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Tuesday, 16 November 2004
Page: 128

Senator Brown asked the Minister for Justice and Customs, upon notice, on 20 August 2004:

With reference to the Australian Customs Service (ACS) decision to terminate the investigation of the subsidisation of olive oil exported to Australia from the European Union (EU):

(1) Why did the ACS terminate the investigation of the subsidisation of EU olive oil entering the Australian domestic market.

(2) Is olive oil exported from Australia to the EU subject to an import duty in the EU.

(3) (a) Did Argentina overcome the inability of local produce to compete with imported EU olive oil by imposing a countervailing duty in 1998; and (b) is that countervailing duty still current.

(4) Did the ACS take into account the actions of Argentina when reaching a decision to terminate its study of EU subsidies; if so, what were its conclusions.

(5) Will the Government now consider imposing a countervailing duty to nurture the developing Australian olive oil industry; if not, why not.

(6) What is the Government's assessment of its failure to proceed with the investigation of the subsidies and its failure to impose a countervailing duty on the viability of the Australian olive oil industry.

Senator Ellison (Minister for Justice and Customs) —The answer to the honourable senator's question is as follows:

(1) The ACS terminated its investigation in accordance with the requirements of the relevant legislation. Its investigation found that there was a subsidy known as “production aid” paid to EU olive growers in certain circumstances. The production aid was not a countervailable (or actionable) subsidy in terms of Australia's anti-dumping legislation and the World Trade Organization (WTO) agreement to which Australia is a signatory.

(2) Olive oil exported from Australia to the EU is subject to an import duty of €1.25, unless the oil is re-exported within 90 days, in which case no import duty applies.

(3) (a) The ACS did not examine the Argentinean olive oil market as part of its investigation, so no conclusions can be drawn as to the effect of any countervailing duties. (b) The countervailing duty is still current; however, the European Commission has informed the ACS that the countervailing duty imposed by Argentina was based on an aid scheme different from the existing production aid scheme.

(4) The ACS was aware of the countervailing duty imposed by Argentina but countervailing measures implemented by Argentina cannot be used as a precedent for similar action by Australia.

(5) In specific circumstances, the Government may impose a countervailing duty. In the case of EU olive oil imported in retail packs, Customs found that there is no legal basis to impose a countervailing duty.

(6) The ACS did not fail to proceed with the investigation of subsidised olive oil from the EU—it completed its investigation and terminated the case as required by the legislation. An independent body, The Trade Measures Review Officer, has affirmed the ACS decision to terminate.