After the recent announcement of anti-dumping reforms by the federal government, the opposition coalition has also developed its own policy to ensure that local products remain competitive against imported, subsidized products.
Dumping is typically defined as the practice of exporting products at prices below cost of production or below domestic market prices.
Under the policy, the opposition said that it would spend US$2.5m to create 20 specialist ‘dumping detectives’ to protect Australian manufacturers from cheap ‘dumped’ food imports.
In addition, the coalition said, it would transfer the responsibility of anti-dumping from the Department of Customs to the Department of Industry and invest to speed up the process.
The coalition also said it would ensure that there is reverse onus of proof on importers, which would mean that if a supplier cannot prove there is no dumping, import duties could be imposed on the company in question.
Food body welcomes political discourse on dumping
Head of the Australian Food and Grocery Council (AFGC), Kate Carnell said it was encouraging that both sides had recognised the issue and were committed to allowing Australia’s food and grocery sector to compete equitably.
“These reforms are an important first step and industry will watch the outcomes with interest. Australia’s AU$108 billion food and grocery manufacturing industry wants to achieve a level playing field,” she said.
Carnell added that industry had worked closely with both the opposition partis and the government to find the best ways to strengthen anti-dumping laws and she said the sector would continue to do so.
“Industry is currently facing a range of pressures impacting on its competitiveness, such as the rise in the Australian dollar and increases in the costs of manufacturing as well as near record high commodity prices,” she said.
According to AFGC’s State of the Industry 2011 report released last week, the food industry’s international net trade deficit ballooned by 48.5% from AU$1.8bn in 2009-10 to AU$2.7bn in 2010-11.
Legal issues remain in any anti-dumping move
However, the opposition’s policy was panned by the government, which said that it would make Australia vulnerable to legal action under the WTO regime and its regulations.
Tim Wilson, director, IP and free trade unit and climate change policy at the Melbourne-based think tank, the Institute of Public Affairs, told FoodNavigator-Asia.com that under Australian law, dumping does not attract government intervention unless there is material injury to an industry.
“Reversing this obligation, as proposed [under the coalition's announced anti-dumping policy], puts the interests of industry first and consumers second,” he pointed out.
But Wilson notes that there is a lot of flexibility within the WTO in terms of anti-dumping measures, with practical application playing a significant role in determining if national legislation is compatible with WTO rules.
However, any measures would have to be tested once established, he added.
Noting a growing trend for barrier imposition on imports into Australia, Wilson warns that other countries might start to strike back.
“Current heavy regulations are also being proposed on timber imports from places like Indonesia and Malaysia. The same was also recently considered with palm oil. Combined these measures are likely to prompt retaliation,” he said.