The Minister of Home Affairs and Minister for Justice Jason Clare yesterday officially announced the appointment of Dale Seymour as the new Anti-Dumping Commissioner. The creation of the Commission follows a report by the Hon John Brumby, former Premier of Victoria, recommending that a separate, adequately resourced commission be established and that an immediate increase in resources be allocated to anti-dumping. In accordance with these recommendations, a $24 million dollar funding boost over the next four years will assist the new Commissioner to address some of the issues identified by Brumby. Those issues include the fact that dumping is on the increase in Australia, and that public confidence in the system is low.
Mr Seymour’s experience is centered around high level business roles, most recently as Director of Deloitte Access Economics and President of Wormser Energy (USA). Prior to this, Mr Seymour was Deputy CEO of the Global CCS Institute. He also has experience in the public sector, including a role as Deputy Secretary of the Victorian Department of Primary Industries and prior to that as Deputy Secretary of the Victorian Department of National Resources. He has also served as Chair of the Board of Directors of Mentone Girls’ Grammar School. This experience should assist Mr Seymour to attract staff with the right expertise and skills to ensure the Commission effectively carries out its mandate. The $24 million dollar boost in funding over four years will also aid to increase staff numbers thus shortening the decision making period. Hopefully the flow-on effect of this is that a number of highly skilled investigators will be recruited to ensure robust investigations.
Dumping is a practice where imported goods are sold in Australia at prices below their normal value. Currently Part XVB of the Customs Act 1901 (Cth) addresses anti-dumping and gives the power to investigate dumping to the Minister of Home Affairs. The Commissioner is provided with a number of measures in addressing anti-dumping measures with Part XVB being administered by the International Trade Remedies Branch of Customs and Border Protections. In its 2011-12 Annual Report Customs and Border Protections noted:
“Anti-dumping applications increased from 11 in 2010–11 to 30 in 2011–12, and continue to be complex, involving multiple companies across many countries.”
With the changes, no doubt Australian business will be expecting shorter timeframes for decisions, and higher quality decisions from the new Commission. Mr Seymour will certainly need to increase the capacity of Commission staff to conduct anti-dumping investigations. He is currently in the process of recruiting staff for the Melbourne-based positions and overall around 25 new staff will be hired in the coming months.
How much difference will the appointment make?
The difficulty for Mr Seymour and the Commission as a whole will be how they deal with being constrained by the existing international and in the Australian legal framework. Australia is bound by prescriptive World Trade Organisation (WTO) Agreements, which are integrated into Australian law by way of the Customs Tariff Act 1995 (Cth). Substantial alteration of the WTO framework is unlikely, and as a result the Commission’s activities will be constrained by this existing framework.
Critically, the recent reforms do not address the fundamental problem of dumping from Asia, and particularly China. Since 1999, anti-dumping measures against China have increased from 6 per cent to 29 per cent of total measures taken. However, the measures taken by other countries are much more stark. This stems from the fact that Australia recognises China as a “market economy”, the effect being that it must look to the domestic selling price of goods in China. This makes it more challenging to substantiate dumping allegations, the onus of which is on Australian business.
Neither the EU, nor the USA treat China as being a “market economy”, and as a result have imposed high tariffs on Chinese companies. In the USA for example, Chinese companies that manufacture crystalline silicon photovoltaic cells (used in solar panels) are currently subject to a dumping margin of 246 per cent, with only a handful of Chinese companies being exempted from that margin and being subject to 30 per cent or 20 per cent margins. In light of this, it is likely that China will turn to Australia to discard large volumes of cheap solar panels. Since January 2012, the CEO of Customs, or their delegate, have found four instances of dumping, two of these relate to products from China. A dumping margin of between 30 and 50 per cent was imposed in these cases. As the Brumby Report noted:
“So long as countries such as the United States and Canada fail to recognise China as a market economy, Australia is likely to be a more attractive export destination for dumped products from China”.
Whether Mr Seymour will attempt to address these issues remains to be seen.