News From USW: USW Applauds Commerce Dept. Duties on Glossy Paper Imports

News From USW: Leo W. Gerard, President of the United Steelworkers (USW) applauded today’s U.S. Department of Commerce (DOC) final determination to place anti-dumping and anti-subsidy duties on coated free sheet paper imports, or glossy paper from China, Indonesia and South Korea.

For the first time ever, the U.S. is applying tariffs to counteract government subsidies benefiting goods imported from China in the form of countervailing duties. Up until this decision, China has enjoyed special treatment as a non-market economy that exempted it from anti-subsidy tariffs. Both Indonesia and South Korea are considered market economies.

“Today’s ruling is the right direction for American workers, but much more still needs to be done to bring about fair trade,” said Leo Gerard, USW President. “For example, China imports most of its timber, yet there is still no real way to determine if the imported wood — which is used to make paper products exported to the U.S. — has been harvested illegally.”

The USW president emphasized the decision as an overdue response to mounting public recognition that free trade is a failed policy. “Enforcing trade rules can make a difference in defending American workers’ jobs and the industries they work in.” He stated, “Unfair predatory trading practices have cost U.S. jobs by forcing mill closures and the shutdown of paper lines.”

Noting the recent appeal by China’s government to the World Trade Organization (WTO), challenging the Commerce Department’s actions in the glossy paper case, Gerard said, “We are pleased that the U.S. has rejected calls from China to grant special treatment to its dumped and subsidized exports.” Gerard said the USW will fight to ensure that the Administration does not bend to Chinese pressure by granting special immunity from the rules that govern fair trade.

“The USW has been a strong supporter of the anti-dumping and anti-subsidy, or countervailing duty cases on coated free sheet paper from China, and we believe that strong enforcement of all our trade remedy tools is required to help level the playing field for American industry.”

It was on Mar. 30 that for the first time ever, the DOC reversed a decades-old policy and decided that countervailing duty (CVD) law could be applied to non-market economies that have led to preliminary tariffs on subsidized glossy paper imports from China. The agency announced preliminary CVD duties of up to 20.35 percent at that time.

One of the subsidies benefiting glossy paper producers in China is the provision of low-cost loans from government-owned banks. The USW participated actively in the case before the Commerce Department to ensure that the full amount of the loan subsidies was correctly measured, helping set a precedent for future subsidies cases against goods from China. The USW succeeded in establishing that subsidized loans should be measured against commercial loan rates, not against artificial rates depressed by massive government interventions in the Chinese financial sector.

The USW is a party to the anti-subsidy trade case with NewPage Corp., where the union represents nearly 4,000 production workers at plants in Escanaba, MI; Luke, MD; Rumford, ME; and Wickliffe, KY.

Commerce today also placed anti-dumping and countervailing duties on glossy paper from Indonesia and South Korea. Indonesia got final antidumping duties of 8.63 percent and countervailing duties of 22.48 percent. Imports from Korea will face antidumping duties from 12 to 31 percent and countervailing duties of 1.46 percent. Final duties against China run from 21 percent to 99 percent on the dumping side and 7.4 to 44 percent in the countervailing duty case.

Dumping refers to the illegal trade practice of selling in a foreign market at below cost of production or home market price. The dumping margins set by Commerce are meant to offset the unfair price advantage, while countervailing duties offset the benefit of subsidies. However, duties will only be finalized if the U.S. International Trade Commission finds that the U.S. industry is materially injured or threatened with material injury by the dumped and subsidized imports.

Richard LaCosse, USW Vice President and top negotiator for represented workers employed in the domestic paper industry, is testifying before the ITC today on the parallel glossy paper trade case. In written testimony submitted to the commission, he said the USW is the dominant union in the industry where he began his career in 1969 at the NewPage mill in Escanaba. He cited unfair imports as the major factor in domestic glossy paper closures of about 500,000 tons capacity and thousands of permanent job losses since 2002.

In 2007, slightly more than 9,800 USW-represented jobs remain at 22 paper mills that produce CFS in 10 states; a drop of 19 percent in just three years. The USW currently has 130,000 workers in the paper and forestry products industries, which are about 60,000 jobs less since 2002. Most of the larger capacity CFS paper mills are in Maine, Michigan, Minnesota and Wisconsin. For more facts on the coated free sheet paper case: www.usw.org/.