Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (Anti-Dumping Measures) Bill 2017. Dumping occurs when goods exported to Australia are priced lower than their normal value, which can undercut the local market and manufacturers. It can include foreign subsidisation by a government in the form of financial aid, income or price support for goods exported to Australia. Dumping itself is not a prohibited practice under the World Trade Organization agreements, but antidumping duties can be imposed when dumping could cause or threatens to cause material injury to an Australian industry.

Australia's antidumping system is an important part of Australia's trade and industry policy, which is consistent with the WTO trade rules and Australia's international trade agreement obligations. Given the potential impact on local workers and manufacturers, Labor, when in government, established the Anti-Dumping Commission in July 2013. The commission is responsible for administering the system and advising the minister for industry whether duty should be imposed on goods found to have been dumped or subsidised. Measures imposed by the commission guard our local industries against unfair and uncompetitive trade practices, such as injurious dumping and subsidisation.

The bill before the chamber amends the Customs Act to address loopholes in Australia's antidumping system that allow foreign exporters to exploit the duty rate review process and then recommence injurious dumping for up to 18 months without any remedial duties in place. At a time when Australia's manufacturers are struggling with high energy costs because of the lack of leadership and poor policy direction from this government, we need to make sure that Australia's manufacturers are not faced with another challenge by being undercut by dumped foreign goods. Given this, Labor will support this bill before the chamber today.

Antidumping measures allow local businesses to be more competitive. In my electorate of Blair, I am acutely aware of the potential impacts of dumping on local businesses, including Capral Aluminium and their plant at Bundamba and G.James Glass & Aluminium in Ipswich. I've spoken about both companies in this place on numerous occasions when antidumping legislation has been before the chamber and how significant they are to my local economy. Both companies mean that local mums and dads can have meaningful work and make a living as they raise their families in the Ipswich and Somerset regions. Capral Aluminium is Australia's largest manufacturing distributor of aluminium profiles and employs over 900 workers in Australia, including 300 at their Bremer Park facility in my electorate of Blair in South East Queensland.

When I last spoke about Capral in this place, in 2012, I spoke about how their plant was operating at only 50 per cent capacity. Since then Capral said, in May 2016, that the 'recent success of the anti-dumping campaign has resulted in a significant increase in volume' and their 2016 annual report revealed production volume had risen 9.7 per cent across the company. I'm proud that changes introduced by Labor in office have led to an increase in jobs for Capral. Capral continue to demonstrate a commitment to training in my local community. In 2016, they trained 60 new production and warehouse workers to a certificate III in competitive systems training at the Bremer Park facility.

They are not alone in being a prominent business based in my electorate in Ipswich. G. James Glass & Aluminium is one of Australia's leading manufacturers of aluminium windows and aluminium doors. They are celebrating their 100th year of operation in 2017. It is vital to support Australian business and make sure that the anti-dumping regulatory environment continuously adapts to keep up with the strategies and behaviours of exporters to prevent injury to Australian industry and companies like Capral and G. James Glass & Aluminium.

Labor's commitment to Australian jobs and manufacturing was bolstered by the recent announcement of the Australian Manufacturing Future Fund. A future Shorten Labor government will invest $1 billion in Australia's advanced manufacturing to support Australian industries, grow Australian businesses and create Australian jobs. This is because Labor always support innovative Australian manufacturing firms who want to grow their businesses and create jobs. We understand that local businesses need assistance to modernise and move into high-value production to make them globally competitive. While it's true under this government businesses have closed and jobs have been sent overseas, Labor will invest in Australian businesses and create Australian jobs.

The legislation before the chamber responds to concerns that foreign exporters are gaming the system and recommencing injurious dumping after their 12-month review. There have been claims that foreign exporters are doing this by suspending exports or exporting low, subcommercial volumes at high prices in the period immediately following the imposition of anti-dumping duties. A foreign exporter can request a review of measures after a period of 12 months if they believe that the variable factors, including export price and normal value, have changed. If a company has gamed the system by purposefully exporting low volumes at high prices or ceased exporting entirely then it's difficult for the Anti-Dumping Commission to determine an appropriate, reliable export price. As a result, this often means the duty is revised to a lower rate or no rate at all. The gaming allows foreign exporters to dump sizable amounts of cheap, overseas products, such as aluminium extrusions and aluminium products, into the local market for a further 18 months with no remedial measures in place.

