Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Hansard source

The Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and the Customs Tariff (Anti-Dumping) Amendment Bill 2015 make several relatively minor amendments to Australia's antidumping laws. The explanatory memorandum of the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 states that the following changes will occur and that those changes will:

…simplify and modernise publication provisions for anti-dumping notices, consolidate lodgement provisions for anti dumping applications and submissions, clarify the length of the investigation period in anti-dumping matters, clarify the cumulative assessment of injury, clarify normal value provisions, clarify the calculation of the dumping margin, clarify material injury determinations, clarify effective notice periods, clarify the definition of a subsidy, amend provisions dealing with new exporters, clarify provisions regarding consideration of the lesser duty rule, streamline the processes and implement a higher procedural and legal threshold for review to be undertaken by the Anti-Dumping Review Panel and allow the Government to replace the statutory International Trade Remedies Forum with administrative business consultative arrangements.

The bill also changes the act to allow the introduction of fees for reviews by the Anti-Dumping Review Panel.

The Customs Tariff (Anti-Dumping) Amendment Bill 2015 makes consequential changes from the first bill relating to, firstly, the publication of notices on the commission and review panel's websites instead of the Gazette or newspapers; and, secondly, clarification of the lesser duty rule, which I have already referred to. It also clarifies the minister's power to exempt goods from dumping duty with limited retrospective effect. The exemption can only take effect from a date that is no earlier than the date the exemption application was made.

Dumping occurs when goods exported to Australia are priced lower than their normal value, which is usually the comparable price in the ordinary course of trade in the exporter's domestic market. Where the price in the ordinary course of trade is unsuitable, normal value may also be determined using comparable prices of exports to a third country or the cost of production plus selling, general and administrative expenses and profit. Dumping is not a prohibited practice under the World Trade Organisation agreements. Rather, the WTO agreements permit antidumping duties to be imposed when dumping causes or threatens to cause material injury to an Australian industry.

Australia's antidumping legislation is based upon the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and the WTO Agreement on Subsidies and Countervailing Measures. Where material injury has been caused by the dumping of a product onto the Australian market, antidumping action can then be taken. The same action can also be taken where a government subsidy has been provided for an imported product. It appears that the number of cases of product dumping have increased in recent years, and I suspect that was aided by the global economic downturn, where in some cases there would have been a glut of products for which there was no market. The strength of the Australian economy, combined with the high Australian dollar in recent years, made Australia an ideal country in which to dump products. I will refer to a comment made by the director of Capral Limited, Mr Phil Jobe, on 26 February, in giving evidence to the Standing Committee on Agriculture and Industry in its inquiry into this very issue. He said:

In recent times in our industry, over 500 direct jobs and almost 2,000 in total, which is about one-third of the workforce, have been lost in Australia. We put this down mainly to unfair dumping of extrusions. This has not been helped by the high exchange rate, which is now coming back to a more reasonable level.

In government, Labor on several occasions amended Australia's anti-dumping laws to make them more effective. Labor also established the Anti-Dumping Commission and the International Trade Remedies Forum. It is evident that importers use very clever techniques to circumvent Australian laws or frustrate the existing process. Circumvention is a practice used by exporters and importers of certain products to avoid the full payment of dumping and countervailing duties. I note that circumvention is currently the subject of an inquiry by the Standing Committee on Agriculture and Industry, and I referred to that just a moment ago. Circumvention activities include assembly of parts in Australia, assembly of parts in a third country, export of goods through one or more third countries, arrangements between exporters, and, I understand, in recent times, the use of phoenix companies—and there may be other ways that people find to circumvent the current process. It seems that, wherever there is a will to rort the system, there is a way.

The use of clever techniques highlights why Australia's anti-dumping regime needs to be continuously reviewed. This legislation makes changes to Australia's anti-dumping laws that Labor believes are steps in the right direction and, collectively, should improve the current process. In what Labor believes is a retrograde step, however, the legislation also abolishes the International Trade Remedies Forum. We also have concerns about the fees for appeals to the Anti-Dumping Review Panel. Labor does not support abolishing the ITRF and I will be moving an amendment to retain the forum at the conclusion of my remarks. I also note that the appeals fees will be set by regulation. We do not know what the fees will be and, whilst the minister states that lower fees will apply to small and medium-sized businesses, the lower fees are not written into the legislation, providing no guarantee that the lower fees will apply into the future.

