Trade Liberalisation & Anti-Dumping

I spoke in parliament yesterday about trade liberalisation and anti-dumping.
Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011
28 February 2012

It is my pleasure to rise to address the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011, a piece of trade legislation that sits proudly in a Labor legacy of trade reform. The opening up of Australian markets which has been so much to the benefit of Australia's workers and consumers is fundamentally a Labor story. It was Gough Whitlam in 1973 who first cut tariffs, and then Bob Hawke and Paul Keating who continued through the tariff cuts. They did so with a view that open markets would be good for Australia, but that that process of dropping the tariff walls would entail transition costs. So they put in place a car industry plan and TCF plan, recognising that industry would need time to adjust. Those changes have been enormously beneficial for Australian families. They have put on average $3,900 per annum into the pockets of Australian households according to a report by the Centre for International Economics. Open markets have also meant that Australian industry has become more competitive. That has meant more export jobs. It has meant more opportunities for Australian workers.

But it is also important that the government ensure that Australian companies are protected from unfair trade practices by other countries. This legislation is making the most important improvements to Australia's antidumping regime for more than a decade. The improvements will include an increase in Customs staff working on antidumping by 45 per cent. It will include increased funding to hire experts and to assist Australian manufacturers in lodging applications for remedies against injurious dumping or subsidisation. The government has established an International Trade Remedies Forum that will provide advice to the government on the effectiveness of the improvements to the antidumping system and will report on options for further improvements. That forum has met a number of times, considered various discussion papers and worked in cooperation to develop an anti-circumvention framework.

Underlying all of this is our compliance with Australia's World Trade Organisation obligations. It is absolutely critical that we comply with WTO laws, because those WTO deals underpin our future prosperity. I am proud to say that I worked for 18 months for the late Senator Peter Cook, who for Australia negotiated the last WTO round of tariff cuts, the Uruguay round. I am equally proud to say that it was my predecessor as the member for Fraser, Bob McMullan, who stepped into Peter Cook's shoes at the very end and whose signature appears for Australia on the Uruguay round agreement. Trade talks can sometimes seem a little arcane, but underpinning them is the notion that we are taking rocks out of harbours. It is good for us to take the rocks out of our own harbours; it is better yet if we can get the rocks out of the harbours of other countries.

But the opposition seem not to recognise this. They have announced that they intend to reverse the onus of proof in antidumping cases, in clear breach of Australia's international obligations. The sharper knives in their drawer know that this cannot be done without risking other countries taking us to the WTO for retaliatory action. They know that they would involve punitive tariffs on Australia's agricultural or manufacturing exports. When you are allowed to impose punitive tariffs, countries think pretty hard about how to hit their neighbours. There is a famous World Trade Organisation case in which the European Union was allowed to impose retaliatory tariffs on the United States for a breach of WTO rules. It was an election year, so the Europeans decided to impose their retaliatory tariffs on exports from key swing states like Florida orange juice concentrate. It did not take long before the Americans capitulated and complied with WTO obligations.

Much the same would happen if Australia were targeted with retaliatory tariffs. In a public submission to the Senate committee looking at this issue in May last year, the Department of Foreign Affairs and Trade was unequivocal in its advice. It said:

'Australia cannot impose an onus on the importer to prove the goods have not been dumped ...'

The opposition claims that, from two months into an investigation, Preliminary Affirmative Determinations can create a shift in the balance of an investigation requiring the foreign producer, rather than the Australian company that believes it has been damaged by the dumping, to prove its conduct has not hurt Australian industry. That is not correct. PADs are already used in accordance with Australia's WTO obligations, but these obligations make it clear that it is still necessary to make a preliminary finding that there is dumping and consequent injury to a domestic industry.

The opposition have a desire to ride roughshod over our international obligations when it comes to antidumping. It is just one of a series of incidents in which the opposition have threatened to tear up the international trading rulebook—the rulebook which has done so much to bring prosperity to Australia; the rulebook which has ensured that Australia could export almost $300 billion worth of goods and services to the world last year.

Last August, the coalition supported an anti-trade private member's bill on compulsory palm oil labelling. That would have breached Australia's obligations under the World Trade Organisation. It would have slugged Australian businesses with compliance costs of $150 million. Just before that, the shadow agriculture minister drafted a bill which sought to overturn a World Trade Organisation ruling that New Zealand apples be allowed into Australia, subject to scientifically based quarantine conditions. Had that private member's bill gone ahead, as the opposition well knows, it would have put Australian trade in jeopardy. It is just another piece of the puzzle as to how the Leader of the Opposition has consistently taken the antimarket view. He has taken the antimarket view on climate change, the use of voluntary water buybacks to alleviate desalination of the Murray-Darling Basin, the use of countercyclical fiscal policy to save Australia from recession when the global financial crisis hit, and the use of good economics that tell you that when you go to an election you should have an independent parliamentary budget office look at your costings rather than a team of accountants that has been fined or a catering company. Each day it is more and more clear that the opposition have lost all economic credibility and are willing to put at risk Australia's trading relations for simple pointscoring.

