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A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Garcia, Martin; Baker, Astrid Working Paper Anti-dumping in New Zealand: A century of protection from "unfair" trade? NZ Trade Consortium Working Paper, No. 39 Provided in Cooperation with: New Zealand Institute of Economic Research (NZIER), Wellington Suggested Citation: Garcia, Martin; Baker, Astrid (2005) : Anti-dumping in New Zealand: A century of protection from "unfair" trade?, NZ Trade Consortium Working Paper, No. 39, New Zealand Institute of Economic Research (NZIER), Wellington This Version is available at: http://hdl.handle.net/10419/66072 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Anti-dumping in New Zealand A century of protection from “unfair” trade? NZ Trade Consortium working paper NZ Trade Consortium working paper no 39 December 2005 The New Zealand Trade Consortium in association with the New Zealand Institute of Economic Research (Inc) Preface NZIER is a specialist consulting firm that uses applied economic research and analysis to provide a wide range of strategic advice to clients in the public and private sectors, throughout New Zealand and Australia, and further afield. NZIER is also known for its long-established Quarterly Survey of Business Opinion and Quarterly Predictions. Our aim is to be the premier centre of applied economic research in New Zealand. We pride ourselves on our reputation for independence and delivering quality analysis in the right form, and at the right time, for our clients. We ensure quality through teamwork on individual projects, critical review at internal seminars, and by peer review at various stages through a project by a senior staff member otherwise not involved in the project. NZIER was established in 1958. Authorship This report has been prepared by Martin Garcia and Astrid Baker. The findings, interpretations and conclusions in this research report are the authors’ own and do not represent the views of the authors’ employers. The research report is based on publicly available documentation and does not imply nor represent any personal criticism by the authors of government policy or practice, nor of any actor in the anti-dumping arena. Acknowledgments This research could not have been completed without the assistance of Anne Corrigan, Gabrielle Nixon, Bridget Martin, Greg Smith, Oriana Chin, Raewyn Tiopira, Paul Herd, and Rebecca Ellis of the Ministry of Economic Development; Ruth Graham of the Parliamentary Library; and John Mills and Tony Lynch of the Ministry of Foreign Affairs and Trade. 8 Halswell St, Thorndon P O Box 3479, Wellington Tel: +64 4 472 1880 Fax: +64 4 472 1211 [email protected] www.nzier.org.nz NZIER’s standard terms of engagement for contract research can be found at www.nzier.org.nz. While NZIER will use all reasonable endeavours in undertaking contract research and producing reports to ensure the information is as accurate as practicable, the Institute, its contributors, employees, and Board shall not be liable (whether in contract, tort (including negligence), equity or on any other basis) for any loss or damage sustained by any person relying on such work whatever the cause of such loss or damage. Abstract Political pressures and concerns about “unfair” trade provide the main rationale for retaining broad anti-dumping provisions in most countries. Almost one hundred years ago, New Zealand was the second country in the world to introduce anti-dumping legislation. Since then New Zealand’s anti-dumping policy and legislation have changed significantly in response to both internal and external pressures. The key issues over the years have remained essentially the same. To what extent should domestic producers be protected from the effects of dumping? To what extent should the interests of other groups, such as consumers and downstream industries, be taken into account? There is a natural tension between the first issue - protection of the private interests of producers - and the second – the public or national interest. The issues of protectionism and the public interest are at the centre of the debate about anti-dumping. The political factors influencing anti-dumping policy are this study’s main focus. The study examines the history of anti-dumping policy in New Zealand, how and why it has been justified and what has shaped it. The study shows that the anti-dumping debate involves the concentrated and organised interests of import-competing industries and their employees, who benefit directly from the protection provided by anti-dumping duties, and other interest groups who bear the more or less widespread costs of anti- dumping action, such as consumers and downstream industries. Manufacturing industries have been able to place significant pressure on governments to retain strong anti-dumping provisions, particularly as other general forms of protection have been removed or reduced and New Zealand has entered into bilateral free trade agreements. Despite this pressure, governments and officials have remained intent on ensuring that anti-dumping does not replace general protection and anti-dumping on trans-Tasman trade was removed in the interests of competition. Recent proposals that competition and wider interests should be considered before taking anti-dumping action have met strong resistance from manufacturers, with pressure from importers, consumers and downstream industries remaining either limited or absent. NZIER – A century of protection from “unfair” trade? i Contents Anti-dumping in New Zealand...........................................................................i 1. Introduction...............................................................................................1 1.1 Dumping and anti-dumping ....................................................................1 1.2 Factors influencing anti-dumping............................................................2 1.3 Anti-dumping as protection.....................................................................2 1.4 Incidence of anti-dumping ......................................................................3 2. Protection and anti-dumping...................................................................4 2.1 Private and public interests ....................................................................4 2.2 Trade liberalisation and the GATT..........................................................5 2.3 Protection and anti-dumping...................................................................6 2.4 Conclusion..............................................................................................8 3. Legitimising anti-dumping actions .........................................................8 3.1 Dumping .................................................................................................8 3.2 The early history of anti-dumping ...........................................................9 3.3 The General Agreement on Tariffs and Trade........................................9 3.4 The World Trade Organisation ...............................................................9 3.5 Unfair trade and equity .........................................................................10 3.6 Rationales for anti-dumping..................................................................11 3.7 The Development of anti-dumping in New Zealand..............................14 4. Design and method of research ............................................................16 4.1 Previous research.................................................................................16 4.2 Literature reviews .................................................................................16 4.3 Analysis ................................................................................................17 4.4 Limitations ............................................................................................17 4.5 Ethical issues .......................................................................................18 5. Flexible anti-dumping protection ..........................................................19 5.1 Agricultural Implement Manufacture, Importation, and Sale Act 1905 19 5.2 Monopoly Prevention Act 1908.............................................................23 5.3 Early anti-dumping action .....................................................................23 5.4 Customs Amendment Act 1921............................................................24
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