For the benefit of anyone who is following this debate, I will briefly comment on some key provisions in the amendments as I understand them. If my understanding is incorrect, perhaps the minister in summing up the debate can clarify the matter for us. Firstly, I will deal with the submission deadlines. This bill introduces more stringent deadlines for the submission of information to dumping and subsidisation investigations. The period in which submissions should be lodged in response to the initiation of an investigation, review of measures, continuation inquiry or anti-circumvention inquiry would be reduced from 40 to 37 days. This would align with the minimum time frames established under the relevant WTO agreements. It would also allow information to be considered earlier by the anti-dumping commissioner when deciding whether a preliminary affirmative determination can be made. The reduction from 40 to 37 days does not seem significant, but it is worth doing. Every day matters and every day that a dumping matter continues can cost local industry tens of thousands of dollars. With respect to lodgement and publication requirements, notices related to anti-dumping processes and decisions will be published electronically on the Anti-Dumping Commission and the review panel's website instead of in the Gazette or in newspapers.

The length of an investigation period has frequently also been raised as a matter of concern by parties involved in anti-dumping cases. The bill inserts a new subsection which intends that the commissioner cannot vary the length of the time for the investigation period once the investigation period has been specified by a notice issued by the commissioner. Again, I think that that is a good thing. In time, we will see how well it works. When considering the termination of an investigation, in certain circumstances the cumulative injurious effect of exportations of goods to Australia from multiple countries can also be considered.

The bill also provides clarification that there is no hierarchy for the methods available to determine a normal value. To clarify the calculation of dumping margins, the investigation period of a dumping investigation considered for the purpose of working out whether dumping has occurred and the levels of dumping is not less than one month. The amendment clarifies that, in calculating a single dumping margin for the good over the entire investigation period, the normal values and export prices of different models or types of that good can be compared over separate one-month periods prior to aggregation.

The definition of a subsidy for the purpose of Australia's anti-dumping system is amended to better align the definition with that of the WTO Agreement on Subsidies and Countervailing Measures. The amendment provides that the receipt of a financial contribution by a government does not, in and of itself, confer a benefit but that it must be determined whether that contribution provides a benefit. The bill amends the definition of 'new exporter', narrowing the period used in the definition. This potentially enables more exporters to access accelerated review. The minister's ability to declare that a dumping duty notice not apply to the applicant will also be removed. Instead, when considering an accelerated review, the minister can only leave the duty unaltered or change the variable rates.

The Customs Act would also be amended to require that, where an undertaking converts to a duty, the duty expires five years after the undertaking was accepted, unless terminated earlier. I also note that, although periods prior to the investigation period can be examined for the purpose of determining whether material injury has been caused, a determination that dumping has occurred prior to the investigation period is not permitted. Provisions of the Customs Act would be amended to require that the minister is not required to have regard to the lesser duty rule where a country has not submitted a notification of its subsidies, as mentioned in paragraph 1 of article 25 of the WTO Agreement on Subsidies and Countervailing Measures, at least once in the compliance period.

I now turn to the conduct of the review by the review panel. The bill would also increase the procedural and legal thresholds for applying for review by introducing requirements that an application must, firstly, set out the grounds for a review; secondly, set out the decision the applicant considered should have been made; and, thirdly, set out how the grounds support the making of the applicant's proposed decision. There will be a requirement that the Anti-Dumping Review Panel can only conduct reviews on reasonable grounds. The bill will also empower the review panel to hold a conference for the purpose of obtaining further information. This includes the ability to hold a conference prior to commencing a review in order to obtain further information from the applicant and the commission. This seems to be a sensible measure and I will be interested to see if, over time, it makes a worthwhile difference. The bill also amends the Customs Act to allow applicants for review to withdraw their application. Withdrawals will be required to be written and given in the same manner as applies to applications. Importantly, parties continue to be able to apply for judicial review of anti-dumping decisions to the Federal Court in order to resolve issues with certainty, consistent with Australia's obligations under the relevant WTO agreements.

I now turn to some of the savings and non-legislative measures within these bills and within the changes in policy. Labor supports the government's intention to use the savings generated from the measures in these bills to offset the costs of implementing some non-legislative measures of the reforms package: specifically, firstly, the establishment of an anti-dumping information service; secondly, the expansion of the International Trade Remedies Advisory Service; and thirdly, a hotline as a central point of contact for inquiries about Australia's anti-dumping system. We also welcome the establishment of a market research function to enhance the capability of the anti-dumping investigators as part of the anti-dumping information service. That will provide targeted economic analysis of trends and trading behaviours across markets to provide better information earlier in the investigation process. The intention for the minister to direct the Anti-Dumping Commissioner that, wherever possible, provisional measures be imposed at day 60 of an investigation is also a positive move.

