Australia’s anti-dumping reforms - An improvement or a lost opportunity?

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25 October 2011

The recently announced changes to Australia’s anti-dumping and subsidies regime have been heralded as “the most important improvements to Australia’s anti-dumping regime in more than a decade”. But will they make the system more effective or was this an opportunity missed?

Announced in June, the changes are largely in response to the Productivity Commission’s 2009 report ‘Australia’s anti-dumping and countervailing system’, but also in response to calls from Australian industry and unions to make the system more effective.

Undoubtedly, a number of the changes are improvements.  For instance, the new 30 day statutory time limit for Ministerial decision-making will improve, perhaps markedly, the system’s responsiveness and provide greater certainty for stakeholders. Previously, Ministerial decision-making could take months and in one notable case over a year.

Similarly, reforms made to streamline and enhance the independence of the review process are a progressive step forward and will boost confidence in the system’s integrity.

However, other changes fall far short of the ideal, including a discretionary public interest test and a failure to provide access to confidential information, with the latter being key to stakeholder confidence in the system.

Public Interest Test

One recommendation made by the Productivity Commission was to introduce a “bounded” public interest test whereby anti-dumping or countervailing measures could not be imposed if any one of five public interest criteria was met.  This was rejected by the Government.

Instead, the Government has reinforced that the Minister has unfettered discretion as to whether or not to impose anti-dumping and/or countervailing measures.  That unfettered discretion, the Government has confirmed, allows the Minister to take account of the public interest when deciding whether or not to impose measures.

Accordingly, Customs and Border Protection Service will now be required to include in its reports to the Minister “an assessment of the likely effect that any measures might have on the Australian market for the goods the subject of those measures” and on “claims on impacts on downstream industries”.

The latter point is extremely important but little understood.  The imposition of measures on products that are used as inputs to manufacture in downstream industries, while possibly assisting the Australian industry producing those products, nevertheless increases costs for downstream industries.  The effect of this can be for the manufacture of the end products to shift overseas.  This will not only adversely affect downstream industries but ultimately the Australian industry that sought the imposition of measures.

While the reforms enable the Minister to take account of public interest issues such as the impacts of measures on local markets and downstream industries, they do not require it.

This lack of certainty is undesirable and it remains to be seen how Ministerial decision-making will take into consideration and be influenced, if at all, by public interest issues.

Transparency

One further motivation for the reforms was to improve confidence in the system through increased transparency.

To this end, it has often been proposed that Australia adopt a system of enforceable undertakings pursuant to which interested parties’ advisers can have access to all confidential information in an investigation once they have executed such an undertaking.  This would usually be by an interested party’s legal advisers but could also extend to other professionals.

The problem with the current system is that only Customs and Border Protection has access to confidential information submitted by an interested party.  While interested parties are required to provide non-confidential summaries of confidential information, often these are inadequate and do not allow other interested parties to understand the case against them.  Consequently, they are unable to respond effectively. 

This lack of transparency makes it difficult for interested parties to understand the outcome in a particular investigation resulting in a lack of confidence in the system.

The reason given for not including enforceable undertakings is that it would increase the already significant costs of interested parties to an antidumping or countervailing investigation.  This does not seem rational.  Such undertakings would allow all interested parties to focus their resources on particular areas of concern instead of trying to cover the field on limited information.

It is also important to note that access to all confidential information in a dumping or subsidy investigation can be obtained if a decision of the CEO of Customs or of the Minister is appealed to the Federal Court.  Why compel interested parties to have recourse to litigation to obtain access to confidential information?  Why not make it available earlier during the investigation pursuant to enforceable confidentiality undertakings and, thereby, reduce the likelihood of costly litigation?

Clearly this was a missed opportunity to improve transparency and, consequently, confidence in the Australia’s anti-dumping and subsidies regime.

Click here for a copy of the Government’s “Streamlining Australia’s anti-dumping system”.




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