Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 10 October 2012
Page: 7798


Senator PRATT (Western Australia) (11:57): I am delighted today to rise to support the bills before us, which represent the second, third and fourth tranches of what have been significant reforms to Australia's antidumping regime. They are in fact the most comprehensive reforms to Australia's antidumping regime in over 10 years. They are the result of a comprehensive inquiry by the Productivity Commission and they take account of the views of state and territory governments and Senate committee reports. The consultation was quite lengthy and I am pleased to know that a broad range of views were sought and listened to, from key industry players affected by dumping in Australia right through to major unions. So I think we can be confident that the reforms we have before the chamber are based on the needs of all sections of the Australian economy.

As we know, the Australian economy is in a strong position under the stewardship of the Labor government, and I congratulate the Treasurer and the finance minister on this. Indeed, they have announced that the Australian economy is now the 12th largest in the world. We have leapt three places, surpassing economies as large and diverse as South Korea, Spain and Mexico. It is a testament to good financial and economic management. But, as these bills highlight, there are challenges facing our economy. As I have said before in this place, the health of our manufacturing sector is perhaps the greatest of those challenges. That is why I am pleased to be here in this chamber taking action to ensure that dumping pressures are relieved on the Australian manufacturing sector as one of the planks that help ensure we have a healthy manufacturing sector into the future.

Today we are looking at the Customs Amendment (Anti-dumping Improvements) Bill (No. 2), the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012 and related bills.

I would like to begin by dismissing the idea that antidumping laws are merely a reflection of protectionist sentiments in this country. It is simply not the case. Antidumping laws are not about protectionism; they are very much about recognising the fact that overseas companies can and do engage in anticompetitive practices by dumping their products here in Australia at prices well below their actual value or cost of production.

Dumping has had serious consequences for the Australian economy and, because Australian companies cannot compete with these artificially low prices, we see the results in the cutting back of jobs and training or sometimes even the closure of shops entirely. Losing manufacturing jobs reduces the diversity and resilience of our economy and we must do everything reasonable to combat these anticompetitive practices. It is notable that the prices of the dumped goods are often artificially lower due to foreign government subsidies and ownership—precisely the type of government economic intervention that opponents of antidumping abhor. In that context, I note the significant challenges to Australian industries, such as the steel industry, while countries that we compete with—China, for example—are building massive reserves of manufactured steel. We need to be mindful that such products are not dumped here in Australia and artificially and falsely compete with Australian steel.

Senator Williams: They don't have a carbon tax.

Senator PRATT: It does not have anything to do with the carbon price. It has to do with the artificial interference with state-owned enterprises where they will not cease production based on market forces, but for their own reasons will continue to create production. For example, they might want just to retain local employment. It does artificially impact on the price of products.

The problem with arguments advanced by opponents of antidumping provisions is that they want to have it both ways. Often we have heard them say that they oppose antidumping laws as unnecessary government intervention, without recognising the fact that such laws are necessitated by overseas government intervention and the serious consequences for Australian industries and jobs. Opponents will often tell us that the benefits to consumers of cheap, dumped products outweigh the benefit of antidumping laws. With all respect to those commentators, I disagree. It has no regard for the long-term health of Australia's manufacturing sector and, by proxy, the Australian economy. It has no regard for the damage that dumping can do to jobs and livelihoods. It does not matter how cheap products are at the supermarket when you are unemployed. It does not matter how cheap products are if we lose our manufacturing industry and its strong multiplier effect on the economy. And it does not matter how cheap those products are now; they will get more expensive once domestic competition has been driven out.

Antidumping laws make sure that the prices people pay for goods both now and in the future are fair and competitive. When we get policy settings right, antidumping laws play an important part in ensuring that we can live in an economy that is fair as well as free. The importance of antidumping laws is understood by stakeholders throughout the economy but it is particularly understood by those who are in the front line of protecting workers from job losses. As Dave Oliver, the former National Secretary of the Australian Manufacturing Workers Union, notes, the practice of illegal dumping has the potential to destroy manufacturing jobs around the country. Importantly, this is a view held not only by unions. It is understood by those businesses who work in the manufacturing sector. Manufacturing Australia, a business coalition of Australian manufacturing companies, state in their March 2012 communique, 'Australia's manufacturers cannot continue to withstand the unfair trade that leads directly to the loss of jobs, loss of Australian capability and vulnerability to price increases.'

This is why I am pleased to speak in support of these bills today. It is fundamentally about protecting the health of our economy and the jobs of Australian manufacturing workers. It is not, however, a matter of ideology. It is a matter of doing what is needed to support both workers and businesses in this country. I am very pleased to see opposition support for these reforms.

The bills make several major reforms to our existing antidumping laws, and I will comment on just a few of those. Firstly, the bills clarify the powers of the CEO of the Australian Customs and Border Protection Service and of the minister when determining whether a countervailable subsidy has been received or when determining the amount of a countervailable subsidy when the parties under investigation fail to provide information to Customs or when they significantly impede Customs' investigation. In these circumstances, the bills make it clear that the CEO of Customs and Border Protection and the minister have express power to take all facts available into account. I think it is important that the minister has these powers and retains them into the future. Given that it is in the interests of companies who engage in dumping practices to cover up the existence or extent of their unfair trading, it is sensible to make it easier for our authorities to decide whether or not dumping has occurred.

Secondly, the bills remove the need for a separate review of antidumping measures and continuation inquiries when those inquiries occur in close proximity to each other. This is an important distinction from the way the legislation has previously operated. For those unfamiliar with the Customs Act, a review of measures under division 5 of the act allows the CEO to recommend to the minister a range of options for changing antidumping measures.

