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

  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”:

  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… &#8220)Customs to provide a further period for answering

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”.

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