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Tuesday, 15 December 1992
Page: 5068

Senator BOSWELL (Leader of the National Party of Australia) (10.16 p.m.) —The Customs Legislation Amendment Bill, the Customs Legislation (Anti-Dumping Amendments) Bill, the Customs Tariff (Anti-Dumping) Amendment Bill (No.2) and the Customs Tariff Amendment Bill (No.2) introduce some of the reforms to our anti-dumping system announced last December. They are in response to inquiries into our anti-dumping and countervailing laws, including the Senate inquiry which reported last June and which I initiated after reports of huge amounts of imported food flooding our markets.

  The Senate inquiry made many recommendations, which the Government has introduced into our laws over the last 18 months. They include a lessening of inquiry times from 55 to 25 days for establishing a prima facie case, 100 days for Customs to reach a preliminary finding when interim duties can be imposed, and a further 120 days for the Anti-Dumping Authority to review and reach a final finding.

  The final decision on whether to impose final duties is made by the Minister. The period for the Minister to reach his decision is open-ended, sometimes amounting to months before final duties are imposed and proven damaged to the Australian industry is remedied. This is an area that the Government should look into, as damage can continue to be done to the Australian industry during this delay.

  These Bills introduce the concept of interim duties based on the difference between the normal value and the determined export price. Any excess duty can be repaid after six months. Review of interim duties on future shipments can only be made 12 months or more after the interim duty has been imposed or last reviewed.

  The Senate inquiry, and others by the Joint Committee on Foreign Affairs, Defence and Trade, and the Department of Industry, Technology and Commerce, all indicated that Australia's anti-dumping and countervailing laws had to be tightened up. The coalition will introduce even tougher anti-dumping laws. A prima facie case will be determined within five days, a preliminary finding made within 60 days, and a final decision within 90 days and 150 days, compared with the present 245 days.

  Most importantly, coalition policy does not require the same decimation of local industry to establish material injury. There are still many difficulties encountered in our anti-dumping system. Two weeks ago there was the extraordinary negative finding by the Australian Customs Service on pork imported from Canada. Feed accounts for 70 per cent of the cost of producing a pig. Canadian producers get a 49 per cent subsidy on barley and a 26 per cent subsidy on corn. Despite that, Customs refused to accept that anti-dumping or countervailing duties needed to be imposed. It found a 2 per cent market share gain by Canadian frozen pork, a dumping margin of 2c per kilo and a subsidy of a few cents per kilo.

   Then, as Senator Spindler has mentioned, there is the extraordinary saga of the fork-lift dumping case that has been running for more than five years. Customs has overridden court decisions and its own legal advice; the importers have even been given the choice of the exchange rate to be used. All in all, the decision has reduced duties from $3,800 to $900 a unit.

  The world recession has seen the increased entry to Australia of subsidised and dumped products. There are many instances of goods kept out of the massive US and EC markets by high retaliatory tariffs. These goods are often redirected to the available and waiting Australian markets. There are also situations where certain imports are targeted at Australian products with the intention of killing off the Australian competitor. There are still a great many problems in the anti-dumping and countervailing system. Legislative changes have not addressed the unfair trading practices—an environment that Australian industries have had to face against dumped and subsidised imports. These take many forms, and I shall mention some across a range of products.

  There is the recent case which was brought against Canadian pork, whose producers benefited from high feed subsidies, as I have mentioned, and there were 20 other subsidies on that Canadian pork. Already there is a level of subsidisation that Australian producers do not receive and cannot compete against.

  The recent pork case is instructive. The pork industry showed the usual independence and resourcefulness of an Australian rural producer and funded its own case from its own resources. The case for the Canadians was funded by the Canadian Federal and provincial governments. Against the might of Canadian treasuries was the farmer fighting alone and unfunded to save the industry. Canadian imports began in August 1990. By the first six months of this year, pig prices were down by 25 per cent and producers were losing $20 a pig. The industry was facing its worst crisis for 20 years. Productive capacity was being permanently lost to the industry from high numbers of producers being forced out.

