Chapter 3

Australia's anti-dumping and countervailing framework

3.1        Australia's anti-dumping and countervailing framework is a product of a number of reviews and reforms undertaken to increase its efficiency and effectiveness, as well as to ensure that it complies with Australia's WTO obligations. This chapter begins by providing a brief outline of relevant parts of the enabling Act and the major reviews and reforms to the system. It describes the investigative and review processes, including the roles of Customs, the Minister and the Trade Measures Review Officer. It then examines the different approaches to administering the system adopted by comparable jurisdictions that are relevant to the discussion of the bill.

Australian anti-dumping and countervailing law

3.2        Australian anti-dumping law is framed by Australia's obligations under the General Agreement on Tariffs and Trade (GATT), the Agreement on Implementation of Article VI (the Anti-Dumping Agreement, or AD Agreement) and the Agreement on Interpretation and Application of Articles VI, XVI and XXIII (the Subsidies and Countervailing Measures Agreement, or SCM Agreement). The Customs Act 1901 (the Act) and the Customs Tariff (Anti-Dumping) Act 1975 are the principal legislation relating to anti-dumping.

Customs Act 1901

3.3        The Act vests certain powers in the Minister (currently the Minister for Home Affairs) and in the Chief Executive Officer (CEO) of Australian Customs and Border Protection Service (Customs) and, where necessary, allows for the delegation of the powers of the CEO.

3.4        Within the Act, Part XVB contains the provisions relevant to Australia's anti-dumping and countervailing framework, and was significantly amended in 1994 and 1998 to reflect Australia's international obligations as part of the Uruguay Round of the GATT.

3.5        Part XVB is divided into ten divisions, as follows:

• Division 1 outlines preliminary matters such as the definitions of various terms;
• Divisions 2 and 3 outline the process the CEO of Customs and the Minister must follow, and matters they must have regard to, when considering anti-dumping and countervailing matters;
• Division 4 provides for importers to apply for an assessment of duty payable;
• Divisions 5 and 6 deal with reviews of anti-dumping and countervailing measures that are in place, as well as providing for accelerated reviews for new exporters;
• Division 6A outlines the process for considering whether to continue anti-dumping and countervailing measures that are otherwise due to expire;
• Division 7 outlines procedural and evidentiary matters; and
• Divisions 8 and 9 establish the position of the Trade Measures Review Officer (TMRO), set out their powers and functions, and provide for reviews by the TMRO of certain decisions by the Minister or the CEO of Customs.

Administration of Australia's anti-dumping and countervailing law

3.6        As defined by the Act, Customs manages Australia's anti-dumping and countervailing system and makes recommendations to the relevant minister. Among other things, it is the Minister who decides whether to issue a dumping or countervailing duty notice. Customs summarised its functions regarding anti-dumping as including:

...investigating applications by manufacturers, conducting reviews and inquiries and advising the minister on whether measures should be imposed, varied, continued or revoked. Customs and Border Protection is also responsible for implementing decisions of the minister. Hence, we monitor compliance with measures imposed and we provide information and assistance to parties who may be interested in making a claim or parties who are subject to measures.[1]

3.7        Customs also has a key role in advising interested parties of their rights and obligations in accessing the system.[2]

3.8        Under the Act, the Minister is the ultimate decision-maker on the imposition and review of anti-dumping and countervailing measures. The Minister can commence an anti-dumping or countervailing investigation on his or her own initiative, and also has powers to extend the timeframes at various stages of the investigation, as well as to suspend an investigation if he or she chooses to accept an undertaking.

3.9        The Act also allows aggrieved parties, in cases of dispute with Customs' or the Minister's decisions, rights to review through the TMRO in the Attorney-General's Department. However, the TMRO is restricted by the Act in what decisions it can review.

3.10      The roles of Customs, the Minister and the TMRO are discussed in detail later in the chapter. 

Reviews and reforms of the Australian system

3.11      Australia's anti-dumping and countervailing system has undergone seven major reviews between 1986 and 2010. These were the:

