China Anti-dumping bill amended

It seems that the Aus­tralian gov­ern­ment has had a last-minute change of plans for it’s pro­posed laws[⇒ relat­ed sto­ry] imple­ment­ing non-mar­ket econ­o­my anti-dump­ing against Chi­na. The bill tabled yes­ter­day in the Sen­ate—Cus­toms Leg­is­la­tion Amend­ment Bill No 2 (2002)—is a major revi­sion of its first pro­pos­als (see this ear­li­er sto­ry[⇒ relat­ed sto­ry]). The Labor Par­ty oppo­si­tion, which had for­mer­ly opposed the bill in Sen­ate Com­mit­tees, has now decid­ed that with the revi­sions the bill is “non-con­tro­ver­sial” and it is like­ly to be passed on the nod on Thurs­day thisweek. The rest of this arti­cle con­tains details of the revi­sions, and how they appear to resolve the con­flict in Gov­ern­ment poli­cies on Chi­na and a rea­son to remain cau­tious about future imple­men­ta­tion of the new poli­cies. Arti­cle 15 of the Chi­na Pro­to­col of Acces­sion to WTO says that
Chi­nese prices should be treat­ed in the stan­dard man­ner for the
pur­pos­es of anti-dump­ing inves­ti­ga­tions if: “… the pro­duc­ers under inves­ti­ga­tion can clear­ly show that
mar­ket econ­o­my con­di­tions pre­vail in the indus­try pro­duc­ing the
like prod­uct with regard to the man­u­fac­ture, pro­duc­tion and
sale of that prod­uct, the import­ing WTO Mem­ber shall use Chi­nese
prices or costs for the indus­try under inves­ti­ga­tion in deter­min­ing
price com­pa­ra­bil­i­ty” [Empha­sis added] In the alter­nate, if pro­duc­ers can­not clear­ly show that mar­ket
econ­o­my con­di­tions pre­vail in the indus­try then the import­ing WTO
mem­ber may use a method­ol­o­gy for deter­min­ing the ‘nor­mal’ price of
the good that is not based on a strict com­par­i­son with
Chi­nese domes­tic prices. WTO Mem­bers are required to noti­fy the method­olo­gies used in the
alter­nate case. The “Economies in Tran­si­tion pro­vi­sions [Sect 269(5B), 269TAC(5D)
and (5E)]” of the Cus­toms Amend­ment Leg­is­la­tion pro­vides that the
Min­is­ter may deter­mine the nor­mal val­ue of the alleged­ly dumped
goods “hav­ing regard to all rel­e­vant infor­ma­tion” (that is, mak­ing
a deter­mi­na­tion of the ‘nor­mal’ val­ue of the alleged­ly dumped good
based on any avail­able infor­ma­tion includ­ing the alle­ga­tions of
the indus­try bring­ing the anti-dump­ing case ) if any one of
four cir­cum­stances apply:

1. The exporter sells the goods in the coun­try of ori­gin
   and the domes­tic sell­ing price of the goods is “sig­nif­i­cant­ly
   affect­ed by a gov­ern­ment (at any lev­el) of that coun­try”


2. The exporter does not sell the goods in the coun­try of
   ori­gin, but oth­er exporters do, and the domes­tic sell­ing price of
   the goods is “sig­nif­i­cant­ly affect­ed by a gov­ern­ment (at any lev­el)
   of that coun­try”


3. The exporter of the goods does not answer a detailed
   price ques­tion­naire issued by Cus­toms (in Eng­lish) with­in a time
   peri­od spec­i­fied by Cus­toms (30 days under Sec­tion 269TC(8) of the
   Bill).


4. The answers giv­en to the ques­tion­naire do not “pro­vide
   a rea­son­able basis for deter­min­ing that…” cir­cum­stances 1. or 2.
   do not apply
   

Con­cern about the Bill There were two caus­es for real con­cern about these pro­vi­sion that
were high­light­ed by the Labor sen­a­tors in their dis­sent­ing report
in the Sen­ate Leg­is­la­tion Com­mit­tee as well as by a num­ber of busi­ness­es and groups such as the “Aus­tralia-Chi­na Busi­ness Council”:http://www.acbc.com.au/.

1. The “sig­nif­i­cant­ly affect­ed” test is much more
   strin­gent than the pro­vi­sions of Arti­cle 15 of the Pro­to­col


2. The pro­ce­dur­al pro­vi­sions on the ques­tion­naire are
   unfair (they require the exporters to rebut a pre­sump­tion of
   non-mar­ket econ­o­my sta­tus) and they are undu­ly harsh because they
   pro­vide for no flex­i­bil­i­ty on the ques­tion of tim­ing of respons­es
   to the ques­tion­naire. This may be actu­al­ly con­trary to the
   pro­vi­sions of the WTO Agree­ment on Anti-dump­ing
   

The revi­sions The revi­sion of Sects 269TAC(5D) and (5E) appear to direct­ly
respond to the con­cerns expressed by a num­ber of busi­ness­es and the Labor Sen­a­tors (among oth­ers).

1. They replace the ‘sig­nif­i­cant­ly affect­ed’ test with
   words drawn from the Chi­na Pro­to­col: “mar­ket con­di­tions do not
   pre­vail in that coun­try in respect of the domes­tic sell­ing price of
   the goods”.


2. They add to the time peri­od allowed for exporter
   response to the ques­tion­naire a clause [269TC(9)] that allows (“…
   the CEO may… &“)Customs to pro­vide a fur­ther peri­od for answer­ing
   ques­tions.
   

These revi­sions restore some super­fi­cial con­sis­ten­cy and fair­ness
to the Bill. But the thresh­olds and method­ol­o­gy for deter­min­ing
whether ‘mar­ket con­di­tions pre­vail’ in a par­tic­u­lar indus­try or
mar­ket are not now set out in the bill. There appears to be noth­ing that would pre­vent the CEO of Cus­toms
from using pre­cise­ly the thresh­olds sug­gest­ed by the ear­li­er draft:
that prices are ‘sig­nif­i­cant­ly affect­ed’ by gov­ern­ment action at
any lev­el. In prac­tice, the impact of the Bill will still be deter­mined by the reg­u­la­tions issued under Sec­tion 269TC. These will deter­mine how Cus­toms goes about deter­min­ing that “mar­ket con­di­tions do not pre­vail” and how it pro­ceeds, in that case, to deter­mine “nor­mal val­ue”.