Welcome to the December edition of Trade Law Focus. In this edition we update on developments with the Australian Government's overhaul of its trade laws, notably in the areas of strategic export controls, sanctions multilateral and autonomous sanctions, and the anti-dumping and countervailing duty system. We also provide our regular summary of recent developments in trade law in Australia and New Zealand.
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Who in trade is talking, about what, where – and why should you be interested?
The world of trade negotiations is changing. Stakeholders must be aware of what they want, what will achieve their desired outcome and where to go to advocate for it. In the emerging environment, internationally engaged businesses should remember:
- Trade negotiations offer opportunity to advance your interests, if you know what you want, how those negotiations can help you achieve those goals, and where and how to effectively advocate for your interests.
- What you want will dictate where, when, how and to whom you should focus your efforts.
- If you want specific technical results, you might consider reaching out to the negotiators on the ground.
- If you want to effect trade policy decision making, you may be best served by finding the decision makers, and optimally, find as many of them in one spot as you can.
In a speech given on October 13, Minister for Trade Craig Emerson did what was until recently unthinkable – he openly discussed the "death" of the Doha Round. It is no coincidence that less than one week later, US President Obama signed into law bilateral trade agreements, with Panama, Colombia and Korea, that had been largely completed during the GW Bush administration, and had been sitting on a shelf waiting passage (Panama for almost eight years).
Jump ahead two weeks, and key leaders and ministers gathered in Honolulu for the APEC Regional Summit. But the headlines were not about APEC. The big news was the Trans-Pacific Partnership (TPP) and the eagerness of countries to progress these ambitious negotiations amongst a growing number of important APEC economies.
These events illustrate two developments. First, there has been a shift in focus away from the WTO towards regional agreements, where results are seen as achievable. Secondly, it is clear in a world focused on regional agreements, the TPP is the biggest game in town.
Another less visible trend is that where the decision makers are having their conversations has become as important as what they are talking about. If you asked trade officials for their candid opinion of APEC a few years ago, they would have labelled it a "talk shop". This year, APEC dominated global headlines, and for those economies concerned, the big objective was progressing TPP. As further evidence of the emphasis on where discussion is taking place, Minister Emerson suggested discussions about WTO rules on regional trade agreements should be held at the G20, not in Geneva.
One reason for this shift is simple: These places are where the decision makers are gathering. Discussions in Geneva are known to have come to a standstill and no longer attract high level attendance. At the same time, the TPP is advancing steadily, with a substantial contingent of industry representatives following the negotiators from round to round.
But even for TPP, meetings of top-level decision makers are rare. With this in mind, stakeholders must be aware of what they want, what will achieve their desired outcome and where to go to advocate for it. For example, if you are concerned about technical treaty drafting issues, such as the geographical indications language in the intellectual property chapter that may need to be "just right" to best serve your industry's interests, then being on the ground with those who are hammering out that language could help deliver the desired result. However, if your main issue is more concerned with broader policy, for instance, Australia's position on investor-state disputes, the real decision makers you would want to reach are unlikely to be one of the trade negotiators traversing the Pacific Basin. Those decision makers are in their respective capitals, and, on rare and valuable occasions, at high level meetings such as APEC, the G20, or the World Economic Forum in Davos. It is at these meetings that a focused and tailored message can reach a critical mass of interested and potentially receptive decision makers.
Author(s) David Morfesi
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Defence Export Control Reforms
The Defence Trade Controls Bill 2011 (Bill) was introduced into the House of Representatives in November 2011. It passed without amendment following a review by the House Standing Committee on Foreign Affairs, Defence, and Trade.
At the time of writing the Bill has been referred to the Senate Standing Committee on Foreign Affairs and Trade for consideration. The Committee has sought submissions by 31 January 2012. The findings of the Committee are expected around April 2012, meaning – barring unexpected developments – the Bill is likely to be enacted by mid-2012.
The Minister has also announced an intention to release the exposure draft of the Regulations to be made under the Bill, which are expected before the end of the year. The Regulations will deal with a range of technical issues, such as the requirements an employee or person engaged as a contractor must satisfy to be a member of the Australian "Community" of approved exporters, as well as other approval and record keeping requirements. A guide as to what can be expected in the proposed regulations is available.
