Consumer Affairs Minister Paul Goldsmith seems determined to press ahead with legislation which Business New Zealand says will open the way for foreign companies to dump their products in New Zealand.
This has ended up in a topsy-turvy political situation with the Opposition joining with the Government’s political allies, BusinerssNZ to oppose the Bill.
Parliament’s Commerce Committee was this week unable to reach a recommendation that the Trade (Anti-dumping and Countervailing Duties) Amendment Bill go forward because votes were tied for and against.
The Bill contains a controversial public interest test to be applied in determining whether dumping occurred.
The test will be whether consumers are benefiting from lower prices, more choice, availability and quality and whether those factors outweigh the effect on industry.
Goldsmith issued a statement to POLITIK saying “The Government does not have a majority on the committee, so no surprise that it was reported back unaltered.
“The Government is considering its options around Supplementary Order Papers at later stages in the parliamentary process.
“This Bill is important because it strikes a balance between considering the wider effects of the duty, while maintaining assurance to our industries that they will be protected against dumped and subsidised goods.”
But Opposition members on the Committee disagreed with those claims.
They said the Bill weakened important protections for New Zealand businesses that suffered from unfair international competition.
BusinessNZ, through the director of ManufacturingNZ, Catherine Beard said dumping products should not be allowed in the New Zealand market.
“Dumping is selling products in an export market at a lower cost than they are sold in their home market,” said Ms Beard and she said that now that the Committee had reached an impasse the Bill should not proceed.
“This Bill came about because there was seen to be a need to reduce the cost of construction materials for the Christchurch rebuild,” she said.
“After the Christchurch earthquakes, the Government suspended penalties, for three years, against Thailand, Malaysia and China for dumping construction products. Now the three-year period is coming to an end; a decision has to be made on what to do about dumping in the future.
“The Bill would allow dumping if a ‘public interest’ test was applied.
“But manufacturers consider the proposed test would be subjective and unworkable and would make New Zealand-made products vulnerable to unfair predatory pricing by international competitors.
“Anti-dumping rules are important for New Zealand – we depend significantly on international trade, and we follow World Trade Organisation rules in all countries we export to. If we were to dump product in any of our overseas markets, we would expect to have anti-dumping penalties imposed.”
There has also been strong opposition to the Bill from National’s provincial heartland with peach growers from the Hawkes Bay taking a petition to Parliament opposing it.
The canning industry argues that a small marginal consignment of canned fruit or vegetables from a larger country overseas could wipe out whole segments of New Zealand’s horticulture industry who use the New Zealand market as their base.
This whole business might be an early test of the desire of the Caucus to become more involved in decision making within the Government.
If National MPs are lobbied by manufacturers in their electorates they might be less sympathetic to Goldsmith than the MPs sitting on the Select Committee were.