APPENDIX 3
Recommendations of the 2009
Productivity Commission inquiry
In March 2009, the Australian Government asked the
Productivity Commission to commence a public inquiry into the effectiveness and
impact of Australia's anti-dumping and countervailing system. The final
report was provided to the Government on 18 December 2009 and was publicly
released on 27 May 2010.
Below are the recommendations made by the Productivity
Commission in its report.
The new public interest test
Recommendation 5.1
The imposition and continuation of anti-dumping and
countervailing measures should be subject to a ‘bounded’ public interest test,
embodying a presumption that measures will be imposed if there has been dumping
or subsidisation that has caused, or threatens to cause, material injury,
unless one (or more) of the following circumstances apply:
- the imposition of measures would preclude effective choice and
competition in the Australian market for the like goods, and the resulting
scope for the applicant supplier to exploit market power could not be addressed
through application of the lesser duty rule
-
the price of the imported goods concerned after the imposition of
measures would still be significantly below competing local suppliers’ costs to
make and sell
- un-dumped or non-subsidised like imported goods are readily
available at a comparable price to the dumped or subsidised imported goods
-
prior to the commencement of injurious dumping or subsidisation,
the local industry’s share of the domestic market for the goods concerned was
low, with that share likely to remain low even if measures were imposed
- the large majority of the overseas supplier’s output of the goods
concerned is exported, with the goods imported into Australia being exported at
a price which covers the supplier’s fully distributed costs and a reasonable
profit margin (plus the value of any identifiable input subsidies).
The explanatory memoranda to the enabling legislation should
elaborate on the intent and application of this list of circumstances, having
regard to the commentary in the body of this report.
Where, based on the advice from the Australian Customs and
Border Protection Service (ACBPS), the Minister is satisfied that one (or more)
of these circumstances apply, measures would not be imposed. And where none of
these circumstances apply and the Minister has determined that measures should
be imposed, then the magnitude of those measures should be set having regard to
the existing lesser duty rule arrangements.
Assessments against the public interest test by the ACBPS
should generally be completed within 30 days, and draw if necessary on advice
from external parties such as the Australian Competition and Consumer
Commission. Provisional measures should be imposed in all cases where a finding
by the ACBPS that there has been injurious dumping or subsidisation provides
the basis for moving to apply the test.
In giving effect to these requirements, the ACBPS should
also:
- clearly indicate the nature and breadth of the public interest
test in its initial invitations to interested parties to comment on
applications for measures
- give interested parties the opportunity to comment on its
assessments against the test through detailing those assessments in the
Statement of Essential Facts
-
include a synthesis of that commentary from interested parties in
its final report to the Minister.
Supporting framework changes
Recommendation 6.1
The Australian Government should convene a working group to
examine the close processed agricultural goods provisions and report to the
Minister on:
- whether the provisions have had a meaningful impact on the
outcomes of any past cases
- if not, whether there is any likelihood that they could, in
future, have a meaningful impact and, if so, in what circumstances
-
whether and how it might be possible to make the provisions more
practically effective, whilst still complying with WTO requirements, and what
benefits and costs would ensue
- what arguments would justify the retention of the provisions more
generally
- what changes, if any, should be made to the provisions in light
of the above.
The working group should consult with interested parties and
publish a draft report for comment.
Recommendation 6.2
Australia should not adopt the practice of zeroing when
calculating normal values.
Recommendation 6.3
In conjunction with the introduction of the new public
interest test (see recommendation 5.1), the arrangements governing the
imposition of provisional measures should be modified as follows:
- If the requirements for imposing provisional measures are met,
then prior to the commencement of any assessments against the public interest
test, the Australian Customs and Border Protection Service should, without
exception, be required to release a Preliminary Affirmative Determination (PAD)
and impose provisional measures.
- Unless an extension of time has been granted, the release of a
PAD should occur no later than day 110 in an investigation.
Recommendation 6.4
There should be no change to the current five-year default
term for anti-dumping and countervailing measures.
