Anti-Dumping - Brumby inquiry into a stand-alone agency

13 July 2012

John Brumby, former Premier of Victoria, has been appointed by the Minister for Home Affairs, the Honourable Jason Clare MP, to undertake an inquiry into the feasibility of a stand-alone anti-dumping agency.

Anti-dumping and subsidy investigations currently are undertaken by the International Trade Remedies Branch in Australian Customs and Border Protection Service (Customs).

However, according to the Minister, anti-dumping is such a specialised area that “there may be real benefits in establishing a specialist agency”. To this end, the Minister has asked Mr Brumby to investigate the benefits and costs of retaining this function within Customs versus establishing an agency to conduct anti-dumping assessments and investigations.

Does establishment of the Brumby inquiry suggest Customs are not up to the “specialised task” of conducting dumping and subsidy investigations notwithstanding decades of experience? 

Indeed, Customs has been criticised for not having the necessary expertise to investigate across the wide range of industries and products involved in dumping and subsidy investigations. 

However this criticism was apparently addressed in the Government’s response to the Productivity Commission’s inquiry into Australia’s anti-dumping system.  In ’Streamlining Australia’s anti-dumping system’ (June 2011), the Government announced a 45% increase in staff in the International Trade Remedies Branch. It also committed to additional funding and greater use of experts, including forensic accountants and industry experts, to improve decision-making.

What would a stand-alone anti-dumping agency provide that the current arrangements do not?  Arguably, the actual conduct of dumping and subsidy investigations, duty assessments and reviews would not alter.  After all, the way investigations are carried out is tightly guided at an international level by GATT rules.

Would a stand-alone dumping agency lead to more anti-dumping and subsidy investigations and result in the imposition of measures more frequently?  Again, this is unlikely.  To be in a position to impose more measures would potentially require Australia to deviate from its current WTO-compliant procedures and change a number of requirements in investigations.

Doing this could risk Australia’s anti-dumping system becoming non-compliant with WTO rules. It could also be contrary to Australia’s pledge, along with a number of other WTO members, to not implement measures that are inconsistent with WTO rules.

Perhaps the idea of a stand-alone anti-dumping agency has been raised to overcome a problem that could flow from recent proposed amendments to the review process in dumping and subsidy investigations?

Currently, if the Minister decides to impose or not impose anti-dumping or countervailing measures, it is open to interested parties to apply to the Trade Measures Review Officer for a review of the findings on which that decision was based.  The Trade Measures Review Officer can recommend to the Minister that he/she affirm the decision or direct Customs to re-investigate one or more of the findings. 

The term “re-investigate” is something of a misnomer given that Customs can only have regard to the information that was before it when it first report to the Minister. Review would be a better description of the process. It almost invariably leads to Customs recommending to the Minister that the original decision be affirmed.

In recent proposed amendments to this process the Trade Measures Review Officer will be replaced by a Review Panel consisting of three members.  More importantly, the Review Panel, after conducting its review, must recommend to the Minister either that the decision in question be affirmed or that it be revoked and a new decision be substituted.

This new review process potentially creates an awkward situation for the Minister. Take the possible scenario where Customs recommends to the Minister that measures be imposed and the Minister does so. Then the Review Panel subsequently reviews the findings on which that decision to impose measures was based and recommends the measures be revoked.  The Minister would then be in the unfortunate and politically insidious position of having to choose between two arms of the executive Government with diametrically opposed recommendations.

Perhaps the solution is to create a stand-alone anti-dumping agency reporting directly to the Minister and abolish the Review Panel as interested parties would still have the right of appeal to the Federal Court.  Time will tell!

Mr Brumby is to report to the Government by 30 November 2012.

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