LONGVIEW, Washington (From news reports) -- Norpac has scored two early wins in its fight against what it calls unfair competition from Canadian papermakers. Two federal agencies recently agreed to launch investigations into whether Canadian manufacturers are dumping cheap groundwood products in the U.S. market, undercutting paper prices for Norpac and other domestic manufacturers.
The Longview papermaker filed a petition in August with the U.S. Department of Commerce and the International Trade Commission asking the government to impose antidumping and countervailing duties against Canadian papermakers.
The company alleges that Canadian papermakers benefit from 65 different government subsidies that add up to "hundreds of millions of dollars." The federal and provincial subsidies include government grants, tax breaks, subsidized loans, raw materials at below-market costs and cheap subsidized electricity, according to Norpac.
This allows Canadian manufacturers to sell paper at prices 16 percent to 65 percent lower than what the paper would normally sell for, according to Norpac.
The International Trade Commission announced late last month it plans to investigate whether the U.S. paper industry is materially hurt by subsidized Canadian products.
Norpac CEO Craig Anneberg said that the ITC's decision is "an important first step for the U.S. groundwood paper industry, which has been the victim of Canadian unfair trade practices for too long."
Separately, the Department of Commerce will conduct a two-pronged investigation into the dumping charges to determine whether the U.S. should impose duties. Both investigations are expected to be complete by July 2018.
"The United States is dedicated to free, fair and reciprocal trade with Canada, and guarantees that this case will be decided strictly on a full and fair assessment of the facts," said Secretary Wilbur Ross of the Department of Commerce, in a press release announcing the decision to investigate the matter.
"The Trump administration is committed to enforcing America's vital trade laws to ensure U.S. businesses and workers have a fair chance to compete," Ross added.
Norpac is struggling to stay profitable in the face of shrinking newsprint and paper markets, and is under pressure to cut costs from its new owners, One Rock Capital.
Earlier this year, mill workers took a 10 percent wage cut along with major reductions to retirement benefits. Later this month, Norpac will idle one of three paper machines, laying off as many as 50 employees in the process.The production cuts were framed as response to Canadian dumping.
"To keep the company and domestic industry competitive in the face of dumped and subsidized imports from Canada, and most importantly to protect our employees and their families, Norpac will continue to use all the tools at its disposal under the U.S. trade law to level the playing field," Anneberg said.
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