Published: Thu, March 15, 2018
Business | By Tara Barton

BC vows to fight U.S. decision on pulp and paper tariffs

BC vows to fight U.S. decision on pulp and paper tariffs

We applaud the leadership of the many Democratic and Republican U.S. Senators, and the publishers of over 1,000 small and medium-sized U.S. newspapers who have demanded that Washington not impose countervailing and anti-dumping duties on Canadian newsprint exports.

The decision follows an announcement in August by the Commerce Department that it was launching an investigation into whether the product used in newspapers was being sold at below-market rates in the United States, and whether Canadian producers were receiving unfair subsidies.

DOC's decision follows an initiative by USA manufacturer of printing and writing papers North Pacific Paper Company (Norpac), who petitioned the agency in August past year to impose antidumping and countervailing duties.

The preliminary decision comes as part of a Commerce investigation into Norpac's claim that Canadian papermakers are selling uncoated groundwood paper - the same paper used for newsprint - at less than fair value.

As a result, Commerce will instruct customs officials to start requiring cash deposits from Canadian paper producers at the border until it makes a final determination in August.

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

That leaves Catalyst paying duties of 28 per cent on its exports to the US, which company CEO Ned Dwyer characterized as "a threat to our competitiveness and the sustainability of our business".

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This kind of paper was already hit by preliminary United States countervailing duties announced in January.

Port Alberni's mayor says the move could have a significant impact on the mill and the community.

Montreal-based Resolute Forest Products Inc. and Catalyst are the mandatory respondents in the anti-dumping case.

A 22.16 per cent anti-dumping duty will come into force five days from now. Canada has won previous disputes with the United States over softwood lumber. And Bruce Ralston, B.C.'s Jobs and Trade Minister, said he will work with Catalyst and Ottawa to help combat the "unfair tariffs".

FPAC applauds the swift response issued last night from Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr - they unequivocally defended Canada's interests. "Any duties will have a direct and negative impact on US newspapers, especially those in small cities and towns, and result in job losses in the American printing sector", they said in a joint release.

The U.S. trade action, which follows the imposition of stiff duties against Canadian softwood lumber past year, comes amid tough renegotiations among the United States, Canada and Mexico on the decades-old North American Free Trade Agreement.

Bryan Yu, deputy chief economist at Central 1 Credit Union, said the decision on newsprint tariffs underscores the confrontational position of the Trump administration.

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