Anti-dumping China

Pad­dy McGuin­ness “nails(link to SMH story)”: the “con­spir­a­cy” behind pro­posed amend­ments to the Aus­tralian anti-dump­ing leg­is­la­tion to make it eas­i­er for the same old pro­tec­tion­ist crowd to use ‘non-mar­ket econ­o­my’ anti-dump­ing penal­ties against Chi­na. bq. In essence, the idea is to neu­tralise the moves towards freer trade in man­u­fac­tur­ing goods between Chi­na and Aus­tralia, block imports from Chi­na, deprive Aus­tralian con­sumers of cheap­er goods and as a result pro­voke Chi­na into cut­ting back on its pur­chas­es from Aus­tralia. So far, the Aus­tralian gov­ern­ment, which has just signed a “Trade and Eco­nom­ic Frame­work” agree­ment with Chi­na that includes a ‘scop­ing study’ lead­ing to a pos­si­ble free-trade agree­ment, is per­sist­ing with this pro­tec­tion­ist mea­sure (although there are late signs that it may soft­en the changes… watch this space). As I’ve not­ed here before[⇒ relat­ed sto­ry], Chi­na is already the tar­get of 20% of all anti-dump­ing actions, world-wide. Many of these actions take advan­tage of the pro­vi­sions of Arti­cle 15 of the Chi­nese “Pro­to­col of Acces­sion to WTO(link to Word doc­u­ment about 1.1 meg on US Chi­na Busi­ness Coun­cil site)”: that per­mits the use of a spe­cial pro­ce­dure for anti-dump­ing cas­es against Chi­na “if the pro­duc­ers under inves­ti­ga­tion can­not clear­ly show that mar­ket econ­o­my con­di­tions pre­vail in the indus­try pro­duc­ing the like prod­uct with regard to man­u­fac­ture, pro­duc­tion and sale of that prod­uct” (Arti­cle 15 of the Pro­to­col). In the bilat­er­al Trade and Eco­nom­ic Frame­work Agree­ment, the Aus­tralian gov­ern­ment has agreed to renounce the pro­vi­sions of Arti­cle 15 of the Pro­to­col, which makes the log­ic of the pro­posed anti-dump­ing leg­is­la­tion still more dif­fi­cult to under­stand. bq. Rec­og­niz­ing Chi­na’s tremen­dous achieve­ments in estab­lish­ing a mar­ket econ­o­my, Aus­tralia will not apply Sec­tions 15 and 16 of the Pro­to­col of Acces­sion of the Peo­ple’s Repub­lic of Chi­na to the WTO and Paragraph242 of the WTO Report of the Work­ing Par­ty on the Acces­sion of Chi­na dur­ing the course of the study.Z Rec­og­niz­ing that Aus­tralia and Chi­na should nego­ti­ate on an equal basis, a joint deci­sion by the two Par­ties to nego­ti­ate an FTA will take account of the results of the fea­si­bil­i­ty study and only fol­low Aus­trali­a’s for­mal recog­ni­tion of Chi­na’s full mar­ket econ­o­my sta­tus (para 8 of the Frame­work Agree­ment) Why are Aus­tralian indus­tries threat­ened with imports from Chi­na so keen to use a ‘non-mar­ket econ­o­my’ test for ‘unfair com­pe­ti­tion’? Because the expe­ri­ence of the USA and the EU shows that anti-dump­ing duties that are levied fol­low­ing a suc­cess­ful non-mar­ket peti­tion are typ­i­cal­ly ten times high­er than the anti-dump­ing duties lev­eied on goods found to be dumped by exporters from mar­ket economies. In the US and EU this trans­lates into tai­lor-makde pro­tec­tive duties between 70 and 90 per­cent of the FOB price of the imports. The ‘non-mar­ket econ­o­my’ test is a ‘no mar­ket access’ guar­an­tee against com­pe­ti­tion from China.

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