Mr CREAN(9.45 a.m.) —Dumping is a threat to our manufacturing industry at any stage. That is why a country like ours, which seeks to build its manufacturing base, needs to ensure that it has in place effective anti-dumping legislation and speedy procedures by which that legislation can be acted upon. That is a position that is required in normal circumstances.

We face a potentially bigger threat in terms of dumped product coming onto our markets at the moment because of the spreading and significant Asian economic downturn, the consequent oversupply in those markets, and the desire for them to ensure that that supply is sold. That is why we believe that not only the Customs Tariff (Anti-Dumping) Amendment Bill 1997 but also the government's bill to implement the recommendations of the Willett report require urgent introduction into and urgent action in the parliament.

Anti-dumping measures are not about protecting Australian industry, they are about ensuring fairness so that our manufacturing industry does not have to compete against unfair or unrealistically fixed prices. That is the fairness aspect, so let no-one pretend that strong anti-dumping legislation is about protecting Australian industry.

As I said before, the current Asian economic circumstances establish the urgency of this. This is but one of two pieces of legislation that the government should be bringing on urgently for finalisation. The other legislation relates to a report which the government commissioned when it came to office to implement an election promise to cut the length of time it took to run an anti-dumping case. The government made an election promise to reduce the number of days to 155. It commissioned a report to tell it how to do that. The government got the report that showed how to do it consistent with our international trading and WTO obligations. It then got too hard, and the government said it was going to refer it to the Productivity Commission for implementation. The government has not even framed the terms of reference to the Productivity Commission, and it has taken no action to ensure that Australian manufacturers can operate in circumstances in which they are not threatened by unfair prices coming in and undercutting the market.

Anyone who has been to the north of Tasmania or into Gippsland recently knows the problem that the pulp and paper industry is facing from the threat of dumped product from Indonesia. Jobs are at stake and communities may be wrecked. The livelihoods of people are under threat because of this government's inaction. These are people who have shown commitment by lifting productivity, embracing new technology, changing work practices and making a commitment to developing world-class operations.

To try to force the government on these issues, Labor has introduced two private members bills. We have taken the initiative again, as we did with the car and textiles industries and the ship and book bounties. Labor is setting the agenda for industry policy in this country. This industry policy would cost the government—if it could actually grapple with it—nothing. This legislation expedites dealing with cases and ensures fairness in the way in which we assess whether product is being dumped. This is the easiest form of industry policy available, and the government has again failed to act.

We had the matter of public important yesterday on the government's failure on industry policy. We listed anti-dumping as one of the things on which the government has failed. The minister sitting back from the table, the Minister for Customs and Consumer Affairs (Mr Truss), has responsibility for this customs area, even though his senior minister has responsibility for the policy. Whenever the Minister for Industry, Science and Tourism (Mr Moore) is asked a question in the parliament, he flick passes it. He writes letters to people telling them that he has policy responsibility, but he will not be held accountable in the House. Let's face it, he is a hopeless minister. This is an example of having responsibility, but obtaining money under false pretences because he is not prepared to act upon it.

The bill before the house was actually introduced in June of this year. It was the last act of the former Minister for Customs and Consumer Affairs.

Mr Martin —Which one?

Mr CREAN —Mr Geoffrey Prosser. This was his last official act. This bill was introduced by the government in June. But when is it brought on for debate? The second last week of the year. What has the government done in scheduling priority in the Senate? It has not given it priority. Our campaign on this has embarrassed the government into bringing the debate on in the House, but it is not serious about it.

The legislation will not be able to be dealt with by the Senate until at least March of next year. Between now and then, according to the government, China is going to be considered a free market for all products. This is your decision, made not on the basis of any policy imperative, not on arguing the case as to why we should treat China as a market economy, not on arguing the toss, but simply on having been forced to introduce this legislation because of a botch-up by the Acting Prime Minister (Mr Tim Fischer)—as he now is—in his capacity as Minister for Trade when he was in China last year.

Over there, embarrassed by the fiasco they created by scrapping the DIFF scheme and anxious to create an environment of cooperation in trade, when the Acting Prime Minister is asked, `Will you consider treating China as a market economy to improve trade between the countries?', he agrees to do so. Tim agrees, in private, without any discussion. In the process of doing that, they thought they could allow this approach on a case by case basis. They allowed it in the case of a product called glyphosate, a product that would be well known to consumers who need herbicides for either gardening or farming purposes. It is used in Roundup and Zero. It is a product that was produced in this country, but no more. A potential investment in this country, an $80 million investment, has now gone to Argentina because of this decision of the government on glyphosate—an $80 million investment lost, along with hundreds of jobs.

