Most Read Contributor in New Zealand, September 2016
Anti-dumping duties may be given a specified termination
period under proposals now being consulted on by the Ministry of
Business, Innovation and Employment (MBIE).
The change, if implemented, is likely to be fairly
complex to administer and may reduce the overall effectiveness of
New Zealand's anti-dumping regime.
Termination periods would be in addition to the new
public interest test, recently adopted in principle by
Submissions are due by 26 June 2015.
Under existing law, anti-dumping or countervailing duties run
for five years but can be renewed, although a review is needed each
time. There is no renewal limit, meaning that they can remain for
as long as the threat of injury persists. Plasterboard duties have
been in place since 1989 to guard local manufacturers against
dumped Thai product. Duties on dumped tinned peaches from South
Africa have existed since 1996.
The Cabinet has now approved in principle the introduction of a
broad new "public interest" test which will require the
Minister of Commerce to weigh the effect of duties against the
public interest – including the government's economic
priorities and consumer welfare. (For more detail, refer to Chapman
commentary last year.)
But the government's view is that, even with this new test,
there is a risk that duties can become "embedded" and
prevent New Zealand producers from adapting to future import
So what's proposed?
mooted two possible formats for a termination period – a
set time cap with no possibility of extension, or a maximum time
period after which renewal can be sought.
Feedback is wanted on:
whether automatic termination periods should be
country or product specific (or both)
the maximum imposition period (e.g. five, eight or ten
whether there should be an ability to reapply or renew, and if
whether there should be a mandatory stand-down period.
MBIE also wants input on how existing anti-dumping duties should
be transitioned to the new rules if a termination period is
Chapman Tripp comment
There is no reason in principle why anti-dumping duties should
not continue for as long as injurious dumping or subsidisation is
occurring, or is likely to occur. Nor is change needed to bring New
Zealand into compliance with WTO rules.
Australia recently considered and rejected such a termination
period and MBIE was lukewarm about the idea in its November 2013
construction market options paper.1
Officials accept that the public interest test will add
complexity, is likely to reduce the overall effectiveness of New
Zealand's anti-dumping regime, and will inject uncertainty and
more subjectivity into the process. An automatic limitation period
will add still more complication and be resource-intensive to
The consultation materials so far available from MBIE do
identify those local industries which MBIE, or Cabinet, thinks
may be improperly guarded by "embedded" anti-dumping
seek to distinguish anti-competitive shelter by embedded duties
from protection against WTO-prohibited dumping or subsidies.
In the absence of a clear problem, New Zealand may be best to
stick to its current WTO-compliant rules. The argument for an
automatic termination period, as well as the new public interest
test, remains contestable. A fixed time limit will ultimately make
it harder for New Zealand manufacturers to withstand price
undercutting by dumped or subsidised goods.
The two MBIE options for termination periods are quite
different, and their policy goals and potential consequences will
need to be carefully thought through. For example, depriving local
producers of any right to seek renewal of anti-dumping duties may
expose them to serious harm if dumping or subsidies continue.
Developing Asia is facing considerable headwinds. Delayed recovery in major industrial economies and moderating prospects for the large economies of the China and India weigh on region's project growth forecasts.
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