Introduction

1.1        On 14 September 2017, the Senate referred the provisions of the Customs Amendment (Anti-Dumping Measures) Bill 2017 (the bill) to the Senate Economics Legislation Committee for inquiry and report by 6 October 2017.[1]

1.2        The purpose of the bill is to provide greater certainty in the determination of export prices for exporters to Australia (Exporters) that are subject to anti-dumping and countervailing duties in reviews of anti-dumping measures under Division 5 of the Customs Act 1901 (the Customs Act).[2]

1.3        The bill would facilitate the use of appropriate methodologies to determine an export price during a review of measure for those Exporters who have not exported the goods, or exported low volumes of the goods such that the export price cannot be reliably determined, during the period examined for the purpose of the review. This would allow specific information to be used to determine an export price and limit Exporters' ability to subvert the anti-dumping framework and benefit from inappropriately reduced rates of duty that do not remedy the injurious effects of dumping.[3]

Conduct of the inquiry

1.4        The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting submissions by 26 September 2017. The committee received 6 submissions, which are listed at Appendix 1.

1.5        No public hearings were held for this inquiry.

1.6        The committee appreciates the efforts of all stakeholders who contributed to the inquiry.

Background

1.7        The Australian Government is committed to free and fair trade, and considers that Australian businesses must be globally competitive and should not be shielded from genuine competition. However, dumping and foreign good subsidisation of goods exported to Australia does not reflect genuine competition and can distort markets and cause serious injury to Australian manufacturers.[4]

1.8        According to the Explanatory Memorandum:

Australia's anti-dumping and countervailing system is intended to provide a market-based remedy to injurious dumping and subsidisation. The remedy provided should be effective at preventing further injury.[5]

1.9        But the evidence suggests that this has not been the case:

...it has been identified that the current operation of the system is producing systemic outcomes that do not fulfil the intent of the system. In every instance that the low volume export behaviour was identified, and following the zero percent margin there was another process such as a later review or continuation inquiry, the exporters behaviour had led to the subsequent process resulting in a positive dumping margin. These outcomes are evidence that the remedial duties are being undermined.[6]

1.10      The Assistant Minister's Second Reading Speech outlined the problem in more accessible language:

Currently, there exists the possibility that foreign exporters subject to duties can subvert the reviews of measures process...Foreign exporters are able to deliberately limit exports of the dutiable goods for a period of time in order to obtain a more favourable rate of duty for future exports. This facilitates the opportunity for the exporter to resume dumping and continue to injure Australian industry.[7]

1.11      The measures proposed by the bill are intended to address issues associated with no or low volume exports where goods are subject to anti-dumping and countervailing duties. The proposed mechanism introduces three specific methods to determine export prices for the purpose of informing the level of dumping duty to be applied to future exports. In doing so, this would establish an export price that is reasonably reflective of the export price that would have existed had the Exporter made exports or made exports of a greater volume.

1.12      In highlighting the benefits of the proposed approach, the Assistant Minister considered that:

This change will increase Australian manufacturing industry's confidence in the strength of the anti-dumping system by removing an unintended consequence of reviews of measures which could be exploited by foreign exporters. This will ensure that the system continues to operate as intended to provide relief from injurious dumping for Australian manufacturers.[8]

Human rights implications

1.13      The bill does not engage any of the applicable rights or freedoms, and, as such, is compatible with human rights.

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