Mr Truss —Absolutely wrong!

Mr CREAN —Absolutely right, Minister. You know it. You have let Australian industry down and you have got no commitment to job creation in this economy. It is about your inaction and your inability—and from someone who used to wax lyrical in this parliament about how China was a terrible dumping threat to this country. Remember when you were going on about the peanut growers in your electorate? Do you remember that, Minister?

Mr Martin —A great speech.

Mr CREAN —It was a terrific speech, because he was actually prepared to stand up for his industry then. But that is the trouble with this government—they only stand up for the industry when they are in opposition. Get them into government and they would not have a clue how to act. You are a hypocrite, Minister—an absolute hypocrite. I hope members of your electorate understand that you will talk tough but you will not act when you get the responsibility. You have the chance to introduce a sensible piece of legislation. You have sat on it. You have had this portfolio for months now. You have not insisted on bringing it on as a priority, nor did you argue for its importance to be dealt with by the Senate. This is a campaign which Labor has run with the industry.

Mr O'Connor —We have to do everything for you blokes.

Mr CREAN —As the honourable member for Corio says, we have to do everything for you. You have got no idea. So we will continue to run the embarrassment campaign. We will continue to get your members in this House to stand up and we will see where they vote with regard to their constituencies. Where will the member for Braddon (Mr Miles) be when it comes to looking after the workers at the Burnie paper mill? Where will the member for McMillan (Mr Broadbent) be when it comes to sticking his hand up to support Labor's bill to protect the workers at the Maryvale mill? These were the people who went around their electorates telling textile workers that they supported them yet, when Labor introduced its bill to freeze tariffs, they sat on the other side and voted against it. The hypocrisy will continue to be exposed.

This government created the problem that we have got, which this bill seeks to effect, more than a year ago when they decided to treat goods from China on a case by case basis. This, it would seem, resulted from a trade-off for the botch-up over the DIFF scheme. Despite the fact that we have asked the Deputy Prime Minister questions, we have had no explanation in this House as to what he said, and why he said it, to Madam Wu; no explanation at all.

I challenge the Minister for Customs and Consumer Affairs (Mr Truss), when he has got the opportunity to reply in this debate, to tell us what did take place in those discussions and why we are facing the circumstances of China now being treated as a market economy. This has not occurred through any policy imperative that they came and explained, so why did they do it? What was the basis of the discussion? What was the compelling case put by China to our Deputy Prime Minister that convinced him to do what no other country in the world does in the way they treat China for the purposes of anti-dumping?

What we have seen here is a government that have mishandled the matter. It has resulted in their thinking they could do it on a case by case basis. With this one product, glyphosate, they thought they could treat it on a case by case basis, but now, having allowed one in, the position is that all goods from China have to be considered as coming from a free market.

In the case of glyphosate, this is where the position really gets bad for the government, because there was overwhelming evidence that the export and domestic pricing of glyphosate from China was government controlled. We asked the minister in the parliament whether he was aware of a notice of the coordination meeting on the pricing of glyphosate. Understand the imagery of this: China, according to the government, is a free market economy. Free market means market forces run. You do not sit down in cartels or monopoly arrangements and fix prices together. You would have to accept that the latter does not fit the definition, Minister, of a free market. He has turned off. I cannot even get a nod from him. Maybe he does not understand what a free market is. Do you accept that a market is not a free market if there is price fixing going on? Do you accept that?

What we have got in the case of glyphosate is this—and this is a quote from the notice that the government had; a notice that they tried to pretend was confidential and therefore could not be released.

Mr Truss —Pretend? Haven't you seen the letter?

Mr CREAN —Did you see it and why didn't you act on it? That is the question. You knew about it. We were not expecting you to make it public but it has been made public in frustration because of your botched handling of this whole issue. We do not expect you to make this issue public if in fact it has been handed to you on a confidential basis, but if it is handed to you on a confidential basis, don't you think you have got to act on it? Do you think if it is handed to you on a confidential basis that you ignore it? Only a dope would do that. What we have got here is advice to the government of which it should have taken notice in deciding whether or not to treat China as a market economy. This is what the note says:

The China Chamber of Commerce for Metals, Minerals and Chemicals, the International Cooperation Department of MCI, the Production Coordination Department of MCI, the CCPIT Sub-council of Chemical Industries—

a nice little group—

have decided to call a conference for coordination of glyphosate prices.

