Impact Publications : AirCargo-260
AirCArgo AsiA-PACifiC • JUNE, 2019 • Page 15 that dumping and subsidies could actually deliver an advantage to the economy far in excess of the damage to Australian industry. This included a separate propos- al for a ‘national Interest’ test to assess whether trade remedies measures were actually in the broader national interest as op- posed to merely looking at injury to local industries affected by the dumping or subsidy. The Review was released on June 12, 2019, with a lead message confirming that global trade is under its greatest threat since World War II. It includes a series of recommendations on economic and trade issues, as well as social issues although my focus is on economic and trade issues, only some of which are discussed below. Consequences of a trade war The Commission observed that even though Australia is not directly engaged with the ma- jority of the main trade issues, it would be directly affected by the consequences of a trade war - and would also be directly affect- ed if that war was averted between the US and China (and maybe the EU) through a series of massive trade deals which would divert trade away from Australia. Further, even though Aus- tralia has been portrayed as a proponent and leading party in liberalising trade, the Com- mission found that Australia “has continued to retreat into protec- tionism in some areas” through A$14.4 billion in annual assistance to industries that lowered its in- ternational competitiveness. The Commission further found that “we damage our own prosperity by maintaining nuisance tariffs, other trade restrictions and one of the most active anti -dumping regimes in the world”. According to the Commission, manufac- turing and primary production receive 28 per cent of assistance while contributing nine per cent of value added to the Australian economy. In the context of the primary production industry it found that government support through droughts often undermined the incentives to farmers to manage their own risks and were ineffec- tive in supporting sustainable farming practices. It said that a new drought policy and a review of subsidies was warranted. Although there were a num- ber of recommendations in the Review, some which were consistent to previous recom- mendations were that Australia should dismantle its anti-dump- ing regime and unilaterally remove its one-to-five per cent tariffs, which the Commission described as ‘nuisance’ meas- ures only delivering A$2 billion a year but requiring a massive support network to be levied and recovered. Those particular recommenda- tions were of no great surprise as they echoed earlier recommen- dations by the Commission. They had previously been rejected and there seems little prospect that they will now be accepted either in political or commercial circles. The recommendations draw from the Commission’s own form of economic assess- ment which may not include con- sideration of wider policy issues. It is not surprising that some responses were that the current policy settings were there for good reason in accordance with international agreements, poli- cies and standards so that move- ment would need to be driven by other factors (for example, the offer of reducing tariffs on Euro- pean vehicles as part of negotia- tions with the EU for an FTA). However, in my view, the rec- ommendations of the Commis- sion warrant very close attention together with considering how there could be a ‘second best’ reform which includes keeping the existing regimes but improv- ing how they operate so that they are not seen as protectionist or inefficient. Consistent with its position on the importance of an open global economy, the Commission was also strong in its recommen- dations to support the WTO and to take all possible steps to achieve position outcomes from the current tensions. One ray of light from the Review was an apparent slight thaw in the position of the Commission regarding FTAs. In an earlier report, the Com- mission questioned the value of the FTAs (from a pure economic perspective). However the Review includes a recommendation for better outreach and engagement on the benefits and use of FTAs seeking to overcome general lack of knowledge or negativity regard- ing FTAs - which suggests a view that there are merits in FTAs after all. The Review and its recommen- dations provide excellent hard data on current trade issues and propose changes which, even if not accepted in full, form the vital basis for work to improve on cur- rent economic and social policies. The Commission found that “we damage our own prosperity by maintaining nuisance tariffs, other trade restrictions and one of the most active anti -dumping regimes in the world”.