You can’t have it both ways

Sure, sure, sure … the age of entitlement is at an end.  Let’s not be fooled.

$25 million for SPC Ardmona was small beer for the government and my guess is that the government found it useful to knock the request back to make the industrial relations argument.

But to suggest that there is any purity coming from the government in relation to industry policy (aka subsidies of various types), forget it.

In the same breath that it knocked back SPCA, it was working to ramp up the already ramped up anti-dumping laws.  I was actually quite relieved when Sophie Mirabella lost her seat (I was not impressed by the way she lost her seat though) because I thought her ridiculous ideas about reversing the onus of proof in respect of anti-dumping claims would also be lost.

But, no, Ian McFarlane, Industry Minister (this position should be abolished, by the way) is evidently working up a package of changes to the legislation underpinning the anti-dumping regime.

Recall that anti-dumping used to be handled by Customs – very slowly and bureaucratically – about as good as you could get without actually abolishing the anti-dumping provisions.

Now I normally don’t read Emmo in The Weekend Australian but his piece this week makes quite a lot of sense apart from over-egging ‘the China will not be happy’ aspect.  It looks pretty certain that reversing the onus of proof in respect of anti-dumping claims (the exporting firms would have to prove that products are not being sold below their costs) would violate World Trade Organisation rules and be struck down.

But here’s the real rub: anti-dumping is just another form of protection, just like governments handing over cash to rent-seeking firms.

And just because I am a sad sack, I did take a look at the Anti-dumping Commission’s recently released report on processed tomatoes after a complaint was launched by SPCA.  It is basically unreadable and far too long.

But the main conclusion is that the dumping margins that the Commission found were tiny and even if a penalty tariff is imposed, it will only make a very small difference to the price of a tin of tomatoes – a few cents. (Note that the non-cooperating exporters will be out of here, in any case.)

So many words, for such a trivial outcome.

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34 Responses to You can’t have it both ways

  1. steve

    Now I normally don’t read Emmo in The Weekend Australian

    ……..but he is a doctor of economics! ……not to mention a great singer and a tour de force in the gigolo department.

  2. Jock

    Even with the dumping ruling imported Italian diced tomatoes are still 40 to 80 cents cheaper than spec ardmona. A big gap to make up. In my view the entire cosy structure of spec is a problem. I also suspect that the Italians have ditched a roe of 12 to 15 percent. Unlike CCA.

  3. H B Bear

    Long live the Leg-over Man. Gone … and largely forgotten.

    Interesting to see CFMEU racketeer Michael O’Connor as another Gillard ex-boyfriend. She must have been as useful as one of those Melbourne hire bikes at the ALP National Conference, for getting around I mean. Unless you were mates with Thommo of course and preferred a hire car.

    Gillard will certainly feature prominently on the Royal Commission “Spaghetti and meatballs” diagram when all the dots are joined. It will look like Atlanta airport.

  4. Angus Black

    The problem in this area is that the Australian farmer must comply with a whole lot of expensive practices mandated by the nanny state relating to environmental “protection”, animal welfare (and, perhaps more justifiable, but nonetheless expensive, restrictions on/requirements for practices which are intended to make the food “better” – less [toxic] chemical contaminants and so on) etc etc and to pay for the cost of policing their conformity with these endless and endlessly changing modifications while and competing (on a pseudo level playing field) with the rest of the world’s agricultural producers who need do none of these things and who are in receipt of massive governemtn subsidy for the most part.

    The tin of italian (and exactly the same goes for NZ) tomatoes you buy almost certainly contains only tomatoes which have been imported to Italy from China where the plants have likely been fertilised using, inter alia, human excrement. The problem is that the consumer cannot tell – indeed, may not care – that such tomatoes would have been condemned as unfit for human consumption under Australian regulations (if it were possible to apply them, which it basically isn’t). The Australian farmer, by contrast has no option but to care and thus to charge more for his product.

    The agricultural sector is a mass of lunatic – and often harmful – regulations. Fix them, make sure that the labels of produce (fresh or processed) is required to explain what the product is, where it came from and how it was produced and neither anti-dumping laws or protection would be required in this sector.

  5. steve

    where the plants have likely been fertilised using, inter alia, human excrement

    ….and the problem is? Do you also realise that tomotoes grow in -shock, horror – dirt? There is no difference whether the fertilizer came out of a human, bovine or equine arse. The product just needs to be clean, healthy and available.

  6. entropy

    Agree that the multi layered mountain of regulations is a ridiculous impost on farming businesses, but if this was true

    The tin of italian (and exactly the same goes for NZ) tomatoes you buy almost certainly contains only tomatoes which have been imported to Italy from China where the plants have likely been fertilised using, inter alia, human excrement. The problem is that the consumer cannot tell – indeed, may not care – that such tomatoes would have been condemned as unfit for human consumption under Australian regulations (if it were possible to apply them, which it basically isn’t).

    a bit of testing for feacal content by some organisation like Choice would be all that would be needed to destroy Italian imports. That it hasn’t happened already would tend suggest that it is just a nasty, malicious rumour.