I turn to some observations which have been made on the issue of antidumping by the Chairman of the Productivity Commission, Gary Banks, when he spoke at the annual dinner of the Australian Chamber of Commerce and Industry on 23 November last year. I have to say that Mr Banks is not particularly complimentary about antidumping, but it is important to look to his statements to see where he regards the real problem lies. He said:

'In its recent report on anti-dumping, the Commission nevertheless recognised that notions of unfairness had become so entrenched that retaining some form of anti-dumping system was inevitable, and on balance may serve to prevent something worse (as is sometimes said of FIRB). We therefore opted simply to moderate its potential to impose costs on Australian industry and consumers ...'

Mr Banks goes on to talk about some of those costs. He then goes on to say:

'However, no such ambiguity is to be found in the Opposition’s recently announced policy, which pushes the boundaries of allowable restrictions. Getting the right balance in anti-dumping policy between addressing perceptions of fairness and avoiding actions that would be costly domestically—and harmful to our bilateral relationships (including with China)—is a very difficult challenge for policy makers and always has been. Unfortunately the Opposition’s policy falls well short of the balance required, and has now made harder the Government’s own efforts to hold the line.'

Mr Banks has highlighted the real problem with the coalition's economic populism in the area of trade—that is, it not only threatens our economic prosperity but threatens our diplomatic relations. In this century, the Asian century, we are—

Mr Craig Kelly:  Mr Deputy Speaker, I rise on a point of order going to relevance. This is about antidumping. I do not know what the speaker is talking about, referring to the coalition's policy.

The DEPUTY SPEAKER:  There is no point of order. I have been listening to the member for Fraser. He has been talking about customs tariff. I have noted the first reading speech and the member for Fraser is in order.

Dr LEIGH:  I refer again to the speech on antidumping by the Chairman of the Productivity Commission. That speech highlighted the very real risks of the opposition's strategy—the opposition's growing economic populism. Getting the balance right on antidumping is critical in this century, the Asian century. It is absolutely vital that we preserve strong economic and diplomatic relationships with the countries in our region. We are enormously fortunate that growth moves in the world from Europe and North America to Asia, to be concentrated in the fastest growing region of the world. The Asian century presents challenges to Australia, to be sure, but the opportunities are far greater—the opportunities to engage in strong trading relationships with countries of our region. We have great potential in services exports, education, finance, law and architecture—all of these sectors will benefit greatly from our strong trading relationships with the countries of our region. Getting the balance right on issues such as antidumping is absolutely critical. Australia's trading relationships are critical to our economic prosperity.

In 2011, our exports to North Asia rose 18 per cent, with shipments to China rising 24 per cent, to Japan rising 16 per cent and to ASEAN countries rising 23 per cent. Australia's trade is projected to more than double by 2025. This strong trade performance is only made possible in a rules based trading system.

Australia is a founding member of the global trading system, and we play by those rules. Just as we may not like it when we lose the Ashes, but we still play by the rules of cricket, so too do we not always like every decision which is made by the World Trade Organisation. But, if we take our bat and ball and go home, we hurt the jobs and the prosperity of many Australians.

There are now over 150 members of the World Trade Organisation, and many more are joining up. It is a rare country in the world that wants to thumb its nose at the World Trade Organisation, but that what those opposite want to do. They have chosen the low road, the economic populist road, at every possible turn. Australia's alternative Deputy Prime Minister, the Leader of the Nationals, condemned the Trans Pacific Partnership as a 'thought bubble'. Well, Deputy Speaker Scott, I can tell you it is a thought bubble that is being advocated by President Obama and something that should seriously be considered for the welfare of Australia. The day after the Deputy Leader of the Opposition said the government should accelerate negotiations on a trade deal with China, the Leader of the Opposition repudiated her and said it should be put on the backburner. It really reflects the fact that those opposite are not that interested in economics or the fundamental reforms which will raise the prosperity of our nation.

Estimates by the Centre for International Economics found in 2009 that one worker in seven in Australia was involved in the production of exports and one in 10 in import related activity. That makes one in five workers involved in trade related activity—exports, imports or both. Just imagine a set of policies that would lose one in five workers their job, that would shut off Australia's trade with the world and that would jeopardise our international trading relationships. That is what we face with the economic populism from those opposite. They are willing to say anything in order to win a vote but not willing to have the long-term conversation with Australians about the great benefits that will come to this nation in the Asian century. I commend the bill to the House.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.