Australian Trade Minister Simon Birmingham (Image: AAP/Lukas Coch)

Australia’s barley producers are facing significant anti-dumping tariffs by China. Trade Minister Simon Birmingham says the government is “deeply concerned” at the “bombshell” news and is threatening to take the matter to the World Trade Organisation.

Australia couldn’t be responsible for dumping, could we? It’s an outrage that China would use dumping as an excuse to protect its own farmers. Well, maybe.

For decades, Australia has told itself it is a free trading nation that doesn’t believe in protectionism or hiding behind tariff barriers. The truth is we continued to cling to protectionism, and in fact despite cutting support to the automobile industry, we’ve become more protectionist in recent years.

We’ve refused to reform drought assistance so that it actually encourages resilience, and instead simply prop up inefficient producers. We’re insisting in spending tens of billions of dollars more on major defence purchases in order to build them here. We even continue to have automobile import tariffs even though we don’t have an automobile industry to protect any more.

Worst of all is our anti-dumping system. Not merely does anti-dumping punish Australian consumers for daring to buy cheap imported goods, it isn’t even a particularly efficient as a form of protectionism. And it’s especially punitive on importers because the process is (deliberately) bureaucratic and slow.

The biggest target of our anti-dumping regime is China. Since 2012, nearly 170 investigations have been launched against Chinese importers, or around one every 17 days. They have formed well over half of all investigations. Of around 30 current anti-dumping investigations, China is the target of 15 of them.

Most anti-dumping cases against China deal with aluminium and steel products, in order to prevent Australia’s construction industry from using cheaper products than those produced by our notoriously inefficient, carbon-intensive steel and aluminium smelting industries (even more absurdly, the Americans have threatened us with accusations of dumping of steel in the US)

According to the Productivity Commission’s recent report on protectionism, our construction industry lost $400 million in 2018-19 due to anti-dumping tariffs. It’s the biggest victim of our anti-dumping system. The food manufacturing sector — which is punished for using imported fruit and veg like Italian tomatoes — is the next biggest target.

Remember, the construction industry is the sector where the government set up a bespoke, draconian anti-union regulator ostensibly because the actions of the CFMMEU were driving up construction costs. Whatever costs union militancy might allegedly inflict on commercial construction are dwarfed by the punitive anti-dumping tariffs.

Worse, households pay some of those costs as well because those tariffs also inflate the price of materials used in residential construction.

Both sides of politics, however, support anti-dumping and for that matter routinely announce they’ll make the current regime even more stringent.

Now China is using anti-dumping against us and we’re professing outrage about it.

Bear in mind that, like Australian households forced to pay more for new houses because of our protection of the steel and aluminium industries, or consumers forced to spend more on food groceries because of our protection of local agriculture, it is Chinese consumers who will indirectly pay more for products manufactured from more expensive Australian barley or higher-cost Chinese barley.

Like most forms of protectionism, it’s an utterly absurd fight in which each pugilist gives themselves an upper cut before proudly declaring “take that!” It’s just that we’ve been doing it much more frequently to China than they’ve done it to us, which until now has suggested they’re a lot smarter at this than we are.

And as onshoring of manufacturing resumes in the wake of the pandemic, expect a lot more abuse of the deeply rotten policy that is anti-dumping — both by us and against us.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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