However, extensions of anti-dumping and countervailing
measures, following a continuation review, should be limited to one three-year
term. And an application for new measures following the expiry of a three-year
extension should be subject to the same requirements as the original
application (including assessment against the public interest test as detailed
in recommendation 5.1).
Continuation reviews should, in all cases, comprehensively
examine and recalculate the relevant variable factors.
Recommendation 6.5
The current ‘review of measures’ and ‘administrative review’
provisions should be abolished and replaced by a single new mechanism to adjust
the magnitude of all anti-dumping and countervailing measures on an
annual basis. The resulting adjustments, which should be determined and
notified by the CEO of the Australian Customs and Border Protection Service
(ACBPS), should not be appellable.
- The new mechanism should employ the sort of risk-management
approach applied by the ACBPS when assessing requests for duty refunds under
the current administrative review provisions, but with greater
reliance—wherever possible without significantly reducing investigative
rigour—on desk-audits of information provided by the relevant parties,
international price indexes, or other relevant price benchmarks.
- Where this adjustment process leads to a zero duty rate, measures
should still remain in place for the original term.
- If considered necessary to facilitate greater reliance on desk
audits, the ACBPS should be granted additional powers to apply appropriate
penalties for false reporting.
Recommendation 6.6
The basis for collecting dumping and countervailing duties
should be modified. Specifically, for goods subject to a dumping duty, or to a
countervailing duty involving the lesser duty rule, the duty collected at the
time of importation should be based on the actual export price relative to the
export price at which no duty would be payable on the basis of the prevailing,
annually adjusted, variable factors. Concurrent with this change, provision for
importers to seek refunds of overpaid duties should be abolished.
Recommendation 6.7
The Australian Customs and Border Protection Service (ACBPS)
should, as part of the annual adjustment of measures (see recommendation 6.5),
seek feedback from the various parties on the impacts of those measures over
the preceding 12 months—including on market prices—and investigate further if
appropriate.
Where such feedback indicates that local production of a
good subject to measures has ceased, and is unlikely to recommence in the
period for which the measures would otherwise remain in place, the CEO of the
ACBPS should advise the Minister to revoke the measures. This process should
replace the current revocation arrangements.
Recommendation 6.8
Australia’s list of actionable subsidies should be aligned
and kept aligned with the lists in the latest relevant WTO agreements.
Administration of the system
Recommendation 7.1
The Australian Customs and Border Protection Service, the
Minister and the Trade Measures Review Officer should retain their broad
administrative and decision-making roles within the anti-dumping system,
with their specific responsibilities modified, as appropriate, to reflect the
Commission’s other recommendations.
These roles and responsibilities should be reconsidered at
the time of the next review (see recommendation 7.11) in the light of
experience with the new system.
Recommendation 7.2
The following changes should be made to the current appeals
arrangements for anti-dumping decisions.
- Decisions on whether or not to commence an investigation into the
continuation of anti-dumping or countervailing measures beyond the initial
five-year term—and any ensuing decisions by the Minister—should be appellable.
- Where the Trade Measures Review Officer (TMRO) finds in favour of
an appeal against a decision made by the Minister, the Minister should make a
final determination without returning the case to the Australian Customs and
Border Protection Service (ACBPS) for reinvestigation, unless the TMRO explicitly
recommends a reinvestigation. In the event of the latter:
- the
reinvestigation and report to the Minister should be conditioned and constrained
by a directive from the TMRO on where the initial investigation was flawed
- within the confines of that directive, there should be scope for the
ACBPS to consider relevant new information.
Any such reinvestigations and ensuing decisions by the
Minister should not be appellable.
Recommendation 7.3
Provision should be made for the Australian Customs and
Border Protection Service (ACBPS) to seek extensions of the investigation
period at any time during an investigation. In addition to notification of
extensions through the issue of an Australian Customs Dumping Notice, all
correspondence relating to such requests should be made available on the public
file.
This new arrangement, together with the adequacy of the
general time limits for the various steps in the investigation process, should
be assessed at the next review (see recommendation 7.11), having regard to
experience in the intervening period under the new system.