The amendments within this bill will help the Australian regulatory system. Given this apparent gaming in the market and the risk and severity of the impact it can have on local manufacturers and local jobs, administrative improvements to the review processes are required. We commend the government for this. This bill incorporates new methodologies for the review of measures to assist the Anti-Dumping Commission in determining an export price where no goods have been exported or goods have been exported at low volumes. The new methodologies are set out in the bill.

The specific methods will enable the minister to consider alternative information to determine the export price. This will reduce the capacity of exporters to subvert Australia's anti-dumping regime. Specific methods in the bill will apply as follows for: all reviews of measures for which an application or request is made following the date of commencement of the legislation; reviews for which an application has been lodged or requested by the minister prior to the commencement of the legislation; and reviews that have commenced prior to the commencement of the legislation but for which a decision hasn't quite yet been made.

The purpose of this retrospective application is to avoid applying a disproportionately low duty to reviews already underway, reducing the further exposure of Australian industry to injurious dumping from exporters. I note the bill's explanatory memorandum states that due to the variable frequency of antidumping reviews the revenue impact is difficult to quantify. Regardless, however, of the financial impact, Australian jobs are really critical and Australian businesses are important.

In government, Labor made significant changes to strengthen the antidumping system. That is why we took a commitment to the last federal election to ensure Australia's antidumping system had the right powers and penalties in place. We promised to ensure Australia's antidumping system was operating effectively and committed to work with the Anti-Dumping Commission to accelerate enhancements to the system. The Turnbull government's bill is consistent with Labor's policy at the last election and we thank them for that. We thank them for catching up to Labor's lead in relation to this area. I take the opportunity to thank the assistant minister for following Labor's lead on banning importations across a whole range of areas and impacts. The government could, however, follow Labor's lead in relation to the importation of highly flammable polyethylene cladding, to protect Australians from dangerous fires in their homes and workplaces.

The bill before the House was referred to the Senate Economics Legislation Committee for an inquiry that reported on 6 October 2017. As the shadow minister for immigration and border protection, I am more than aware of the Turnbull government's consistent failure to consult with stakeholders about legislative changes which may affect them. We believe in genuine consultation in this area. I note all Australian industry representatives made submissions to the Senate inquiry and they all supported the proposed introduction of measures to strengthen Australia's antidumping scheme. BlueScope Steel stated in their submission:

It became obvious that a new strategy had been employed by a large number of these exporters to exploit a 'gap' within the existing review of measures process. This strategy was simply to withdraw from exporting to Australia for 12 months and then request a review of their imposed measures. The outcome of such a strategy was to effectively guarantee a new interim anti-dumping duty of 0 %.

As a consequence, BlueScope has witnessed an immediate recommencement of exports from those countries, increasing within three months of the minister's decision by over 300 per cent, in conjunction with a price drop of around 15 per cent. This was a huge undercut to local manufacturers, the local economy and local jobs. The Australian Manufacturing Workers' Union, AMWU, concluded:

This legislation improves Australia's anti-dumping system by ensuring a more transparent and efficient review mechanism to avoid circumvention.

The CFMEU supported that as well. The AMWU indicated it remains 'open to further changes to the antidumping system to ensure injurious dumping is stamped out'.

Given the feedback by industry and by trade unions, it is important that we support this legislation. Indeed, the Senate Economics Legislation Committee recommended the bill be passed. I commend the work of Senator Kim Carr, the shadow minister for innovation, industry, science and research, for the extensive consultation in relation to the legislation before the chamber. We have consulted with a whole range of organisations about this matter. I urge the Turnbull government to follow our lead and consult widely and wisely in relation to this, as we have done.

