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Thursday, 9 May 1968

Mr SINCLAIR (New England) (Minister for Shipping and Transport and Acting Minister for Trade and Industry) - by leave - Honourable members will recall that the Minister for Trade and Industry (Mr McEwen) made a statement to the House of Representatives on 4th April, concerning allegations of dumping of Japanese passenger cars and evidence of concerted attempts by the Japanese motor companies to frustrate the investigation. The Minister undertook to inform the House of the progress of the inquiry. The Minister for Customs and Excise (Senator Scott) has today made a statement in another place announcing the outcome of the inquiry.

Protection by the tariff to economic and efficient Australian industry is afforded only after the full procedure of reference to the Tariff Board, public inquiry and statement in the Parliament. Protection on this basis through the tariff is afforded after taking into account comparable imports at fair and reasonable prices. It is to ensure that the prices are fair and reasonable as a basis for determining tariff protection that there are anti-dumping laws.

All countries which rely normally on a tariff to protect their industries have such dumping laws to ensure that tariffs and taxes are not evaded and their industries damaged. Dumping laws are always complex. Basically, the provisions of Australian law ensure that the protection afforded Australian manufacturing industry is not defeated by evasion of duties or taxes or by other unfair trade practices. Provided these conditions of fair competition are met, no dumping duty is applied and the Australian industry relies only on the existing tariff to give it protection.

The inquiry into Japanese cars involved quite lengthy and detailed discussions with representatives of each individual company on both the pricing of those cars for export and the conditions for sale of those cars in Australia in relation to Australian duties and taxes. Throughout the inquiry, representatives of the Japanese Government from Japan were present, and there have been continuing consultations with the Japanese Government.

As a result of this detailed examination, assessments have been made of the pricing and other policies of the importers and manufacturers of Japanese cars and how they would need to be adjusted to conform with Australian legislation. In making these assessments I understand that the Department of Customs and Excise took into account the determination by the Japanese Government of what constitutes the manufacturer's sale price in Japan of the various cars for its own taxation purposes. The assessments made by the Department of Customs and Excise for cars exported, in the light of the evidence produced by Japanese manufacturers, have been established at price levels which are more liberal than those adopted for tax purposes by the Japanese Government itself.

Nevertheless, the examination has shown that, to avoid the possibility of action under our anti-dumping law, the prices at which virtually the whole range of Japanese passenger cars will be exported in future and sold in Australia will need to rise to conform with our legislation. The increase in retail prices of Japanese cars in Australia necessary to conform with existing levels of tariff varies, of course, from car to car and between Japanese manufacturers. But, to show the significance of these increases in relation to complaints from Australian manufacturers of serious damage to their operations, the retail price rise likely to result would be, for small cars, of the order of $100, rising to $250 for medium sized cars, and more for luxury, lower volume cars.

The Japanese Government has given an assurance that the future pricing policy of the Japanese car manufacturers will be fully in conformity with Australian legislation. This should put a stop to all malpractice. Having regard to our trade relations and the co-operative approach of the Japanese Government itself, taking action to ensure compliance with our laws, and the fact that full adjustments are being made, no further action will be taken, except in some cases where breaches of the Customs Act have occurred. The Minister for Trade and Industry indicated in his earlier statement that, before considering any action to change the existing tariff protection, there should first be an examination of whether there is evasion of present protection. The conclusion to be reached from the outcome of the discussions with the Japanese manufacturers is that this view was fully justified. As a result, the local industry will receive the full measure of existing protection.

I am pleased to announce to the House that this matter has now been resolved in co-operation with the Japanese Government and Japanese industry. With the benefit of established tariff protection based on fair and reasonable prices, Australian cars will now compete as intended with Japanese cars on the Australian market.

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