• Gruen Report (1986), which terminated the role of the Industries Assistance Commission (IAC), and implemented a two-tier system administered by Customs and the Anti-Dumping Authority (ADA). It also introduced three year sunset clauses for measures and specific time limits for various assessment process stages;
• Senate Standing Committee on Industry, Science and Technology inquiry (1991), which reduced the assessment timeframes introduced and extended the default term for measures to five years, allowing for reviews prior to automatic termination of the duties;
• Turning Point Report (1993), which reviewed overall Customs service with changes to administrative duty penalties;
• Uruguay Round Legislation review (1995), which introduced changes to promote higher transparency of the inquiry process;
• Willet Report (1996), which abolished of the ADA due to criticisms of system 'taking too long, creating duplication, inconsistency, uncertainty and additional cost'.[3] It also led to significantly shorter statutory timeframes for investigation were introduced, and a new system for collecting duties;
• Joint study conducted by Customs, DRET, DFAT and the TMRO (2006), which improved access to and understanding of the system. It resulted in the creation of enhanced guidelines for users and the establishment of a Dumping Liaison Unit to assist small to medium sized enterprises. It also improved access to case precedents, legal advice, as well as decisions by courts, the WTO and the TMRO in relation to anti-dumping and countervailing cases. Improvements were made to the analysis and reporting of material injury and causal links. It also increased transparency by requiring explanations to be provided of confidential information deleted in public versions of confidential reports; and
• Productivity Commission inquiry (2009), 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. Its recommendations are currently under consideration by the Government (see appendix 3 for a list of the Commission's recommendations).

The investigative process

3.12      For Customs to begin an investigation into dumping or subsidisation, it must either receive an application from an interested party or be directed to initiate an investigation by the Minister.

3.13      The process in which an applicant can apply for an anti-dumping or countervailing notice is depicted in Figure 3.1. The maximum timeframe for Customs to investigate and report to the Minister is 155 days; however, the Minister can approve an extension of time, where necessary.

Figure 3.1: Australia's anti-dumping/countervailing application process

Source: Customs, Anti-dumping and Countervailing Investigation Process, August 2007, http://www.customs.gov.au/webdata/resources/files/Anti_dumping_and_countervailing_investigation_process1.pdf (accessed: 18 April 2011).

Application process

Prima-facie or screening stage

3.14      For Customs to initiate an investigation into dumping or subsidisation of goods, an application must be submitted by an interested party that needs to satisfy  prima facie requirements that it is: (a) in writing; (b) in the approved form; and (c) supported by a sufficient part of the industry.[4] Once lodged, Customs has up to 20 days to determine whether the application meets the mandatory requirements.

Investigation stage

3.15      Once reasonable grounds for the publication of a dumping or countervailing notice have been established, Customs will commence an investigation, issuing a public notice inviting all interested parties to respond. During this period, it will also send questionnaires to all known importers and exporters,[5] with separate questionnaires for importers and exporters in each of the countries. Customs will also gather and verify information from producers, importers and exporters through verification visits as well as through other forms of consultation. Depending on the case, they may also employ forensic accountants, interpreters and industry experts.

3.16      If during the investigation Customs determines that dumping has occurred, it must then establish whether the relevant Australian industry’s performance has deteriorated, whether any injury suffered would be considered material and, if so, whether it was dumping that caused the material injury to the industry. It must not attribute any injury that has resulted from other factors to dumping. Customs must also assess during this period whether future dumping threatens to cause material injury to the Australian industry. 

Preliminary Affirmative Determination

3.17      Where the CEO is satisfied that: (a) there is sufficient evidence of dumping and injury or threat of injury to an Australian industry, and (b) injury or threat of injury is caused by the dumping, Customs may make a Preliminary Affirmative Determination (PAD) from day 60 of the investigation. Customs may then impose provisional measures in the form of securities. The securities are temporary additional duties designed to prevent material injury while the investigation continues.

Statement of essential facts

3.18      At or before day 110 of the investigation,[6] Customs is required to place on the public record a Statement of Essential Facts (SEF) on which it proposes to base its recommendations to the Minister. Interested parties have 20 days from the day the SEF is placed on the public record to respond. Any submissions not received within this 20 day period may be disregarded.

3.19      In the remaining days of the investigation, Customs will review the evidence in light of the most recent submissions and finalise its report and recommendations to the Minister.[7] Based on the CEO's report, the Minister will decide whether to publish a dumping duty notice or countervailing duty notice for the imposition of measures.

Rights of appeal

3.20      In the case of dispute, the aggrieved party has rights to review through the Trade Measures Review Officer (TMRO) in the Attorney-General's Department, who is a statutory appointment made by the Minister to provide an independent administrative appeal mechanism.

3.21      Applicants also have judicial rights of review through Federal Court action. However, in both cases, rights of appeal are limited as the TMRO has no investigative function, and judicial challenges to Customs' decisions can only be made on points of law.