The Bill will significantly change the export control landscape in Australia. Key changes include:
- implementation of the Australia-United States Treaty of Defence Trade Cooperation
- regulation of intangible exports (such as person-to-person contacts or emails) of items on Australia's Defence and Strategic Goods List (DSGL) for the first time
- regulation of the provision of defence 'services' in relation to DSGL items for the first time, and
- the creation of general 'brokering' rules for those who deal internationally with DSGL goods and technology and have a connection with Australia, even where such brokering does not involve an export from Australia as such.
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Introduction of the Autonomous Sanctions Regulations
The Government has released its response to the public consultations received on the exposure draft to the Autonomous Sanctions Regulations. The final version of the Regulations has also been released and is expected to come into effect this week.
Public submissions were generally supportive of the new autonomous sanctions framework because it promises to simplify the system by harmonizing the scheme of Australian autonomous sanctions with those imposed under United Nations (UN) Security Council resolutions. However, submissions called for a range of amendments in order to address the practicality of the regime as well as some aspects of its scope.
The Government has stated that it has not altered the regulations to account for the majority of submissions made. To do so would deviate from the original policy approval behind these reforms, which was to align Australia's autonomous sanctions regime with UN measures. A copy of the Government's response to the public submissions and a final draft of the Regulations is available.
Although the new Autonomous Sanctions Regulations will come into effect this week, existing autonomous sanctions (such as those imposed under Reserve Bank and Customs regulations) are not expected to be repealed until early next year following the transitional period from the old system to the new one.
Our analysis of the Exposure Draft and an explanation of the key differences from the existing regime is available in our News Alert of 6 October.
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Developments in the Overhaul of Australia's Anti Dumping & Countervailing System
Following the major reforms announced earlier this year to Australia's anti-dumping and countervailing system, the first stage of the Government's suite of legislative amendments passed through Parliament mid-October.
The Customs Amendment (Anti-Dumping Improvements) Bill will:
- clarify factors that may indicate material injury to an Australian industry;
- impose a 30 day time limit on the Minister's consideration of an investigation;
- ensure that Australia's anti-dumping system is comparable to those of other jurisdictions by allowing Australian businesses to take action against the full range of subsidies in accordance with WTO agreements; and
- provide relevant parties with an interest in anti-dumping matters an opportunity to participate during an anti-dumping investigation.
A second piece of legislation also passed through Parliament, the Customs Amendment (Anti-Dumping Measures) Bill, clarifies how parties may apply for a review of anti-dumping measures and outlines the test that the Minister must apply when considering whether to remove anti-dumping measures. This reform responds to the Full Federal Court's decision in the Siam Polyethylene case.
Further changes, both legislative and as a result of increased resources to Customs, are expected to be implemented over the coming year. For further information in relation to these changes, please see our recent News Alert Changes to Australia's Anti Dumping / Countervailing Regime.
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Possible Changes to Australia's Anti-Bribery & Corruption Regime
As part of its commitment to stamping out corruption in the public and private sector in the context of the Government's National Anti-Corruption Plan, the Minister for Home Affairs Brendan O'Connor announced in November that the Government was considering the removal of the 'facilitation payments' defence presently available under Australia's anti-bribery law.
This defence provides an exception where small payments intended to secure routine government actions of a minor nature are made to a foreign public official. A similar defence is available under US law, although there is no such exception under UK legislation.
The Attorney General's department has released a consultation paper on the issue and has called for public submissions. Specific areas of focus include:
- the treatment of 'facilitation payments' under Australian law
- the factors that influence whether a benefit is 'legitimately due' to the recipient
- the current requirement to identify a particular foreign public official in order to establish an offence, and
- the role of dishonesty in domestic corruption offences.
Further information is available on the Australian Government website.
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Australia & New Zealand trade law updates
Note: This update covers the period 16 August to 12 December 2011.
