ECA News

The danger of imposing safeguards to protect industry

Liam Dilley - Tuesday, June 09, 2015

As a WTO member, Australia is allowed to impose safeguard measures on certain imports if there is a sudden and unforeseen surge of imports which causes, or is likely to cause, serious injury to an industry. Such measures are different to quotas on certain products, for instance those applied by Australia to pineapple and tuna imports from Thailand, even under the Australia- Thailand FTA. They are also different from anti-dumping or countervailing measures which impose additional duties on goods sold in Australia at a price less than in their export markets and that cause injury. Currently, this is applied by the Australia Government to steel products and canned mushrooms.

While the pork industry has tried to secure safeguard measures unsuccessfully in Australia, such measures are being used elsewhere in the world more regularly, for example against China’s textiles clothing and footwear imports into the US or US imports of women's jeans to the EU.

Shepparton Preserving Company (SPC) Ardmona last week put forward a request to the Federal Government to implement tariff protection measures to prevent further detrimental damage being incurred to SPC and those Australian farmers supplying the fresh produce used by SPC in their final manufactured goods. An area of most concern has been the importation of cheap fruit and fruit produce from abroad. The Government is said to be currently considering SPC’s application for safeguard measures.

Ultimately, the Federal Governments decision will be both a legal and a political one. The legal argument will first need to be established, which may be a struggle as there has been no sudden surge in imports. The Government also needs to decide whether it is, in fact, good idea politically and defensible at the WTO.

Unfortunately, Australia, cannot attempt to portray itself as a fair/free trader, whilst simultaneously taking steps on dumping and local content.

While seeking to implement policies that err on the side of protectionist, the government is positioning itself favourably in an election year. However, one must not be short sighted about the impacts such actions would have on the perception of Australia in the international community and our ability to successfully develop relationships and do business with Asia in the future.

The ECA believes the government should seek to implement alternative measures to support the industry while it is re-structured rather than imposing safeguards which could expose Australia to international criticism and jeopardise FTA’s currently under negotiation.

For further information, please contact:

Andrew Hudson
Partner- Hunt & Hunt Lawyers
Director- Export Council of AustraliaLevel 
26, 385 Bourke Street, Melbourne, VIC 3000
GPO Box 1533N, Melbourne VIC 3001
T +61 3 8602 9231
F +61 3 8602 9299


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