NewsAlert: Canada launches global trade complaint vs U.S. over use of duties

NewsAlert: Canada launches global trade complaint vs U.S. over use of duties

The duty against Kruger is 9.93% and the preliminary penalty against White Birch is 0.65%.

In a preliminary determination released on January 9, the US Commerce Department stated that exporters of uncoated groundwood paper from Canada had received countervailable subsidies ranging from 4.42 percent to 9.93 percent.

At the time, company CEO Craig Anneberg said in published reports that NORCO would use all the tools at its disposal under USA trade law to address and counteract the dumped and subsidized imports from Canada.

Meantime, the new duties will also put many local newspapers at risk of failing, according to USA newspaper coalitions.

The US government began investigating Canada's newsprint industry after Washington-based North Pacific Paper Co., complained Canada was dumping newsprint into the American market and unfairly subsidizing its industry at home.

Imports from companies that receive unfair subsidies from their governments in the form of grants, loans, equity infusions, tax breaks, and low-cost production inputs are subject to "countervailing duties" aimed at directly countering those subsidies.

It is the same argument made regarding Canada's softwood industry, which led to the imposition of both countervailing and anti-dumping duties on most Canadian softwood exports to the United States. "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), the company that launched the complaint, said it only seeks to "compete on a level playing field" against Canadian mills that get cheap fibre and preferred rates for electricity. About 80 per cent of newsprint is sold directly to newspaper publishers, Norpac estimates.

"Now they are perversely manipulating trade law in an effort to satisfy their own personal greed".

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Kursman said Norpac was alone in its challenge because production margins are "razor thin".

Given its "outlier status", the letter said, "it appears that One Rock Capital Partners may be using the petitions as a means of increasing the short-term value of this one mill, without any regard for the dramatic negative implications for US newspapers in thousands of small cities and towns".

"Canada's forest industry sustains good, middle-class jobs and provides economic opportunities for rural and Indigenous communities across our country". After that, the International Trade Commission would take up the matter and conduct hearings to determine whether the preliminary duties would become permanent.

Last month, about 1,100 small newspapers jointly filed a letter with Ross that warned "many small-town papers will be at risk of failing" if higher newsprint costs are added to existing problems caused by the movement of many advertisers to online media.

They explained that they will continue to work with the industry, and with Canada's provinces and territories, "to defend this vital sector against unfair and unwarranted United States trade measures and practices".

Norpac's petitions "are based on incorrect assessments of a changing market and appear to be driven by short-term investment strategies of the company's hedge fund owners", the letter said.

The union representing workers at Resolute, White Birch and Kruger said jobs will be hurt because producers won't likely be able to turn to other foreign markets. "Maybe we are going to experience plant shutdowns for a few weeks".

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