3.22      Interested parties have up to 30 days to appeal to the TMRO. The TMRO must reject an appeal application if it fails to provide sufficient particulars concerning the finding(s) of the CEO and/or Minister. Parties may respond to the TMRO's notice of appeal within 30 days of its publication. The TMRO's review is limited to a maximum period of 60 days.

3.23      The TMRO may only consider information that was before the CEO and/or the Minister at the time the finding(s) were made. While the TMRO may substitute a decision of the CEO to reject an application, it does not have the power to overturn a decision of the Minister. In other words, the TMRO can only recommend that the Minister require Customs to re-investigate the matter.

3.24      In addition to the administrative and judicial rights of review available under Australia's legislative framework, where a member country of the WTO considers that actions taken by another member country are not in accordance with the terms of the AD Agreement and/or the SCM Agreement, specific dispute settlement procedures are available under the WTO framework.

Review of anti-dumping and countervailing measures

3.25      After an anti-dumping or countervailing duty has been imposed, an affected party can seek a review of the measures as they affect an exporter(s) on the following grounds:

(a) variable factors—one or more of the variable factors have changed (i.e. normal value, export price and/or the non-injurious price underlying an anti-dumping duty notice); or

(b) revocation—if those measures had not been taken, the Minister would not be entitled to take any such measures.

3.26      However, unless specifically requested by the Minister, reviews will not normally be considered until an interim duty rate has been in place for a minimum period of twelve months (in accordance with WTO agreements). Subsequent requests for review (again, with an allowance for Ministerial request) will be considered at twelve monthly intervals from notification of the decision on any previous review.

3.27      There are special circumstances in which an accelerated review may be sought, outlined in Division 6 of Part XVB of the Act. This process allows a review to be sought when a review of the notice would not be available, but is only open to new exporters.[8]

Continuation review

3.28      Anti-dumping and countervailing measures can be imposed for five years, unless revoked earlier. No later than nine months prior to the expiry of an anti-dumping or countervailing measure, the CEO must issue a public notice indicating their imminent expiry, and inviting interested parties to lodge applications for the continuation of the measures. If no applications are received by the due-by date specified in the notice, then the measure expires on the specified expiry date.

3.29      If, on the other hand, an application is received, then the CEO must decide whether to reject the application or not in accordance with section 269ZHD of the Act. If the CEO rejects the application, a notice is given to the applicant detailing reasons for the rejection.

3.30      If the CEO does not reject the application, then he or she must publish a notice proposing to inquire into whether the continuation of the measures is justified. The remaining stages of the process are similar both in timeframe and in process to that of an anti-dumping/countervailing application.

International comparisons

3.31      Australia's anti-dumping and countervailing system is regularly compared to other international jurisdictions, with changes often proposed to align it with the US and Canadian systems. At this point, it is important to note that although these jurisdictions are all signatories to the WTO AD and SCM Agreements, some of the differences between their systems and Australia's have arisen due to:

(a) the Australian reforms which were undertaken and were a result of extensive consultation with affected parties;

(b) the considerable flexibility afforded by the AD and SCM Agreements  in interpreting certain aspects of the agreement and its implementation;

(c) the relative size of their economies and the market structures;[9] and

(d) the differences in their legal and economic frameworks.[10]

3.32      Customs contends that comparisons between the outcome of Australian investigations and foreign jurisdictions are 'problematic' due to the differing circumstances of each case and due to differences in:

• the periods examined in determining whether goods have been dumped;
• the goods being investigated;
• the parties involved in the investigation;
• the domestic markets; and
• the legal frameworks, for example Australia recognises China as a market economy for anti-dumping purposes, but the EU, US and Canada do not.[11]

3.33      In addition, the systems in place in other countries are often criticised themselves,[12] with a number of practices under question subject to negotiation and discussion as part of the Doha Round:

Senator XENOPHON: ...You have made a number of assertions in your submission that this would be in breach of our international obligations. How do the US, Canada and Europe deal with these issues? In a sense, they seem to be more vigilant in terms of the potential impact on local manufacturers than we seem to be, particularly the US with steel imports.

Mr Hudson: Hopefully I can address this in part. There are increasingly situations where measures in respect of certain goods are being applied internationally. For example, I think we have talked of extruded aluminium. There were Canadian measures which were put into place, there are Australian measures which are now in place and the US has initiated an investigation. I do not quite know how far that has got. The US has got a different system, which is still WTO compliant but—

Mr Percival: Um—...

Senator XENOPHON: Mr Percival, you are not sure? It must be WTO compliant.

Mr Hudson: Indeed, it must be—

Mr Percival: It is not.

