World

Higgins opposes tariffs on Canadian newsprint

Higgins opposes tariffs on Canadian newsprint

The government of Newfoundland and Labrador is bracing for a US decision that could apply duties to newsprint exported into the United States.

The countervailing rate could increase in mid-2018 and there will also be a determination by the department in March on whether to place anti-dumping duties on Canadian groundwood.

According to Resolute, 90% of the newsprint in the American Northeast and Midwest - the paper that newspapers are printed on - is supplied by companies in the Canadian provinces of Ontario and Quebec.

"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 US, hurting American consumers. Unlike some trade disputes, this decision came in the face of opposition not only by USA newspapers and publishers, but by other US paper mills, the American Forest and Paper Association and dozens of members of Congress - all of whom said the move will be injurious to USA business interests.

"Today's preliminary decision allows US 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", said Wilbur Ross, commerce secretary.

"Our North Country economy relies on strong trade with our Canadian neighbors and these proposed duties would harm the many businesses that rely on these paper products", she said.

"This is the case that over 1,000 newspaper publishers are trying to make to the US - that this is not helpful".




Equally troubling is that this is just one of many such actions a newly zealous Commerce Department has taken on behalf of a president who has made the trade imbalance his special whipping post. "Faced with increased costs for newsprint, there are several potential scenarios. To survive, some newspapers may resort to increasing print subscription prices, which would only exacerbate the severe challenges facing print newspapers".

The letter didn't include publishers of larger papers, but concerns there are similar.

Last month, about 1,100 small newspapers jointly filed a letter with Ross that warned "many small-town papers will be at risk of failing" if higher newsprint costs are added to existing problems caused by the movement of many advertisers to online media.

The Commerce Department determined that duties would range from 4.42 to 9.93 per cent.

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

Canada's Foreign Affairs Minister called the tariffs "unfair and unwarranted". "This is about a hedge fund's own narrow self-interests", Mr. Kursman said in an interview. Canada is also seeking relief from the softwood duties in appeals through the North American Free Trade Agreement and the World Trade Organization.

It has essentially claimed that Canadian government subsidies are giving Canadian newsprint producers an unfair advantage over USA paper producers, and that the Canadians are dumping paper on the US market at prices below the cost of production. Resolute and Catalyst are the two mandatory respondents in the anti-dumping probe. Paper Excellence, for example, no longer makes newsprint, following the closure of its Howe Sound paper mill.


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