Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Hansard source

I rise to speak to the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and cognate bill. This bill introduces a range of reforms designed to strengthen Australia's anti-dumping system.

In December last year this government released a blueprint to strengthen our anti-dumping regime—the first of two tranches of planned improvements to Australia's anti-dumping system.

When the Minister for Industry, Ian Macfarlane, and I, as his then parliamentary secretary, began looking further into industry's claims that we had fallen behind world's best practice, we acted quickly. We began looking at how the rest of the world was tackling dumping and addressing countervailing and subsidisation practices.

I am happy to say that nearly 90 per cent of Australia's approach was world's best practice. In fact, we soon found out that our investigations were amongst those who took the shortest time to complete in the world—with the US taking nearly double the time to finalise their investigations—and yet we were getting comparable results.

What we did find, though, is that we could further strengthen the anti-dumping regime. For example, under WTO laws, Australia could apply stronger penalties to exporters who were found guilty of dumping or to governments who were found guilty of countervailing or subsidisation practices. So that is what we did.

In December last year, Minister Macfarlane and I outlined how we would strengthen our antidumping regime. This included: implementing the outstanding four election commitments and I will talk further about these shortly; abolishing or reforming less useful and underperforming features of the anti-dumping system, including improving the merits review process; improving support services in order to provide better advice, assistance and information to Australian businesses engaging in the anti-dumping system; and seeing a range of other technical amendments made to the system that would simplify and clarify various aspects of antidumping investigative processes.

I would like to focus, just for a minute, on one of the coalition's promises to reverse the onus of proof. We soon discovered in coming to government that reversing the onus of proof was illegal under our WTO obligations and that no other jurisdiction in the world did this, so we were not going to entertain that idea any further.

However, we discovered that the policy intent of this commitment could be achieved by placing a greater onus on exporters to cooperate with the antidumping investigations, something that other international jurisdictions do.

I am proud to say that the policy change has already been implemented and it is working as intended. A good example of an outcome we have already received is that a number of canned tomato exporters from Italy, who were uncooperative with our investigators last year and who were later found guilty of illegal dumping, were slapped with a 26 per cent duty, instead of an eight per cent duty. That duty will last for five years.

To further show the teeth in this new policy, even when the eight per cent duty was reviewed and downgraded to five per cent earlier this year, the uncooperative exporters were not given any reduction and are still paying 26 per cent. We have also seen exporters of wind towers, canned pineapples and various steel products face the same fate for being uncooperative with investigators.

This policy change is doing what it intended: providing an incentive for exporters to cooperate with investigators and for dumpers to stop targeting our Australian industry. I believe this government is also sending a strong message to dumpers that we will not tolerate this practice in Australia.

Another change we took to cabinet was creating a cost-recovery mechanism surrounding the review of a dumping decision. When we looked at who was seeking reviews of decisions and how often, about two-thirds accessing this information were exporters from overseas and more than three-quarters of the reviews backed the Anti-Dumping Commission's original decision. Exporters were essentially getting a free kick at taxpayers' expense and chewing up another 90 days before duties could actually be imposed.

We also made it tougher to access a review by demanding the ADC and exporters attend a mediation session and, in tightening the grounds for an appeal, we now expect more solid grounds for a review to take place. The coalition government will also introduce a range of measures to assist Australian manufacturers and businesses.

One thing that Minster Macfarlane and I quickly realised was that applicants were unsure which type of investigation they wanted to undertake. They were unsure whether they required a dumping, countervailing or subsidisation investigation. I understood how this was happening, because trade law is extremely complex and most companies do not have antidumping experts working with them. To address this, a new unit of dumping experts will be formed in the future. The information service will have three key functions. Firstly, to provide general information and guidance to applicants. Secondly, to undertake a market analysis project, which will help identify dumping trends so we can attack dumping on the front foot. Thirdly, to collate data that we can share with industry to help applicants determine whether they have a genuine case.

The steel and aluminium industry is the one we found that was being most targeted by dumpers. In fact, close to 80 per cent of all cases last year were applications from this industry. So we took it upon ourselves to try and understand why so many applicants were coming from this industry. That was when we were educated about a devious practice taking place called circumvention. For all of those who do not know what circumvention is, it occurs when a foreign business changes their products, often only very slightly, to avoid duties. One case we later nicknamed 'pixie dust' showed just how devious exporters were getting. The steel industry alleged an exporter was avoiding duties by adding, for example, five per cent boron to its steel product. They then claimed it was another product, so duties did not apply. Yet it was still used for the exact same purpose.

Under the current system, we realised they had found a legal loophole. This government has now closed this loophole with a policy change and a test that helps identify these situations and takes action much more quickly. But to ensure we kept a level playing field, we have also provided avenues for Australian importers who feel they have been unfairly caught up in circumvention decisions. They can ask for a duty assessment, a review of the duties or an exemption, which ensures natural justice is adhered to. Australian industry voiced their concerns about circumvention to us and we acted. But there is much more to do in terms of tackling circumvention. In fact, at a meeting last year of the world's dumping experts, they found that circumvention, subsidisation and countervailing were growing trends around the world.

