The Assistant Treasurer, Chris Bowen, and Home Affairs Minister, Bob Debus, today announced that the Productivity Commission would undertake an inquiry into Australia's anti-dumping and countervailing system.

This announcement delivers on a commitment made at the Council of Australian Governments (COAG) 3 July 2008 meeting, to progress a number of priority areas for competition reform, including anti-dumping. COAG agreed that the Commonwealth would request the Productivity Commission (the Commission) to undertake a review of Australia's anti-dumping system.

Australia's anti-dumping and countervailing system allows Australian industries that have been materially injured to make a claim against foreign businesses that they consider to be 'dumping' low-priced competing goods or exporting subsidised goods into the Australian market. If a claim is upheld, the Australian Customs and Border Protection Service imposes duties on the foreign goods. Countervailing duties are another form of trade remedy that are imposed in response to a foreign country subsidising its exports.

The Commission has been asked to assess the policy rationale for, and objectives of, Australia's anti dumping and countervailing system, and assess the effectiveness of the current system in achieving those objectives. It is to make recommendations on the appropriate future role of an anti-dumping and countervailing system within the Government's overall policy framework.

This will involve an examination of the economy-wide costs and benefits of Australia's anti-dumping and countervailing system including its impact on Australian industry, consumers and the broader community.

The Commission will hold hearings as part of this inquiry, publish a draft report, and provide a final report to the Australian Government within nine months of receiving the terms of reference.

The Government encourages those industries affected by the current anti-dumping and countervailing system to contribute their ideas and suggestions to the Commission's inquiry.

Further information can be obtained from the Commission's website at http://www.pc.gov.au or by contacting the Commission directly on 02 6240 3239.

Terms of Reference

Anti-Dumping and Countervailing System

Productivity Commission Act 1998

I, CHRIS BOWEN, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998 hereby request that the Productivity Commission undertake an inquiry into Australia's anti-dumping and countervailing system ('anti-dumping system') and report within nine months of the date of receipt of this reference. The Commission is to hold hearings for the purpose of this inquiry.

Background

Australia's anti‑dumping system seeks to remedy the injurious effects on Australian industry caused by imports deemed to be unfairly priced. It allows local industry to apply for anti-dumping duties on goods 'dumped' in Australian markets at prices below those prevailing in the exporter's domestic market or to apply for countervailing duties on goods that have been subsidised by the government of the country of export. Where the dumping or subsidisation results in material injury to local industry, anti‑dumping or countervailing duties can be applied.

The Australian Government's legislation review program under the National Competition Policy provided for a review of the anti-dumping arrangements. In January 2006, the Taskforce on Reducing the Regulatory Burden on Business recommended that the current anti-dumping system be reviewed. A broad review would complement and build on the Joint Study by the Australian Customs Service and the former Department of Industry, Tourism and Resources into the administrative elements of the anti-dumping arrangements, finalised in August 2006.

On 3 July 2008, the Council of Australian Governments (COAG) agreed to a list of priority areas for competition reform, which included a review of Australia's anti-dumping system.

The Australian Government believes an inquiry into the effectiveness and impact of Australia's anti‑dumping system, including both the policy and administrative aspects, is warranted at the current time.

Scope of the Inquiry

1. The Commission is to assess the policy rationale for, and objectives of, Australia's anti-dumping system, and assess the effectiveness of the current system in achieving those objectives. It is to make recommendations on the appropriate future role of an anti-dumping system within the Government's overall policy framework.
2. In undertaking its assessment, the Commission is to examine the economy-wide costs and benefits of Australia's anti-dumping system, having regard to the administration and compliance costs of the system and taking account of, and where possible quantifying, the impact of the arrangements on:
   1. the overall performance of the Australian economy, particularly economic growth, investment and competitiveness;
   2. importers and domestic industry, including small businesses, exporters, firms at different stages in the supply chain; and
   3. consumers and the broader community, including regions.
3. The Commission is also to assess the administration of the anti-dumping system, taking account of the concerns of both importers and domestic industry, including but not limited to, the costs of compliance and administration, timeliness of the process, the effect on business certainty, and difficulties in accessing the system. In doing so, the Commission is to consider:
   1.  
      1. determination of dumping/existence of subsidies;
      2. assessment of injury;
      3. establishment of a connection between the dumping/subsidisation and the injury;
      4. determination of appropriate measures; and
      5. review mechanisms.
   2. relevant substantive studies undertaken elsewhere, including the findings of the Joint Study into Australia's Anti-Dumping System undertaken by the Australian Customs Service and the former Department of Industry, Tourism and Resources.
4. In making recommendations on the appropriate future role of an anti-dumping system in the Government's overall policy framework, the Commission is to:
   1. aim to improve the overall performance of the Australian economy, taking into account the interests of industry, importers and consumers;
   2. consider the consistency of anti-dumping policy with the overall policy framework, in particular competition, trade and industry policies, and alternative means of achieving the Government's objectives;
   3. have regard to Australia's international rights and obligations, including recent developments in international trade law and the current World Trade Organization Doha Round; and
   4. suggest practical ways of reducing compliance and administration costs, increasing business certainty and simplifying access to, and the timeliness and effectiveness of, the system.
5. The Commission is to provide both a draft and a final report. The Government will consider the Commission's recommendations, and its response will be announced as soon as possible after the receipt of the Commission's report.

CHRIS BOWEN