Through its ‘Anti-Dumping and Countervailing Actions—Status
Reports’, the ACBPS should provide an annual, consolidated, summary of the
timeliness of each of its investigations in the preceding 12 month period.
Recommendation 7.4
Decisions by the Minister in response to advice from the
Australian Customs and Border Protection Service, or from the Trade Measures
Review Officer, should be subject to a 30-day time limit.
Recommendation 7.5
The Australian Government should ensure that the Australian
Customs and Border Protection Service (ACBPS) and the Trade Measures Review
Officer (TMRO) are adequately and appropriately resourced to enable them to
effectively undertake their functions under the new system. The level of
resourcing should take into account the opportunities for the ACBPS and the
TMRO to engage outside expertise to enhance the quality and/or cost-effectiveness
of aspects of their assessment tasks.
Recommendation 7.6
In providing advice to the Minister on whether anti-dumping
measures should be imposed or continued, the Australian Customs and Border
Protection Service should indicate in its investigation reports whether there
have been any comparable recent cases in other countries; what the outcomes of
those cases were; and what is the relevance, if any, of those outcomes to the
investigation at hand.
Recommendation 7.7
Through its ‘Anti-Dumping and Countervailing Actions—Status
Reports’, the Australian Customs and Border Protection Service should report
annually on the number of applications for anti-dumping measures that do not
proceed to initiation, and the products and countries that were the subject of
those applications.
Recommendation 7.8
Through its various reports and/or Australian Customs
Dumping Notices, the Australian Customs and Border Protection Service (ACBPS)
should be required to publish the maximum amount of information on the magnitude
of individual anti-dumping and countervailing measures and the underlying
variable factors that is consistent with maintaining appropriate protection for
commercially sensitive information submitted by individual parties.
- Where the ACBPS determines that the firm-specific nature of the
measures or the variable factors (or some other reason) militates against
disclosing full details on those measures, it should reduce the amount of
information published by the minimum necessary to provide the requisite protection
for the commercially sensitive material concerned.
- At the very least, the ad valorem equivalents of measures should
be publicly notified at the time of imposition and following annual adjustments
under the new adjustment mechanism (see recommendation 6.5).
Customs should also report annually on the number of cases
where the lesser duty rule has been applied.
Other matters
Recommendation 7.9
The Australian Government should consult with the Australian
Bureau of Statistics on the best way to ensure that import data are not
suppressed on confidentiality grounds when the same or similar data can be
publicly accessed through other sources.
Implementation of the new
requirements
Recommendation 7.10
All of the proposed reforms should take effect as soon as
practically possible, except for the new public interest test (see
recommendation 5.1) and the changes to the continuation provisions (see
recommendation 6.4). These should take effect two years later.
Recommendation 7.11
There should be a broad and independent public review of the
new anti-dumping system five years after the reform package is fully operative.
Amongst other things, that review should examine:
- the impacts on decision-making of the public interest test and
whether that case history points to any gaps or deficiencies in the test and/or
the accompanying legislative guidance, or to the need for supporting changes to
other aspects of the legislative architecture
-
the need for changes to the system framework separate from the
public interest test requirements
- the efficiency and effectiveness of the Australian Customs and
Border Protection Service, the Trade Measures Review Officer and the Minister
in administering the anti-dumping system and giving effect to the new
requirements, and whether any changes to their responsibilities are warranted
in the light of that experience
- whether the resourcing of the assessment and appeals process is
adequate and appropriate, having regard to any proposed changes in
decision-making responsibilities
- what changes, if any, are required to the statutory timeframes
for the conduct of investigations, or to the related provisions governing
extensions to those timeframes
- the effectiveness of the changes to the public reporting
requirements in promoting more transparent decision-making and outcomes, while
continuing to provide appropriate protection for commercially sensitive
material submitted by the parties, and what more might be done in this regard
- whether there have been changes to overseas anti-dumping regimes
that could be relevant to the Australian system.
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