Tuesday, 29 July 2014

A tale of two "protections"

When I was looking at the Australian Productivity Commission's reports as background for my previous post, I discovered that somewhere along the line the Aussie Productivity Commission had drawn the short straw, and had been made the regulatory authority for what are euphemistically called "safeguard measures", or in other words emergency "protection" against imports.
And so in June 2013 the Aussie government asked it to look at the case for "safeguard measures" against those wicked underminers of the Australian economy, and of Aussie firm SPC Ardmona in particular: imports of tinned fruit and tinned tomatoes.
In December last year, the Commission ruled on both. It said, go away.
On fruit, it said:
"The domestic processed fruit industry is suffering serious injury. However, injury was not caused by an increase in imports of products under reference...Other factors have caused the injury, including: decreasing domestic demand for processed fruit; rising domestic costs of production; and decreasing export volumes. Also playing an important role were domestic competitive pressures in the retail sector, where the availability to the supermarket chain of the option to import provides the threat of reduced margins for SPC Ardmona, but where the choice of that strategy is, ultimately, a domestic decision".
On tomatoes, it said:
"While absolute imports have not increased in a sudden, sharp or significant manner during the period under investigation, domestic production has fallen significantly. This has caused an increase in the ratio of imports to domestic production that passes the test in the Agreement on Safeguards. The domestic processed tomato industry is suffering serious injury. However, the injury was caused by other factors, including domestic competitive pressures emanating from decisions made by supermarkets, the appreciation of the Australian dollar and floods in the tomato growing regions of Victoria".
SPC Ardmona had also stirred Australia's Anti-Dumping Commission into action against those damned South African peaches. No, I don't know how the Aussie Productivity Commission and their Anti-Dumping Commission share the waterfront, either, but it doesn't matter, since the Anti-Dumping Commission also told SPC to go away. It said it was "satisfied that, in relation to [two South African exporters], the goods exported by those exporters have been dumped, but the dumping margin is less than two per cent and, therefore, has decided to terminate the investigation".
Three cheers for three small victories in the never-ending battle for free trade.
However.
Back on this side of the Tasman, MBIE drew the short straw and got to do the anti-dumping stuff. Here, Heinz Wattie's has been on its case about those damn peaches, and with considerable success. It got anti-dumping duties imposed in 1996, and again in 2007/08. They were due to expire in 2013, but Wattie's made another fuss, said they still needed the protection, and got it. The duties were renewed yet again, as you can read here (I warn you, it's a rather turgid, technical read, though trade policy wonks may conceivably like it).
You'll be pleased to know that MBIE is also protecting us from those awful cheap peaches from Greece. Oh, and Spain.
So my question is this. If even the easy-to-stir-to-protectionism Aussies - remember the terrible fireblight on our apple exports? - have flagged away trying to keep out peaches and tomatoes, why are we persisting?

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