The Views Of Farmers And “Officials”

By Global Tax Weekly

In the parlance of global trade, “dumping” occurs when products are exported to one or more countries at below the price they are sold in their home market, or at below cost price. It is generally perceived that such pricing practices are deliberate and predatory: producers of widgets in country A slash prices to the point where producers of widgets in country B simply can’t compete, enabling the former to grab a larger share of country B’s market for widgets. To protect domestic industry, the remedy that country B’s government will most likely use, after much lobbying from said injured industry, is anti-dumping duties. These force up the price of widgets imported from country A, thereby leveling the competitive playing field. Simple but ingenious, no? Well, no. Where do we consumers of widgets stand in all this? Nowhere, is the answer. It never seems to enter into policy makers’ heads that consumers might be fed up with paying for over-priced widgets produced by domestic manufacturers who simply aren’t as efficient and competitive as foreign factories. What’s more, how does a country actually prove that dumping is taking place? It must be very difficult, hence anti-dumping investigations tend to take months, sometimes years. But isn’t it funny how often governments seem to prove themselves right though.

And so I was pleasantly surprised to read that New Zealand has published a public consultation document on legislative proposals that will ensure that the impact of anti-dumping taxes on consumers will be considered before such a remedy is used. Whether this measure will prove effective at protecting the interest of consumers in New Zealand is another matter. I suspect it probably won’t for the simple reason that, ironically, consumers won’t be included in the actual consultation – and not by choice. You’ve got to wonder how many people take an interest in the intricacies of world trade law, and even if they do have some knowledge in this area, how many will actually bother to write in to the Government to express their views? The fact that the minister responsible for this initiative said he’s been taking into account the views of farmers and “officials” in the shaping of this policy – not consumers – pretty much confirms this. Nevertheless, I can’t disagree with the general thrust of the measure, and therefore an encomium goes New Zealand’s way.

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