Delegation targets foreign paper subsidies

Posted Sept. 17, 2010, at 12:36 a.m.

Delegation targets foreign paper subsidies

FROM STAFF AND WIRE REPORTS

WASHINGTON — All four members of Maine’s congressional delegation say they believe the governments of China and Indonesia have illegally subsidized their paper industries, harming the state’s manufacturers.

Speaking Thursday at a hearing in Washington, Republican Sens. Olympia Snowe and Susan Collins and Democratic Reps. Chellie Pingree and Mike Michaud testified before the International Trade Commission on a petition by American paper manufacturers and their workers against Chinese and Indonesian subsidized imports.

The delegation members have been working with Sappi Fine and NewPage, which have mills in Maine and are petitioners in the case, to press the U.S. Department of Commerce and the ITC to assess tariffs on Chinese and Indonesian paper imports.

The petitioners say those imports have materially injured America’s paper industry. Snowe said Chinese and Indonesian practices have had a harmful effect on production, prices and jobs in the United States. She called papermaking “an indispensable economic pillar of our state.”

“Over the years, I have witnessed our state’s paper manufacturers and their workers going to great lengths to improve their competitiveness,” Snowe said. “These are the types of companies that should thrive in our global economy — but they cannot if the foreign producers are playing with a proverbial stacked deck.”

Michaud, a former papermaker, said U.S. manufacturers can’t compete in a market that’s flooded with cheap imports. He asked the commission to look to his hometown of East Millinocket to see the damage done by unfair trade practices.

“While the good people of the Katahdin region are as hardworking and as resilient as ever, no one can deny that the community was changed for the worse when the mill shut its doors,” Michaud said. “But my hometown mill is not the only one that has suffered this fate, which is why we are all here today.”

During her testimony, Pingree pointed out that China is a long way from U.S. markets and they don’t have the forestry resources we have in Maine, but they still undercut American papermakers through subsidies.

“[W]hat they do have is the ability to dump into the U.S. market and a government who provides them with significant and distortive subsidies — causing severe material injury to U.S. producers,” Pingree told the ITC. “The move by Chinese coated paper producers into the U.S. market clearly was not the result of a market-based decision-making process.”

Collins said she believed that “clear violations of international trading rules and practices exist.”

“If these violations are not addressed, Maine’s proud tradition of producing pulp and paper could be lost to foreign manufacturers who have benefited from unfair government subsidies and assistance,” she told members of the commission.

The ITC decision is expected on Oct. 19.

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