COUNTERVAILING AND ANTI-DUMPING DUTIES (AMENDMENT) BILL

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COUNTERVAILING AND ANTI-DUMPING DUTIES (AMENDMENT) BILL: Order for Second Reading read.

2.50 pm

The Senior Minister of State for Trade and Industry (Dr Vivian Balakrishnan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Countervailing and Anti-Dumping Duties Actwas enacted in 1996 to allow for the investigation of subsidies on goods imported into Singapore, as well as the dumping of such goods in Singapore. The Act also allows for the imposition of countervailing or anti-dumping duties to offset such subsidies or dumping. The purpose of the legislation is to empower

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Singapore to protect our market against unfair trade practices.

Sir, if a company exports a product at a price lower than the price it normally charges in its own home market, that company is said to be "dumping" the product. There are World Trade Organisation (WTO) rules governing how a WTO member country can or cannot react to dumping. Broadly speaking, the WTO rules allow a government to act, or take anti-dumping action, when there is material injury to the competing domestic industry. The government must be able to show that dumping is indeed taking place, calculate the extent of dumping, and show that dumping is causing injury or threatening to do so. Taking anti-dumping action means charging extra import duty on the imported product in order to bring its price closer to the "normal value" or to remove the injury to domestic industry.

Sir, it is an infrequent occurrence for Singapore to take anti-dumping actions. Our exporters are more likely to suffer from the imposition of such duties by other countries, than to benefit from us taking anti-dumping actions. Hence, in our negotiations on Free Trade Agreements (FTAs), we seek to rule out the application of anti-dumping actions with ourFTA partners, or at least agree to tighten the WTO rules so that it is more difficult for our FTA partner to impose these measures against us.

For example, our FTA with the European Free Trade Association (EFTA) states commits all parties to the non-application of anti-dumping actions vis-a-vis each other. In our FTA with New Zealand, both sides agreed to raise the de minimis threshold for the initiation of anti-dumping actions from 2% to 5% of export price.

The existing Act, which provides for general rules applying to imports from all

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countries, needs to be amended to take into account our current and future FTA commitments.

The amendment Bill creates a new section 45A. This gives the Minister for Trade and Industry the power to make regulations to give effect to Singapore's legal obligations under any international agreement.

In the unlikely situation that Singapore might initiate an anti-dumping action against one of our FTA partners, the new section 45A will allow us to enact regulations that modify the application of the Act's provisions to goods from our FTA partners. The new section 45A is not expected to be used frequently, if at all. Even if we have to do so in future, there would be an even slimmer chance of us taking an action againstone of our ownFTA partners with whom we have, after all,preferential trading relations.

Sir,Singapore exporters have been the subject of more than 20 anti-dumping investigations initiated by a variety of countries including India, China, Australia and the United States. To reduce or even eliminate the burdens faced by our businesses when they are subject to anti-dumping investigations, we will continue to push for tighter rules on anti-dumping in our FTA negotiations. The new section 45A will provide the legislative basis to give effect to the tighter rules that we secure.

Sir, I beg to move.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill.- [Dr Vivian Balakrishnan].

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Bill considered in Committee; reported without amendment; read a Third time and passed.