Finally, I come to the two matters about which Labor has concerns. The first matter I refer to is the fee for review by the review panel, which I alluded to earlier. The bill will allow the government to introduce a fee for applying to the review panel, as I pointed out earlier in my contribution. There will be, I understand, different fees for different kinds of applicants. The introduction of fees will likely lead to fewer applications for review. Whilst this may benefit the Australian producer when the original decision was to impose duties, it also makes it more expensive for Australian producers to review decisions which did not impose duties. In other words, if you lose the appeal and there is no finding of dumping, and you want to appeal, and you are an Australian business, then obviously it puts another cost in front of you. I note that the government has stated that the intention is for there to be reduced fees for small and medium-sized businesses.

I made the point earlier on that, as the fees are not in legislation, but are instead established under an instrument made by the minister, we have no guarantee that those fees will apply into the future, or that that principle and the intent of it, will be continued into the future. So, we will reserve our final position in respect of the fees until we have at least seen the schedule of fees proposed. I also note that the coalition's election policy document in respect of the Australian manufacturing sector stated:

The current anti-dumping laws are cumbersome, slow and prohibitively expensive for many Australian businesses to utilise.

I would be interested to hear the minister's explanation of how a fee for review by the Anti-Dumping Review Panel is consistent with this statement, in particular with the term 'prohibitively expensive'.

A further concern which I bring to the minister's attention is that exporters may channel their requests for review through the importer, which is likely to be a significantly smaller business than the exporter, in order to unfairly access the reduced fee structure for small and medium-sized businesses. The point we strongly make is that we would want to be assured that the system of having different fee scales is not going to also be abused or rorted in any way.

Finally, I come to the International Trade Remedies Forum. Labor initially established the ITRF in August 2011 following the announcement of the Streamlining Australia's anti-dumping systems policy. The legislation to formally establish the ITRF came into effect on 10 June 2013. The forum is a stakeholder body comprised of representatives from manufacturers, producers and importers, as well as industry associations, trade unions and relevant government agencies. The forum provides advice and feedback to the government on, firstly, the operation of the anti-dumping system; secondly, the implementation and monitoring of government reforms to the anti-dumping system; and, thirdly, other information which may lead to the further improvement of the anti-dumping system. It provides a good sounding-board for the government when it is considering matters that arise in respect of dumping legislation.

Prior to the announcement of the reforms in June 2011 there was no stakeholder body to provide feedback to government on the operation of the anti-dumping system. The forum was established specifically to do just that.

The former, Labor government committed to establishing the International Trade Remedies Forum to provide strategic advice and feedback to the government on the implementation and monitoring of the proposed reforms. The ITRF was established in legislation to ensure that this valuable dialogue with industry continued into the future. At the time that the legislation was debated in this place, the coalition did not oppose the ITRF, and in fact they supported it. At the time their spokesperson said:

… we support the establishment of the International Trade Remedies Forum. Indeed, the coalition has said for a long time that industry must be given a much greater voice in articulating improvements to the system and, more to the point, that its voice should be far more clearly heard … If we take the government at face value on this and accept that its genuine intention is to bring together representatives from local industries, importers and unions and give them a better say in identifying problems and suggesting future improvements to our national antidumping system, then it is certainly a step in the right direction.

Those were the words of the former member for Indi who was, at the time, the opposition shadow spokesperson on this matter.

The ITRF has made a positive contribution through the work it has undertaken, which included determination of normal value when a particular market situation is found. Indeed, the Customs Amendment (Anti-dumping Improvements) Bill (No.2) 2012 implemented its recommendation to remove the limitation to the inclusion of profit when calculating the normal value of a good in its country of origin in certain circumstances.

I note that it appears as though the forum has not met since March 2013, despite being required by the Customs Act to meet at least twice each year.

Labor believes that the ITRF was a constructive body that did good work and that the government should utilise the ITRF legislation that is currently in place and the forum itself. It seems that it has, indeed, done the opposite. We have seen no justification for abolishing the forum and I do not accept, as the minister said in his second reading speech on this matter, that the ITRF is red tape or that it is a 'rigid and restricted method' for consultation. I therefore move the following amendment. I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House is of the opinion that the bill should be amended to delete the section of the bill which abolishes the International Trade Remedies Forum.”

With those comments, and having moved the amendment, I commend the amendment to the House.

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