Senator XENOPHON: It is not?

Mr Hudson: It is possibly not....

Mr Percival: On your question about the US and other countries, I could be wrong but I think it might have been DFAT representatives who said that disputes in the WTO are predominantly about antidumping rules. The US gets regularly hauled into there. Their practice of zeroing has been found three times to be non-compliant.[13]

3.34      While the systems are not strictly comparable, and some international practices are questionable from a WTO compliance perspective, it appears that the interpretation of the agreements has significant bearing on both the successful advancement of an application to an investigation stage, and the final outcome of investigations.

3.35      Furthermore, the broad-ranging nature of the bill's amendments necessitate a comparison between approaches to administering anti-dumping and countervailing claims, particularly as some of these differences (summarised in Table 3.1) have significant flow-on effects on the outcomes of investigations.

Table 3.1: International comparison of anti-dumping and countervailing systems

Issue	Australia	EU	USA	Canada
Investigation Timeframe	155 days	365 days	280 days	210 days
Bifurcated administration	No Customs	No European Commission	Yes Dumping – US Department of Commerce Injury and Causal Link –US International Trade Commission	Yes Dumping – Canada Border Services Agency Injury and Causal Link – Canadian International Trade Tribunal
Decision maker on the imposition of the measures	Minister for Home Affairs	Council of Ministers	US International Trade Commission	Canadian International Trade Tribunal
Review of decision	TMRO Judicial Review	Judicial Review	Judicial Review	Judicial Review
Consultation of interested and affected parties	Public notice Questionnaires sent Industry verification visits	Public notice Questionnaires sent Industry verification visits	Public notice Questionnaires sent Industry verification visits Public hearing	Public notice Questionnaires sent Industry verification visits Public hearing
National Interest Test	No	Yes	No	Yes
Anti-dumping and countervailing duties	Minimum export price and fixed rates of duty for dumping. Fixed rates of duty for countervailing. A higher rate of duties for non-cooperating exporters.	Ad-valorem duty, specific duty (fixed value for certain amount of goods), or a variable duty (minimum import price) for dumping. Fixed rates of duty for countervailing	Ad-valorem duty for dumping. Use of zero pricing. Fixed rates of duty for countervailing.	A floor price equal to each cooperating exporter's normal value - duty is paid if export price is less than floor price. An ad-valorem duty is set for all non-cooperating exporters.
Lesser Duty	Yes	Yes	No	Yes
Treatment of China	Market Economy	Economy in Transition	Non-Market Economy	Economy in Transition

Source: adapted from Customs, Submission 33 to Productivity Commission's inquiry into Australia's anti-dumping and countervailing system, 2009, p. 7.

Investigative timeframes

3.36      While maximum duration of an investigation for WTO members is specified under WTO rules,[14] one of the striking differences between the Australian system and that in other comparable jurisdictions is the substantially lower investigation timeframe Australia has adopted. Customs explained in its submission to the Productivity Commission's inquiry that:

The objectives of timely and efficient resolution of investigations and providing certainty in the market place were reinforced by provisions which conferred power upon decision-makers throughout the investigation or review process to disregard submissions received if there was insufficient time remaining for proper consideration. The limitations on what could be considered on review were also intended to 'ensure the outcome of dumping inquiries is decided as quickly as possible'.[15]

Administration and the power of the administrator

3.37      Unlike Australia and the EU, which both have one agency to investigate dumping and countervailing claims, the bifurcated system in the US and Canada separates the determination of dumping, injury and causal link between two investigative agencies (see Table 3.1).

Role of authorities

3.38      The overall focus and number of additional functions performed by the administrators also tends to differ. Customs, for example, has a number of functions, with its primary role being border protection. In contrast, the primary responsibility of the United States International Trade Commission (USITC) is to administer trade remedy laws, provide independent analysis and support on matters of tariffs, international trade, and US competitiveness. This creates different skill sets, expertise and capacities each administration can draw on when undertaking anti-dumping and countervailing investigations.

Investigation team

3.39      The composition of investigative teams is another point of disparity. Investigative teams under the US system are assigned six members with different areas of expertise: an investigator, economist, accountant/auditor, industry analyst, attorney and supervisory investigator.

3.40      Customs, on the other hand, indicated that:

The typical number of resources required to manage a simple anti-dumping investigation is three investigations staff. The typical number of resources required to manage a complex anti-dumping and countervailing case...is five investigations staff. Additional resources including support staff from within the branch are brought into the team at certain times during an investigation to undertake domestic and international verification visits.[16]

3.41      While Customs acknowledged that 'there appears to be a greater degree of specialisation in material injury and dumping analysis under the European system relative to Australia',[17] it did note that independent experts were engaged to assist with analysis of issues during complex investigations.