Anti-Dumping, Countervailing Duties, or Safeguard Decisions
Australia
- Minister to continue anti-dumping measures for FSI Pineapple from the Philippines
Customs has completed its continuation inquiry and review concerning whether the expiry of the anti-dumping measures regarding Food Service and Industrial (FSI) Pineapple, exported from the Republic of the Philippines (Philippines) to Australia would, or would be likely to, lead to a continuation of the dumping which occurred previously. The Minister decided to continue and vary the anti-dumping measures currently applying to FSI pineapple.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/34
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/36
- Dumping duty to apply to consumer pineapple from Philippines
Customs completed its continuation inquiry and review of the anti-dumping measures applying to consumer pineapple exported from the Philippines. The Minister decided to continue and vary the anti-dumping measures currently applying to consumer pineapple exported from the Philippines.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/35
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/37
- Customs finds no dumping decides on pineapple from Indonesia
In September 2011 Customs terminated anti-dumping investigations relating to FSI and consumer pineapple exported from Indonesia because of zero or de minimis levels of dumping.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO.2011/38
AUSTRALIAN CUSTOMS DUMPING NOTICE NO.2011/39
- Customs to investigate electrical cables from China
On 9 September, Customs announced it would initiate an anti-dumping investigation in respect of electric cables exported to Australia from the People's Republic of China.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/40
- Customs to investigate certain structural timber imports
On 9 September, Customs announced the initiation of an anti-dumping investigation into certain structural timber exported to Australia from Republic of Austria, Canada, the Czech Republic, the Republic of Estonia, the Federal Republic of Germany, the Republic of Lithuania, Sweden and the United States of America.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO.2011/41
- Customs to investigate certain hollow structural sections
On 19 September, Customs announced a combined anti-dumping and countervailing duty investigation into certain hollow structural sections exported to Australia from several East Asian countries.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/43
- Variation of anti-dumping measures for Thai FSI pineapple
Customs recently completed its review of anti-dumping measures applying to Food Service and Industrial (FSI) pineapple exported to Australia from Thailand. On advice from Customs, the Minister decided to vary the anti-dumping measures. Note that neither the review or decision covered exports of FSI pineapple by Malay Sampran Public Co.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/45
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/47
- Consumer pineapple exported from Thailand
Customs recently completed a continuation inquiry and review of anti-dumping measures applying to consumer pineapple from Thailand. On advice from Customs, the Minister announced that he would take steps to secure the continuation of the anti-dumping measures currently applying to consumer pineapple exported to Australia from Thailand. The Minster also imposed duties on Thai Pineapple Canning Industry Corp Ltd, which had previously been excluded from measures.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/46
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/48
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/49
- Clear Float Glass from China, Indonesia & Thailand
The Attorney-General accepted Customs' recommendations to impose anti-dumping measures on clear float class exported from China, Indonesia and Thailand.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/50
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/56
- Investigation into quicklime exported from Thailand
On 27 October, Customs announced that it initiated an investigation quicklime, also known as Calcium Oxide, Burnt Lime and Unslaked Lime, exported from Thailand. Interested parties have until 10 December 2011 to lodge a submission.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/53
- Chinese aluminium road wheels (2011/54)
On 7 November, Customs initiated a combined anti-dumping and countervailing duty investigation into the importation of aluminium road wheels from the People's Republic of China.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/54
- Continuation of anti-dumping measures for American PVC
On 11 November, a notice was published announcing the Minister decided to continue the anti-dumping measures currently applying to PVC exported from the US.
AUSTRALIAN CUSTOMS DUMPING NOTICE NO. 2011/55
- Linear low density polyethylene from Thailand
After an accelerated review was completed by Customs into linear low density polyethylene exported from Thailand, the Minister declared that a dumping notice would apply. The effective rate of duty imposed on exports from Thailand is zero, however a minimum floor price operates such that a duty will be payable where the price falls below the specified threshold.
New Zealand
- Initiation of a review investigation on Plasterboard from Thailand (5 September 2011)
The Ministry of Economic Development initiated a review of the anti-dumping duties that currently apply to imports of plasterboard from Thailand.
Application for a Review of the Anti-Dumping Duties on Plasterboard from Thailand
- Initiation of a dumping investigation on Preserved Tomatoes from Italy (19 September 2011)
The Ministry of Economic Development recommended that a dumping investigation be initiated into preserved tomatoes from Italy. This was based on their conclusions that:
- sufficient evidence has been provided that shows preserved tomatoes from Italy are being dumped
- sufficient evidence has been provided that shows the New Zealand industry is currently suffering material injury, and
- sufficient evidence has been provided that shows the imports of preserved tomatoes from Italy are the cause of material injury.
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Sanctions adopted or modified
Australia
- Autonomous Sanctions Regulations
See comment above.
