Developments in anti-dumping arrangements
Commission research paper
This research paper was released on 29 February 2016 and provides an economic stocktake of recent anti-dumping activity and the changes to Australia's anti-dumping system since the Commission's 2009 report.
Amongst other things, it looks at the reasons for the recent increase in the usage of anti-dumping measures, analyses key recent changes to system requirements, and discusses the implications for the future evolution of the system.
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- Recent changes to Australia's anti-dumping system have increased its protectionist impact.
- Generally soft economic conditions in the wake of the Global Financial Crisis, a supply glut in the global steel industry and the recent changes to the system have contributed to an upswing in cases initiated, new measures imposed and measures in force.
- Usage of anti-dumping and countervailing measures is concentrated in several capital-intensive industries producing mainly intermediate goods. Steel products accounted for 86 per cent of new investigations during 2014-15 and now make up over 60 per cent of all measures in force.
- The average dumping and countervailing duty currently in place in Australia is 17 per cent, more than three times greater than the general tariff rate of 5 per cent.
- Some measures have been in place for more than 15 years.
- Australia ostensibly has an anti-dumping system because WTO rules allow it. However, there is no compelling economic rationale for doing so and it is clear that current anti-dumping arrangements are making Australia, on a national welfare basis, worse off.
- There is little to distinguish anti-dumping protection from other trade restrictions. As such, the benefits for recipients of protection are outweighed by the costs for industries using the protected goods, consumers and the broader economy.
- Arguments that the system provides other benefits to the community that would eliminate this net cost are not credible.
- This state of affairs reflects deficient policy processes — and, in particular, inadequate reporting on system outcomes, and limited attention to the detriment to the community of anti-dumping protection in policy evaluation and development.
- The current environment is one in which policy is being driven by the interests of a small group of local industries.
- The weight of evidence indicates that an anti-dumping policy based on informed consideration of its net impacts would lead at a minimum to heavy modification of the system to reduce its costs.
- The costs of the system could be significantly reduced by increasing the thresholds for accepting anti-dumping and countervailing applications (the de minimis margins), instituting provisions that would allow measures to not be applied if they would be disproportionately costly for the community and putting a finite limit on the duration of measures.
- However, such a 'harm minimisation' approach would have drawbacks and risks, as experience since the Commission's inquiry in 2009 shows. Accordingly, as part of a rethink of policy in this area, serious consideration as to whether it is in Australia's interests to retain an anti-dumping system at all is warranted.
