Thursday, 19 October 2017
Customs Amendment (Anti-Dumping Measures) Bill 2017; Second Reading
Dumping, the sale of products on the Australian market below their normal price on a foreign exporter's home market is a major threat to manufacturers in this country. Dumped products are often inferior in quality to local products, and in some cases their export to Australia has the potential to undermine strategically vital industries such as steelmaking and construction.
Labor fully supports the Customs Amendment (Anti-Dumping Measures) Bill 2017, which closes a loophole that allows overseas exporters to evade Australia's antidumping regime. At present, it is possible for exporters who have had dumping duties imposed to cease exporting or export low volumes at high prices before applying for a review of antidumping measures imposed on them. The 12-month interruption of normal export behaviour makes it difficult for the Anti-Dumping Commission to determine the appropriate export price, and dumping duties can be revised to zero per cent. This effectively clears the slate for the foreign exporter, allowing a resumption of dumping without penalty or restriction for up to 18 months.
This bill was unanimously supported by industry stakeholders who made submissions to the inquiry by the Senate Economics Committee. They included BlueScope Steel, the Manufacturers' Trade Alliance, the Australian Steel Institute and unions with members in manufacturing and construction: the AMWU, the AWU and the CFMEU. BlueScope's submission explained that they have witnessed a surge in the number of requests by Chinese and Taiwanese steel exporters for reviews of antidumping measures. BlueScope said:
It became obvious that a new strategy had been employed by a large number of these exporters to exploit a 'gap' …
The strategy was to withdraw from the Australian market for a year and then request a review with a view to securing a reduced duty. BlueScope surmised:
The outcome of such a strategy was to effectively guarantee a new interim anti-dumping duty of 0%.
The BlueScope submission stated that, in a three-month period, nine of 11 requests for a review of antidumping measures were made by foreign exporters who had ceased exporting to Australia for the 12-month period after duties had been imposed. All these exporters had their interim antidumping duty reduced to zero. As a result, they resumed exporting to Australia immediately.
Within three months of the minister's ruling, exports from China had increased by 300 per cent, with a price drop of 15 per cent. The exporters were therefore able to resume dumping products on the Australian market for 18 months. That is because affected local industries cannot apply for a review until a 12-month interval has passed, and it takes up to six months for a review to be completed.
This bill aims to eliminate this evasive tactic by foreign exporters. It sets out new methodologies to be used by the Anti-Dumping Commission in determining an export price when no goods have been exported or goods have been exported at low volumes. The changes are administrative. There is no substantial alteration to existing policy. The new review process will, however, allow the Anti-Dumping Commission to be more vigilant in blocking unfair trade practices that harm Australian industry. Labor is pleased that the government has heeded the concerns of affected local industries and their employees. We will therefore wholeheartedly support this bill.
I too, on behalf of my colleagues, support the Customs Amendment (Anti-Dumping Measures) Bill 2017. This bill will improve our antidumping regime, but for too long our antidumping regime has been too weak in this country. We have not ensured that Australian industry can compete on a level playing field with those countries that dump goods on our shores. The dumping and, in effect, foreign government subsidisation of goods exported to Australia hurt Australian manufacturers, producers and jobs, and we must do everything we can to stop it.
There are opportunistic and predatory exporters who dump such goods and who look for weak international targets that don't enforce their WTO rights. For too long, Australia has been seen as a soft target for those who want to dump goods on our shores. We've been seen as a soft touch for predatory practices and, in effect, an easy dumping ground for those who seek to bend and break WTO rules. So I support this bill.
The administrative measures that Senator Collins referred to are welcome. The government is doing the right thing in terms of these measures, but there are other things that need to be done, and I want to put that on the public record. Initiating and prosecuting an antidumping claim can be arduous and expensive. That's why there ought to be an independent advocacy and advisory service, similar to the previous International Trade Remedies Advisory Service, to assist those small and medium enterprises to determine whether a prima facie case of dumping and countervailing subsidies or duty circumvention exists and to help them prepare those applications.
