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Australia Threatens Legal Action On Mining Contracts

by Mary Swire, Tax-News.com, Hong Kong Thursday, February 02, 2012

Australian Prime Minister Julia Gillard has warned that Australia will bring proceedings at World Trade Organisation level if it is confirmed by industry that Australian suppliers are unfairly being shut out of lucrative supply deals as has been alleged.

A submission from the Australian Industry Group in response to the Australian Participation Plan alleged that Australian manufacturers were unjustly prevented from competing for deals. This, the submission says, is due to clauses said to often be negotiated into raw material export deals by non-Australian companies with nations encouraging the use of capital goods and other mining operation inputs from suppliers in the contractee nation. China was in particular implicated in the submission.

The AIG also claimed that "in major mining projects, overseas-owned mining companies often give preference to suppliers from their country or origin".

Gillard said: “Any clear evidence of this will be taken by us to the World Trade Organisation, because it's in breach of the rules and it's not giving Aussie manufacturers a fair go. So my message would be to people who have got this anecdotal evidence that we need to take it to the next stage, to get the clear evidence and if clear evidence is available then we will certainly do every thing we can to press the case internationally because it is not fair to Aussie [interests].”

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