Overseas companies who refuse to cooperate with local investigations into alleged dumping of steel and other products into the Australian market are set to face higher duties and have interim measures imposed on them sooner under a newly announced shake-up of anti-dumping rules.

Unveiling the latest round of measures, Industry Minister Ian McFarlane and Parliamentary Secretary Bob Baldwin said dumping – where exporters from overseas of products such as steel, timber, aluminium, glass and agricultural produce sell goods to Australia at a price which is below the normal domestic price of the goods in the country of export – was unfairly putting local Australian manufacturers at a disadvantage and that the reforms would bolster efforts to minimise these types of practices.

“The changes will ensure that while Australia becomes increasingly open to trade, Australian industry is not left vulnerable to dumping by foreign companies.” McFarlane said. “Australia supports free trade, but free trade should also be fair trade.”

Typically a result of overseas suppliers looking to offload surplus stock onto Australian and other export markets (but occasionally a result of a more deliberate effort to drive domestic producers out of business before reaping monopoly benefits), dumping is not technically illegal but is widely considered to be an unfair trading practice and local rules allow the Minister to impose duties on exporters who undertake such practices.

The impact of the practice can be significant: an anti-dumping claim by Arrium’s OneSteel subsidiary relating to reinforcing bar imported from Korea, Malaysia, Singapore, Taiwan, Thailand and Turkey, for example, covered steel products which account for around 30 per cent of its annual sales.

Moreover, apart from immediate benefits in terms of lower prices in the short run than would otherwise be the case if the dumping did not occur, the practice is also considered to hurt upstream industries such as construction in the long run because of the impact on the sector’s local supply chain.

Under the new rules, overseas exporters whom the Minister considers not to have cooperated with local investigations will be subject to higher levels of duty being imposed against their products.

The government will also:

  • Create a new regulation designed to address emerging behaviours relating to overseas exporters slightly modifying their goods in order to circumvent anti-dumping duties that are currently in place
  • Overhaul the merit review system for anti-dumping complaints including, for example raising the legal threshold for applications and introduce a scaled fee for seeking approval
  • Beef up information and support services for local suppliers who are impacted by dumping
  • Amend anti-dumping legislation to simplify the system and reduce red tape.

Australian Industry Group chief executive officer Innes Willox welcomed the latest moves, saying the changes represent a comprehensive package of reforms which would go a long way toward the elimination of inappropriate behaviour by foreign competitors.

“Overall, the new measures, if properly implemented, offer a higher degree of support to Australian companies concerned about illegal dumping into domestic markets,” Willox said.