There was a case I was involved in some time ago, advocating for a small Australian business with about 30 employees. They were quoted a million dollars in legal fees to run an antidumping case. That's why we need to have that service to help those small manufacturers and those small and medium enterprises to prepare these complex applications.
The current application process to complain about dumping has been criticised as extremely complex, expensive and bureaucratic by those in industry that I have spoken to. We need to adopt a simplified application process for SMEs. That is essential. The European Commission's approach would still satisfy the need to be WTO compliant but would reduce the burden on the Australian industry applicant to ensure that we don't have extraneous and irrelevant information, that we get to the core of the issues in terms of a dumping claim.
The shift to a European Commission inquisitorial style process would see the commissioner drawing out the relevant merits of the case without placing a blanket burden on Australian businesses. That is why we need to do that. We need to make is simpler for Australian businesses because they're up against these companies that dump these goods. Sometimes it costs them an absolute fortune in terms of legal fees. But what it costs them in terms of the impact it has on their businesses can be disastrous. We need to have an increased focus on countervailable subsidy investigations, and the Anti-Dumping Commission needs the resources to do that. As Australia has become more effective in investigating the dumping of imported goods causing material injury to Australian producers, the role of countervailable subsidies has continued to grow; and that's one way of circumventing the antidumping regimes.
Consistent with the recommendations of the 2012 Brumby review into antidumping arrangements, the Anti-Dumping Commissioner needs to further address the shortage of staff with appropriate skill sets to execute his functions. The increased use of independent non-government experts, especially during exporter verification visits, needs to be implemented as a matter of urgency; and the power to collect any shortfall in duty payable needs to be addressed immediately. The current optional duty assessment process encourages exporters and importers to continue to trade in dumped goods—in some cases, by a greater magnitude of dumping—with no risk of back-capture of underpaid duties. These are the issues we need to deal with. This bill is welcome but we need to go much further. We can be WTO compliant but ensure Australian industry has a fighting chance—and, with that, save many thousands of Australian jobs.
Businesses fail. New businesses start up. Customers end up getting more of what they want. And workers, whose wages never prosper in a failing business, end up working in better jobs, more often than not. It's called free market capitalism. It's not perfect but there's nothing better. And it's the proven recipe for improving the welfare of Australians. Governments should be the guardians of free market capitalism. So when a failing business complains to government that competitors are selling products at a cheaper price, the government response that best serves the Australian people is to do nothing. For instance, suppose an Australian business facing competition can't cut its costs and the workers involved won't accept a lower wage to keep the business afloat—presumably because they think they can get a better-paying job else where. In this case, the business should close and those workers should take those better-paying jobs they think are available elsewhere. This is in the interests of both workers and consumers.
However, this government is not a guardian of capitalism and is not looking after the welfare of Australians. It responds to complaints by failing businesses by putting up prices for Australians. That is what the bill before us today, the Customs Amendment (Anti-Dumping Measures) Bill 2017, seeks to do. It gives the minister more options to increase tariffs under antidumping law. Under antidumping law, the minister imposes tariffs on certain goods from certain importers. The lower the importer's prices in Australia compared to the country of origin, after accounting for transport costs, the greater the rate of tariff imposed. This is a ridiculous approach. Competition in Australia might be greater than in the country of origin such that lower prices in Australia is what we would expect and want. To calculate the tariff, the minister first declares the importer's price in Australia to be the observed price during a particular reference period or, if the information on this price is insufficient, whatever price the minister chooses. With this bill the government wants to change this arrangement. The bill would allow the minister in certain circumstances to deem the importer's price in Australia to be different from the observed price. So, essentially, if there is no case for claiming that dumping is occurring, the minister can invent a case.
This is a step from the ridiculous to the outrageous. If an importer's prices in Australia are observable, the minister should not be allowed to make up different, lower prices just so the minister can sustain the victim complex of those who bleat about dumping to maximise the tariff and to drive up prices.
There are few Liberal senators in the chamber at the moment, but most will be listening on their televisions in their offices nearby. I ask them: when will you stop in this place the daily flow of socialist, rather than capitalist, legislation slowly squeezing the prosperity out of this country? If it is not soon, comrades, we may as well rename the country the Democratic People's Republic of Australia.