This report is intended to assist people making a submission to the Productivity Commission's inquiry into the import of processed tomato products.
About the inquiry
On 21 June 2013, the Australian Government asked the Commission to inquire into whether safeguard action under World Trade Organization (WTO) rules is justified against imports of processed tomato products falling within tariff subheading 2002.10.00.60 of the Australian Customs Tariff. The terms of reference are reprinted at the beginning of this report.
Safeguard action is temporary, ‘emergency action’ (using tariffs, tariff-quotas or quotas) implemented in situations where a surge of imports causes or threatens to cause serious injury to a domestic industry. Safeguard measures may be applied for up to four years, and may be extended for a further four years, subject to several conditions (Commonwealth of Australia Special Gazette No. S 297, 1998).
The Commission is to provide a report to the Australian Government by 20 December 2013 on whether safeguard measures are justified. In addition, the Commission is to provide an ‘accelerated report’ by 20 September 2013, as to whether provisional safeguard measures should be put in place. According to Article 6 of the WTO Agreement on Safeguards, provisional measures may be implemented:
[i]n critical circumstances where delay would cause damage which it would be difficult to repair … pursuant to a preliminary determination that there is clear evidence that increased imports have caused or are threatening to cause serious injury.
The terms of reference require the Commission to conduct the safeguards inquiry in line with the criteria set out in the Commonwealth of Australia Special Gazette No. S 297, as amended by No. GN 39 (reprinted in appendix B). These criteria largely mirror the terms of the WTO Agreement on Safeguards. They stipulate that before recommending any safeguard measures, the Commission must:
- determine whether safeguard measures would be justified under the WTO Agreement and, if so,
- consider what measures would be necessary to prevent or remedy serious injury and to facilitate adjustment.
Australia’s procedures for safeguard inquiries go beyond what is essential under the WTO Agreement. In assessing whether measures should be implemented, the Commission must also have regard to the Government’s requirements for assessing the impact of regulation which affects business. This requires the Commission to subject any proposed measures to a regulatory impact assessment of the community-wide costs and benefits, before making a recommendation.
Under WTO rules, a government can only take safeguard action (whether final or provisional) if its ‘competent authority’ finds that action is justified. Although the government can choose not to act, if it does take action it cannot impose measures greater than those considered appropriate by the authority (in this case, the Productivity Commission).