Anti-dumping: one small step for manufacturers, or one giant leap onto the slippery slope of protectionism?

The government’s commitment to improving Australia’s anti-dumping regulations is a welcome act of support for local suppliers doing it tough on the export market. But when teamed with talks of local content mandates in the resources sector, is this beginning to smack of protectionist policy from a government so hell-bent against it?

The government has voiced its commitment to overhauling Australia’s anti-dumping policy, claiming it will fast-track dumping investigations and ensure stronger compliance measures are put in place in areas where Australian businesses have suffered as a result of the practice.

Meanwhile, workers unions are pushing Western Australia to install local content mandates to ensure Australian companies get a larger slice of resources supplier contracts, claiming WA resources should benefit WA workers, not our foreign neighbours.

Our Trade Minister Craig Emerson has long been against protectionism, claiming it flies in the face of our commitments to free trade.

And he’s right, it does: we can’t move to limit foreign imports into our country when we expect other nations to happily import our goods into theirs. Practise what you preach.

We’re the first ones to complain when other countries put such policies into place. Only this week, Holden announced it is being forced to re-think its lucrative export program to Brazil due to raised import taxes in the region, which will add thousands of dollars to the retail price of the 650 rebadged Commodores it exports annually.

What’s Brazil doing? It’s protecting its national interest, by making it harder for foreign car-makers to do business in the area.

The truth is though, Australia’s manufacturing industry can’t survive without exporting – we simply don’t have the demand here at home. However, our export industry also relies on the promise of a level playing field overseas, and that’s a notion that has been brought into question more and more since the global manufacturing outlook took a turn for the worse around about 2008.

Anti-dumping direction

The government has committed to improving Australia’s anti-dumping regulations, including fast-tracking dumping investigations and ensuring stronger compliance measures are put in place in areas where Australian businesses have suffered as a result of dumping.

The reform was announced in Parliament last week, in a bid to support businesses and jobs into the future.

The move coincides with two metal dumping instances made public during the past week:

1. An investigation lead by OneSteel into Chinese and other Asian steelmakers for suspected dumping and subsidisation of “certain hollow structural” steel products;

2. Union representatives for the steel industry are criticising the decision to use cheap Chinese aluminium for the new headquarters for the federal Climate Change Department.

In June this year, the government sought help from the Productivity Commission to review the operation of Australia’s anti-dumping laws.

According to Brendan O’Connor, Minister for Home Affairs, the anti-dumping reform agenda is helping businesses move to a modern, high-skill, high-tech, clean energy economy which will create Australian jobs into the future.

“As part of the reform agenda, the government is also supporting Australian business to remedy the harmful effects of unfair trading practices like dumping and the subsidisation of goods by other countries. We are doing so through the most significant improvements to the anti-dumping and countervailing system in a decade,” O’Connor said in an address to the House of Representatives.

According to o’Connor, the government inherited an anti-dumping and countervailing system that ‘needed reform’.

“The antidumping system under the Howard government became overly complex, time consuming and difficult to access. Antidumping investigations were at historically low levels,” he said.

The government has reportedly consulted with manufacturing business-owners, workers, producers, importers, members of parliament, industry associations and trade unions to come up with a number of reforms it claims will ensure the anti-dumping system continues to reflect industry experience and the international trading environment.

The anti-dumping reforms will be implemented as part of the government’s new International Trade Remedies Forum.

Improvements to be undertaken as part of the reform are: 

  • Increased staff in the International Trade Remedies Branch of Customs and Border Protection over the next 12 months by 45%, from 31 to 45 staff, to ensure cases are resolved as quickly as possible
  • Legislation introducing a 30-day time limit on minister’s decision-making for investigation into a case
  • Specialist knowledge of particular industries and particular countries and experts in forensic accounting will supplement existing staff knowledge in complex cases and provide advice on key issues
  • Changes to the appeals process, through the use of an appropriately supported panel of review officers to ensure a review officer with appropriate skills and experience hears appeals in a timely manner; the review officer will be able to make recommendations directly to the minister
  • The definition of what constitutes material injury caused by dumping will be amended to allow a more inclusive consideration of the impact of dumping on employment and investment
  • Improved access to the anti-dumping system for Australian businesses; more practical support for small and medium enterprises, who face the greatest barriers to accessing the antidumping system
  • Ensure Australia’s antidumping system is administered more in line with comparable countries, taking into account relevant cases and practices in other countries
  • Ensure stronger compliance mechanisms so that Australian industry actually gets the protection of measures where dumping or subsidisation has caused them material injury.

The Coalition is supporting the reform, claiming it is long overdue.

Shadow Industry Minister Sophie Mirabella says there has been ‘considerable and growing frustration’ over recent years due to the lack of ‘timeliness and effectiveness’ of the investigation process undertaken in Customs.

She also says there have been ‘significant costs’ imposed on businesses which wish to raise possible cases for consideration under the current anti-dumping regime.

“The system is widely regarded as being too expensive to access and largely unworkable,” she says.

According to Mirabella, the government’s move to reform anti-dumping regulations has been the result of being ‘shamed’ into it through pressure from parliamentary stakeholders.

The Coalition has reportedly been calling for reform for many months, claiming the current system does not work in the best interests of Australia’s manufacturing businesses.

“The current structure of the system also typically works against the best interests of Australian manufacturers,” Mirabella said.

“It represents another burden on them at a time when they are already encountering a range of unwanted costs and pressures, a series of poor and clumsy policies from a government that simply has no empathy for their plight, and a Prime Minister who says, ‘Manufacturers will just get on with it; they’ll innovate; they’ll do what they’ve always done,’ without having a genuine understanding of the problems these businesses face at the coalface of their industry.

“They want a system that works for them, not one that thwarts them, especially at a time when they are already confronted with so many pressures and so many regulatory costs.”

The anti-dumping agenda has been particularly prevalent over the past six months due to the pressures on Australian manufacturers due to the high dollar, making it more difficult for many businesses to rely on export revenue. 

Content mandates model

Australia’s mining industry has been a consistent target for choosing cheaper Asian materials and labour over more expensive, locally-made skills and produce.

"Queensland’s coal seam gas and other major resources projects should be delivering skilled jobs throughout Queensland and creating thousands of apprenticeships for Queensland kids," said the Australian Manufacturing Workers Union (AMWU).

"Instead, our big resources companies are sending their engineering, detailing and fabrication work offshore and many local businesses are in danger of closing their doors.

"Queensland’s natural resources belong to all of us and we only get to use them once.  We want Queensland jobs from Queensland resources."

The argument has been tightly-linked to calls from unions claiming the WA state government should put local content laws in place to mandate the purchase of goods of domestic origin.

The WTO has advised WA not to proceed with the content quotas, claiming it will be in breach of Australia’s obligations under international treaties, and could trigger trade action from other countries.

Protectionism or just protection?

TALK-BACK

Are local content mandates and a renewed focus on anti-dumping sign-posting the beginnings of protectionist policy?

Are import tariffs next?

Or are we just protecting Australia’s manufacturing future?

Tell us your thoughts by clicking on the ‘comment’ button below.

[Image: Namag.com.au]

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