Administrative powers

3.42      Certain jurisdictions also have greater powers. The Canadian and US agencies are semi-judicial in nature and have power to subpoena. Canadian authorities have the power to require a party to provide evidence, however the Canadian Border Services Agency (CBSA) have 'rarely, if ever' exercised this power. The USITC approach is similar, in that it also has statutory subpoena powers, however, this power is 'very rarely' used. While the US Department of Commerce does not have similar powers, 'information is provided on a voluntary basis and failure to cooperate results in the use of some sort of facts available determined by the particular circumstances of the case'.[18]

3.43      The Act does contain the power, under section 214B, to compel Australian based interested parties to provide information. However, Customs has indicated that it 'very rarely used these provisions for its anti-dumping and countervailing investigations. Information is generally provided by interested parties on a voluntary basis'.[19]

Consideration of injury and the public/national interest test

3.44      In addition to the WTO requirements, in the EU and Canada, a public interest test is used to consider whether the imposition of anti-dumping or countervailing duties is in the national or public interest. While this is part of every EU investigation, the public interest inquiry in Canada is not strictly applied in each case.

3.45      During their investigations, Canada and the US also consider whether anti-dumping and/or countervailing measures have been imposed by other jurisdictions. Customs noted that in the event all exporters contacted during an anti-dumping/countervailing investigation fail to cooperate, then it will consider information gathered from other countries subject of the same investigation.[20] 

Access to and treatment of information

Collection and availability of statistical data

3.46      While all jurisdictions undertake verification visits to the complainant parties, the overall level of public and industry consultation in gathering information differs.

3.47      Customs relies on a number of different forms of communication to notify interested parties of the initiation of an investigation. Firstly, it invites interested parties to lodge a submission through its public notices published in major newspapers and Australian Customs Dumping Notices. Secondly, it relies on email and post to invite submissions. To do this, it utilises its own import database to identify the most interested parties, including exporters, importers and traders. Thirdly, its alternative, more indirect, form of communication is through its electronic public record, which allows interested parties to monitor anti-dumping and/or countervailing applications once initiated, and to respond to submissions, reports and other published information. Customs noted that in relation to the third form of communication:

It is very likely interested parties would be aware of an investigation. Experience has shown that organisations with an interest that are not included on the initial interested parties list, become aware of the investigation as it proceeds, generally with sufficient time to make submissions.[21]

3.48      Customs primarily relies on the complainant and domestic industry to provide evidence to support their claims of injury attributed to dumping/subsidisation. To verify the information it receives from interested parties, it conducts a number of visits to the applicants and companies, both domestic and foreign, that have chosen to participate in the investigation.[22]

3.49      Unlike the EU and Australia, the Canadian and US systems also hold public hearings as part of their injury inquiry. Both allow parties in support of and in opposition to the application an opportunity to summarise and present their legal and factual argument and testimonials. Cross examination of witnesses is only allowed under the Canadian system, and public hearings in that jurisdiction often take place over a three to five day period.

3.50      The breadth of information available to investigative authorities and applicants also differs, due to the varying level of data collection and availability of the central body for information collection.

3.51      For example, some submissions pointed to the 'common' suppression of country of origin information in Customs/ABS import statistics in tariff codes affected industries that often have to resort to applications for anti-dumping/countervailing measures.[23] This is often contrasted with the US system, which requires the full disclosure of individual import data on a transaction by transaction basis with full detail of 'what is being imported by who, from where, and at what price'.[24]

Treatment of confidential information

3.52      Canada and Australia both require parties submitting information claimed to be confidential to provide for the public record a non-confidential version of the information, with sufficient detail summarising the confidential parts of the application.

