Chapter 1


Chapter 1

Introduction

The bill

1.1        The Customs Amendment (Anti-Dumping) Bill 2011 was introduced into the Senate by Senator Nick Xenophon on 2 March 2011. The bill responds to industry concerns that were raised following the Kimberly-Clark decision which, despite a finding that tissue products from Indonesia and China were dumped, resulted in the removal of dumping duties on the grounds that no 'material injury' to Australian manufacturing was occurring as a result of the imports.

1.2        In his Second Reading Speech, Senator Xenophon argued that the bill:

...seeks to redress the flaws in the current framework and strengthen the provisions under the [Customs] Act that will give greater support to Australian manufacturers during the application and investigation processes and in any review of decisions by the Trade Measures Review Officer or the Minister.[1]

1.3        The bill's key amendments:

  • provide that the importer of goods which are subject to anti-dumping applications bears the onus of proof to demonstrate that the goods have not been dumped or subsidised for export into Australia;
  • provide a presumption that where dumping and material injury have been proven, the material injury is the result of the dumping;
  • provide for trade unions, whose members are directly concerned with the production or manufacture of like goods, to be included in the definitions of 'affected parties' and 'interested parties' for the purpose of applications for anti-dumping measures and reviews;
  • enable new or updated information to be provided at various stages;
  • allow supporting material for an application for anti-dumping or countervailing measures to be based on evidence compiled in the previous 90 days;
  • enable preliminary affirmative determinations to be made once an investigation is started;
  • require consultation with industry experts as part of investigations and reviews;
  • prohibit the CEO of Customs from providing a statement to affected parties of the normal value or export price of anti-dumping or countervailing duties if it is based on information provided on a confidential basis or disclosure would affect the providers business interests;
  • enable decisions to be referred to the Administrative Appeals Tribunal for appeal; and
  • require an independent review of the first two years of the operation of the amended Part of the Customs Act.

Conduct of the inquiry

1.4        On 2 March 2011, the Senate referred the bill to the Senate Economics Legislation Committee for report by 22 June 2011.

1.5        The inquiry was advertised in both The Australian and on the committee's website. The committee also wrote to a range of stakeholders inviting written submissions by Friday 31 March 2011. The committee received 20 submissions. Submitters included legal experts and academics, manufacturers, industry groups, trade union organisations, government departments and agencies, and individual stakeholders. The submissions presented a wide range of opinions on both the amendments of the bill and the administration of the system itself. They also included viewpoints from both users of the system and those affected by anti-dumping measures. The details of the organisations and individuals who made those submissions are listed at Appendix 1.

1.6        The committee is conducting a separate inquiry into the government's Customs Amendment (Anti-dumping Measures) Bill 2011, which also addresses aspects of the administration of Australia's anti-dumping and countervailing system. As both the private senator's bill and the government's bill deal with issues of Australia's anti-dumping framework, the committee decided to hold a concurrent hearing to examine the bills in Canberra on 4 May 2011. A full list of witnesses is at Appendix 2.

1.7        During the hearing, concerns were raised by some committee members at the Department of Foreign Affairs and Trade's (DFAT) request that its submission and evidence be treated as confidential. Senators were concerned that DFAT’s role and expertise in representing Australia’s trade interests internationally necessitated its evidence being part of the public record. Subsequent to the hearing, DFAT provided a public submission that was accepted by the committee on 12 May 2011.

1.8        The committee thanks all those individuals and organisations who contributed to and participated in the inquiry process.

Context of the inquiry

1.9        Dumping is a situation where an exporter's product is priced at a lower price in the importing country than the price in the domestic market of the exporter. Governments may also subsidise industries through grants, tax concessions, loan guarantees and other measures. To protect domestic industries from injury or threat of injury, governments often impose dumping and countervailing import duties on dumped and subsidised goods.

1.10      Australia's anti-dumping and countervailing system is administered by the Australian Customs and Border Protection Service (Customs). It has been subject to a number of reviews and reforms over the past 25 years that have aligned the system with Australia's international obligations and responded to industry concerns and changes in both the domestic and international environment. Many of the issues identified by submissions to this inquiry and which the bill seeks to address have been highlighted under these various reviews of the system.

1.11      The legislation primarily relevant to Australia's anti-dumping and countervailing framework is the Customs Act 1901, but also the Customs (Anti-dumping) Act 1975 and the Customs Regulations 1926. While the bill's main focus is on anti-dumping procedures, many of its amendments also affect the administration of Australia's countervailing system. Accordingly, this report will look at both dumping and subsidisation in the context of the bill's provisions.

1.12      The committee's inquiry was conducted at the same time as a broader review of Australia's anti-dumping and countervailing system initiated by the government. The government is currently considering Productivity Commission's 2009 report on Australia's anti-dumping and countervailing system, which examined the effectiveness of Australia's anti-dumping system and made recommendations on the appropriate future role of an anti-dumping system within the government's overall policy framework. The government's response to the Productivity Commission report was not yet been released. The Minister for Home Affairs, the Hon. Brendan O'Connor MP recently stated 'beginning to change the anti-dumping system before the completion of the Senate’s processes would be premature and could create confusion and uncertainty amongst Australian businesses'.[2] Accordingly, the government's response is expected after the tabling of the committee's report.

1.13      Many issues raised by submitters were linked to the Productivity Commission's report and recommendations, and were outside the scope of this inquiry, which is limited to discussion and recommendations related to the bill's proposed amendments. It should be noted that the recommendations made by the committee are envisaged in a situation where the Productivity Commission's findings have not been implemented.

Outline of report

1.14      This report has ten chapters. Chapter 2 provides an overview of the international anti-dumping and countervailing environment. It explores the effects of subsidies and dumping on trade, trends in global and Australian anti-dumping and countervailing activities, as well as the WTO's anti-dumping and countervailing agreements and their enforceability.

1.15      Chapter 3 provides a brief overview of Australia's legal and administrative anti-dumping and countervailing framework. It describes the roles and functions of Customs, the relevant Minister and the Trade Measures Review Officer (TMRO), and the course of an anti-dumping and/or countervailing investigation as framed by Australian domestic legislation and the guidelines established by Customs. It then discusses comparable international practices in key international jurisdictions, including the United States, the European Union and Canada.

1.16      Chapter 4 discusses the criticisms of Australia's anti-dumping and countervailing framework as identified in submissions to the inquiry. It also establishes guiding principles in evaluating the merit of the bill's amendments.

1.17      Chapters 5–9 canvass the views on the bill's amendments. They reflect evidence heard by the committee both supporting and opposing the amendments, as well as the committee's own views based on the criteria established under Chapter 4.

  • Chapter 5 examines the proposal for the importer of goods to bear the onus of proof that the goods have not been dumped or subsidised for export into Australia.
  • Chapter 6 considers the rebuttable presumption of dumping amendment.
  • Chapter 7 examines a number of amendments which affect the application and submission processes.
  • Chapter 8 analyses the amendments which may affect how an investigation or review is conducted, such as the requirement for Customs to consult with industry experts and the economic factors the Minister may have regard to when determining material injury.
  • Chapter 9 examines the remaining amendments proposed by the bill.
  • Chapter 10 provides a summary of the committee's views and recommendations.

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