Will the new anti-dumping boss do what’s right or what’s normal?

Industry Minister Ed Husic is due shortly to name a replacement for Bradley Armstrong as head of the key trade protection agency, the Anti-Dumping Commission.

Armstrong, whose three-year term expires in the middle of next month, has won widespread applause for taking the time to hear both sides of the argument in the difficult role.

His term was not without controversy, most recently when questions were raised about the dropping of duties on Chinese wind turbines at a time when the federal government was seeking the reversal of penal tariffs imposed on a range of Australian exports, including wine and lobsters.

The dumping commission is an independent statutory authority and not supposed to bow to political pressure.

In 2021, Armstrong replaced three-term boss Dale Seymour, who was seen as being close to the major users of the scheme, particularly local manufacturers seeking backdoor protection.

Dumping occurs when imports land in Australia at below their normal value in their country of origin and cause injury to Australian industry.

The commission works out what duty to apply to lift the price of imports to “normal” levels if injury can be established.

In recent years the strong domestic market has raised the barrier to the imposition of duties due to record local profits.

Industry Minister Ed Husic has an important job at hand, choosing the new boss of the Anti-Dumping Commission. Picture: Martin Ollman

The overwhelmingly dominant users of the system are steel monopolies, BlueScope (flat products) and InfraBuild (long products) which account for 83 per cent of all cases before the ADC and 71 per cent of measures in place.

But other users include ammonium nitrate and chemical producers Orica (formerly ICI), Wesfarmers and Dyno, Golden Circle Pineapple and Italian-based electric cable producer Prysmian.

China is the target of most Australian complaints, with 18 dumping and 11 countervailing duty measures outstanding, followed by South Korea at seven, Malaysia at six and Taiwan with six.

The dumping duties are an effective protection mechanism helping the often monopolistic local manufacturer while hurting scores of other downstream producers with higher costs.

They are allowed by the World Trade Organisation as a means of stopping unfair trade and hide local producers seeking protection behind this measure of respectability.

In a statement last September, Productivity Commission deputy Alex Robson said: “We recommend getting rid of our remaining tariffs and progressively removing Australia’s anti-dumping and countervailing measures and subject any new measures to an economy-wide and cost benefit test.”

Just whether Husic goes this far remains to be seen, but given the politics it is doubtful.

This puts more pressure on choosing the right person to run the agency.

The benefits of the present system go to a handful of high profile and vocal minorities and the detriments are widespread to a sometimes ignorant group of downstream users.

The winners then of wholesale reform are arguably sometimes not aware of their potential gains.

This is the political test facing Husic, a decision which may hurt the vocal minority to the benefit of an ignorant majority, particularly at a time when cost of living pressures are top of the government’s to-do list.

The PC, for one, has made its views clear and the ACCC would support its recommendations given the threat of dumping action is often used by dominant companies in a highly concentrated industry.

In its successful recent case against BlueScope and former executive Jason Ellis, dumping threats were the central part of the attempted cartel behaviour. BlueScope has appealed the ruling.

Bradley Armstrong came to the job with an eclectic career starting as an apprentice carpenter before doing some time as a banker and diplomat, earning a PhD in anthropology along the way.

Assuming Husic doesn’t take the rational step of winding down the dumping commission, the question remains just who will be the next boss and whether this person follows Armstrong’s open mind or the politically convenient role of bowing to the noisy minority.

USA v AUS: A tale of two focuses

Just as the US focus turns to a string of potentially high-profile tech antitrust rulings the federal government is instead looking at potential merger reforms.

Submissions on the matter are due in the middle of this month, pitching big business against the ACCC, which wants a major overhaul of its merger powers.

Clayton Utz partner Michael Corrigan noted most trade practices lawyers are opposed to the bulk of the changes being sought, arguing the ACCC has the necessary powers and it’s just a question of using them better.

While his colleagues in the US await judicial guidance the Australian focus is on law reform.

The pace of reform is glacial, as highlighted by the tepid pace on issues surrounding artificial intelligence reform.

Quay Law Partners Angela Flannery and Dave Poddar note a federal government “outcomes” paper released late last month does little more than acknowledge AI and copyright is “complex”, with further discussion required.

The New York Times in the US is attempting to use copyright law to force Microsoft and ChatGPT to a better deal on using its content.

Australian copyright law is stronger than in the US where more exceptions are granted, and Flannery and Poddar argue “given the rapid developments in AI, which show no signs of slowing, there is little time for a slow-moving consultation process”.

“Government must move quickly to determine what protections are required for Australian media and other content providers and decisively take that action. It is hoped such action provides for a long-term solution,” they said.

PwC claims AI-related economic inputs will hit $US15.7 trillion globally in 2030.

The US cases, which come to a head this year, include one against Google alleging abuse of its near monopoly search functions, excess market power in ad tech, and Meta’s acquisitions of WhatsApp and others to entrench its market power.

The US cases are a major test of the Biden administration’s antitrust revolution lead by former News Corp lawyer Jonathan Kanter and the Department of Justice’s Lina Khan.

The reforms sought by the ACCC include mandatory merger notifications above a $35m deal value, reversal of ownership of proof so the parties wanting the merger must satisfy with the regulator the deal doesn’t breach competition tests, and new tests including whether the deal is part of a series of acquisitions, entrenches or extends market power and whether it results in increased access or control of data.