Additional Comments by Senator Nick Xenophon

Additional Comments by Senator Nick Xenophon

1.1        Australia’s anti-dumping and countervailing system has undergone significant change over the last five years since the measures originally introduced by the Rudd Government in 2011 that arose, at least in part, from the Productivity Commission’s 2009 inquiry and my Private Senator’s Bill, the Customs Amendment (Anti-Dumping) Bill 2011. Subsequent governments have continued to respond to concerns about the system, and it is generally acknowledged that the legislative framework is now suitably robust.

1.2        I do not resile from my position of supporting a reverse onus of proof in anti-dumping cases. I note that this was essentially Coalition policy in 2011:

The Coalition's Plan to Strengthen Australia's Anti-Dumping Regime will:

  1. Transfer anti-dumping responsibilities from Customs to the Department of Industry;
  2. Reverse the onus of proof in anti-dumping investigations;
  3. Commit more funding for anti-dumping investigations;
  4. Hire an additional 20 specialist anti-dumping investigators;
  5. Introduce more stringent and rigorous enforcement of deadlines for submissions;
  6. Crack down on those overseas producers who don't cooperate with anti-dumping investigations, and
  7. Strengthen enforcement of the provisions of the WTO Agreement on subsidies and countervailing measures.[1]

1.3        While the Government now asserts that a reverse onus of proof would be against WTO rules, there ought to be a willingness on the part of the Government to explore the toughest possible measures to ensure dumping does not occur that does not contravene WTO rules. It seems that other countries, particularly the US and European Union, have taken a much more active approach against dumping than successive Australian governments have.

1.4        It is vital to note, however, that the application of this legislative framework is equally important. While the Abbott Government’s transition of the Anti-Dumping Commission from Customs to Industry is to be congratulated, the system as a whole is still overly complex, under-resourced, and difficult for businesses to access. By their very nature, anti-dumping and countervailing investigations create a labyrinthine mix of domestic and international law that is almost impossible for anyone who is not an expert to navigate. Indeed, Anti-Dumping Commissioner Dale Seymour stated in the hearing for this inquiry that there are only about 1,000 technical experts around the globe and that most of those live outside Australia.[2]

1.5        Given that many of the Australian businesses who most need protection from dumped products are small to medium manufacturers, it is vitally important that the system be easy to access and navigate, and that the application and review processes not be overly onerous. Indeed, one small business was quoted $1 million to fight an anti-dumping case by a specialist firm of lawyers: clearly a prohibitive amount.

1.6        I note that the Government has expanded on the Trade Remedies Adviser role that previously existed under the Australian Industries Group to ensure that SMEs are supported and advised during the application process. While I strongly support this measure in theory, I believe there is significant scope to improve it in practice, particularly in terms of resourcing.

1.7        Further, I believe there is a far greater role for the Commission itself in taking a more pre-emptive position in terms of dumping activity. I strongly encourage the Government to provide greater resources to the Commission so that it can appropriately monitor and respond to cases in other jurisdictions and be more active on an international level. The whole onus of bringing and proving cases should not be on Australian businesses; instead, the Commission must take on part of this responsibility as an advocate for Australian industry in these matters and seek to address issues before they reach a critical stage.

1.8        In terms of the measures in the bills themselves, it is my strong view that the International Trade Remedies Forum should be retained. This is a vitally important mechanism for facilitating communication between industry, government and other interested parties. It is not enough, in my view, for the Government to ‘consider’ replacing the ITRF with an administratively established measure, particularly one with as a few as five members.[3] Anti-dumping and countervailing measures are an incredibly important part of what should be a broad suite of measures to support industry, and a consultative forum mandated through legislation is the only appropriate way to ensure thorough consultation with industry and other interested parties takes place.

1.9        I also note concerns raised with the committee regarding the operation of the ITRF since its last meeting in 2013. This is unacceptable, and I refer the Government to its legislative responsibilities in this regard.

1.10      I also share the concerns of submitters regarding the proposed measure to allow the Review Panel to charge fees for review. While I acknowledge the need to address frivolous reviews or the use of the process as a stalling tactic, it is vital to ensure that the establishment of fees does not create an undue burden or even a disincentive for valid applicants. While I will reserve my final position until the Government releases the regulations, I do support the position of the Manufacturers’ Trade Alliance that there are other measures (including greater scrutiny of applications) that could be equally efficient in addressing these concerns.

1.11      In addition, I support the concerns raised by the CFMEU and the MTA regarding the proposed change to the definition of ‘subsidies’. In my view, proving whether or not a benefit has occurred to determine whether a payment can be considered a subsidy is adding an additional layer of complexity to the system, and will make it more difficult for duties to be applied. As such, I oppose this proposed change.

1.12      Further, I am concerned that the proposed changes to the notification of subsidies relating to the measures regarding the lesser duty rule have the effect of reducing compliance requirements on relevant countries. Under these proposed changes, for example, a country would only have had to report subsidies once during the two most recent biennial periods in which subsidy notifications were due. In effect, this means that countries will only have to report once in a four year period for the lesser duty rule to be considered, which will provide little or no protection to Australian industry.

1.13      I also acknowledge the issues that have been raised in relation to the proposed changes to the lesser duty rule. In my view it would be preferable for the rule to be removed completely. Given the WTO requirements, however, the Government should approach clarifying the application of the rule in such a way as to provide the greatest support to Australian industry. It is my view that the proposed changes make the application of the rule slightly better than is currently the case, but are still behind the best practice of other countries.

1.14      While there is general support for most of the measures in these bills, there are still significant concerns amongst industry and other interested parties regarding the operation of Australia’s anti-dumping and countervailing system as a whole. This is particularly relevant in terms of the operation of the Commission and how it applies the legislative framework to protect Australian industry.

Recommendation 1

1.15             That the bills be amended to remove Parts 7, 11 and 15.

Recommendation 2

1.16             That, subject to Recommendation 1, the bills be passed.

Recommendation 3

1.17             That a root and branch review regarding the overall effectiveness of the Anti-Dumping Commission and the legislative framework under which it operates commences within 12 months of the passage of these bills.

Senator Nick Xenophon
Independent Senator for South Australia

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