Anti-dumping controls imminent in Australia

Press, 13 October 1983, Page 17

Anti-dumping controls imminent in Australia

NZPA staff correspondent Sydney Australia is about to complete a major overhaul of its import dumping laws, aimed at making them stricter and more streamlined.

Trade and Industry and Customs Department officials are putting the finishing touches to the review which is due in the hands of the Minister of Trade, Mr John Button, within the next few weeks.

The results are keenly awaited in New Zealand both for their ramifications for New Zealand exports, and because officials in Wellington are in the process of conducting a review of their own. While the Australian exercise is expected to have the effect of raising a few trade barriers, any New Zealand complaints will be tempered by the knowledge that whatever the Australians can get away with, New Zealand might like to try, too. Ostensibly the Australian review was born out of the frustration of recession-hit local industries struggling to cope with cheap imports, and getting only slow redress of their complaints to Customs.

In June, the Labour Government, in the form of the Department of Industry and Commerce, produced a discussion paper which was to become the basis of consultations with interested parties about what they wanted

to see in the new laws.

The parties were expected to call for a stronger stand against cheaper imports and a quicker response to their complaints, but official spokesmen are refusing to say exactly what they are likely to get. One official pointed to the brief given to the reviewers by Mr Button, calling for the review as a matter of urgency “to strengthen the effectiveness of the legislation against unfair trading practices.” But some observers were cynical about what the effect of the expected changes would be. “There are those who have accused Australia of using dumping laws as the first line of trade protection, and they probably don’t expect much to change,” said one. “The Australians have always been extra sensitive if they think someone is getting away with too much.” The expectation is that the result will be a combination of a bit of streamlining, and a bit of barrierraising. But mindful that trade is a two-way street, officialdom cautioned the architects of the new regulations.

“It should also be noted that some of the proposals suggested for consideration may have implications for the way in which other countries treat exports from Australia that are subject to dumping and countervailing complaints.”

The problems with the dumping laws have come to a head over the last two years as the recession finally bit home and local industries became increasingly hurt by, and sensitive to, cheap imports.

As the clamour for action increased, officials in the Customs dumping branch could not cope, inspite of an 83 per cent increase in staff, as complaints almost tripled. No-one was getting satisfaction, and Labour promised it would do something if elected, with the present review as the result. The problems facing both industry and customs officials ere compounded by the complexity of the legislation, which has been most kindly described as “untidy.” “The anti-dumping act has been amended so many times, it reads like a dog’s breakfast,” one Canberra official said. The law is based on the General Agreement on Tariffs and Trade (G.A.T.T.) codes on dumping and subsidation, and deals with goods that are exported at a price that is either unprofitable or cheaper than on the home market, or are subsidised by the producer’s government. Those products sold in another market can harm local industry through unfair competition, but the basis of dumping or countervailing actions in any country basing their laws on the G.A.T.T. code is that

there must be a casual link between the cheap imports and the injury to local industry.

However, as one observer noted, in a recession it is difficult to decide whether the injury is caused by the dumping or by the recession itself, and there is the added complication of goods coming from a country that is simply able to produce them cheaper.

Under the Closer Economic Relations treaty, Australia and New Zealand have added another component to the dumping complaint process. It has been agreed that before any action is initiated, there would be added consultation between the dumping branch and the companies involved. An Industry and Commerce spokesman said that the new review would not hurt that special relationship between Australia and New Zealand. The Government’s discussion document, known as the Green Paper, focuses on a number of problems, such as how to calculate the price of goods on the home market of the exporter, and this issue in particular is reported to be the centre of a row between industry and commerce and other departments that have been working on the draft new law, notably Trade, Treasury, and Finance. Other areas include prices on the exporter’s home market that are set or influenced by the government, sales dumping where the exporter and importer collude on import and selling prices to beat the regulations, voluntary undertakings by importers, and retrospective action. It also looks at secondary dumping, where goods are made from materials bought at dumped prices; freight dumping, where the export price is helped by cheap freight costs; tendering; and export goods that have been produced with the help of cheap finance.

But two of the most contentious issues from the

New Zealand standpoint are the question of the onus of proof, and provisional action.

At the moment, an exporter is deemed to be innocent of dumping until a case is made against it, but must then prove that its prices fairly reflect those at home.

The suggestion is that if the exporter delays in providing the information, the Australian government would be empowered to make its own decisions on whether the goods are being dumped.

But a Canberra official said that what had been proposed could be against the provisions of G.A.T.T., and the same would apply to one proposed change to provisional action regulations.

The suggestion in Australia is that provisional securities would be applied earlier in the complaints process, but such a move could be exploited by local companies wanting to inhibit trade with unjustified complaints, and would slow down the resolution of the companies. The Australian Government must end up with regulations that are workable, but they must also comply with the G.A.T.T. dumping code which it signed last year. Officials of the Industry and Commerce Department, which now controls customs, expect their review to be finished on time, by the end of this month, and it will go to Mr Button soon after. The Minister must then decide whether he wants any changes, before presenting it to the Cabinet.

Officials expect the new rules to be in place, as promised by the Government, before this session ends in December. But while the new rules are in place, the irony will be that with the revival of the Australian economy, the number of complaints of dumping and unfair subsidies has fallen away.