A new federal bureaucracy will be working hard to raise prices for Australian consumers and business from 1 July this year, according to a report from The Centre for Independent Studies.
The government’s Anti-Dumping Commission will use new laws to impose extra duties on imports of some foreign goods at the expense of Australian consumers and businesses.
Dumping occurs when foreign firms sell goods in Australia at prices considered below their normal value in the exporting country. ‘Dumping is a net benefit to Australia, but our anti-dumping laws mistakenly assume it is a cost,’ according to report author, Dr Stephen Kirchner.
‘Anti-dumping duties raise prices for Australian consumers, including businesses that use dumped goods as inputs. The Australian car industry has been adversely affected by anti-dumping duties on imported alloy wheels and the threat of increased duties on steel imports.’
‘It is ironic that federal government support for the car industry is being directly undermined by its own anti-dumping measures.’
Dumping is not illegal under World Trade Organization rules; anti-dumping laws are meant to restrain rather than encourage anti-dumping.
‘Anti-dumping laws are open to abuse by local producers, who use anti-dumping measures to make the local market less competitive,’ says Dr Kirchner.
‘There has been a significant increase in anti-dumping applications by a small number of Australian producers who are using anti-dumping measures as a substitute for more traditional forms of anti-competitive protection such as tariffs.’
‘The danger is the new Anti-Dumping Commission may become a vehicle for creeping protectionism for the benefit of a few producers at the expense of Australian consumers and business.’
Dr Kirchner says Australia should repeal its anti-dumping laws.
‘The responsible minister can also use his discretion under the existing law to refuse anti-dumping applications by Australian producers in the public interest.’
‘Home Affairs Minister Jason Clare should show leadership by highlighting the benefits of cheap imports for the Australian economy and work to build community support for free trade,’ Dr Kirchner said.
Dr Stephen Kirchner is a Research Fellow at The Centre for Independent Studies.
The CIS report, Time to Dump Australia’s Anti-Dumping System, is available at the CIS website.
A Snapshots document is also available online.
Watch Dr Kirchner discuss the findings of the report in this YouTube video.