Parliament's commerce select committee was split on a bill which seeks to introduce an additional test before anti-dumping penalties can be imposed, with opposition MPs opposed, in the run-up to a formal investigation into Chinese steel dumping.
The Trade (Anti-dumping and countervailing duties) Amendment Bill, first announced in August 2015, suggests introducing a bounded public interest test - one which would consider the cost of duties only on downstream industries and consumers - as part of an investigation into dumping. The test would include public interest elements such as competition and consumer benefits, and would add 90 days to the existing investigation timeline.
Dumping is when manufacturers export products at a lower price than they sell to their domestic market, while countervailing is when foreign governments provide a subsidy on exports. Currently, a duty is imposed on those dumped products considered to harm New Zealand manufacturers or a local industry, but the costs of imposing duties are not considered.
The committee was tied on voting on the bill and couldn't agree on whether to recommend it be passed, it said its December 9 report back to parliament. National Party members of the committee supported the bill, which they said would be fairer than the current regime as it would allow the commerce minister to consider the wider effects of a duty, and would increase competition and enhance consumer welfare.
The opposition members of the committee opposed the bill, saying it weakened important protections for New Zealand businesses which suffer from unfair international competition, particularly small businesses.