CUSTOMS (DUMPING AND SUBSIDIES) BILL

Order for Second Reading read.

3.49 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I have the Yang di-Pertuan Negara's recommendation that the Bill be proceeded with. My Parliamentary Secretary will move the Second Reading.

The Parliamentary Secretary Minister for Finance (Mr S. Ramaswamy): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

As early as 1954, a World Bank Mission recommended the introduction of anti-dumping legislation to protect industry in Singapore against unfair competition. Now the United Nations Industrial Survey Mission in its Report has again made that recommendation. The Mission is convinced that there have been some instances of exports of other countries being dumped into Singapore at prices below cost, and that there have been other instances in which the exports of industries in Singapore have been discriminated against. Therefore, without anti-dumping legislation, any country can set up a high tariff wall against Singapore's products and dump its exports into Singapore at unfair and destructive prices. This very vulnerability is psychologically unhealthy.

Besides, anti-dumping legislation for Singapore has the advantage of strengthening the State's bargaining position against that of other countries in trade matters. It may also be advantageous in negotiations for trade arrangements with other countries for mutual protection of each other's goods.

The Federation of Malaya already has an anti-dumping Ordinance, and similar legislation for Singapore is desirable.

New legislation is considered necessary in this instance, because the Control of Imports and Exports Ordinance is not suitable for the purposes outlined above, and the existing Customs Ordinance does not provide for levying of import duties on items on grounds of dumping. With the new legislation, adequate countervailing duties can be levied without the time-consuming processes provided for in that Ordinance. The purpose of this Bill is to ensure that industries in Singapore are not choked off by a flood of goods dumped into the State at uneconomic prices. Manufacturers had complained to the Government that there were instances of new industries that have been established in Singapore which suffered almost instant death because the prices of imported products were reduced just as these factories commenced production. I am not in a position to say whether these complaints of the manufacturers are well founded or not. There was, at the time when these alleged offences occurred, no proper machinery for the investigation of such complaints. The Bill sets out in clause 7 two tests for the imposition of countervailing duties. These are that the effect of dumping is such as either to cause or threaten material injury to an established industry in Singapore or to retard periodic establishment of industries in Singapore.

I can assure the House that the powers given under this Bill will be used with care and discrimination. In an entrepot economy such as ours, import duties should be introduced only when it is established beyond doubt that the gain to the State in terms of employment, national income and economic growth outweighs any possible loss to the entrepot trade. The mere existence of this Bill may itself make any action unnecessary for importers, and the manufacturers abroad whom they represent would know that any attempt to destroy Singapore's economic growth by unfair economic practice can be frustrated with ease. This factor alone will serve as a constant reminder to everyone - a reminder which I trust will make it unnecessary to enforce the provisions of this Bill. In the Federation where a similar Ordinance has been enforced for some years, there has been no instance, to my knowledge, where countervailing duties have had to be levied. It is my hope that our experience in Singapore will be equally happy.

The Customs (Dumping and Subsidies) Ordinance, 1961, does not in any way contravene the General Agreement on Tariffs and Trade. Under Article VI of the General Agreement on Tariffs and Trade, any contracting country is permitted to protect itself against the flooding of its market by products of another country at less than normal value. It is also permissible to impose countervailing duties to offset any bounty or subsidy given to the exported products of another country.

Sir, I beg to move.

Question proposed.

Mr David Marshall: Mr Speaker, Singapore has a century - old tradition of being a free port. Again and again, we have often heard legitimate requests for the imposition of duties to protect the establishment or even the survival of existing industries, and we have repeatedly resisted these requests until very recently, because we are conscious that once you introduce the thin end of the wedge and start imposing duties on imports, that tradition which is of such value to us will slowly evaporate and Singapore will lose much of its trade and goodwill.

In those circumstances, Sir, every attempt to impose duties on imports should be carefully scrutinised and no responsible government should attempt to introduce measures to that end unless the case for such measures is overwhelming. Is the case for the provisions of this Bill overwhelming?

The Second Reading of this Bill is moved by the Parliamentary Secretary and he tells us that he knows of no single instance in which the Ordinance was utilised in the Federation. He tells us that he knows of no single instance in Singapore where a complaint of dumping was justified because they do not have the machinery to prove what a fair price is. In those circumstances, it must be obvious to this House that the conditions do not exist for this Bill or for the need of this power.

The Parliamentary Secretary goes on further to say that he hopes - no doubt he has every reason to hope - that the powers here would never be used. In those circumstances, Sir, the powers should never be sought. They are great powers which are given to His Excellency the Yang di-Pertuan Negara without the advice of any Committee. We appreciate constitutionally that it means the Cabinet, but the Cabinet can take these decisions without the advice of any Committee in whom we can place reliance that they should view these matters from the purely economic aspect. We who survive by virtue of serving our neighbours should never place ourselves in a position whereby our Government could in a moment wangle or otherwise utilise these provisions against a neighbouring State. In fairness to the Government, Sir, they have put in provisions whereby orders made under this Bill when it is made law would be submitted to this House so that this House would have scrutiny of government conduct in each and every instance. I must say, Sir, that that very fact, to my mind, takes away the sting from the provisions which lead to the exclusive discretion of the Cabinet the decision whether to impose duties or not on the whole range of goods which come into this area. But I do deplore - and I speak not as a businessman but as a citizen who is conscious of the life-blood of this country in its service in commerce - the action of the Government in seeking to introduce a Bill which gives powers of imposing duties where the need for such a Bill has not been made out, and it is frankly admitted that there is no such need.