- New Sanctions on Iran
On 6 December, the Minister for Foreign Affairs Kevin Rudd announced the Government's intention to impose additional sanctions on Iran.
These new measures follow the recent attacks on the British Embassy in Tehran, and a report issued by the International Atomic Energy Agency which raised further concerns regarding Iran's nuclear program. Similar actions has been taken by the United States and the European Union.
Whilst details of these new sanctions is yet to be published, they are likely to involve an expansion of the list of sanctioned entities and individuals, targeting those assisting with Iran's ballistic missile and nuclear programs.
- Amended Sanctions on Libya
In mid-September, the UN Security Council modified the sanctions regime against Libya. Although these amendments are yet to be incorporated under Australian law, they will include:
- new exemptions to the UN arms embargo, permitting countries to provide security assistance to the new Libyan authorities
- removal of the asset freeze and related measures against the Libyan National Oil Corporation and the Zueitina Oil Company
- modifications to the targeted financial sanctions in relation to the Central Bank of Libya, the Libyan Arab Foreign Bank, the Libyan Investment Authority and the Libyan Africa Investment Portfolio to enable the resumption of economic activity
- relaxing of the restrictions on Libyan-operated aircraft operating abroad.
- Additional sanctions on Eritrea
The UNSC adopted Resolution 2023 on 5 December, which imposes further sanctions in relation to Eritrea. This Resolution requires:
- Eritrea to stop using extortion, threats of violence, fraud and other illicit means to extract taxes outside of Eritrea from Eritrean nationals and those of Eritrean descent;
- countries to implement appropriate measures to hold individuals to account who are acting, officially or unofficially, on behalf of the Eritrean government or the PFDJ contrary to the above requirement;
- countries to prevent funds derived from Eritrea's mining sector contributing to breaches of applicable UNSC resolutions, and require businesses and individuals to exercise vigilance to also avoid such breaches.
This Resolution will be given effect in Australia once amendments to the Charter of the United Nations (Sanctions - Eritrea) Regulations 2010 are prepared.
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Notable trade-related litigation
Australia
Tobacco Plain Packaging Act
British American Tobacco has launched a constitutional challenge to these laws in the High Court.
Aluminium Extrusions from China
A number of interested parties have sought judicial review of the Attorney General's decision to impose anti-dumping and countervailing measures in relation to aluminium extrusions from China.
New Zealand
Exide Technologies Ltd v Attorney General [2011] NZHC 1127
Exide requested judicial review of the decision to allow lead acid batteries to be shipped overseas for recycling, because Exide's NZ recycling plant is struggling to get enough batteries to recycle since Australia no longer allows batteries to be exported for recycling. Exide is arguing that the decision to allow overseas shipping of the batteries is counter to the intent of conventions New Zealand is a signatory to that are aimed at reducing the amount of hazardous materials shipped internationally for disposal. The counter-argument is that refusing to allow batteries to be shipped overseas for recycling will create a monopoly for Exide in New Zealand. Exide lost in the High Court, but was granted a stay of judgement while the case is appealed to the Court of Appeal. That appeal was heard on 24 November and the Judges have reserved their decision.
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New Trade Agreement Negotiations
Trans-Pacific Partnership Agreement (TPP) Negotiations
Negotiation round eight was held in Chicago in September, and round nine was held in Lima in October. See above for further commentary in relation to the TPP.
Australia-India Comprehensive Economic Cooperation Agreement Negotiations
The second round of negotiations has been held in Canberra over 17-18 November. Working groups focused on services and investment, goods, and legal and other issues. The goods working group progressed elements on a draft chapter on 'Trade in Goods' and considered other issues such as procedures to advance market access discussions. Views were also exchanged by the services and investment working group as to approach text covering trade in services.
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New international trade disputes involving Australia or New Zealand
Tobacco Plain Packaging Act
Following the passage of the Tobacco Plain Packaging Act through Parliament, Phillip Morris announced it had served a notice of arbitration under Australia's Bilateral Investment Treaty with Hong Kong.
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Notable New Trade Legislation
Australia
Exposure Draft of the Autonomous Sanctions Regulations released
See above for comment
Anti Dumping Reforms:
Customs Amendment (Anti-Dumping) Bill
Customs Amendment (Anti-Dumping Measures) Bill
Customs Amendment (Anti-Dumping Improvements) Bill
See above for comment.
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