Gud Sees The Dark Side Of Trade

Sydney Morning Herald

Thursday October 20, 2005

Ian Porter

A free trade deal with China will offer no net benefit to Australia or its manufacturers, a leading industrialist says.

Such an agreement would probably make it harder to establish the price of China's export goods in its domestic market, making it difficult to prove dumping, said GUD Holdings managing director Ian Campbell.

"Of course I am concerned," he said after yesterday's annual meeting.

"There is no protection for Australian industry and it is highly unlikely we are going to be selling too many lawnmowers into China. Or pumps. From a GUD perspective, a [free trade agreement] is not going to do anything for us."

GUD is one of many manufacturers which are now designing products here, making them in China or elsewhere in Asia, and importing them to Australia.

The Australian Industry Group estimates this has resulted in the loss of 46,800 full-time manufacturing jobs - out of 1.1 million - in the past year.

GUD's Victa lawnmower division had to contend with six new Chinese rivals last year and had to import more parts.

Mr Campbell said that when China started making products not commonly sold in its domestic market, unfair trading was hard to guard against.

"From our experience, getting an anti-dumping case up is not straightforward because generally there isn't a market for these goods in the countries where they are made," he said.

But Mr Campbell said he would not bother discussing the free trade agreement with the Government.

"We take the view the economy will change, currencies will move; there are all sorts of variables for manufacturing.

"Even if the currency went to US60c to the dollar, it is highly unlikely we would ever re-establish manufacture of appliances in this country."

Shareholders were told GUD's first-quarter results were in line with last time, before including those of the recently acquired Oates group.

The chairman, Clive Hall, said directors expected a better result and higher dividends for the full year. "With the benefits from an improved mower season, with renewed consumer spending in the Christmas season and with the contribution from new products and recent acquisitions, we expect a stronger financial performance this year."

© 2005 Sydney Morning Herald

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