Australia began anti-dumping probes into Chinese aluminium, steel and A4 paper in 2020

29/05/2020 12:00 - 47 total view

Australia has this year launched three anti-dumping investigations into Chinese aluminium, steel and A4 paper, records from the Australian Anti-Dumping Commission show, adding weight to Beijing’s claims that Canberra has played a lead role in ratcheting up trade tensions between the two nations.

Diplomatic ties between China and Australia have soured in recent weeks after Beijing placed a 80.5 per cent tariff on all Australian barley imports, raising suspicions it was in retaliation for Australia’s calls for an independent investigation into the origins of the coronavirus.

The Chinese government has maintained its investigation was thorough and reasonable, with Commerce Minister Zhong Shan pointing out early this week that Australia had launched 100 anti-dumping cases against China since diplomatic relations began in the 1970s, including three in 2020.

Responding to the statement on Tuesday, Australian Trade Minister Simon Birmingham said trade remedy investigations were not about keeping a tally or “doing things in a tit-for-tat way”.

The Australian Dumping Commission in February initiated its first dumping investigation against China for the year, looking at the sales of aluminium micro-extrusions, which are used for domestic window flyscreens and television aerials, made by Chinese companies Guangdong Jiangshen Aluminium and Guangdong Zhongya Aluminium.

Aluminium Shapemakers, which trades as Alushapes and specialises in making the micro-extrusions, said in its application that demand for the products in Australia had grown between 2015 and 2019, but sales volumes had been muted due to Chinese dumping.

The application, which was supported by other aluminium manufacturers and claimed Alushapes had lost market share, did not accuse competitors from Malaysia, Vietnam and Thailand of dumping.

Another manufacturer, Capral Limited, made a separate request to extend the dumping measures against aluminium extrusions.

In March, as Australia ramped up its Covid-19 battle, the commission launched a second investigation into dumping of cheap precision pipe and tube steel from China, Korea, Taiwan and Vietnam.

Local manufacturer Orrcon, a subsidiary of leading Australian steel producer BlueScope Steel, said imported steel products were priced at “less than their normal value”.

In April, the commission began reviewing current anti-dumping measures against A4 copy paper exported by China, Brazil, Indonesia and Thailand.

Paper Australia said domestic prices in China and other countries had risen and needed to be reflected to ensure the right dumping margins were imposed.

The products have long been the target of anti-dumping investigations in Australia and revolve around cheap prices that are allegedly enabled by Chinese government subsidies.

Australia’s use of proxy prices, instead of Chinese domestic prices that it regards as “distorted”, have angered Beijing in the past, trade lawyers said.

Birmingham has defended Australia's use of the anti-dumping system, but its frequent deployment against China has raised questions about whether the government should continue protecting some of its less competitive industries.

“Nobody knows if China is dumping because no one has looked at China’s prices,” said Simon Lacey, senior lecturer in international trade at Australia’s University of Adelaide.

“Everyone discards China’s price because they say it’s manipulated and distorted and so Australia picks a surrogate price usually from the economy with the highest costs, because they want the biggest margin.

“We also have to understand many Chinese companies operate on such a massive scale that they are crushing economies of scale that no other companies can really match, that allows them to be so efficient.”

However, that did not mean China was not engaged in dumping, as state-owned enterprises enjoy government help, he added.

Lacey said there were reasons for keeping certain “inefficient” industries around, even though Australia’s Productivity Commission had found protectionism, which was mainly used to keep jobs, was unhelpful and imposed bigger costs on consumers and firms.

“If you look purely at efficiencies, yes you would argue why keep an aluminium, steel or paper sector … but efficiency is not the be all and end all,” he said. “There is the idea of systemic resilience in supply chains.”

Jim Minifie, from AlphaBeta strategy and economic advisory business, said disruptions to global supply chains caused by the coronavirus pandemic had caused governments to refocus on preserving strategic industries.

“In addition, when global demand is down, importers and exporters alike can face the challenges of excess capacity, so trade tensions naturally intensify in downturns,” he said.

“The bigger picture, regardless of any frustrations over individual industries, is the large and mutually beneficial trade and cultural relationship between Australia and China. There is a much bigger win-win story.” 

Source: South China Morning Post