Canada 'deeply disappointed' by U.S. groundwood paper duty

Rise against proposed newsprint taxes

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

"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.

A single business, the North Pacific Paper Co., or NORPAC, is championing the duties, petitioning the U.S. Commerce Department to adopt the tariff.

Following a period of tension over possibly having more taxes imposed by Canada's neighbours to the south, the U.S. Department of Commerce slapped on preliminary countervailing duties up to 9.93 per cent on Tuesday for uncoated groundwood paper (newsprint) imported from Canada.

"People in small towns all over America still depend on their local newspapers", according to their letter, the latest in a series of political efforts to sway the Commerce Department.

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"As for our customers, many can barely pay their printing bills now", the letter said.

To be sure, USA newspapers are using less newsprint. "An escalation in paper prices would push some over the edge, and cost their communities not only the newspaper jobs but the news and advertising support that drives other local jobs". But industry officials said that's due primarily to the shift from print to digital media consumption, not to unfair trade practices.

This follows a series of similar penalties as the USA alleges unfair trade practices from Canada in softwood lumber and Bombardier subsidies.

Washington-based North Pacific Paper Co. filed a petition past year that argued American mills couldn't compete against Ottawa's support for Canadian producers, whose business in the United States was worth $1.3 billion in 2016.

Reacting to the decision, Canadian Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr said: "We are deeply disappointed with the unjustified countervailing duty rates announced by the the US Department of Commerce".

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"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 ministers said in a statement. "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 USA trade measures and practices".

Officials at both One Rock Capital Partners and NORCO did not respond to requests for interviews or statements about the case.

With almost 400 non-union employees, Norpac is one of Cowlitz County's largest employers.

In August, Norpac announced plans to idle one of its three paper machines, framing the production cuts as a response to competition from subsidized Canadian manufacturers.

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.

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