3.53      Under both systems, the designation as confidential and inclusion of such information as part of the investigation is ultimately the decision of the investigative authority.  In Australia, if Customs disagrees with the party's claim of confidentiality, or the party 'refuses either to include the information in the public record or to prepare a summary, the CEO may disregard the information, unless the information is demonstrated to be correct. There are no specific tests in the legislation as to what constitutes "correct"'.[25]

3.54      Where the systems also differ is in providing access to confidential information to other users of the system, which reflects, in the case of the US and Canada, the public hearing process. Canada's system specifies the parties who can access the confidential information to be the counsel (any person acting on behalf of a party) and experts (operating under the direction or control of the counsel). However, this can only be allowed once the tribunal receives a Notice of Representation and a Declaration and Undertaking signed by the council. Breaches of confidentiality could result in fines up to $1 million and 'potential prohibition from appearing before the Tribunal in any future proceedings for...[both] counsel or expert'.^[26]

3.55      While all submissions to the inquiry must have a public version, the US has a developed a system for treating confidential information. Through the questionnaires, the USITC obtains extensive company-specific Business Propriety Information (BPI) from US producers, importers and purchasers and from foreign producers. Questionnaire data is considered confidential if the aggregate data only includes one or two companies, or if they include three or more companies and one company accounts for at least 75 per cent of the total or two account for least 90 per cent of the total. In these cases, discussion in public documents will only discuss non-numerical trends and characterisations of the data.

3.56      An Administrative Protective Order (APO) exists to protect the confidentiality of such information. Only specified parties are allowed to apply for access to BPI under APO, and are limited to representatives of an 'interested party'.[27] However, these individuals are 'strictly forbidden' from divulging BPI obtained under APO to clients or other individuals not on the APO service list, with severe sanctions implemented against individuals who breach this requirement, including: disbarment from practice in any capacity before the USITC; referral to the United States Attorney, referral to the ethics panel of the appropriate professional association; and other administrative sanctions as the USITC determines to be appropriate.[28]

Calculations of dumping margins and duties

3.57      While the AD Agreement does outline certain steps that must be undertaken to establish dumping margins and duties, it also affords a great deal of flexibility in interpretation. This flexibility in interpretation has resulted in significantly divergent international practices.

3.58      To illustrate, according to the Australian Workers' Union (AWU), the same product from a Chinese aluminium manufacturer has a 40 per cent dumping margin imposed on its product in Canada, 60 per cent in the United States, but only 6 per cent in Australia.[29]

3.59      While other factors may reflect these differences, the methodology used to calculate the duty may potentially lead to such situations. Indeed, one practice often cited as significantly inflating dumping margins calculated by the US is the practice of "zeroing". The process involves removing export prices above the dumping margin price, and averaging the remaining, dumped prices. Through this averaging process, the dumping margin calculated will tend to be significantly higher due to the omission of the lower non-dumped prices.[30]

3.60      The treatment of China (i.e. whether it is given a market economy status (MES), or is classified as an economy in transition (EIT), or a non-market economy (NME)), could also result in differences between the level of measures imposed, and the success of anti-dumping/countervailing applications between the countries.

3.61      Given the prevalence of China in Australian anti-dumping investigations and measures, this is a point worthy of further consideration. Anti-dumping rules provide various methods for calculating the normal value[31] of goods depends on the classification of its market. Historically, the determination of normal values for countries classified as NME increases the likelihood of a positive dumping finding. This is because it involves using the price of a surrogate or third country to determine the domestic price in the exporting country, which is invariably a higher cost producer. Australia's treatment of China as a market economy results in a higher burden of proof in the prima facie stage of an investigation when an industry first alleges dumping.[32] The burden of proof of dumping on the applicants 'would be much higher than a calculation based on third country production costs'.[33]

3.62      In addition, the use of the 'lesser duty' rule also results in much lower duties imposed under the Australian, EU, and Canadian systems than under the US system. The US imposes anti-dumping measures based on the dumping margin, even if a lesser duty would be sufficient to remove the injury. Under the former systems, however, the lesser duty rule is applied, where, even where the dumping margins are 'high, but where it is found that a 'lesser duty' would be sufficient to ward off the injury suffered and/or likely to be suffered by the [European Union] Community (or domestic) industry, only the lesser duty will be imposed and vice versa'.[34] While both practices are legal and in conformity with the WTO agreements, under the agreements, the lesser duty rule is optional.

Summary

3.63      The above section suggests that the flexibility afforded under the WTO's AD and SCM Agreements is only one of many factors that differentiate the Australian anti-dumping and countervailing system from other comparable jurisdictions. Other factors, such as domestic legislation and reforms, the resourcing and priorities of the administrative system, as well as the economic framework of a country (including its size, composition and exposure to trade), also play a role.

3.64      Ultimately, what is driving the perception that Australia is not taking advantage of this flexibility is its treatment of China as a market economy. Given the prevalence of China in Australian anti-dumping initiations and measures, the calculations underpinning investigations of the dumping and/or subsidisation of Chinese goods play a critical role in the overall outcomes of Australian investigations. 

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