Goldsmith PaulTRADE (ANTI-DUMPING AND COUNTERVAILING DUTIES) AMENDMENT BILLFirst ReadingHon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): I move That the Trade (Anti-dumping and Countervailing Duties) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. The bill puts in place new arrangements for the Government to consider the wider impact of imposing anti-dumping or countervailing duties.In 2013 the Government completed the Residential Construction Market Study in response to a Productivity Commission report into the cost of residential construction. The study found that residential building materials were considerably more expensive in New Zealand than in Australia and recommended steps that the Government should take to reduce their cost and help improve housing affordability. One recommendation was to remove tariffs on residential building products which the Government did by putting in place a tariff concession in 2014. Another was to introduce a public interest test into the dumping and countervailing duties regime. The study highlighted that anti-dumping and countervailing duties can impose costs that are disproportionate to their benefits.The current system protects New Zealand industry from material injury caused by the dumping and subsidisation of goods from abroad but it does not take into account the wider public interest when duties are imposed. So the point of this bill is that it will allow the Government to have a fuller consideration of the effect of duties through the introduction of a bounded public interest test also known as a consumer test. The test will consider the benefits that a duty will have for the domestic industry against the cost of that duty on downstream industries and customers. This change modernises the anti-dumping and countervailing duties regime by weighing up those who will pay for the duty through higher prices and those who will benefit.The test will have a materiality threshold built into it—that is a presumption in favour of imposing duties. The bill requires that duties are imposed unless the cost to downstream industries and consumers is likely to materially outweigh the benefits to the domestic industry. The materiality threshold is designed to strike a balance between maintaining a regime that provides an appropriate degree of assurance to domestic industries that they have remedies available to them when confronted by dumped or subsidised goods and the wider public interest in determining whether duties should be imposed. Dumping and countervailing duties are legitimate trade instruments that are part of an international set of rules necessary to facilitate fair and honest trade between World Trade Organization members. The dumping and countervailing duties agreements provide member States with legitimate trade instruments to level the playing field and to provide remedies against dumped or subsidised goods. It is important that New Zealand maintains an effective trade remedies regime so that our domestic industries have confidence in the international trading system.However the current Act does not allow the Government to consider the effect that duties can have on consumers and other industries. The bill prescribes specific factors that the public interest test must consider. They relate to competition prices alternate supply sources choice and availability quality employment levels and the financial viability of the domestic industry. The public interest test reflects similar credible trade remedy regimes such as those found in Canada and the European Union and was developed with consideration of specific features of the New Zealand economy. The test is necessarily bounded within parameters and factors prescribed in the legislation. This ensures that the Government maintains a consistent approach over time. The test will be automatically conducted immediately after investigations or reviews.The current Act gives specific deadlines before which investigations have to be completed. This bill continues those deadlines and imposes additional time frames within which the public interest test must be completed. The Minister will make a determination on whether or not to impose duties based on officials' findings that dumped or subsidised goods have caused or threatened to cause material injury to a domestic industry and whether or not those duties are in the public interest. Officials will collect information from parties that are likely to be affected by the duties being imposed or not imposed. They will also draw on advice from external expert parties such as the Commerce Commission and use information gathered in the initial investigation on dumping or subsidisation causing injury.The bill requires officials to release a draft findings report prior to making the final recommendation. Interested parties will be invited to comment on draft findings. The bill will allow the Government to complete a public interest test on ongoing investigations and on duties that have been determined within 3 months before the date of commencement. The bill also clarifies various processes in the Act that are undertaken in conformance with the World Trade Organization rules. For instance the bill clarifies the decision-making powers and reviews of existing duties and explicitly allows for the imposition of a separate rate of duty for named exporters and a residual rate of duty for all other exporters and allows for those rates to be reassessed if circumstances change. I am sure the members are very pleased to hear that.The Government considered and consulted on an automatic termination period—this is where duties would automatically expire after a set number of years. I spoke extensively to relevant industry representatives and decided that introducing a public interest test but not an automatic termination period would strike the right balance between improving competition and maintaining an effective dumping and countervailing duties regime.The bill also creates a power for the Government to suspend or terminate current duties or to defer or not impose new duties on products where the users have been affected by a natural disaster. This power is a stand-alone provision in the bill so it is not tied to the public interest test nor any review provision. This provision will strengthen the Government's ability to respond to natural disasters. The bill ties the natural disaster powers to the Civil Defence Emergency Management Act to ensure a consistent approach to emergency management across legislation.I do nominate the Commerce Committee to consider this bill because it will improve competition in the New Zealand economy. Under the current legislation anti-dumping and countervailing duties can impose costs that are disproportionate to their benefits. This bill takes the necessary steps to modernise the legislation. The new consumer test will help promote competition in New Zealand by requiring the Government to consider the interests of consumers and downstream industries before imposing duties. So I do look forward to progressing the bill through the House. I move that the bill be now referred to the Commerce Committee for consideration. Thank you.