While the Australian government was addressing the 'pixie dust' issue, we asked for a bipartisan committee from the House of Representatives to look further into circumvention, subsidisation and countervailing more broadly. We are expect their findings to be delivered later this year, and it will help us further strengthen tranche 2 of our reforms when we expect to deliver it at the end of this year. When I was first tasked with looking at the antidumping regime back in December 2013, industry was extremely vocal. We also had a number of highly publicised cases, including SPC Ardmona's canned tomatoes case, local wind tower manufacturers were unhappy and the phone was just ringing off the hook from steel and aluminium manufacturers wanting to meet. Instead of hiding, we went proactively on the front foot. We engaged with and worked closely with the Australian manufacturers and importers and industry as a whole. We found a common ground. We all wanted a fair and level playing field within Australia to operate within. This was then used as the basis to investigate whether the regime could be strengthened.

A bit over one year later and I can say our work has paid off. Their collaborative approach led us to announcing the first tranche of reforms in December last year. I could tell you how closely we listened to worked with the stakeholders, but I would rather you read what they said about the first tranche of reforms. Innes Willox, the Chief Executive of the Australian Industry Group said:

The comprehensive package of reforms, which honours remaining pre-election commitments, includes reversing the onus of proof in line with practices in other international jurisdictions. This will ensure that Australia meets WTO rules placing greater emphasis on overseas producers to cooperate with anti-dumping investigations.

The decision to abolish less useful and underperforming features of the anti-dumping system, including through improving the merits review process, makes considerable sense.

You may remember SPC Ardmona's canned tomatoes case and the problems that they faced. The member for Murray made constant and solid representations on their behalf to bring about change that supported Australian industry and, in particular, addressed issues that SPC were having. Peter Kelly, the Managing Director of SPC, came out 12 months later and said he was happy with the progress of this government had made to improve the antidumping regime. He said:

These reforms to our anti-dumping system are a significant step forward for Australian manufacturers and producers …

  …   …   …

As an Australian food producer this gives SPC a tremendous level of confidence to invest in our future as a proud Australian Company…

I previously said that about 80 per cent of antidumping applicants came from the steel and aluminium industry. So it was heartening to me to see the support through Don McDonald, the Chief Executive of the Australian Steel Institute. He said:

… the reform package will improve support for a fairer trade regime by providing enhanced remedies for upstream and downstream Australian steel manufacturing companies.

  …   …   …

These reforms will assist in leveling the playing field through a tougher approach to timeframes and remedies, and they will improve the process for Australian steel manufacturers through expanded information and support services …

This bill and the reforms have always had bipartisan interests. When in government, the member for Blair spoke to the Brisbane Times about the importance of improving our antidumping system and ensuring a level playing field for local manufacturers. He did this because Capral, one of Australia's largest aluminium extrusion companies, sits within his electorate and claimed at the time that dumped aluminium extrusions from China had seized about 40 per cent of the Australian market and had put the domestic extrusion industry under severe stress. Capral spoke about the circumvention issues, and I am glad to say that their allegations were recently proven. An overseas exporter's aluminium product has now had dumping duties placed on them.

My neighbour, the member for Hunter, also experienced the effect of dumping and circumvention. Hundreds of jobs within his electorate were lost when Arrium downsized last year. Arrium cited pressure placed on them due to subsidisation and circumvention practices as the reasons for the job losses. I am glad that the member for Hunter is a part of the House of Representatives Standing Committee on Agriculture and Industry, chaired by the member for Grey, which looking into these circumvention practices, because he also knows firsthand the effect of dumping at an electorate level.

I ask colleagues on both sides of the House to support this amendment bill as it goes through this House, and ask you to encourage your Senate colleagues to support the bill in their chamber. I am confident this bill will get through the House and Senate because there is no reason for delay. The reason is that this bill is in Australia's interest. It is in both our trade interest and Australian jobs interest. It takes Australia's antidumping measures to the very WTO limit, without crossing the line and, therefore, endangering Australia's reputation as a fair and free trader. At the same time it sends a very strong message to those who seek to dump, circumvent or countervail through subsidies into our market that Australia is the wrong place to do so and we will take every action and apply every penalty in our power under WTO rules to stop you.

Finally, I would like to thank the industry minister, Ian Macfarlane, for giving me the opportunity to drive these reforms as his parliamentary secretary. I thank Stephanie McKew from Minister Macfarlane's office and my staff member Aaron Parnell for their hard work. I thank ADC Commissioner Dale Seymour and the department for helping to shape a policy that is so right on so many fronts. I commend this bill to the House.

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