Zealand both benefit massively from the regime. Countries removing import quotas, bans dropping, and tariffs lowering over time have allowed our meat, produce, milk, and tonnes of other agricultural products to find new markets around the world. We rely on other countries interpreting the rules fairly, and not replacing arbitrary import bans (like would have happened decades ago) with dodgy science that discriminates against our imports.

Australia spent 7 years on an investigation, and then technically allowed imports from 2006, but with stringent requirements: apples and bins needed to be chlorine dipped, and 3000 apples from each import lot needed to be inspected. All adding costs

NZ wasn’t happy. So they appealed to the WTO, and in 2010, the WTO ruled in NZ’s favour. Our apples needed to be accepted in the Australian market. So from September 2011, Australia was open for business to NZ Apple growers. It might have been a pyrrhic victory: from what I can tell, it looks as though Australia only buys a couple million ($1.5m USD in 2024) of apples a year. But it’s technically open for business. And it illuminates how modern trade actually works: because it’s rich to rely on other countries buying our produce while putting obstacles in the way of imports.

What I'm reading

I'm working through Matt Stoller's excellent book Goliath: the 100 year war between monopoly power and democracy. It covers the shift in thinking in the USA between barriers to aggregated business power, aggressive anti-trust work in the first half of the 20th century, and then a shift again back to shorter-term thinking. I'm conflicted while I read it: it's excellent, and it seems to map well onto some genuine competition issues we're experiencing at the moment. But at the same time, when all you have is a hammer everything starts to look like a nail, so I'm suspicious of how much I'm enjoying the book.

What I'm watching

In that vein, this is an excellent look at how pubs in Australia are getting rolled up by a few big corporates. And it echos one of my biggest tangible arguments against consolidation: economics and pricing power might be hard to prove, but the bland 'sameness' of shared ownership is the real crime. Make pubs weird again.

Bonus: can you help?

I'm working on a few videos around biosecurity and what's imported as food (and might contain viable seeds) vs what's allowed to be grown here. For the varieties I'm thinking, I need to use a tetrazolium test rather than sprouting them. I know I could get the seeds tested, but I'm keen to do it on camera at home. Tetrazolium dye is annoying to get hold of as a consumer in NZ. Are you able to point me in the right direction to get my hands on the reagent?

That's all from me this week.

Reuben

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