Australia is a trade-orientated economy that has prospered over the last 30 years by pursuing an open trade agenda. However, mismanagement of open trade can easily lead to unintended consequences such as dumping and exclusion of domestic manufacturers from domestic markets. This undermines fairness and limits growth and development in domestic manufacturing.
Australian manufacturers have many advantages over international competitors in a global trading environment including a highly skilled workforce, abundant sources of energy, world-class research and innovation and stable governance.
These advantages are easily undermined when our trading stance fails to capitalise upon them, or worse, allows unintended or perverse consequences of our trading arrangements to deliver unfair advantages to our competitors.
Manufacturing Australia (MA) is seeking fair outcomes for trade-exposed industries which will operate within World Trade Organisation guidelines and allow Australia’s manufacturing sector to grow.
MA has identified three priority areas for action by federal and state governments:
- Overhaul coastal shipping regulations to ensure Australian manufacturers are not disadvantaged.
- Strengthen anti-dumping powers to stop predatory dumping and circumvention of dumping duties by foreign importers, address currency manipulation and provide redress against subsidies to foreign manufacturers.
Managing the cost of shipping and transport is fundamental to global competitiveness in manufacturing. Presently, Australian manufacturers that depend on coastal shipping to move goods around the country are unfairly disadvantaged against international competitors. There is a growing disparity between the cost of shipping domestically in Australia and the cost of shipping to Australia from overseas. Importers can now access freight rates that are substantially less than those available to Australian manufacturers. For example, it costs approximately 40% more to ship bulk commodity goods such as raw sugar between Queensland and Melbourne than it does to ship comparable goods from Thailand to Melbourne.
In 2014, MA made a submission to the federal government’s Review of Coastal Shipping. MA is seeking an opening up of the market so that Australia can regain business that has been lost overseas or replace imports with local product. There is an efficiency dividend and costs savings to be gained for full reform of the Acts. MA welcomes any moves to reduce the costs and red tape on coastal shipping and improve competiveness in the shipping industry.
The Australian economy is very dependent on shipping and needs flexible and cost efficient services that support the needs of industry and the national and regional economy.
Enforcing World Trade Organisation rules, such as those related to the dumping of product in a country below its cost of production, requires a well resourced and regulated anti-dumping regime. Unfortunately, until recently, Australia’s anti-dumping regime was characterised by a philosophy that Australia benefitted by having the lowest cost imported goods, regardless of how that was achieved. The remedy process delivered unfair outcomes for Australian manufacturers as it did not kept pace with developments in Asia and was inconsistent with other comparable countries.
Recent measures introduced by the Australian Government, particularly the establishment of a new Anti-Dumping Commission (ADC), have begun a welcome process of reform of Australia’s anti-dumping regime. Progress on strengthening the regime has been made, however several issues continue to tip the balance of fairness in favour of importers and disadvantage Australian manufacturers.
MA believes the Australian Government must stay the course on strengthening the nation’s anti-dumping regime by implementing key reforms in partnership with industry.
- support changes to the Customs Act (the Lloyd Amendment) which will strengthen the powers of the Commission enforce new anti-circumvention provisions
- reject a proposal in the National Commission of Audit for a Public Interest Test in proven dumping cases
- reinstate regular dialogue with regulators and the industry (such as the currently dormant International Trade Remedies Forum.