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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