Productivity Commission: Australia’s Anti- Dumping and Countervailing System
Introduction: Hi, I’m with David Birrell from the Australian Steel Association to talk about the recently released Productivity Commission report on Australia’s Anti- Dumping and Countervailing system.
Question 1: It is a long title, what exactly does the Anti-Dumping and Countervailing system report involve.
Answer: The Anti Dumping and countervailing system report undertaken by the Productivity Commission investigated the appropriateness of the present Anti Dumping regime operating in Australia
Dumping is said to occur when an overseas supplier exports a good to Australia at a price below its ‘normal value’ in the supplier’s home market. If dumping causes, or threatens to cause, ‘material injury’ to local producers of ‘like goods’, then remedial action — mainly the imposition of special customs duties — can be taken against the imported goods concerned.
Question 2: What has been the ASA’s involvement in the Productivity Commission’s report.
An ASA Task Force has been actively involved with submissions and presentations to the Productivity Commission’s enquiry process. The Productivity Commission is the Australian Government’s independent research and advisory body on a range of economic , social and environmental issues affecting the welfare of Australians.
Question 3: What has been the outcome of the ASA’s efforts?
It is noteworthy that the recommendations arrived at by the Productivity Commission reflect in the main the views put forward by the ASA. This is despite 65 submissions being received from other stakeholders that with the exception of the Law Council argued for a continuation and strengthening of the present regime.
Importantly the ASA supports the need for an effective, timely and relevant anti-dumping system.
The ASA’s view is that those most affected by anti-dumping measures have little or no access to the system. It is the monopoly local producers of basic industry inputs for the steel, chemical, plastic, cement etc,industry sectors that have “ready access” to a costly, exhaustive process that serves as an incubator for market protection.
Question 4: What are the key outcomes from an ASA member’s perspective?
Notable points from the report include:
- That the Australian ant-dumping system, which is based on agreed WTO rules and procedures, benefits a small number of import competing firms ( i.e: domestic steel producers) but imposes greater costs on the rest of the economy.
- Retention of the current system would be strengthened by measures to address a number of deficiencies. Specifically
- That there is no consideration of the wider economic impacts of anti-dumping measures
- Measures can too easily become long term protection
- The decision making process and it’s outcomes are not sufficiently transparent.
- Introducing a `bounded’ public interest test as a practical means of assessing the broader impacts of dumping actions.
Question 5: Can you elaborate on the new public interest test?
In simple terms the public interest test presumes that measures will be imposed if there has been dumping or subsidisation that has caused or threatens to cause material injury UNLESS one or more of the following circumstances apply:
(i) Imposing of measures would preclude effective choice and competition in the Australian market for like goods.
(ii) If after the imposing of duties, the costs are still below the local manufacturer’s costs;
that is local manufacture is not world competitive
(iii) un dumped or non subsidised goods are readily available at a comparable price.
This for example will counter the tendency for targeted dumping actions whilst maintaining preferred import supply channels.
(iv) If prior to the imposition of duties, the local producer’s market share was low and is likely to remain low even with measures imposed.
(v) If the large majority of the supplier’s output of the goods is exported with the goods imported into Australia being at a price which covers the suppliers fully distributed costs
and a reasonable margin. This is relevant where the exporter may not have not have an extensive local market, having been largely established as an export business.
Question 6: Where can ASA members find out more and what are the next steps?
The ASA website or contacting the ASA directly are the best ways to find out more. As far as next steps:
The government’s interdepartmental committee recently presented its’ findings to the Minister for Home Affairs & Justice, Brendan O’Connor. In early February, the ASA met with the Minister. It is noteworthy that the ASA was the first industry group consulted by the Minister and acknowledges the legitimacy of the ASA to represent steel users.
It should be clearly recognised that this is a once in a generation opportunity to change the way that imported goods, that are value added in Australia, are treated.
The ASA will continue to actively work, along with its’ members, to promote the principles of competition and choice. The Productivity Commission’s recommendations, as advocated by the ASA, reflect these principles of fair and open trade and public benefit.