These include recalculating the levels of duty where there is an application that relevant factors have changed or the measures are no longer warranted. There is a continuation of inquiry under division 6A, which is an inquiry into whether or not antidumping measures should continue beyond their expiry date. So you can see this is an important improvement on how the act has operated to date.

Currently, antidumping measures cannot be changed as part of a decision to continue those measures. Instead, a separate review has had to be conducted, and it has been quite inefficient. In considering whether to continue antidumping measures, the minister should have the flexibility to continue and change those measures. That is precisely what the bills before us provide for. With the passage of these bills, Customs will be able to recalculate the level of duties of an antidumping measure during a continuation inquiry rather than going through two separate processes. This is clearly going to streamline the process, which means quicker outcomes for all interested parties.

Third, the bills implement the recommendation of the International Trade Remedies Forum to remove the current limitation to the inclusion of profit when calculating the normal value of a good in its country of origin in certain circumstances. This, I think, is going to improve the effectiveness of the particular market situation provisions in the Customs Act by providing greater flexibility for Customs to more accurately determine the normal value of goods. Fourth, these bills allow different forms of interim duty to be applied from those currently used. Fifth, these bills insert a new division into the Customs Act that will allow Australian industry to apply for an anti-circumvention inquiry. I think the circumvention issue is important because these kinds of behaviours take a number of forms but they are always strategies used by exporters and importers to avoid paying the full payment of dumping duties. Again, strategies like this are anticompetitive and unfair. This is essentially where companies are exploiting loopholes in the existing laws to avoid having to import goods at what should be the proper market value for those goods. This new division will close loopholes, which means that Australian industry can be more confident that imported goods are subject to the same level playing field that they are. These bills make other worthwhile changes to our antidumping regime, including a new appeals process and strengthening the provisions that address noncooperation.

What I have done today is lay out just a few of the changes and how those changes are responding to particular problems within our existing antidumping regime. Indeed, they are responding to the specific concerns of the manufacturing industry. They will, I think, create a better and more effective Customs Act. What they are also about, though, is providing certainty for business. These changes have been broadly welcomed by business and unions alike. They provide certainty and better service for businesses by streamlining our antidumping processes and providing antidumping decisions more quickly, such as by allowing a variation to antidumping measures and continuation inquiries, as I have previously highlighted. They do this by providing better access to the antidumping system and by improving the quality of decision making. They also do this by making our system more consistent with those of other countries and by encouraging stronger compliance. They are sensible reforms that will modernise our antidumping laws and help to level the playing field for Australia's manufacturers.

With this in mind, I would like to briefly mention, as I have done many times in this place, the need to do more to promote the health of the manufacturing sector in our country. We have a high Australian dollar and a resources boom that has drained many of the skills out of the manufacturing sector. We must ensure that there will be an industry after the peak of the mining industry has passed. In WA, our manufacturing sector is grappling much more with a lack of supply than with dumping practices. I will continue to advocate for stronger commitments to local content in large projects because it is one of the best ways that we can ensure that the benefits of this once-in-a-lifetime mining boom continue into the future. In tandem with the plan for local content, we must have laws that ensure that local content can compete fairly with overseas content. This is what these bills do.

Finally, I want to return to my original point about antidumping laws being a necessary response to unfair international business practices. The Australian government takes open international trade very seriously. We want trade in this country to be rigorous, and we want our trading partners to trust our antidumping measures. This is why these bills have been carefully constructed. They have been carefully constructed to satisfy our obligations under the World Trade Organization obligations. Indeed, section 1 of article VI of the General Agreement on Tariffs and Trade says:

… dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry.

Section 2 of article VI specifically endorses the levying of an antidumping duty as a remedy for this unfair trading practice.

It is clear that antidumping systems are regarded as not only acceptable but necessary by the international community. Why is this so? It is so because countries around the world recognise that dumping does occur and that it has serious consequences for economies and serious consequences for free and fair trade. The government estimates in its report entitled Streamlining Australia's anti-dumping system that more than 90 countries have antidumping systems. The Productivity Commission further notes that the majority of World Trade Organization members now have a system in place. By passing these bills, we are not doing anything unusual in the global economy, except building an antidumping system that is world's best practice.

Australia is a nation of trade. For our entire history, we have relied on our exports, from high value manufacturing products through to our primary resources in agriculture and mining. It is not in our interest to encourage countries to throw up unnecessary barriers to trade, but we do want an international trade system that is fair. It is a core Labor value that distinguishes us, I think, from those on the other side of the chamber. We believe that economies should create opportunities for our citizens and for our nation's businesses, but we believe that those opportunities should be available under fair conditions. Unfortunately though, some of our competitors have come to look on Australia as an easy dumping ground and they are not playing under fair conditions.

As my briefing with the steel industry this morning highlighted, we are considered a dumping ground because we pay our bills on time. It is a desirable place to dump your goods because you know you are going to get paid for them. We have got good ports and good access to infrastructure and it is fairly easy to import things, so when you need to get rid of goods quickly and dispose of them on a market, Australia has been seen as a desirable place to do that.

In the face of unfair trading practices like these, governments, like this one, must act—and act we have done. We are acting to level the playing field for Australia's manufacturers. That is why we need robust anti-dumping laws. If the result of these laws is the protection of Australian jobs then we need make no apology for that.

I cannot see a reason other than fringe ideology as to why anyone would oppose such measures, but we do find commentators that occasionally do. Labor's reforms will make our laws some of the best in the world. They are based on broad consultations with industry and unions alike. These reforms will make our anti-dumping system more sensible, efficient and better resourced, and they will satisfy our international obligations. Labor fights for jobs. It fights for fairness. It fights for a stronger economy. I am very proud to stand with a government that is delivering on those values yet again. I commend the bills to the Senate.