We are seeing a move towards a more considered trade policy, which is a very good thing. There are three events from the last year which support my view. The first was the decision of the Minister of Trade, Industry and Competition (Minister of Trade) to suspend the implementation of the anti-dumping duties on bone-in chicken from Brazil, Denmark, Ireland, Poland and Spain. It was the first time in ITAC’s 20-year history that such a decision has been taken and it appears to have been driven by a concern for the inflationary impact on chicken prices if the duties had been imposed. Public interest is a long overdue consideration in anti-dumping investigations.
The second was the February 2023 decision to proactively review the import duties on rolled aluminium. This is the stuff you use to make beverage cans, foil and truck tankers, amongst other things. No specific reasons have been given for the review, but given the duties are at their maximum possible level of 15%, the review will be considering whether to reduce these duties. These reviews should happen automatically, but for the longest time this has not happened. The fact that they are happening reflects very well on ITAC.
The third was the decision by the Minister of Trade to not impose anti-dumping duties on steel chain from China even though ITAC recommended imposing duties. ITAC would have found dumping and material injury caused by the dumping. The Minister however took a contrary view, noting instead that the import volumes had dropped out of China and the Applicant’s prices had been rising. Near the end of the gazette, ITAC notes “This rejection was based on the Minister’s belief that the Commission’s recommendation did not duly empower him to establish, to a reasonable degree of certainty, that material injury or the threat of it from dumped imports, had been inflicted on the applicant.” The Minister is right. Here are the imports for the investigation period (first three years), plus another year. The import volumes dropped by 46%, for the investigation period, while the price rose by 15% over the three years.
The implications of the shift in policy
- Both tariff and anti-dumping investigations are hewing closer to the rules which govern them. For the longest time, there was an increasing shift towards political, rather than technically correct decisions. The shift back is welcomed. It will see improved use of the instruments, which have been in slow decline for a while.
- It is a little alarming that we need to rely on the Minister to pick up on a technical error, but at the same time, its good to know he is attentive enough to have spotted the mistake before it was locked into law for at least five years. Yay for Minister Patel!
- I don’t believe applicants for anti-dumping duties need concern themselves that this is a swing in the opposite direction where they will struggle to have duties implemented. The shift appears to be towards taking decisions which more closely aligned with the law, which is just good all around. Valid cases will still have duties imposed and poor cases will rightly be terminated.
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We are about to release our XA Trade Investigation Index before the end of March 2023. If you subscribe to our blog, you will receive an invite to the launch. The index monitors how long investigations take to be completed and measures the economic implications of delayed decisions. (Spoiler: It’s a lot).