The Government is considering inserting a new public
interest test into New Zealand's anti-dumping and
countervailing duties regime.
Submissions are due by 30 June 2014.
The proposal is among a number of reform options outlined in a
discussion paper released by Commerce Minister Craig Foss last
week. It follows the suspension last month of anti-dumping duties
on imported construction products.
The current regime
The present law is intended to protect local manufacturing
industries. It effectively requires the Minister of Commerce to
impose anti-dumping duties on imported goods where:
an investigation finds the imported goods to be dumped or
the dumping of those goods is causing or threatening to cause
material injury to a domestic industry.
But the Government is increasingly concerned that these
protections may be doing more economic harm than good by:
reducing competition in local industries
causing higher prices to domestic consumers, and
adversely impacting New Zealand's terms of trade.
The Ministry of Business, Innovation and Employment
(MBIE) is suggesting that officials should have
flexibility not to impose anti-dumping duties in some cases under a
"bounded public interest test". This approach is in line
with EU and Canadian law. Australia, however, recently decided not
to follow this route. It instead retains a ministerial discretion
(which is hardly ever used) not to impose duties on public interest
The discussion paper offers two alternative approaches:
the provision of (subjective) public interest criteria, or
the provision of (objective) numerical thresholds.
In both cases the tests would be an additional final step in the
existing decision making process.
Public interest criteria
This option would give the decision maker (MBIE or the Minister)
a broad discretion to impose duties after taking account of factors
the competitive effects on local markets (including any
lessening of competition)
the impact on employment in the domestic industry and
associated upstream industries
any potential harm on downstream industries, including their
ability to access necessary inputs, and
whether duties would restrict consumer choice or availability
of goods at competitive prices.
In contrast to the public interest test, this option would
include fixed thresholds and so limit the amount of discretion the
Minister can exercise.
Suggested criteria include:
the market share of the domestic industry (as an indicator of
the number of market participants that would benefit), and
the domestic cost of production vs. the price of the imported
goods when duties are imposed (as an indicator of the effectiveness
of the duties in reducing the harm suffered by the domestic
Neither list is fixed
MBIE has requested submissions on both criteria lists and
whether any other factors should be added. MBIE, for example,
suggests that the long term viability of the domestic industry
absent the duties should be included in the public interest
MBIE also invites feedback on the weight to be given to domestic
producers' interests relative to other participants in the New
Zealand economy, such as consumers. This wider question overarches
the entire proposal.
Chapman Tripp comments
While anti-dumping duties may be imperfect, any reform of the
anti-dumping regime needs to be careful to ensure a fair
competitive platform for New Zealand manufacturers. Relaxing the
anti-dumping test will make it harder for New Zealand manufacturers
to withstand price undercutting from low-cost importers.
Even if we choose reform, the two MBIE proposals are quite
different, and their policy goals and potential consequences will
need to be carefully thought through. For example, the public
interest test is far more fluid than the existing regime. It
potentially gives elected Ministers a much greater role in deciding
which industries to protect. The thresholds, while appearing more
"certain", are likely to be hard to draft and may deprive
the Government of future flexibility.
We encourage local industries and importers to participate in
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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