It is clear that this bill would help close the gap in the antidumping system that has been gamed by foreign exporters. In these circumstances, we support the legislation. While antidumping measures might not be the everyday topic of conversation over a water cooler or at a barbecue, it is extremely important to the livelihood of Australia's local manufacturers and the livelihood of their workers. On this side of the chamber, we will always fight for workers. A Shorten Labor government will put middle- and working-class Australians first. We support the legislation and thank the government for following our lead.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

( I would like to thank the opposition for standing with the government on this measure. It is often said that failures are orphans and successes have many fathers, and it is no surprise that we have here a terrific measure being introduced by the government for which the opposition wish to take credit. That's okay, Mr Speaker. At the end of the day, the opposition do look to the Turnbull government to get things done and we are paving the way in all areas, not least of which is this area of international trade. We are ensuring that those companies that are exposed to trade here in Australia, because either they trade internationally or their competitors or substitutes for their goods or services also come from international markets, are looked after. That's what the Turnbull government do, and we're delighted that the opposition recognise the good work that we're doing and so much wish to be part of it. They seek to take the credit, and good on them for attempting to do so.

There are few more contentious issues to be had around the topic of international trade than the issue of dumping and the measures governments right around the world have exercised for a century or more to combat it. The simplest definition of dumping is the sale by an exporter of a product in another country for less than it is sold at home. In other words, a company sells a product for a certain price at home and then exports it to another market and undercuts the domestic price significantly, thereby 'dumping' it into the other market. This has been a highly contentious element of international trade for many hundreds of years because it has the clear potential to do significant damage to businesses, industries and potentially entire economies. Dumping has become increasingly important over the past few decades as the volume of international trade has increased at exponential rates.

Over the past 20 years or so, measures to control dumping have expanded and come into more widespread use right around the world. The motivation of governments to take action to control dumping is quite straightforward: it's a defence mechanism. The motive of the exporter, or the dumper, might well be predatory. An offending exporter may seek to price other exporters out of a particular market in a recipient country. It may want to have that market to itself or it may want to kill off a local industry in the market so it can supplant it, beat off potential competitors and establish a monopoly or at least a dominant position in that market. Alternatively, the exporter may simply have overcapacity in its home market and, rather than slow down production, may wish to export the excess of its inventory so that it can keep its production line rolling on. Of course, potentially this will end up having a devastating effect on the like industry and competitors in the recipient market. Whatever the motivation—predatory or even strategically benign—the impacts in the importing recipient country can be significant and generally negative for local businesses and jobs. To compete with dumped products, a local business may well, at the very least, have to drop its own prices to maintain market share and production, possibly to levels below even the cost of production. That is obviously a dead end for any business and potentially fatal for an enterprise if such an imbalance persists.

At the other end of the spectrum, however, you could argue that consumers in a recipient country might be better off, at least in the short term, whether the dumped product is finished retail or maybe an input into a manufacturing supply chain. If it is a finished product then it is cheaper than the locally produced product, and maybe that's a straightforward benefit to the consumer. If the dumped product is a cheap or at least less expensive input into a manufacturing supply chain, that might help the manufacturer boost his or her profits and use those profits to reinvest. Some free market fundamentalists, who don't understand the true meaning of free trade, will describe antidumping measures as protectionist because they will concentrate on those last couple of points. They will start to argue, 'You know what, even if it is dumping, it ends up being cheaper product for the recipient marketplace.' However, what these fundamentalists clearly do not understand is that unfair free trade is in fact an oxymoron.

Rational national governments with an eye to history and a firsthand knowledge of the dangers of dumping, both potential and real, differ from these fundamentalists. This government, the Turnbull government, is indeed a rational government, as all Australian governments have been on this issue, at least since Federation. Measures to control dumping have been in place in Australia from the beginning, from Federation, 1901. Ever since, they have been updated and revised regularly by governments—I have to say, in the spirit of the previous speaker—of both persuasions, with the measures in this bill, the Customs Amendment (Anti-Dumping Measures) Bill being the latest but inevitably not the last iteration of a very important defensive measure. For more than a century, these measures have never been abandoned or even sidelined. Through war, depression, boom and bust, this basic defence of the Australian economy has been maintained.

