Printed imports rise with free trade - News commentary by Andy McCourt

The dissection of 15-year statistics reported:

“ABS statistics show that during the 1990/91 financial year, $740 million out of the $1.22 billion of total paper products imported, or 61 percent, was comprised of printed material. By the 2002/03 financial year however, ABS statistics shows this proportion has fallen to 50 per cent. It would appear that Australian printers have succeeded in pulling back work previously printed offshore,” Paper2PaperEdge claims.”

Misleading conclusion

As the sage once observed “statistics are often used as a drunkard uses a lamppost – more for support than illumination.” Whilst the data is no doubt correct, the conclusion fails to connect that in the last 15 years, we have seen an explosion in A4 and A3 unprinted cut sheet imports, and an overall boom in blank paper imports. A significant proportion of the imported A4/A3 unprinted sheets are used in domestic and SOHO printers, copiers and office environments that contribute little or nothing to what we call the 'Printing Industry.' This is not to criticize this sector, but to begin to make it clear that the truth is the opposite of the conclusion implied.

In a Printing Industries report to be published in the next issue of Print 21 Magazine, a look at the latest ABS statistics paints a different picture. It says; “A closer examination of the data on imports of printed matter also reveals that for the first six months of this financial year [2004-05], total printed matter imports are 5.4 per cent higher than for the same period in the previous financial year.”

A plot of December quarter outcomes since 1984 shows that December 2004 was the highest import month on record for printed material – and the graph is decidedly upwards. Since 1999, Australia's annual imports of printed matter has exceeded one billion dollars. Full year 2004 did see a slight decline but comparing 1993-94 imports to 2003-04, there is a clear 13 per cent increase and rising.

Import penetration of the Australian Printing Industry is now 6 per cent. It is virtually impossible to find an Australian-printed full colour, hardcover book in any major retail store, irrespective of the Australian pictorial content.

The Free Trade conundrum

In a warning that an upcoming Free Trade Agreement with China could 'open the floodgates to cheap Chinese goods to swamp the local market.' The Australian Industry Group's Heather Ridout told ABC Radio, “Our members are very clearly worried about China taking their markets and they have been very aggressive in terms of taking market share away from Australia and, in fact, world industry… I think the issue has to be that we want an agreement that really does address the fact that we want a level playing field as far as possible in dealing with China.”

Printing does not have any magical force-field of protection and, as a manufacturing sector, is in the same boat as the AIG's members. Right now Australia's printers are facing:
o A strong dollar making imports cheaper
o Heavy Chinese government subsidies of their printing industry
o Aggressive export drives by Chinese firms
o Onerous environmental compliance costs which China does not have
o Higher raw material costs
o Wage, taxation and OH&S costs hundreds of times higher than China

Printing Industries CEO Mr Gary Donnison stated that the Association is
closely monitoring FTA related developments and has written to the trade
Minister highlighting the concerns of the printing industry.

"Our industry is not opposed to FTA's with China, Malaysia or ASEAN
nations. We are a mature industry and we appreciate that competition can
no longer be confined to just national boundaries. But what we have told
the Federal Government is that Asian based printers must abide by the
same OHS and environmental regulations that Australian printers are
currently abiding by.

"We also emphasised that adequate measures need to be put in place to
prevent the practice of product dumping once an FTA is concluded with
China and other Asian based economies" he said.

Printing Industries has also called on the Federal Government to
undertake a detailed economic modeling of the proposed FTA with China
as part of the current scoping study, as it did with the USA FTA.

"Given China's low cost structure it is anticipated that some sectors of
our industry such as books, greeting cards, calendars and diaries, and
stationery items will be hurt by an FTA with China. What Printing Industries is aiming to do is to quantify the expected negative impact,
then seek adequate industry compensation measures from the Federal Government. This is why we need detailed economic modeling work to be undertaken," concluded Mr Donnison.

MY CALL

Printed imports into Australia, principally from China, will almost certainly continue to rise. To say otherwise is ignoring the facts. What our industry can do is develop strategies to retain printing that can not be performed offshore due to time constraints, or initiate JIT printing for work currently printed offshore that, by printing shorter runs quickly, is appealing to publishers.

China is becoming Australia's leading trading partner, balancing our former dependence on Japan. If China's steel industry had not taken off, there is no way our producers would have secured 50%+ price increases in February.

All nations selling to China are expected to open their markets for manufactured exports, printing is no exception. But, as Gary Donnison says, if our industry is expected to compete with the financial burdens of OH&S, environment, government charges etc, then it is unfair to give open-slather to countries who do not have these social protections.

Soon, all Australian printers may have to identify that their paper has come from sustainable resources (FSC) and is free of harmful chemicals such as dioxins. I would welcome such an analysis of printed matter entering Australia, for it would highlight the double-standards that exist under the consumer's nose. Children's books containing dioxin have already been found in the US. Pulpwood is being stolen from the Siberian Taiga and freighted into China to feed its mills. Fifty-four cents an hour is hardly enough pay to sustain a workable OH&S scheme, pension fund or compensation for loss of limbs or sight in industrial accidents.

China invented printing, and is emerging as a great modern market-economy - and that's good but, for our manufacturing printers, the 'level playing field' is inclined at a 45 degree angle, and we're kicking into a strong headwind.