DOC Rules Against Paper Importers

WASHINGTON, DC—The U.S. Department of Commerce (DOC) imposed preliminary countervailing duties (CVD) on imported coated paper from China and Indonesia to offset subsidies from those governments. Chinese coated paper companies were assessed duties ranging from 3.92 to 12.83 percent, while Indonesia importers were socked with a 17.48 percent duty.

Appleton Coated LLC, NewPage Corp. and Sappi Fine Paper North America, along with the United Steelworkers (USW), filed unfair trade cases last September with the DOC and the U.S. International Trade Commission, alleging that certain coated paper from China and Indonesia had been dumped and subsidized, resulting in injury to the domestic industry and its employees.

The paper products covered by the petitions include coated paper used in high-quality writing, printing and other graphic applications, with a GE brightness rating of 80 or higher and weighing up to 340 gsm.

"The Department of Commerce's preliminary decision is welcome news to U.S. coated fine paper companies, workers and the communities in which we operate. The decision validates our allegations of subsidies that have injured the industry," said Mark Gardner, president and CEO of Sappi Fine Paper North America. "All we're seeking is fair competition and protection against those companies not making investments in sustainable practices."

Asia Pulp & Paper (APP), a major exporter of coated paper from China and Indonesia, expressed disappointment with the initial findings. "This is a disappointing preliminary decision," said Terry Hunley, acting president, APP Americas, "but it is a long process and the Commerce Department is still gathering and analyzing all the facts. At the end of the day we expect a significant improvement in these preliminary subsidy findings, and confirmation again that the U.S. industry has not been injured and is therefore not entitled to any special protection."

In a similar case brought by U.S. paper manufacturers several few years ago, the U.S. International Trade Commission blocked final duties from going into effect.

"This investigation has even less basis than the last one, since the U.S. industry is making more money and has benefited from enormous government subsidies in the form of environmental tax credits," Hunley added.

The U.S. companies are also seeking additional anti-dumping duties of 33 to 41 percent on Indonesian and 25.7 to 135.8 percent on Chinese imports to offset what they believe to be below-market pricing. The Commerce Department will issue its preliminary decision on those anti-dumping duties in coming months.

On the initial complaint, APP remains confident that when Commerce has fully considered all of the facts, the preliminary margins will be reduced or eliminated. The DOC's final ruling on CVD is expected to be released in September along with the final ruling on anti-dumping (AD). The last phase of the cases takes place in October or early November, when the U.S. International Trade Commission will determine if the U.S. paper industry has been harmed. Only an affirmative ruling at that time would lead to the imposition of an AD/CVD duty order on the coated paper in question from China and Indonesia.