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What is dumping?

Dumping occurs when a country or company exports goods to another market at prices below their normal value, often due to government subsidies or predatory pricing strategies.

This practice can distort competition, undercut domestic producers and harm local industries.

Anti-dumping measures, such as tariffs or import restrictions, can be imposed to counteract these unfair trade practices and protect homegrown businesses. Australia’s latest anti-dumping reforms aim to strengthen its ability to detect and penalise dumping, ensuring a fairer market for local manufacturers.

Australia's current anti-dumping system allows Australian manufacturers to apply for anti-dumping or countervailing duties when they believe dumped or subsidised goods being imported into Australia are harming their business.

The government notes that dumping is not prohibited or illegal under World Trade Organisation (WTO) international agreements, but also states that it is defined as anti-competitive behaviour.

In the context of the recent trade tensions and tariffs, Australia's anti-dumping measures are seen counteracting the influx of cheap imports while maintaining obligations under free trade agreements and WTO rules.

How do anti-dumping measures help Australia?

Given the imposition of tariffs, various countries, including Australia, could struggle to sell their products in the US and choose instead to dump them at lower costs in other markets.

This means potentially depriving local manufacturers of their full profits. The Guardian notes that in the worst-case scenario, these manufacturers could be forced out of business.

Strengthening anti-dumping capabilities means protecting the chances of these local manufacturers.

It's important to note that dumping is not always bad, especially if local producers aren't being disadvantaged.

According to TheGlobalEconomy.com, manufacturing makes up 5.36 percent of Australia’s economy. This is half of the world average of 12.33 percent, based on data from 153 countries.

Despite the smaller number, Australia sees manufacturing as a critical component of its economic landscape given that it's responsible for 45 percent of the nation's merchandise exports.

Manufacturing also contributes to 25 percent of total research and development spending in the country.

How does anti-dumping relate to mining?

Anti-dumping is relevant to the mining industry as protecting manufacturers equates to safeguarding domestic industries that supply essential materials and services to mining operations.

Steel is a major element in the manufacturing industry, with Australia currently having 44 anti-dumping measures in place on 12 steel products from 14 countries. Anti-dumping also protects downstream industries, given that mining supplies raw materials such as iron ore and bauxite used for steel and aluminum.

The Australian Steel Institute has said that robust anti-dumping provisions serve as a national defense against unfair trade practices. These policies prevent market distortions caused by dumped imports, helping maintain the viability of both manufacturing and mining sectors.