Forestry industry responds after U.S. decision to impose newsprint duties

Jan. 11, 2018 – Numerous Canadian associations and businesses are speaking out after the U.S. Department of Commerce announced yesterday it will levy preliminary countervailing duties of 0.65 to 9.93 per cent on imported Canadian uncoated groundwood paper (newsprint).

Forest Products Association of Canada (FPAC) described the duties as “completely unjustified and protectionist in nature.”

“We call on the federal government to stand with us and the over 4,500 hard-working Canadians from British Columbia to Newfoundland and Labrador who could be impacted by this frivolous trade action,” said Derek Nighbor, CEO of FPAC.

“There are 600,000 workers in the newspaper publishing sector as well as the commercial printing sector who are at risk,” said Resolute Forest Products spokesman Seth Kursman, as reported by The Canadian Press. “And we know as a manufacturer of this product that if demand continues to go down over time this has an impact on our ability to operate facilities.”

Canada is the largest exporter of newsprint in the world, dominated by Resolute Forest Products, Kruger and Catalyst Paper Corp. According to the U.S. Department of Commerce, Canada exported more than C$2.4 billion worth of newsprint paper to the United States in 2016.
 
Kruger faces a preliminary duty of 9.93 per cent, while the duty against Catalyst Paper is 6.09 per cent, 4.42 per cent for Resolute, and 0.65 per cent for White Birch. All other Canadian producers weighted an average of 6.53 per cent.

“[This] preliminary decision allows U.S. producers to receive relief from the market-distorting effects of potential government subsidies while taking into account the need to keep groundwood paper prices affordable for domestic consumers,” stated U.S. Commerce Secretary Wilbur Ross.

In a joint statement, Chrystia Freeland, Minister of Foreign Affairs, and Jim Carr, Minister of Natural Resources, said they are “deeply disappointed” with the decision.

“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. Our government is committed to helping our forest industry enhance existing trade relationships and diversify trade with new international markets,” said the ministers.

“Canada’s forest industry sustains good, middle-class jobs and provides economic opportunities for rural and Indigenous communities across our country. We will continue to work with our forest industry, provinces and territories, and communities across Canada to defend this vital sector against unfair and unwarranted U.S. trade measures and practices.”

Dennis Darby, Canadian Manufacturers & Exporters (CME) president and CEO, noted the decision will not only affect pulp and paper producers but also their entire supply chain.

“Manufacturers are strong proponents of free and fair trade and are concerned that this new tariff barrier will affect Canada’s trading relationship with its most important partner, the United States,” he said, adding that the duties will also drive up the prices of newsprint up in the U.S., hurting American consumers.

CME, as part of its NAFTA engagement with the Canadian government, has called for the modernization of the agreement to include a clear and independent process for dispute resolution.

The Canadian government has since filed a complaint to the World Trade Organization (WTO) over U.S. trade remedy measures, requesting WTO consultations with the United States with respect to anti-dumping and countervailing duty proceedings.

The request was circulated to WTO members yesterday.

“The U.S. is trying to bully us, and we’re not going to stand for it,” said Jerry Dias, Unifor national president. “Canada’s forestry sector is following the rules and we’re confident that we will prevail — again — in international tribunals.”

— With files from The Canadian Press