Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Agriculture and Industry, I present the committee's report entitled Circumvention: Closing the loopholes: Inquiry into Australia's anti-circumvention framework in relation to anti-dumping measures, together with the minutes of proceedings.

Manufacturing in Australia has for many years been coming under increasing pressure from imported products. Some cheaper goods given access to our markets are unfairly subsidised and sold to our customers at less than the cost of production. This dumping of goods on Australian markets may cause material injury to the Australian industry, resulting in reduction in selling prices, profit or market share. This can lead to a transfer of jobs offshore with no guarantee the goods in question will continue to be supplied below production costs when the local production is driven out of business.

Australia now has an antidumping framework and has appointed an antidumping commissioner. While some manufacturers are concerned that the task of launching an antidumping action is too onerous, many have done so and had successful outcomes with duties being applied to the offending goods. Manufacturers have been generally pleased with this process but have become increasingly dismayed as they have watched the entities which have had the rulings placed against them indulge in a raft of activities that circumvent or avoid the duties and thus the intention of the action.

Following numerous approaches from affected industries to the Australian government and to me as Chair of the Standing Committee on Agriculture and Industry, the Minister for Industry and Science, Ian Macfarlane, asked the committee to investigate the prevalence of circumvention activity, whether recent changes to the antidumping regulations are effective, and if anything further could be done.

It was quite clear from our earliest submissions that the issue of 'like product', or the minor modification of goods to avoid duty, was at the forefront of industry concerns. It is highly likely that the committee would have recommended strong action in this area if it were not for the announcement in March by the Department of Industry and Science that regulations had been altered to empower the Anti-Dumping Commissioner to deal with this issue. While the ruling on slight modification will take a while to digest, I understand that some applications have already been lodged as a result.

Overall the committee is of the opinion that most of what can be done at the moment has been done and that it is prudent to observe the effects of the latest rulings before further steps are contemplated.

However, the committee's report does make recommendations on the application of different types of duties and the anti-dumping and anti-circumvention investigation processes. In particular, the time frame requirement for investigations has been exceeded considerably. An average of more than 275 days for seven recent investigations is far beyond the targeted 155-day time frame. The average time frame should be reduced in order for the Australian industry to have confidence in the frameworks and the Anti-Dumping Commission itself.

The committee recognises that the rewards for circumvention of anti-dumping actions are high and that those intent on circumvention have proved enormously resourceful and adaptable. It is for this reason the committee believes all concerned, including the committee, should keep a close watching brief on the situation. To this end, the committee recommends that the Anti-Dumping Commissioner provide a briefing to the committee every six months for the remainder of the 44th Parliament. The briefings should include any proposed legislative or regulatory changes, progress on anti-circumvention cases, and any changes to Anti-Dumping Commission processes.

The committee recognises and appreciates that the establishment of the Anti-Dumping Commission, the appointment of an independent commissioner and the changes recently implemented with respect to circumvention are producing a different environment for Australian businesses dealing with the act of circumvention. The declaration by the commissioner around the classification of 'like goods' is warmly welcomed by the committee as a watershed moment, but it will take a little while before a clear assessment can be made of its effectiveness.

I would like to thank all those who made their time and resources available to participate in this inquiry. I would like to thank my fellow committee members, including my deputy chair, the member for Hotham, who is in the chamber at the moment, for their application to the task, as I thank the secretariat staff, who ably assisted in this inquiry. I commend the report to the House.

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

It is great to have the opportunity to speak on the Circumvention: closing the loopholesreport. Australia is, of course, a free trade nation. As a small country, trade is our lifeblood. Over the last 30 years in this country we have seen real average incomes double. Trade has been a critical part of driving that, but sometimes trade is not done fairly. The Standing Committee on Agriculture and Industry recently looked into one of the more difficult areas where we see a barrier to fair trade in Australia, and that is around the practice of dumping.

For those listening in the gallery, dumping is a process where we see foreign exporters selling goods into Australia at below the price of making them. It is often the result of foreign governments who, usually for their own reasons, in their own domestic economies, provide unfair subsidies to the producers who operate in those countries. These are subsidies that a free and fair trading nation like Australia would not provide.

Essentially what happens is that dumping allows foreign companies to come in and compete with Australian companies but not on a level playing field. Dumping is not illegal, but under the World Trade Organization rules Australia is allowed to impose duties when we see that a product is being dumped into our market. So it is through this mechanism that we are able to even up the playing field a little bit.

One of the things we learned in this inquiry was that the law that regulates action against dumping and how those duties are set needs to be in a continuous process of evolution. As fast as we can make laws against dumping, companies that are operating overseas find a way to get around them. I will give an example, to bring it to life a little bit. One of the things we heard a great deal about in this inquiry is something called the minor modifications problem. This is occurring quite significantly in the steel industry in Australia, which faces a lot of competition from goods that the Australian government has deemed as dumped in our country.

We have put dumping duties on the importation of some steel, but recently exporters have tried to circumvent those rules by putting small amounts of boron into their steel formula. They call this 'pixie dust' because the boron does nothing to the essential properties of the steel. It has been put in there by the producer simply to circumvent the dumping duties that the Australian government has imposed on those imports. We see this quite frequently in other areas too—a dumping duty is put in place on a particular product and then an exporter makes a minor modification to that product so it meets a different definition. Clearly this is completely unfair.

This is one of the issues we covered in this ever-evolving area of trade. What did we recommend in response to some of the issues we heard about? On the minor-modifications problem, we are very pleased to see the Department of Agriculture has picked up on that. They have put in place a new process. We are keenly watching to see whether that manages the problems we have raised. But we want to see constant and rigorous evaluations of the laws we have in place. It is for that reason that the standing committee has recommended that we get a six-monthly report from the Anti-Dumping Commission to explain a little bit about how things are going and update us on any actions they are taking to ensure constant vigilance in this space. We have also made some recommendations about making the system faster and easier to use for Australian companies.

The report we are tabling today is testament to the hard work that is often done in this parliament but that often does not get a lot of play from our friends in the fourth estate. We worked very collaboratively on this. The chair of the committee, Rowan Ramsey, did a fantastic job. It is a bipartisan report and an area of bipartisan concern. I am very proud of the work we have done. I want to say thank you to the wonderful committee staff who helped us with this. Anthony Overs, who drafted this report, is here in the House. Thank you, Anthony. I also want to acknowledge the support provided by Peggy Danaee. I thank the committee for their hard work. It has been a pleasure to participate in this inquiry.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The time allotted for statements on this report has expired. Does the honourable member for Grey wish to move a motion in connection with the report to enable it to be debated on a later occasion?

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Debate adjourned.