By: Central Maine
A preliminary decision on alleged violations of international trade law by a Canadian papermaker that directly competes with mills in Madison and Minnesota will be delayed until July at the request of the U.S. paper companies that filed the complaint.
The U.S. Department of Commerce has been investigating the subsidies paid to Port Hawkesbury Paper, a Canadian producer of supercalendered paper, by the government of Nova Scotia.
The investigation was opened in March after U.S. paper producers, including Madison Paper Industries, filed a complaint claiming that the subsidies to the Port Hawkesbury mill allow that company to sell specialty magazine-quality papers to U.S. publishers at prices that undercut domestic paper mills.
Earlier this month, the U.S. International Trade Commission ruled there is a “reasonable indication”that the domestic mills have been hurt by the subsidies. That determination could lead to the imposition of countervailing duties, a fee that would be charged on paper imported from Port Hawkesbury. The countervailing duties are intended to offset the lower prices that the Canadian mill can charge U.S. customers because part of its expenses are subsidized.
A representative for Port Hawkesbury Paper did not respond to a request for comment Wednesday. Russ Drechsel, president of Madison Paper Industries, also did not return a request for comment.
The department announced this week that a preliminary decision in the case has been delayed. The notice was posted in the Federal Register, the official listing of actions taken or being considered by federal agencies.
The ruling pushes the date for a decision from May 22 to July 27. A spokeswoman for the U.S. International Trade Commission, which provides policy advice to the commerce department, did not return a request for comment late Wednesday.
The Coalition for Fair Paper Imports, a partnership between the Madison mill and Verso Paper’s Duluth Mill in Minnesota, submitted a request that the commerce department postpone the preliminary decision, according to the notice. Federal law provides that the secretary of commerce must grant a request for an extension unless there is a “compelling reason” to reject it.
The complaint filed by the coalition claimed that provincial government subsidies to the Port Hawkesbury Mill were hurting the market for domestically produced paper. It asks for higher import duties on the company’s supercalendered paper, which is used for magazines, catalogs and similar publications.
Port Hawkesbury, which is owned by the Pacific West Commercial Corporation, reopened in 2012 with the help of $125 million in aid from the Nova Scotia government. The operator of the Madison mill first contacted U.S. government officials about investigating Canada’s alleged subsidies in October 2012.
The recent coalition complaint was filed soon after a two-week period of temporary layoffs at Madison Paper that were directly related to the subsidies and subsequent flooding of the U.S. paper market with cheaper paper from Canada, according to Drechsel. At the time the complaint was filed with the U.S. Department of Commerce, he said he was hopeful it would help create more equitable market conditions.
“We’ve been talking about this issue over the last two years, and we finally have the data required to file (a complaint),” Drechsel said. “We’re hopeful that the case result will be a level playing field for American producers and workers.”
By: Central Maine