Politicians split on dumping penalties bill in run-up to Chinese steel inquiry

Commerce Minister Jacqui Dean

Parliament's commerce select committee was split on a bill which seeks to introduce an additional test before anti-dumping penalties can be imposed, with opposition MPs opposed, in the run-up to a formal investigation into Chinese steel dumping.

The Trade (Anti-dumping and countervailing duties) Amendment Bill, first announced in August 2015, suggests introducing a bounded public interest test – one which would consider the cost of duties only on downstream industries and consumers – as part of an investigation into dumping.

The test would include public interest elements such as competition and consumer benefits, and would add 90 days to the existing investigation timeline. 

Dumping is when manufacturers export products at a lower price than they sell to their domestic market, while countervailing is when foreign governments provide a subsidy on exports.

Currently, a duty is imposed on those dumped products considered to harm New Zealand manufacturers or a local industry, but the costs of imposing duties are not considered.

Select committee tied
The committee was tied on voting on the bill and couldn't agree on whether to recommend it be passed, it said its December 9 report back to parliament.

National MPs supported the bill, which they said would be fairer than the current regime as it would allow the commerce minister to consider the wider effects of a duty, and would increase competition and enhance consumer welfare.

Opposition members opposed the bill, saying it weakened important protections for New Zealand businesses that face unfair international competition, particularly small businesses.

The Labour, Greens and NZ First MPs said they weren't convinced the test was adequately accurate, rigorous and consistent, and submitters had been "overwhelmingly opposed" to the bill, saying it would tilt the playing field in favour of dumped or subsidised imports rather than supporting local industry.

The bill was drafted in direct response to concern about the cost of building materials in New Zealand, the opposition MPs said.

In 2014, the government announced the removal of tariffs and duties on building materials covered under existing legislation with the intention of improving housing affordability, an issue that continues to plague policymakers. 

Chinese steel inquiry
On December 22, the Ministry of Business, Innovation and Employment (MBIE) announced an investigation into claims Chinese galvanised steel coil imports, used in construction, have been dumped on the local market, causing "material injury" to New Zealand industry. 

The government department said it considers there's enough evidence that Chinese imports are undercutting New Zealand Steel, a subsidiary of ASX-listed BlueScope, leading to lower prices for the company which meant it wasn't able to recover increasing costs, putting a squeeze on profit and investment.

In a submission on the trade legislation, NZ Steel said it opposed the bill as being "an unnecessary and radical shift in New Zealand's trade policy" with "no principled reason why New Zealand producers should be expected to compete with goods illegally dumped here below their cost of production offshore". 

Chinese steel imports have been a bone of contention around the world, with the world's most populous nation facing down Europe and US claims of dumping.

When New Zealand was dragged into the matter in June, there were claims that Kiwi companies could face a backlash if the government pursued an anti-dumping probe.

MBIE's investigation must be completed within 180 days, excluding the holiday period, after which a recommendation will be made to the commerce minister, with recently appointed Commerce Minister Jacqui Dean making a final decision on whether to impose duties or not by July 9.

(BusinessDesk)


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Hardly an inspiring Bill if Craig Foss or the new Minister Jacqui Dean created it.
Would suggest that the Opposition MP's are on the right track which is supported by local businesses

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https://www.beehive.govt.nz/release/feedback-sought-public-interest-test ... While anti-dumping duties provide relief for domestic industries, the additional costs imposed on imported goods may also reduce competition and result in higher prices for New Zealanders. “Adopting a public interest test would provide flexibility to consider whether an anti-dumping duty is actually in the best interests of the public ...

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Anonymous? Are you really trying to educate Mr Scribe that it is not the NZ gov's job to supply free lunches with a protected job for all NZers?
If you are, then I'm afraid you are pushing it uphill my friend, with a pointed stick.
I respectfully suggest suggest your time would be more productively spent teaching a cow on how to ride a pushbike.
Happy New Year.

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Chinese beat up time and again! Restrictions because they are non white New Zealanders!

We are just like the Aussie Banks where Xenaphobia rules and now if you are Kiwi and you want to buy a house tough luck.

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Please tell me why the chinese are selling their metal products well below where the taiwanese or even the malaysians are selling it....now before you make any rash statements about racism.....mills wanting cheaper labour have been moving to malaysia from china......yet other Chinese mills sell well below the good mills we buy from that have moved to malaysia.

Scrap is purchased on world prices. Labour is a higher cost than malaysia and electricity is comparable..........yet they can undercut by 10 - 15% and even more at times.....something does not add up. Either they are manufacturing an inferior product with inferior components or they are dumping.

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How about the Chinese crack down on NZ's use of cheap foreign labor in most export orientated food industries?
I suggest that the government leaves it and focuses on quality control.

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So the Chinese say this action will affect trade between our two Countries.
Our response? Just ignore what they say, carry on as if nothing has happened.
On a need to know basis our media and politicans have decided that there are some things which are too important for us to know about and discuss./sarc

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Free trade should also be fair trade. NZ Steel has operated without tariff protection since the mid-1980s. It should not have to compete unfairly with imported steel from any country; not just China.

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