  7. You can’t have it both ways

    Nonsense; the whole point, principle, zeitgeist and vibe of “progressivism” is, precisely, to have everything both ways. The Greens abhor profits, for instance, but charge well over cost-price whenever they do any selling; the awarmists deplore modern fossil-fuelled travel, and use it constantly whilst sumptuously flitting around the world to command the lesser folk to eschew all modern luxuries; the unions stridently oppose huge wages and expense accounts for company directors whilst lavishing enormous salaries and perquisites on their own leaders; one could multiply examples all day long…

  8. Tel

    Anyone who claims to be able to fully understand the European system of agricultural subsidies is a liar.

  9. robbo

    You are right Judith. I worked in the chemical industry many years ago and fought a good few anti-dumping actions with my colleagues. In the end Customs took so long and the process was so well flagged in advance that the alleged dumpers had long moved on and we had a bunch of peeved customers. In the end the plant was closed.

  10. Tel

    There is no difference whether the fertilizer came out of a human, bovine or equine arse. The product just needs to be clean, healthy and available.

    If the tomatoes are washed properly that’s true. The theory is that maybe some fertilizer ends up splashed up onto the tomato and doesn’t get washed off. In that case, it’s slightly healthier to eat cow dung than to eat human dung. The most critical stage is the washing stage and the quality of the water available.

    I would have thought we could demand random inspections at the factory to check this… but since the product is cooked at high temperature most consumers don’t care. I must admit IMHO the risks are minuscule.

    Bad sprouts on the other hand will kill you stone dead, no questions.

  11. Eyrie

    Not just the position but Macfarlane should be abolished.

  12. steve

    Tel, you don’t have to have random inspections at the factory. Open a can when it get here and test it. Do it randomly, multiple times if you like. I suspect that in order to sell something in Australia it is mandatory for them to pass some sort of health check, but what do I know?

  13. Tel

    bad sprouts?

    A surprisingly large number of people don’t know just how deadly sprouts are.

    http://www.foodsafetynews.com/2011/06/sprouts-and-bacteria-its-about-growing-conditions/

    You will note that if you see Korean cooking where sprouts have been used for a long time, they give them a quick dip in boiling water before serving.

  14. Squirrel

    “Tel

    #1191196, posted on February 16, 2014 at 12:10 pm

    bad sprouts?

    A surprisingly large number of people don’t know just how deadly sprouts are.

    http://www.foodsafetynews.com/2011/06/sprouts-and-bacteria-its-about-growing-conditions/

    You will note that if you see Korean cooking where sprouts have been used for a long time, they give them a quick dip in boiling water before serving.”

    I’m not inclined to sprouts, but thanks for that, anyway – you are so often a fount of interesting facts and details (very impressed by your early post-Federation Hansard research the other week).

  15. Leigh Lowe

    a bit of testing for feacal content by some organisation like Choice would be all that would be needed to destroy Italian imports. That it hasn’t happened already would tend suggest that it is just a nasty, malicious rumour.

    Yes, Angus, by all means make out an argument for health and quarantine which can be tested for and objectively assessed.
    But don’t repeat bullshit pub rumours here about Italian tomatoes containing Chinese shit.
    Incidentally, why is Chinese shit worse than, say, Scandinavian shit?
    Some yellow peril dog-whistling perhaps?

  16. Oh come on

    If the EU taxpayer wants to subsidise my tinned tomatoes, I’m delighted. The Italian tomatoes are nicer than the Aussie ones, too. Thanks, Euroweenies!

    Same goes for Chinese goods.

    “Dumping” (if it exists) is great for the consumer – the most numerous but least considered benefactor of free trading.

  17. Leigh Lowe

    Bad sprouts on the other hand will kill you stone dead, no questions

    Oxymoron alert.
    There are no good sprouts.

  18. candy

    Thanks for that, Tel.

    Think I might keep those sprouts out of my salad sandwiches now.

  19. Leigh Lowe

    This question of dumping bemuses me.
    I have asked this question here before, looking in vain for an economist well versed in dumping regulations to answer it.
    A few weeks back, the Oz carried a report about a dumping case against Chinese and, I think, Korean importers of wind turbine towers.
    However, the head of the Australian peak manufacturing body for towers was quoted, bemoaning a number of factors, including “local labour costs, regulation and energy costs”.
    IMHO, these are competitive factors and have nothing to do with foreign costs of production. In fact, I would have thought the importers would be using this sort of data as a defence to dumping claims, justifying why their costs are lower, leading to the price differential of imports.
    It seems that, in the tiny minds of some (eg Member for Murray, Ms Stone-Fruit) that a price differential is prima-facie proof of dumping.
    Question – Have the dumping rules been enhanced to include elements other than the source country cost of production.

  20. Oh come on

    The tin of italian (and exactly the same goes for NZ) tomatoes you buy almost certainly contains only tomatoes which have been imported to Italy from China where the plants have likely been fertilised using, inter alia, human excrement.

