Does Australia really need a new anti-dumping agency?

Image Source: Department of Finance and Deregulation

Last week, the Minister for Justice and Home Affairs, Jason Clare, introduced the Customs Amendment (Anti-Dumping Commission) Bill 2013 into the House of Representatives. The purpose of this Bill is to establish a new anti-dumping agency, which will investigate foreign exporters who are allegedly dumping their goods in the Australian market. While the idea of a Commission dedicated to exposing those who are looking to cheat Australian manufacturers and undermine free trade sounds worthwhile, criticisms have been raised as to whether such an agency is necessary or whether the current arrangements will suffice.

The establishment of an anti-dumping commission was announced by the Prime Minister on 4 December 2012 and is one of the key reforms aimed at ‘further strengthening Australia’s anti-dumping system’. An extra $24.4 million over 4 years is also being given to Customs so it can significantly increase the number of its investigations into cases of dumping. These reforms came as a response to the recommendations made by former Victorian Premier John Brumby, as part of his enquiry into ‘the current arrangements for assessing and investigating anti-dumping matters; and to consider the feasibility of establishing a Commonwealth Anti-Dumping Agency’. Mr Brumby’s report was released on 27 November 2012, and he strongly recommended that the Government set up ‘a new International Trade Remedies Authority, Agency or Commission, to be established under legislation’.

 

This is not the only enquiry that has recently been conducted into Australia’s anti-dumping regime. In 2006, a Joint Study looked at whether Australia’s current administrative arrangements reflected best practice. In 2009, the Productivity Commission (the PC) was asked by the Government to conduct a full inquiry into Australia’s anti-dumping system. The Government responded to the PC’s recommendations in 2011, by announcing a range of reforms that were aimed at achieving:

• better access to the anti-dumping system
• improved timeliness
• improved decision-making
• greater consistency with other countries, and
• stronger compliance.

These reforms were introduced through a number of tranches of legislation:

• Customs Amendment (Anti-dumping Improvements) Bill 2011
• Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011
• Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012 and
• Customs Amendment (Anti-dumping Improvements) Bill (No. 3) 2012. 

Upon releasing Mr Brumby’s report, the Minister cited a rise in the expected number of anti-dumping complaints due to the current economic climate as justification for the need to establish a new anti-dumping authority. Pressure from industry groups, Independents such as Senator Xenophon and the Opposition also appears to have contributed to the Government’s desire to be seen as being tough on dumping. The former Chair of the PC, Gary Banks, has been critical of this approach and has argued to limit the provisions that allow for anti-dumping actions. Mr Banks went on to say that whilst it is uncertain how the Government’s new anti-dumping policies will play out in practice, no such certainty exists with the Coalition’s policy which ‘pushes the boundaries of allowable restrictions’ and ‘falls short of the balance required’. This sentiment is consistent with the latest UN-OECD report on G-20 Trade and Investment Measures which warned that the increased use of trade restrictions and inward-looking policy ‘will only aggravate global problems and risk generating tit-for-tat reactions’. Given Australia’s reliance on exports and the need for more open markets for Australian goods this rise in global restrictive trade regimes may impact Australia’s future prosperity.

While the announcement of a dedicated anti-dumping commission has been met with support from industry groups, such as the Australian Industry Group and the Australian Steel Industry, some concerns have been raised as to whether it may be seen as being protectionist. The Australian Financial Review has stated that the Commission will be ‘a protectionist initiative that will reduce the pressure on industry to become more innovative and productive’. The Coalition maintains that Government has not gone far enough in protecting Australian industry.

 

In order to judge the effect the new anti-dumping will have on Australia’s anti-dumping regime, it is important to look at it in conjunction with the other proposed reforms. The Minister has highlighted in his second reading speech that further amendments will be introduced in the next sittings. While it would seem that transferring the role of the CEO of Customs with respect to anti-dumping over to the Commissioner is not a big change in itself, with Customs staff to continue to be the ones effectively carrying out the anti-dumping investigations, such an organisational change may have a positive impact in the way such investigations are conducted, especially for small business. It remains unclear whether there will be any changes to the investigations process or how the Commission will operate with respect to the current appeal structure. It remains unclear what, if any, substantive impact the Commission will have on reducing unfair trade practices and it may just act as a symbolic gesture of the Government’s stance on discouraging anti-dumping.

Co-authored by Eugenia Karanikolas with assistance from Juli Tomaras.