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Monday, 27 February 2012
Page: 1839


Mr ADAMS (Lyons) (19:40): The previous speaker got a lot of things wrong, including issues relating to the car industry. I do not think she has a clue about the industry policy of this country, let alone what antidumping means and what the Customs Amendment (Anti-Dumping Improvements) Bill (No. 2) 2011 is trying to achieve.

I want to deal with dumping: where a company exports its goods to Australia at a price below that which it charges in its own market or which is below the cost of producing them. That is what we are talking about. We have to deal with that and we have to protect the standards in our own country, and that is what antidumping is about—it is not about stopping competition. This great country of Australia is a great trading nation, and we always have to protect trade as a major factor in our economy, but we do not have to accept our industries being dumped on by people who produce things and export them to our country below the price they cost to make.

Where dumping materially injures an Australian business producing similar goods, additional Customs duties can be applied as a remedy to that problem. Australia's economy is strong, but some industries are very vulnerable to dumping and we always have to be aware of that, and this bill is endeavouring to find ways to help those industries.

The World Trade Organisation recognises the damage that unfair trading practices can cause and has established a system in which countries can respond to and remedy such practices. Australian manufacturers and primary producers, especially small businesses, are finding that the expense and complexities of taking antidumping action can be prohibitive. I have spoken to many over the time I have been in this House, and they say that getting a law firm to do the work is expensive—I am not saying our law firms overcharge, but there is a lot of work involved in building the arguments. You can also get a consultant to do it, and they can charge a fair bit as well, but building the case, building the evidence to be able to stimulate a case, is a most prohibitive process for our small businesses.

This suite of improvements will help keep our economy strong and provide greater certainty for manufacturers and primary producers, and of course their workers and families and the communities in which they live and work. This bill also provides a legislative basis for the International Trade Remedies Forum, which I think will meet for the first time in August this year. So that is an international forum that has been established. Better support can be provided to our industries and workforce with a modern, rigorous and better resourced anti-dumping regime. I think there are many areas of Australia calling for this. We have had a number of examples in the past where dumping has occurred in Australia to the detriment of our industries. If there is a more rigorous appeals process, it will mean that we can make the playing field a little more even for some of those industries which are under pressure.

Australia has had an anti-dumping system in one form or another, I understand, for over 100 years. So we have certainly been aware of the problem and we have had systems to try to counter it. The anti-dumping system in its current form is governed by two key World Trade Organisation agreements: the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, also known as the anti-dumping agreement; and the Agreement on Subsidies and Countervailing Measures, also known as the countervailing measures agreement. The WTO agreements do not prohibit dumping or all forms of subsidies. Instead, the agreements govern the use of trade remedies where dumped and/or subsidised goods cause or threaten to cause injury to domestic producers—and fair enough.

The objective of the anti-dumping and countervailing system is to address the negative impact of unfair trading and activities by overseas companies on Australian industries. However, there is a tension between preventing unfair trade on the one hand and encouraging the benefits of effective competition on the other, as there always is. This is about endeavouring to get that process right. Of course, as this bill is trying to meet, there are always changing circumstances, especially when you are dealing with world trade circumstances. Australian manufacturers and producers operate in a global economy and benefit from international supply chains and access to foreign markets. Where would we as a nation be if we did not trade? We would be one-fifth of the size we are today. The benefits of such competition may be felt by consumers and purchasers of inputs, which benefit from cheaper prices and greater choice. That can translate into improved profits and profitability. We must always remember that we are a trading nation.

However, Australians can also be negatively impacted by international competition. In some cases this will be the result of fair competition from a more effective producer, somebody who has an advantage over us and the way we produce. It will be up to marketing and processes how you deal with that as an Australian company. But at other times it will come from unfair competition resulting from dumping or subsidisation. Sometimes this unfair competition can have a material impact on the industry's performance and may threaten its long-term viability. Resulting problems include reduced competition in the market and reduced choice for consumers and purchasers. So there are a lot of things around dumping and anti-dumping that always needs to be looked at and watched.

On a domestic level, this behaviour is addressed through competition regulation, including the misuse of market power provisions in the Competition and Consumer Act 2010. Such provisions aim to address the misuse of market power by looking for evidence of abuse of market power and the intent to eliminate, damage, prevent or deter competitors. The formulation applied in the current anti-dumping law looks at damage caused to the complainant. While the test does not explicitly take into account the wider economic impacts of measures, the minister has the discretion to take these impacts into account. The main challenge for anti-dumping regulation is the distinction between unfair trade and normal competitive activity. That is always the test in making sure we get the balance right.

In its recent review of the current system, the Productivity Commission concluded that Australia should retain an anti-dumping and countervailing system. However, it considered greater checks and balances needed to be included in the form of a bounded public interest test to ensure that competitive conduct was not captured by the system. In the administrative processes in this country people seem to be well aware of what we have to try to do with anti-dumping. The commission also suggested a number of administrative changes to balance cost, administrative ease, timing and transparency. For example, it noted that, under current arrangements, reviews have the same time frames as investigations when they could be completed within a shorter time frame. They also observed that reviews are undertaken infrequently. The commission also noted that the current duty collection scheme could be considered all over the place, inefficient and potentially inflexible, as duties are collected even if goods are exported above the floor price. Finally, the commission was concerned that duty assessments did not reset the level of measures applying to future imports.

TEMCO in Tasmania are having some difficulties with the price of the Australian dollar. They are a major manufacturer in Tasmania on the mouth of the Tamar River, and a considerable proportion of their workforce live within the electorate of Lyons. With its cement and ferroalloys, that comes to my mind as a company that could be impacted by dumping because global conditions such as the high dollar and cheaper labour elsewhere allows industries to consider shifting to other parts of the world where they sometimes have less stringent environmental conditions and fewer safety standards to comply with. We should always discourage these things. They do not necessarily lead to dumping, but we have noticed that they do not allow our industries to compete equally. We should be wary of this possibility with companies that go offshore and we should always have a look at what they want to put back into our country. This legislation is important for our industries and for the manufacturing base of Australia. I commend the bill to the House