Very significantly, when Australia was a signatory to the first real international attempt to promote free trade, via the GATT, the General Agreement on Tariffs and Trade, in 1948, which was aimed largely at reducing tariffs so we could expand trade globally, the ability of the original 23 member states to undertake remedial action against dumpers was very actively pushed for and accepted. Tariffs came down, free trade was significantly expanded, but anti-dumping measures remained in place. In the various iterations of GATT, right up to the Uruguay Round of 1994, which led to the establishment of the WTO, the World Trade Organization, in the following year as the successor to the GATT, that right was deliberately retained and is still there, accessible to all of the now 159 member states of the WTO. In the context of defending ever freer, ever fairer global trade, they're using it. This is not some passive measure that is never used. In 2015-16 alone, 45 WTO members initiated 267 anti-dumping investigations: India, 66; the US, 51; Pakistan, 21. Australia initiated 18, mostly in the steel and aluminium sectors, with the vast majority involving Asian exporters.

There is a critical juxtaposition here. GATT, now the WTO, is all about liberalising trade. The anti-dumping provisions contained in this bill, principally via special duties on dumped goods, are in keeping with that aim, despite the claims of the fundamentalists, by ensuring that tree trade is not distorted or undermined by dumping practices, that indeed it's given the opportunity to be fair, that there's a fair playing field. We need to ensure that this government, and indeed future governments, remain vigilant in that task. Becoming increasingly wise to the manoeuvres used by dumpers to achieve this has led the Australian government to enhance and be ever more specific about the measures needed to keep our playing field level.

For example, one tactic now covered by this bill is that an exporter of a product that is subject to an anti-dumping duty will have another exporter, a different company, whose similar dumped product has a lower duty set against it, do the exporting for them. Another tactic is called country-hopping, where the exports will be diverted through a country that does not have anti-dumping penalties in place, and again, the government is on top of that one. A third trick is to slightly modify your product beyond the specifications of a product that has attracted the anti-dumping duty, even though it is effectively one and the same, and that avenue of circumvention has now too been blocked. We're also addressing other behaviours that seek to disguise dumping practices, including the assembly of products in third countries.

You see, the fundamentalist free traders will no doubt attack this measure, in the same way that they have attacked any form of constraint on dumping over a very long period of time, but they won't win with this government. They won't win with this argument. Free trade, to be worthy of that description, has to be fair. It is essential that the G20, which has recently endorsed this view, maintains the strength of its opposition to dumping, as has the WTO. In the communique following the most recent meeting of the G20 in Hamburg, in July, it was noted that the group would:

… continue to fight protectionism including all unfair trade practices and recognise the role of legitimate trade defence instruments in this regard.

That was said by the G20 against the backdrop of a deep and abiding commitment to, certainly, free trade but indeed also to fair trade.

Australia has long maintained exactly that approach. In our most recent free trade agreements we've ensured that that principle has been enshrined. In all these arguments we have had, we stick to that fundamental principle that free trade has to be fair trade. As a practitioner myself of international trade, across everything from agriculture through to high technology, I have seen dumping measures, and in fact I've been on the receiving end of them, both in the Australian market and in international markets. We need to remember that as a country, not unlike as a company, you prosper by leveraging your core strengths, by leveraging what you are good at. If one market happens to have a competitive advantage over another, then so be it. That is the way the free market economy operates. But dumping actually does not recognise any core competency of one marketplace over another, of one player over another. It is a clear market distortion and manipulation and it is for that reason that we, together with the opposition, need to hold firm on anti-dumping measures. For this reason I commend the bill to the House.

Craig Laundy (Reid, Liberal Party, Assistant Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I would like to thank the member for Fairfax for his contribution. I note that, as he said right at the outset, success has many parents. Of course, I would like to thank the member for Blair for his support; however, I'm not going to quite let go through to the keeper some of the comments that were made, especially in regard to us—or me in particular as the minister responsible—following Senator Carr's lead. I would like to thank the industry for coming to me some three or four months ago to highlight that we had a deficiency in our system. I also would like to thank my senior colleagues, especially the Attorney-General and his department for working so closely with us to draft so quickly a remedy to this problem. The problem, put simply, was that the system as it sat had functioned fine, but no system lives in a vacuum and people operating under the confines of that system, especially when there is dumping involved, and financial gain off the back of that and obviously financial detriment to industry domestically, are forever looking for loopholes—loophole-mining—and they found one. They found that, if they stayed out of the market for a period of time, instead of the duty assessed and attached to it they would revert back to a price that was far more beneficial to them, and, as a result, place Australian industry, and ultimately Australian jobs, at risk. This was brought to my attention strongly by major industrial employers in this country.