Dr Goh Keng Swee: Sir, I listened with astonishment to the outburst by the Member for Anson. He said that the Government had admitted that the need for introducing the Bill has not been established. I think it may be that he misunderstood what the Parliamentary Secretary said. The Parliamentary Secretary made the point that in the past the Government had received complaints from manufacturers that goods were being dumped, as a consequence of which factories had to be closed down. All that the Parliamentary Secretary said is that in the absence of suitable machinery for investigation, it was not possible for the Government - and he was not referring to the present Government but to previous Governments - to establish whether or not these complaints are true. They may be true, they may not be true. Until a full and thorough investigation has been made with the backing of the law, it is not possible to draw definite conclusions.

As for the Member for Anson's contention that no case has been made out for the necessity of this Bill, surely, Sir, the opinion of experts of the World Bank is not to be set aside very lightly, and they made this recommendation as early as 1954. No doubt when the Member for Anson was Chief Minister of the State of Singapore - before that he was Minister for Commerce - he must have seen and studied the recommendations of the mission despatched by the World Bank. Weighty reasons were adduced in, the Report. I do not think such opinion could be lightly dismissed as unworthy of consideration by any government. But more recently we have had the opinion of another mission of industrial experts, despatched by the United Nations this time, and they urged with some emphasis that it was high time the Government implemented the recommendation of the World Bank made as far back as 1954. This is one of the principal reasons why the Government today is seeing this Bill through.

Everyone, of course, is aware of the importance of the free port status of Singapore and no one in his senses would want that free port status destroyed. The Member for Anson did suggest in his remarks that in a moment of anger the Government might impose retaliatory measures against a neighbouring State wherby in that way we destroy the free port status of Singapore. Sir, I can assure the hon. Member that the Government never makes any important decision, in fact, never makes any decision in a moment of anger.

He was also under some misapprehension as to the contents of the Bill. He seemed to be under the impression that this Bill empowers the Government to levy import duties on - to quote his own actual words - "the whole range of goods". This Bill does not give the Government any such powers. The powers are limited to the levying of import duties on a restricted class of commodities. They are defined, I think, in clause 7 of the Bill. They refer to goods which are manufactured in Singapore or are about to be so produced in the State. Therefore, when those goods are not manufactured or where there is no immediate prospect of their manufacture in the State, the powers given in this Bill do not apply.

Now, while we have been able in the past century or more to grow or prosper because of the services being performed as a free port and the emporium for South-East Asia, it is now getting obvious to everyone that this trade is an entrepot trade by itself. If we are not able to expand fast enough to provide increasing employment and a growing national income for our rapidly increasing population, we are therefore compelled - and by "we" I do not mean merely this Government, I say the country as a whole is compelled - to ensure its future livelihood by other means. One of the principal measures open to us is to rely on ourselves and our resources to produce those goods which we are now importing, and to produce, if possible, new goods which we can export to other countries, thereby yielding income to the State and providing employment for our population. This is a task of considerable magnitude. The whole of our future prosperity and well-being will depend on whether the country as a whole can achieve success in this endeavour.

The Bill now before the House is one of those very necessary measures which we must take if we decide to accept accelerated industrialisation as a serious objective of our endeavours. Many other things will have to be done. Perhaps some of these will require greater efforts, amounting to sacrifices on our part, if we are to succeed in the great effort that lies ahead of us.

So all we can say at this moment is this: that the Government must have these powers to ensure that the new industries which are established in Singapore can have reasonable security against dumping from foreign sources. At the same time, we must take into account the demands of the free port, and where any particular instance of a request for the levying of countervailing duties arises, the Government will be in a position to make the necessary calculations of profit and loss to strike a proper balance sheet, and, after all relevant factors have been taken into account, to make the proper decision in the interests of the people.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole Assembly.

Assembly immediately resolved itself into a Committee on the Bill. -[Mr Ramaswamy].

Bill considered in Committee.

[Mr SPEAKER in the Chair]

4.12 p.m.

Clause 1 -

The Chairman: The figure "1961" will be altered to "1962" as a matter of course.

Clause 1 ordered to stand part of the Bill.

Clause 2 -

Mr Ramaswamy: I beg to move,

In page 1, lines 8 to 10, to leave out the whole of sub-clause (1) .

Mr Speaker, Sir, sub-clause (1) refers to the General Agreement on Tariffs and Trade concluded at Geneva in 1947. But there is no reference to this General Agreement in the whole of the Bill. Therefore, it becomes necessary to leave this out.

Amendment agreed to.

The Chairman: A consequential amendment will be made, that is to say, the renumbering of the subsequent sub-clauses.

Clause 2, as amended, ordered to stand part of the Bill.

4.15 p.m.

Clauses 3 to 14 inclusive ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.