Recent events have focused attention on Australia’s anti-dumping laws. Media sources have reported that Senator Nick Xenophon proposes introducing a Bill into Federal Parliament on 28 February to amend anti-dumping provisions within the Customs Act 1901 (Cth) (Customs Act).
A newly formed federal Opposition task force and a recently launched public anti-dumping campaign by the Australian Workers’ Union have also focused attention on the operation of Australia’s anti-dumping laws.
1. Current anti-dumping laws in Australia
Australian anti-dumping laws, which broadly follow the World Trade Organization Anti-Dumping Agreement, aim to prevent the dumping of imports found to cause or threaten “material injury”. Although dumping is not specifically prohibited, competition from imports can be considered by the Commonwealth to be unfair in certain circumstances and remedial action can be taken.
The Australian Customs and Border Protection Service (Customs) investigates claims of dumping, and oversees anti-dumping measures, under the Customs Act. In general terms:
“dumping” occurs when goods are, or are likely to be, imported at a price below the “normal value” of the goods in the importer’s domestic market. In summary, “normal value” is defined as the price of like goods sold in the domestic market of the country of export, in the ordinary course of trade for home consumption in arm’s length transactions by the exporter or other sellers of like goods;
“material injury” is caused if the effect of dumping is “not immaterial, insubstantial or insignificant and is more than is likely to occur in the normal ebb and flow of business”;
domestic producers and certain other parties may make an application seeking remedial action against dumping. Assuming the necessary criteria are met, the Government may impose a dumping duty, which in effect is the difference between the export price of the goods and their ‘normal value’.
Although Customs has reported an 80 per cent increase in the number of anti-dumping and countervailing investigations within the last year, media reports point to a decrease in the overall number of anti-dumping cases managed by Customs from 1990s figures.
Customs dumping notices are available on Customs’ website.
2. Productivity Commission report and Government response
The Productivity Commission recently reported on Australia’s anti-dumping system. The report, released in May 2010, recommended retaining the current system but making some changes. The Commonwealth Government is yet to formally respond to the report, but Customs indicated in its 2009/10 Annual Report that the Government is expected to do so as part of the 2011/12 Budget process. Customs are currently chairing an independent committee tasked with considering the Productivity Commission recommendations and are consulting with stakeholders.
3. Proposals by other parties
3.1 The Coalition Taskforce
It has been announced that the recently established coalition taskforce will consider:
whether action should be available in response to “imports that only threaten to cause material injury”;
whether the 155 day Customs investigation period should be reduced; and
whether the Minister “should be expected to take action of some kind where dumping has been found to exist”.
3.2 Senator Xenophon
Recent media reports indicate that Senator Xenophon proposes introducing changes to the Customs Act to ensure that greater consideration is given to the effects imports have on Australian businesses and jobs. The reports stated that this would be achieved by:
changing the definition of ‘material injury’ to include ‘any impact on jobs’;
enabling Australian unions to make applications and appeals on dumped goods as an affected party; and
amending the Customs Act so that a finding that goods have been dumped would lead to a presumption that material injury has occurred. The onus would then be on importers or overseas manufacturers to show that they were not involved in dumping.
4. Discussion
The detailed effects of possible legislative changes cannot be determined until the Government and/or Senator Xenophon announce their proposed amendments to the Customs Act. For now, it is only possible to compare Senator Xenophon’s reported amendments to those recommended by the Productivity Commission.
Current position under the Customs Act |
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Local businesses or interested parties must make an application for relief against the dumping of goods. The applicant must provide evidence that dumping has occurred and show that material injury was caused or threatened before remedial action can be taken. |
Taken to mean: the effect of dumping is “not immaterial, insubstantial or insignificant and is more than is likely to occur in the normal ebb and flow of business”. |
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Productivity Commission’s recommended amendments to the Customs Act |
No recommendations to grant standing to unions. |
A key recommendation was to introduce a “bounded public interest test”, based on a finding that the Australian anti-dumping system benefits a small number of import competing firms but imposes greater costs on the economy. The test proposed a presumption in favour of measures where there has been injurious dumping or subsidisation.
However, the test would detail specific circumstances where relief measures would not be in the public interest - eg, where they would be ineffectual in removing injury or would impose large costs on downstream users or consumers relative to the benefits for the applicant industry. |
No recommendations for change to definition. |
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Senator Xenophon’s reported amendments to the Customs Act |
Enabling Australian unions to make applications and appeals on dumped goods as an affected party (although how this would be achieved remains unclear). |
Onus of proof to be changed to require importers or overseas suppliers to prove they are not involved in dumping if an application has been made against them. Compliance and other costs may be increased for importers. |
The definition of “material injury” would be broadened to include “any” impact on jobs. If enacted, this change is likely to increase the number of anti-dumping applications and the number of investigations undertaken by Customs. Has the potential to increase compliance costs, especially for importers. |
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Importers, and businesses that are or may be affected by dumping, should:
consider the Productivity Commission recommendations;
consider potential impacts on your business should the Productivity Commission recommendations or Senator Xenophon’s proposals be adopted;
be prepared to comment on any draft legislation or public consultation being prepared by the Federal Government, the Coalition taskforce or Senator Xenophon; and
keep watch for the proposed introduction of Senator Xenophon’s legislation (which reportedly will be introduced in Federal Parliament on 28 February 2011).
This publication is only a general outline. It is not legal advice. You should seek professional advice before taking any action based on its contents.