That does not sound like a free market to me; it sounds like a bit of collusion. But we are just people who read the words. Maybe people like you read them and want to interpret something different. They go on to say:

Through the event, it is hoped that through the efforts studies on the ex prices and export prices limit will be well studied.

Mr Truss —Ah, `export'!

Mr CREAN —Here he falls in. He wants to quote selectively. What this notice says is not just `export prices', which was your defence in this House, but also `on the ex prices'—ex prices and export prices.In other words, domestic prices. You dope! He sits here and tries to pretend, under the fiction of the fact that this only applies to export prices, that there is no collusion in China on glyphosate.

Mr O'Connor —What hope have we got?

Mr CREAN —As the member for Corio points out, what hope have we got with you? What hope has Australian manufacturing industry got. What about your peanut farmers, Minister? You talk tough for them, but this is no indication that you are prepared to act for them. The simple fact of the matter is this: this government, despite evidence to the contrary, has determined that China is a free market and that has resulted in glyphosate being allowed to come into this country from China. That saw Monsanto make the decision to invest in an $80 million plant not in Australia but in Argentina. It is not as if the government did not know about this. Monsanto warned the government about the consequences of their action. I might just quote from a letter that they wrote to the Prime Minister (Mr Howard) on 22 November 1996, more than 12 months ago. They wrote to the Prime Minister because they thought that this was such an important issue. They had no confidence in your predecessor. They had no confidence in the industry minister. In that letter to the Prime Minister they said:

As a company, we have several manufacturing facilities in Australia which recently announced plans to invest a further $80 million into Australian manufacturing. The move—

that is, the move by you to treat China as a market economy—

created much doubt as to the soundness of any such investment.

They warned the government and the Prime Minister in that letter that, unless this issue was fixed, the investment would be lost to the country. I would be interested to know wheth er the Prime Minister ever responded to the company. There seems to be no record around. This is a Prime Minister who not only cannot lead; he closes his eyes when presented with an issue. `Close the eyes and hope it goes away' is the Prime Minister's philosophy in life. `It will not be a headline tomorrow; don't have to deal with it. It's not a crisis today; don't have to deal with it.' It is a crisis now, 12 months down the track, because the $80 million investment in Australia has been lost, jobs have been lost and regional development has been lost—all because the government has failed to act.

I said before that Australia's position on this is unique. No other OECD nation treats product from China in the way your government does, Minister. Why is it that we have to take this stupid lead? I can understand leadership, but this is stupidity. This is a circumstance where there is no pressure on us to do it, there are no international pressures and no precedent. It is simply a request, presumably to the Deputy Prime Minister—who is feeling pretty guilty because we have axed some effective export programs—and he agrees. No consultation, but look at the consequences.

They are not the only consequences. The fact of the matter is that other significant investments have also been threatened or lost as a result of the government's U-turn following what happened. Pilkingtons employment—they produce glass; it is a very important industry in the member for Corio's electorate—has declined from 1,022 to 746. They have lost 276 jobs. We have lost 100 jobs as a result of the Monsanto failure and we have lost the $80 million investment. Garmond picture framers have laid off 20 per cent of their work force, including highly skilled craftsmen, and ACI Fibreglass is contemplating its position on fibreglass manufacturing in Australia. Well done, Minister!

This was the government committed to creating 200,000 new jobs in manufacturing and all they have done is to drive them backwards. As I say, this does not even cost them anything. This does not even involve the so-called business welfare that they like to label the other business programs with. They could not run a manufacturing policy for this country if they tried, and that is the disgrace of it all. That is why we are seeing employment fall in this country and that is why we need more urgent, more effective action.

There is no deliberate policy imperative in what this legislation does. The bill is not putting in place new policy which is being consciously determined. It is about fixing the mess created by the incompetence of the Acting Prime Minister. Market status in anti-dumping cases was offered to China to make up for the government's foreign policy failings in areas such as the axing of the DIFF scheme.

Mr Truss —Wrong!

Mr CREAN —Let us hear your explanation and, most importantly, tell us why you have sat on this for the past six months as a government and why you have given it no urgency in the Senate. Tell us why this exposure to dump product from China is still going to persist for at least the next three months. Tell us why, Minister, you have only got a half-baked response in the House and you are not even prepared to back it with legislative support in the Senate.

