Table-Grape Dispute Could Sour Australia-Calif. Trade Relations

California’s vineyard scourge, the glassy winged sharpshooter, has not only sent a chill through the state’s wine industry, it’s now threatening to set off a nasty trade dispute with Australia.

Australian agriculture officials this week said they won’t accept imported California table grapes until agriculture officials can ensure that none of the insidious insects that spread a bacterium deadly to grapevines could be shipped along with the fruit.

“Australia has a growing industry in table grapes and a particularly important wine-grape industry. Because of the changing circumstance in California and the marked increase in the number of sharpshooters, our concern is that . . . insects may be included in bunches of grapes that are packed, chilled and sent to Australia,” an Australian embassy official said.

Scientists both here and in Australia agree that there’s a lot at stake, but most say the chances are tiny that the bug, which transmits the disease to the vines on which it feeds, could be contained in the boxes that are fumigated, chilled and shipped over.

And state agriculture officials say they have found no sign of the bug in any of the 115,000 loads of grapes moving through California that they inspected in the last year.

“There is a very, very low risk,” said Matthew Blua, a research entomologist at UC Riverside who is studying the sharpshooter. “Yet the theoretical damage from an infestation is huge.”

The sharpshooter has infested the Temecula wine-growing region, destroying nearly $40 million in vineyards. The insect has been found as far north as Butte County, although state officials say it was isolated in areas away from vineyards.

The U.S. has fought for more than a decade to get its grapes into Australia, but objections over pests and disease have blocked those efforts. Grape growers and some trade analysts say this is a classic case of economic protectionism for Australian early-season growers, who compete with U.S. imports.

“We see it as just the latest in a long series of excuses to keep the market closed,” said Kathleen Nave, president of the California Table Grape Commission.

None of the state’s other export markets have blocked California shipments, although New Zealand has inquired about the safety of moving grapes out of the California market, said Jay Van Rein of the California Department of Food and Agriculture.

The Australian government set conditions in January 2000 under which California grapes would be allowed in, including among other things an application of the fumigant methyl bromide to kill any pests.

However, after hearing of the rising numbers of sharpshooters, officials there dispatched two scientists last summer to study the situation. On the basis of their report, agriculture officials decided this week to continue a ban on California grapes--at least, they say, until more research is done about the effectiveness of methyl bromide and cool temperatures in killing any pests that might have found their way into grape bunches.

Grape-industry officials have called upon the USDA and the U.S. trade representative to step in and resolve the matter or raise it at the World Trade Organization meeting in Geneva next month.

“This is not a ban that would hold up very well [should the WTO mediate],” said Peter Morici, a senior fellow with the Economic Strategy Institute, a Washington, D.C.-based think tank. However, he said, “if it takes two years to settle, [their growers] get two years of economic protection even if we win.”

Although the Australian market probably would not be one of California’s top export destinations, it was expected to add an additional $12 million to $19 million to the coffers of the 600 table-grape farmers in the state. California exports 30% of its table grapes, about 85 million boxes worth about $1 billion.

Officials of both countries met in Washington, D.C., recently to discuss the ban and what Australian officials would require to lift it.

“We are concerned about the Australian government’s justification for continuing to keep out California table grapes,” said a spokeswoman for the U.S. trade representative’s office. “We are pursuing a resolution of this issue in all appropriate forums and are working closely with USDA on this issue.”