19 December 2012

Reform of Australian anti-dumping arrangements, after the Brumby Review

The implementation of the recommendations should tackle 'how' dumping is dealt with and complement the existing reforms.
Australia International Law
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On December 6 2012, the Federal Government announced a range of reforms aimed at reducing dumping on Australian shores.

According to Bill Digest No. 145 2011-12: 'Anti-dumping measures are imposed to prevent an importer from unfairly damaging Australian manufacturing, and commonly include the payment of extra import duties or undertakings.' The Australian reported in its article of 6 December 2012, 'Broad support for plan to tackle dumping', that these measures are designed to combat the 'growing number of companies using Australia as a clearing house for excess capacity'. Dumping is not an illegal practice, but where a domestic country's economy is negatively affected by the practice, affected governments may take steps to ensure that domestic companies are able to compete with overseas manufacturers. The Prime Minister, in her press release, commented that 'Australian manufacturing can only be strong if it gets a fair go and a level playing field.'

For the last two decades, the Australian anti-dumping system has been 'administered with limited resources and a low organisational profile', according to John Brumby's Review into Anti-dumping Arrangements, published in November 2012. Since the mid-1980s, various reforms aimed to combat dumping have been successful. From 1998 to 2008, Australia experienced a downward trend in dumping, which may be explained be a relatively strong domestic and international economy. However, according to the Brumby review, since 2008 there has been a 'significant and measurable increase' in dumping in Australia. This is attributable to the appreciating Australian dollar, challenge from developing economies and allowing market economy status - valuing goods at the same value as their domestic economy would.

Earlier reforms
In response to the increase in dumping, the Productivity Commission produced a report in 2009, which primarily recommended increasing the efficiency of the anti-dumping process. In 2011 the Government produced a report entitled Streamlining Australia's anti-dumping system: An effective anti-dumping and countervailing system for Australia. The report recommended that the anti-dumping system be more accessible, have improved timeliness, improved decision making, increased consistency with international protocols and seek stronger compliance. While these measures went some way in discouraging dumping, certain industries suggested that they received 'virtually no benefit from the measures' (as reported in the Brumby review). In reaction to this criticism, the Minister for Home Affairs, the Hon Justice Jason Clare MP commissioned a further review into dumping, which was completed by the Hon John Brumby MP.

The Brumby review
The review considered the existing improvements to anti-dumping in Australia and what challenges remained. The report, released on the 30th November 2012, concluded that dumping in Australia is highly likely to increase in the future. During the consultation process, it emerged that the problem in anti-dumping administration is not 'what' is being done, but 'how' it is being done. The key outstanding issues that remain after the recent reforms are the skills and experience of officers, the transparency of the process, investigative rigour, monitoring compliance, resources needed to address these issues and the general culture of the administration. These issues have been centralised into three key recommendations:

  • A new International Trade Remedies Authority, Agency or Commission will be createdunder legislation. As well as being established within Customs and Boarder Protection to utilise existing know-how, this body will be separately and adequately resourced and headed by a legislated CEO or Commissioner.
  • The new agency be located in a major capital city where there is a high concentration of Australian industry.
  • There be an immediate increase in resources to fund the new agency and combat the issues currently facing Australian manufacturers.

The recommendations were accepted by the Federal Government. It has announced it will create an Anti-Dumping Commission based in Melbourne and provide an increase in funding of $24 million over four years.

The report has received broad support from industry and commentators alike. The implementation of the suggested recommendations should tackle 'how' dumping is dealt with in Australia and complement the existing reforms, which outline the 'what.' Companies such as Bluescope Steel and Reflex (Australia's number one paper producer) have commented positively about the reforms. It will remain to be seen what form the legislation takes and whether the implementation of the recommendations will be more successful than following the 2011 report.

© DLA Piper

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