THE PRESS SATURDAY, NOVEMBER 27, 1982. Friction across the Tasman

Press, 27 November 1982, Page 14

THE PRESS SATURDAY, NOVEMBER 27, 1982. Friction across the Tasman

The impact in New Zealand of the move by the Australian Government to tighten its provisions on anti-dumping, and its procedures for countervailing duties, is both psychological and financial. The regulations that have been adopted, and the legislation that will supersede the regulations, remove the possibility of judicial review of Customs Department decisions on actions against dumping of goods. This is particularly relevant to New Zealand at the moment because the Customs Department in Australia ruled that exporters of New Zealand timber should deposit a cash security, against the possibility that a case would be made against them and that they would need to pay a countervailing duty. An Australian court granted an injunction against the requirement that a cash security be deposited. The regulations remove the right of a court to do this in future. In taking this action, the Australian Government is bringing its practice into line with the New Zealand practice. Such a ruling by the Customs Department in New Zealand is not open to judicial review. However, it is not so much the action in itself, which may be viewed as . an administrative matter, but the fact that it has occurred at this time, while inquiries and cases are pending against New Zealand timber exporters and an exporter of metal roofing tiles. The Australians, appear to be changing the rules of the game before the game is over. It is not clear whether the moves will affect the present injunction, which is temporary. If the injunction is reviewed, a court might come to the conclusion that it no longer has jurisdiction in the matter. If the Customs Department - took any further steps to require deposits of cash as security against a possible duty, a New Zealand exporter would have to comply. The dumping allegations come about because of New Zealand’s export incentives. Australian industries complained to the Customs Department that the incentives amounted to subsidies and that Australian producers were being harmed by the importing of the New Zealand products. The Australian Customs Department considered that a prima facie case had been made and sought to impose the cash security deposits, pending the decision on the cases. The depositing of cash securities would present serious problems for some of the New Zealand exporters of timber to Australia. Some 37 smaller exporters of timber are well outside the big league of Tasman Pulp and Paper, Forest Products, and the New Zealand Forest Service. One estimate has it that, on present exports, they would have to pay $4O million in cash as security. Such moves are upsetting not only to the exporters, but to the importers who want to be sure of their sources of supply. Manufacturers in New Zealand are greatly concerned about the downturn in the domestic market and are nervous about entering into a new trading relationship with Australia under the closer economic relations agreement. This is why the Australian action has a bad psychological effect. The Minister of Trade and Industry, Mr Templeton, has accepted the Australian assurance that the measures

are not directed particularly against New Zealand, but New Zealand manufacturers might view the matter differently. The measures to introduce the tightened provisions came about before the cases against the New Zealand firms and appear to have been related to . allegations of freight-dumping in Australia from North America. This does not alter the fact that New Zealand firms have been caught in the squeeze. New Zealand manufacturers who are looking for signs of how they will fare under C.E.R. will find no reassurance in this affair. In themselves, the threats of countervailing duties are serious. New Zealand export incentives are allowed to continue under the C.E.R. agreement until 1987, though they would be phased out rapidly after 1985. A safeguards provision was included to protect Australian industry. Some Australian manufacturers have taken complaints to the Customs Department about export incentives. Such complaints might be precedents for countless others and the potential is there for New Zealand exports to Australia to be seriously harmed. The New Zealand Government took the view that the Governments on both sides of the, Tasman had to' give assurances to their manufacturers that dumping complaints would be treated seriously and that Australia. had a set of procedures which it was compelled to follow if complaints were made. The procedures are under the rules of the General Agreement on Tariffs and Trade and strict proof is required. It would be necessary to establish that the incentives were subsidies, that Australian industries were being. materially harmed by New Zealand exports, and that it was the incentives which caused the harm. Proving all this is not an easy matter. The result of the Australian decision will undoubtedly be a heightening of tension. Some rapid action to defuse the issue should be made. The Governments should come to some understanding about what procedures should be followed. The question of dumping, and the possibility of countervailing duty actions, were discussed during negotiations leading to the C.E.R. agreement. The understandings need to be revived and clearly grasped on both sides. If, in fact, the Australian Government introduced the new measures for other reasons, and New Zealand was overlooked in the rush, such an oversight should not have occurred. Better communication is needed between the two Governments. Industries on both sides of the Tasman should also be encouraged to talk and work out something between them. Industry-to-industry talks have been an important part of the whole C.E.R. negotiations — to the extent even that some observers consider that there has been too much cosiness. __ Nevertheless, talks between the industries are needed now. The new agreement was designed to remove a sense of unfairness and suspicion. For a threat to arise from a lack of communication is not something to be excused, either in the Governments or in the industries.