What we are stuck with is a hybrid case. The government have not only mishandled the DIFF issue in China, but because of the way they have mishandled the issue we cannot restore the previous arrangements. Once one product is allowed in it has to apply to all of them. We are stuck with the hybrid case by case arrangement. The question now is: how do we make it work? This legislation does not provide the answer to that question. It results in the de facto recognition of practically all Chinese product as being from a free market. The legislation fails to take account of the market situation for inputs within each industry sector.

Take shirts, for example. This is an easy example to understand. Under the government's legislation, provided the finished shirt is sold in China in a free market circumstance the determination of its price takes account of what happens in China. But what if the material, the buttons, the power and the machinery all come from state owned enterprises, all of which are capable of fixing the price? Under this legislation, that set of factors cannot be taken into account. One of our amendments—I am foreshadowing at this stage we will be moving amendments in the consideration in detail stage—redresses that position. It requires the circumstances of inputs to be taken into account in determining whether China is the case example or whether some surrogate pricing arrangement should apply.

I am pleased to hear that the government has recognised that its legislation as introduced is inadequate and that it will be moving some amendments. The amendments go some of the way towards meeting our concerns, but not far enough. The amendments that the government has proposed are unsatisfactory. They fail on two counts. In an effort to address the fundamental issue of input prices, which are government controlled, the amendments propose `flexibility' in addressing inputs. A better word, I suggest, would be `uncertainty'.  The government input price can be ignored, it can be accepted or it can be substituted with the cost of that input from another country. That is at the minister's whim. So understand this: you have got flexibility at three different levels. For input prices, it is in at Customs consideration level, out at the Anti-Dumping Authority; in again at minister level or the reverse. We do not want flexibility, we want certainty. We want to know whether input prices are properly considered. Our amendments seek to do that.

Besides creating huge uncertainty, the amendments will add even greater complexity to an already complex piece of legislation as proponents argue which surrogate country should be used for each significant cost input. The amendments that the Labor opposition will move propose a similar trigger system if greater than 10 per cent of the input is government controlled. In other words, if inputs represent 10 per cent, then a surrogate country test is required. Total surrogacy would then become, as it was before, the way in which we would treat cases in relation to China, not the alternative so-called free market arrangements. The amendment to subsection 269(5F) further compounds the uncertainty in the legislation. In circumstances where foreign government price control is identified, discretion is allowed as to whether or not to establish a normal value inquiry in a free market country. The amendments that Labor is proposing do not allow for that discretion.

The second major count where the government's amendments fail is the recognition that in economies in transition industry sectors still exhibit substantial government control because of the presence of state owned enterprises trading at distressed prices. These industry sectors do not represent a free market and domestic prices should not be accepted as a basis for normal value. Again, the amendments that we are proposing cover this by ensuring that, where there is substantial government ownership in a sector, surrogacy should again apply.

Take again the example of the shirt. Sure, you can have a whole lot of shirt manufacturers producing in what is considered to be a free market. But if there is a state owned shirt company as well that finds itself in difficulty and forces the prices down, what do you think the domestic prices have got to do? They too have got to drop to compete. Yet, in the circumstances of the government's bill, no account is taken of the significant influence that a state owned enterprise would have. Again, the government has recognised that problem in this bill, but it has only come up with a half-baked solution which creates uncertainty because of its proposed unwarranted complexity.

We are saying that this bill is deficient. We are also laying the charge that the government is not serious about amending it. The government has been forced into it only because we came in and said, `Do something because there is a lot of concern out there.' They are not serious about doing it because they have not given it priority.

So far I have mentioned cost. The other point that I would like to make is this: the bill that we introduced on Monday provides the real alternative. It is what the government should be embracing. In essence, the amendments that I am foreshadowing pick up the thrust of what my new bill proposes. But I think it is important to understand that all of what Labor is proposing is consistent with our international trading obligations.

In conclusion, I would like to read from a memo which I sought from the Department of the Parliamentary Library when we submitted our bill to them for consideration. The conclusion they came to was:

In my opinion, the amendments proposed by the Customs Legislation (Economies in Transition) Amendment Bill 1997 —

my bill—

do not reach article 6 of the GATT and in particular do not propose a method for determining normal value which is prohibited.

We are proposing a sensible solution consistent with WTO trading obligations. We should support the amendments.