  The way dumped and subsidised imports hit Australian industry can be illustrated by the pork industry experience. By mid-year, processors normally start stockpiling products to prepare for Christmas demand. This puts a floor under the prices. But this year they did not start storing because they knew they could use cheap imports at any time to meet the demand. Also, as they did not know how low the imports would force the local price, they did not want to get caught with stock on hand. The availability of imports drove prices down and at the same time out of all proportion to the quantities that have come in.

  Subsidised products have brought Australian industries and companies to crisis point. Large international companies and governments are able to employ all sorts of techniques to disguise their dumping practices. In the pork case, subsidies reduced the normal price so the difference between the normal and export price was less than it would have been in the absence of subsidisation. As with the fork-lifts, large international companies can manipulate transactions between their overseas manufacturing company and their local representatives. They can practise dumping where the full costs of the sale are not reflected in the selling price in Australia. Nissan, in the face of a dumping notice against a Japanese trading house, has reverted to exporting trucks direct rather than through the trading house specified in the dumping notice, thereby avoiding the dumping duties altogether. Customs apparently has been aware of this alteration for months but has done nothing about it.

  The Minister in December 1989 instructed Customs to monitor the importation of fork-lift trucks within the various product lines to ensure that the intention of the controls was not circumvented by the importation of the particular model and its subsequent sale with another category rating. To date, despite much documented evidence, Customs has failed to make one wharf inspection or follow up the supplied information—and I hope Senator Cook, if he is going to—

Senator Cook —Senator Button is, I think.

Senator BOSWELL —I hope that he is listening.

Senator Cook —I am sure he will be well advised.

Senator BOSWELL —I thank the Minister. In the fork-lift and pork cases, Customs did not invite further submissions on its changed direction, which has had the effect of reducing duties further. It issued the decision before it received a reply from the industry. Australian industries have to ask what more they can do to continue operating against the onslaught from dumped and subsidised products and against the way our anti-dumping system is administered. They spend their own resources on expensive and lengthy anti-dumping and countervailing actions without any government financial assistance such as their opponents receive. They take matters to the Federal Court at great expense. They assist and cooperate with Customs. They look for concessional by-laws against dumped components not made in Australia and find that they do not exist. They want to keep going employing Australian workers, developing their Australian industries and supporting other Australian component industries. Australian customers want to keep buying from them, but they are being blown out of the water by world surpluses of dumped and subsidised manufactured products finding easy entry into this country.

  All industries across the board are being affected. Many multi-million dollar operations are close to closing their Australian operations because of the damage being done by dumped imports. Vitally needed business investment is not taking place because of the uncertainty caused by dumped competition. Viable industries are on their knees after losing obvious anti-dumping cases. Even when a lengthy and extremely costly case is won, the industry is subject to overseas government-funded appeals in our court—and I hope Senator Button is listening to this. This can be aided and abetted by Australian retail chains with their dominant position in the marketplace. The same big grocery chains promoting themselves with `Buy Australian' campaigns are at the same time importing and bringing action against successful anti-dumping actions, as is occurring at present in the tomato industry.

  It is hoped that the reforms in this Bill will address some of the current problems in the system. However, the operation of our anti-dumping and countervailing laws is at the heart of the current major difficulties for Australian industry. The Government must be getting the same feedback from industry that I am getting—that our anti-dumping system is not creating a fair result for Australian manufacturers when faced by the many dumping practices adopted for imported products. The Minister's response when approached by suffering industries has been to give assurances that the offending practices will be monitored by Customs.

  I urge the Minister to ensure that these assurances are followed through. It is only when we start to go into all the industries which are being severely affected by dumped imports that the scope and extent of the damage being inflicted on Australian industry becomes obvious. I support these Bills but urge the Government to take very seriously the irreparable damage being done to otherwise viable Australian industries by Australia being a soft destination for dumped and subsidised imports.

  Debate (on motion by Senator Reid) adjourned.