Prime Minister Julia Gillard is against hiking import tariffs, saying such a move would spark trade reprisals from other countries.
Ford’s decision to end Falcon production has some government leaders pushing for new import barriers.
The Australian government is resisting calls for emergency tariffs to protect the beleaguered domestic auto manufacturing industry following’s announcement it will end production in 2016.
Prime Minister Julia Gillard tells reporters imposing tariffs may spark trade reprisals and is not the right strategy for Australia, adding it would not help auto makers in the long term.
“I would rule that out,” Melbourne’s The Age newspaper quotes her as saying. “I don’t believe that imposing tariffs and getting in the way of us being able to be an exporting nation by potentially sparking trade reprisals is the right strategy for Australia.”
The call for a doubling of the tariff from the current 5% comes from within her own Labor Party and from some in the union movement.
Gillard’s stance is supported by Australian Council of Trade Union Secretary Dave Oliver, who tells the Australian Broadcasting Corp. raising tariffs is not the answer.
“I'm not calling for tariffs to be put on,” Oliver says.
But Australian Manufacturing Workers Union National Secretary Paul Bastian tells Fairfax Media that higher tariffs should be an option.
“'We've always maintained there's no such thing as free trade, and you never get a better example of that than in the auto sector,” he says. “'We play by a set of rules that no other country plays by.”
Bastian says in a statement the auto industry is suffering from the high dollar, as well as currency manipulation and trade barriers in other countries.
“Free-trade agreements had seen Australia lower its tariff barriers to a flood of cheap, imported vehicles from markets in Asia and Europe,” he says. “Unfortunately, much of the rest of the world have put up restrictive trade barriers against imports and held down the value of their currencies.
“Australia must maintain a car industry if we are to keep the diverse economy we will need when the mining boom is over.”