Published: Fri, January 12, 2018
Business | By Tara Barton

Reps. Higgins, Stefanik oppose tariffs on Canadian paper used by NY newspapers

Reps. Higgins, Stefanik oppose tariffs on Canadian paper used by NY newspapers

The Canadian complaint alleges that American use of anti-dumping and countervailing duties violate global trade rules.

The U.S. Department of Commerce has made a decision to impose initial duties of up to 9.93 per cent against Canadian newsprint sold south of the border.

The decision dealt a blow to domestic newspaper industry giants who'd argued that countervailing duties against the paper importers could decimate their already hobbled industry.

"Any duties will have a direct and negative impact on ‎U.S. newspapers, especially those in small cities and towns, ‎and result in job losses in the American printing sector‎".

The tariff is as high as 9.93 per cent for Kruger Inc., which is based in Quebec.

In a victory for Norpac - and potential blow to local newspapers - the U.S. Department of Commerce announced Tuesday that it will start imposing preliminary antidumping and countervailing duties on Canadian paper producers. The tariffs are expected to take effect within one week. "This decision will protect American jobs in Washington, Mississippi and Georgia, and may even serve to create jobs in the U.S.as idled paper machines restart", Norpac chief executive officer Craig Anneberg said in a statement Tuesday night.

Norpac, owned by hedge fund One Rock Capital Partners LLC of NY, said subsidies in Canada include breaks on electricity rates and unfair financial assistance.

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Officials with the Newfoundland and Labrador government say the investigation by the US focused on a $110-million loan the province gave the company in 2014, as well as various tax credits, but then looked at everything the province said or did relating to the mill over the last 13 years. Norpac claimed that Canadian paper companies benefit from 65 different subsidies that add up to hundreds of millions of dollars.

In sharp contrast to USA publishers' warnings of potential devastation for small-town newspapers, Mr. Anneberg estimates that the impact of the Commerce Department's countervailing ruling would be less than 5 cents (U.S.) for the average printed newspaper - "a small price to pay to preserve American manufacturing jobs". The Daily News is printed on paper manufactured at Norpac.

But that's what will happen if the federal government imposes duties of up to 50 percent on Canadian newsprint, upon which American newspaper companies rely.

The new duties comes as Canada and the USA continue to try to negotiate a trade settlement on softwood to replace the deal which expired in 2015.

Canada is the largest exporter of newsprint in the world, dominated by Resolute Forest Products, Kruger and Catalyst Paper Corp.

It had asked the World Trade Organization to examine the American use of punitive duties, alleging that they violate global law for five reasons. All other Canadian producers weighted an average of 6.53 per cent.

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