So, with the help of the Attorney-General, the Minister for Immigration and Border Protection, and his office, the Treasurer and the Prime Minister's office, we worked very quickly and collaboratively to come up with some legislative changes that will fix this loophole. I would like to thank the shadow minister for his help and any help he may have had in working with the Senate Economics Committee, on their side of the fence, on the fair dinkum front, and for following our lead to ensure that these changes were implemented as quickly as was physically possible.

Because the shadow minister opened this door, I will as well make reference to his thoughts that he wished I would follow my opponent in the Senate on building cladding. I am not a fan of unconstitutional laws. There is a problem, of course, when you rush something out and you don't do your homework and don't think about how our system of governance actually works. If you are to ban cladding and put in place legislative changes that penalise people, then as a federal government, because of our Constitution, you can only do that to federal instruments—that is, companies. If we want to go down the building regulation side, sadly—and I wish it wasn't this way—property rights in this country lie with states. Sole traders or partnerships that are working, as they do, predominantly and largely in the building sector are subject to state laws, not Commonwealth laws.

That said, the problem is complex and we are working through it in a measured fashion. I will have a lot more to say on it—and my state and territory counterparts, who are in charge of compliance and enforcement in the building space. And, again, my shadow minister in the other place had trouble understanding how the National Construction Code actually works. The National Construction Code came about in 1944 when the states and territories agreed with the federal government to jointly administer our construction codes. My shadow minister is of the understanding that we administer the National Construction Code. We do not. We do it in conjunction with our state and territory counterparts. He has had some very derogatory things to say about the code itself, which is sad, because all that does is shake confidence. In the overwhelming majority of examples, our state and territory counterparts are doing the right thing and enforcing the law the way that it is written.

I will say, also, while I have the opportunity—and the member for Fairfax used this exact term, and I said it across the desk to my shadow minister—that we on this side have obviously been, for almost five years, very keen on free trade. However, as the minister responsible for this portfolio, I know it is extremely important that free trade should be fair trade. Why? Because if it's not, Australian jobs will be put at risk.

I do want to quickly say that at the moment, sadly, manufacturing in this great country is getting a dud rap. There is so much happening, and not just the transitioning from traditional blue-collar jobs to more advanced manufacturing. You have heard a lot said about manufacturing employment over the last week, and you'll hear a lot more in the next week, no doubt, as events unfold in South Australia and Victoria. In the last 12 months there has been a net increase of 15,100 jobs in the manufacturing sector in this country; 6,300 of those have come in Victoria and 3,700 in South Australia, with the rest spread around the country.

There are many, many good transition stories. I was at the University of South Australia recently with SMR Automotive, who were traditionally a component supplier to Holden. They are now, with a collaboration that's occurred through a Cooperative Research Centre project—a CRC-P—working with the University of South Australia. They've come up with a new plastic adhesive. The traditional rear-view mirror and side door mirror on the car is now made with their groundbreaking plastic technology. This is a world first—patented and implemented here. They've just signed in excess of $75 million worth of global deals. In South Australia and Victoria the transition that is occurring in the motor industry is from being builders of entire cars to becoming part of a global supply chain. SMR is the classic example of that, and it is but one. I have travelled around Victoria, including Deakin University—the carbon hub there, and the carbon revolution that is happening there. One of the companies in the seat of the member for Corangamite had a 25-person team in Germany in R&D. They have moved those 25 people back here to Australia to do their research and development.

I thank the Senate Economics Legislation Committee for its recent consideration of the bill, particularly its recommendation that this bill be passed by the Senate. The government will respond to the report they issued during that debate because an effective antidumping system is an essential part of this government's commitment to free and fair trade. The antidumping system is complex. This requires us in government to maintain constant vigilance to ensure it keeps up with the changing nature of international trade as well as the ability to act rapidly when significant issues arise, and this was quite clearly one of those. The government continually monitors the efficiency and effectiveness of the antidumping system and consults closely with Australian industry in evaluating the need for further improvements.

I thank the chamber for considering this bill. It will assist in maintaining the integrity of our antidumping system and provide relief and certainty for Australian industry being injured by dumped or subsidised goods and, most importantly, look after, ultimately, Australian jobs. I commend this bill to the House.

Question agreed to.

Bill read a second time.