House of Representatives

Second Reading Speech

Mr BRENDAN O'CONNOR (Gorton-Minister for Privacy and Freedom of Information, Minister for Home Affairs and Minister for Justice)

I am pleased to present the Customs Amendment (Anti-dumping Improvements) Bill 2011, representing the first tranche of legislation implementing the government's improvements to Australia's antidumping system.

The package of improvements announced by the Gillard government on 22 June 2011 are the most important changes to Australia's antidumping regime in more than a decade. These changes will improve the way we administer global antidumping rules in Australia, and better align our laws and practices with other countries.

These changes overall will improve the antidumping system's effectiveness and they are vital because, even though our economy is strong, some local industries are vulnerable to dumping. The government's package of improvements to the antidumping system will help keep our economy strong and provide greater certainty and support for our local industries, workers, families and communities against unfair dumping practices.

The package of improvements announced by the government on 22 June includes the government's response to the Productivity Commission's report into Australia's anti­dumping system. These changes also resp­ond to issues identified by Senator Xenophon, in a private member's bill introduced into the Senate in March, and also take account of important issues that have been raised by stakeholders in relation to the operation of Australia's antidumping system.

The improvements that I am introducing today capture the four key themes which have been at the heart of the government's detailed examination of how the existing antidumping system can be improved.

First, these changes improve the time­liness of the antidumping system through the imposition of a time limit on ministerial decision making.

Second, we will improve decision making by clarifying that all appropriate and relevant factors which may indicate material injury to an Australian industry are specifically listed as factors to which the minister may have regard.

Third, these changes aim to provide greater comparability of Australia's anti­dumping system with those of other jurisdictions, and further implement the relevant World Trade Organisation agreements which provide the basis for internationally agreed antidumping rules.

Fourth, these changes will clarify that parties with a clear interest in antidumping matters are expressly given an opportunity to participate in antidumping investigations.

These amendments were developed after consultation with industry, and subsequently drafted in consultation with the Attorney-General's Department and the Department of Foreign Affairs and Trade, in order to ensure that they are consistent with Australia's international legal obligations.

Time frame for m inisterial decision making.

In relation to the improved timeliness of the system, these amendments provide that the minister will exercise decision-making powers within 30 days of receiving a report or recommendation on which to make a decision.

Unlike all other decisions and processes in the antidumping system there are currently no legislative time constraints governing the minister's decision.

The responsible minister has a large range of decision-making functions in the anti­dumping system and may make decisions following:

an investigation to determine whether antidumping or countervailing measures should be imposed,

a continuation inquiry to determine whether antidumping or countervailing measures should continue beyond the specified expiry date,

a review of measures to determine whether measures should be varied to reflect contemporary market conditions, or revoked where they are no longer justified, or

a review (appeal) to the review officer of an earlier ministerial decision, including where relevant, where a reinvestigation has been performed by Customs and Border Protection.

The amendments provide that, subject to extenuating circumstances, the minister will make a decision within 30 days of receiving the relevant report and/or recommendations.

There are clear benefits in imposing a time limit on ministerial decision making, providing greater certainty for parties, and ultimately reducing the overall time frame to conclude an investigation. Maintaining Australia's comparatively brief investigative time frames is important because anti­dumping investigations affect the comm­ercial operations of a range of stakeholders.

Consideration of injury factors

In relation to improved decision making, these amendments provide that, in determining whether material injury to an Australian industry has been or is being caused or is threatened, the minister may consider any impacts on jobs and any impact on investment in the domestic industry producing like goods to the goods which are the subject of the investigation.

The Customs Act currently contains a list of relevant economic factors which the minister may have regard to when determ­ining material injury. However, certain injury factors could be more adequately considered when assessing whether dumping or subsidisation has caused material injury.

The impact on jobs and investment in an industry are two such factors.

The amendments provide that the minister can consider any impact on jobs in the domestic industry producing like goods, not just the effects currently specified. As well as the wage rate and the number of workers employed, the minister would be able to consider all aspects of the terms and conditions of employment, including the number of hours worked and the incidence of part-time employment.

The amendments also provide that the minister can examine any impact on investment in the industry, to again ensure that a broad examination of the factors affecting investment is permitted.

Expanding the list of actionable subsidies

In relation to ensuring that Australia's antidumping system is in step with comparable administrations, these amend­ments ensure that Australian industry can apply for countervailing duties on the full range of actionable subsidies provided by the WTO Agreement on Subsidies and Countervailing Measures and the WTO Agreement on Agriculture.

These WTO agreements specify the types of government subsidies that can be actioned by another country. Australian legislation has not reflected the fact that some subsidies were excluded on a temporary basis. As a result, Australian companies cannot currently seek remedies in relation to these subsidies.

These amendments update the Customs Act to reflect all countervailable subsidies under the WTO including certain assistance:

for research activities conducted by firms or by higher education and research establishments

for disadvantaged regions pursuant to a general framework of regional develop­ment

to enable firms to adapt to new environmental requirements, and for a variety of government programs that provide services or benefits to agriculture.

These amendments ensure that Australian companies can take action against subsidies of this nature where such subsidies cause material injury. Australian companies will therefore be operating on a level playing field compared to manufacturers and producers in other jurisdictions, as they are no longer disadvantaged by restrictions associated with out-of-date legislation.

Expanding the definition of 'interested party'

In relation to accessibility, these amend­ments ensure that all relevant parties are expressly recognised as having rights to participate in antidumping and counter­vailing investigations as an 'interested party'.

An 'interested party' to an investigation is currently defined in section 269T of the Customs Act to comprise, in broad terms, domestic manufacturers and producers, importers, exporters, trade organisations and foreign governments.

Submissions to government suggest that in the present system some stakeholder groups, who should be engaged, are not properly engaged in antidumping invest­igations.

The amendments clarify that industry associations, trade unions and downstream industry (whether or not they are an importer) who have a direct interest in a particular matter can be treated as interested parties. The amendments further confirm that these parties can participate in an invest­igation.

This change will not affect the present standing requirements for determining who can bring an application for antidumping or countervailing measures. Rather, the amend­ments make it clear who has a right to participate in investigations once an applic­ation is initiated.

These amendments will facilitate the provision of relevant information to Customs and Border Protection during the invest­igation phase and ensure that reports and recommendations made to the minister take account of the views and interests of this broader range of stakeholders.

Concluding remarks

The government is committed to ensuring that we have an effective, accessible antidumping system that complies with WTO obligations. The first tranche of changes set out in this bill directly respond to concerns expressed by stakeholders about the accessibility and timeliness of the anti­dumping system. These amendments will further strengthen the antidumping system by improving decision making in relation to how material injury to an Australian industry is assessed.

It will also improve accessibility by ensuring that interested parties with a stake in an antidumping matter will have the opportunity to participate and be heard in antidumping investigations.

The government believes that better sup­port can be provided to our local industries and workforce with a streamlined, rigorous and better resourced antidumping system. The government's package of improvements, of which this bill is the first tranche, will provide more certainty for local manu­facturers and primary producers resulting in more confidence to invest in the future. Indeed, the rules against unfair dumping practices will be more effectively applied.

This bill will result in better access to the antidumping system; improved timeliness; improved quality of decision making; and greater consistency with other countries, in line with WTO guidelines.

I commend the bill to the House.