Published: Sun, January 14, 2018
Money | By Armando Alvarado

Norpac triumphs in trade battle with Canadian papermakers

Norpac triumphs in trade battle with Canadian papermakers

A U.S. Commerce Department decision to impose tariffs on Canadian paper imports is stoking concerns at American newspapers about financial strains facing the news industry. The duty against Kruger is 9.93% and the preliminary penalty against White Birch is 0.65%.

The Canadian government has since filed a complaint to the World Trade Organization (WTO) over USA trade remedy measures, requesting WTO consultations with the United States with respect to anti-dumping and countervailing duty proceedings. Norpac claimed that Canadian paper companies benefit from 65 different subsidies that add up to hundreds of millions of dollars.

The industry's turmoil is due to readers turning in droves to digital devices and away from printed copies, so it is wrong for a paper mill in Washington State to blame Canadian newsprint for hurting the USA manufacturing sector, said Paul Boyle, the alliance's senior vice-president of public policy.

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.

Anneberg said the company estimates the duties would increase the cost to produce the average printed newspaper by less than 5 cents per copy.

By contrast, Norpac has just one mill and is owned by a NY private equity firm.

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

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.

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"This additional cost resulting from these tariffs will be significant, and yes, they will directly impact us locally here in Jacksonville, Florida, just like any other local newspaper in America", Nusbaum said.

"Canada's forest industry sustains good, middle-class jobs and provides economic opportunities for rural and Indigenous communities across our country".

It had asked the World Trade Organization to examine the American use of punitive duties, alleging that they violate global law for five reasons.

More than 1,100 small and mid-sized newspapers - members of the alliance - signed a letter in December to warn Commerce Secretary Wilbur Ross that punitive duties on Canadian newsprint would have a devastating impact.

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

Joel Neuheimer, vice-president of worldwide trade and transportation for the Forest Products Association of Canada, said the U.S. trade remedy system is a politically-motivated mess.

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.

Canadian newsprint producers have lower profit margins and is an industry has been hit hard in the last decade by falling demand for newsprint. "Maybe we are going to experience plant shutdowns for a few weeks".

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