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Coated Paper Trade Cases

July 19, 2010
NPES continues its longstanding support of free, fair international trade policy that enforces existing trade laws, and provides a level playing field for Association members’ products in global markets. In that light, NPES is monitoring the unfair trade practice cases filed by three U.S. paper manufacturers and a workers’ union, which allege that China and Indonesia are harming the U.S. paper industry by providing unfair support to their domestic paper manufacturers that export to the United States. Opponents of the cases fear the repercussions of increased paper prices that could result from the imposition of duties on coated paper from China and Indonesia.

In September 2009, U.S. paper producers Appleton Coated, LLC; NewPage Corporation; and S.D. Warren Company, dba Sappi Fine Paper North America, along with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union filed a petition seeking the imposition of tariffs on certain categories of coated paper suitable for high quality graphics using sheetfed presses manufactured by paper producers in China and Indonesia. The paper under investigation is typically used for printing multicolored graphics for catalogues, books, magazines, labels and wraps, greeting cards and other high quality items.

Petitioners have sought relief under two of the most frequently applied U.S. trade statutes, Antidumping (AD) and Countervailing Duty (CVD) trade laws. Antidumping laws provide relief to domestic industries that have been, or are, threatened with the adverse impact of imports sold in the U.S. market at prices that are shown to be less than fair market value. Additional import duties can be imposed on dumped imports.

Countervailing Duty laws give similar relief to domestic industries that are jeopardized by imported goods that have been subsidized by a foreign government or public entity and therefore have a competitive advantage over similar goods produced in the United States. Like dumped goods, additional duties can be placed on subsidized imports.

AD and CVD cases are conducted jointly by the U.S. Commerce Department’s International Trade Administration (ITA) and the International Trade Commission (ITC). Following an initial finding by the ITC that there is enough information to arguably support the imposition of AD and/or CVD duties, the ITA conducts an investigation and issues a preliminary determination.

In the coated paper cases at hand, the ITA issued its preliminary CVD determination against coated paper imports from China and Indonesia in March 2010, and imposed immediate tariffs averaging 8.38 %, which will be held pending a final resolution of the case. According to petitioner NewPage, the ITA found that Chinese producers were benefiting from preferential lending, income tax programs, tax credits for equipment purchases and research and development, import duty and VAT exemptions on capital equipment and preferential provision of electric. Indonesian producers were found to have received timber for less than adequate remuneration, and government debt forgiveness.


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