    I want a strong source for your claim that the Italians tin Chinese tomatoes before I buy this claim.

    where the plants have likely been fertilised using, inter alia, human excrement

    Bullshit. I’m sure it happens in isolated cases, but likely? This sounds like the squirrel/possum/rat substituted for chicken scare that stereotypes cheap Chinese restaurants. Collecting and transporting all that poo would end up costing a lot more than the very cheap conventional fertilisers.

    Anyway, aren’t tinned tomatoes cooked before canning, and their skins removed? That’s going to get rid of the majority of the dirt and sterilise what’s left over.

  21. Damon Schultz

    The Australian farmer must comply with a whole lot of expensive practices mandated by the nanny state relating to…animal welfare

    Not sure how this relates to tomatoes.

  22. Baldrick

    Sack Ian McFarlane, scrap the Industry Ministry, do away with anti-dumping laws … next!

  23. boof

    Mcfarlane likes to be known as chain saw but in his own electorate he is known as fret saw.

  24. Oh come on

    Those skinny white sprouts which have to be eaten raw (you can’t cook them because they’d disappear to nothing in 5 seconds) are best avoided for reasons of hygiene as well as taste. Yuk.

    Bean sprouts, however, can be briefly cooked and are nice.

  25. Kaboom

    I’m confused – are the Chinese “dumping” as fertiliser, or are the Italians “dumping” the dumped-upon tomatoes?

    A fruity conundrum…

  26. manalive

    Tinned Italian …tomatoes which have been imported to Italy from China where the plants have likely been fertilised using, inter alia, human excrement …

    That probably accounts for the rich luscious flavour, hum.

  27. rickw

    What is actually wrong with dumping?

    Product X is dumped into the Australian market at below cost, meaning that we get something very cheap. The Australian manufacturers of product X go out of business, the workforce and assets get redeployed into more profitable and lucrative areas of business activity.

    Eventually those subsidising product X will run out of money. At that point, when the business is once again profitable, Australian businesses can return to that market. Let’s face it, there isn’t a massive barrier to entry for tinned fruit and veg, if that businesses is ever profitable again, or if it even exists in the future.

    The key to dealing with dumping is to ensure that businesses can rapidly and quickly close down with few costs and barriers AND that new businesses can rapidly start with few costs and barriers.

    We shouldn’t get to nostalgic (and this is really the issue) about industry and agriculture, what’s the point of hanging around in dying or low margin businesses or businesses that other Governments want to pay money to sustain?

  28. Leigh Lowe

    I’m confused – are the Chinese “dumping” as fertiliser, or are the Italians “dumping” the dumped-upon tomatoes?

    A fruity conundrum…

    ….. and thank you for the dumping double entendre.
    Beautiful work Kaboom.

  29. Tel

    … you are so often a fount of interesting facts and details (very impressed by your early post-Federation Hansard research the other week).

    Thanks. Anyone can do it you know, I don’t keep those in my head…

    http://parlinfo.aph.gov.au/parlInfo/search/search.w3p

    At some stage we the people paid for an excellent search engine, so I recommend everyone should use it.

  30. The LNP are basically level playing field free traders, this though will be a sop to various groups and applied with as much vigour as the old system.

    Any animal manures used in Australia must first be composted. Most of us have seen the the footage of crap going straight from the latrine to the veggies in Asia. As the boy said to the strawberry grower,” I prefer sugar on mine!”.

    Personally as a citrus grower I can see the merit of such an option though of no help when we export, which Australia must .

    As we can’t all expect to be employed in high tech ,cutting edge, industries,with Free Trade I guess that we just have to hope their wages and expenses go up faster than ours go down.

  31. Mick of Brisbane

    “But here’s the real rub: anti-dumping is just another form of protection, just like governments handing over cash to rent-seeking firms.”

    I don’t get it. I figured that the rent-seekings firms were hoping to take funds provided by all taxpayers, because, for what ever reason, were not making a go of it. Whereas the tariffs imposed on dumped products would not be provided to the industry being protected and, a user pays system, meaning, if I don’t buy the dumped product it should make no difference to me or my taxes.

  32. Angus Black

    For all of me, you’re absolutely welcome to eat whatever you want.

    Having said that, here are just a few references to a long saga playing in Europe. Details are not hard to find, so follow the story up, by all means.

    An interesting question to ask is how much Chinese tomato does Italy import? It isn’t hard to find out… But what the Italians do with their vast imports is (intentionally, I imagine) obscure. I’ll leave these questions and identifying the rules for “product of NZ” as an exercise for those interested.

    http://www.freshplaza.com/article/106456/Produced-in-Italy-tomato-puree-made-in-China
    http://www.corriere.it/13_dicembre_06/lithuanian-milk-chinese-tomatoes-and-belgian-ham-italian-food-products-7f3fe532-5e77-11e3-aee7-1683485977a2.shtml
    http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+P-2013-013372+0+DOC+XML+V0//EN
    http://www.theguardian.com/world/2013/feb/27/asda-italy-tomato-puree-china

    And note especially the 2nd last paragraph of http://www.smh.com.au/national/canned-why-local-tomatoes-cop-a-pasting-20120526-1zc2q.html – though the rest is also interesting.

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