As a veteran of the paper industry, I am concerned for the U.S. printing industry regarding the international trade dispute initiated by three paper makers. Since mid-2008, more than 73,000 printing and graphics communications jobs have been lost, according to the Printing Industries of America, and if these few domestic paper producers get their way, it’s only going to get worse.
Because of where our paper is made, we (Asia Pulp & Paper) are caught in the middle of an international trade dispute. These three paper manufacturers are accusing two Asian countries—China and Indonesia—of providing companies that operate there with unfair support.
If this feels like déjà vu, we’ve been here before. A similar complaint was rejected by the U.S. International Trade Commission (ITC) in December 2007, when it rightfully concluded that the domestic paper industry had not been harmed.
Over the past 20 years the printing industry has weathered many challenging situations, but this could lead to a considerable pull back for those who teeter on the edge of existence. So what has changed since the last ruling two years and four months ago?
Quarterly data analysis from the ITC indicates that coated paper import volumes from 2006 to 2009 did not change significantly and reflect recent historical levels. The argument that the U.S. market is being flooded with imported coated paper just does not have merit. Domestic paper shipments are down because overall demand is down in this deep recession—not because of any alleged unfair practices.
Unfortunately, the U.S. Department of Commerce issued a preliminary ruling in the case on March 2, 2010, in favor of countervailing duties, and the duty margins applicable to APP are 12.83% on products from China and 17.48% on products from Indonesia. This action, in addition to the impending postal changes, will be damaging to many quality printers. From increasing postage rates to the impending elimination of Saturday postal delivery service, direct mail opportunities for printers are shrinking.
It is worth noting that the Commerce Department estimates the total value of coated paper imports from China and Indonesia in 2008 relevant to this case was $273 million. Compare that to the “black liquor” subsidies U.S. paper makers received in 2009 from the federal government. Complete data is not available, but the entire U.S. paper industry may have earned up to $9 billion of these tax credits last year. It is hypocritical for these paper makers to accuse foreign producers of receiving unfair subsidies.
We continue to vigorously defend our position because the United States and our customers here are an important and valued market for us. The time is now for your voices to be heard and your company needs to be considered. We are looking for feedback from readers like you on how these actions and its details impact your business. Let your voices be heard by making a comment below or via e-mail to firstname.lastname@example.org and phone at (888) 764-4951.
Some have argued that the impact of duties would be small because the scope of the case is narrow in terms of product and countries of origin. AGAIN, make no mistake, if duties are imposed by the ITC, this will negatively and artificially restrict competition in the U.S. paper market. Paper supplies will be disrupted. The delivery of paper products will be delayed and the range of available supplier options will be reduced. The ripple effects will be felt by every consumer of coated paper products, especially those in the printing industry. Duties in this case are unwarranted and, given the current economic climate, they would delay recovery in this sector.
APP has established a Website to let printers know about the case and its potential to negatively affect their business: www.saveprinterjobs.com
As for the scope of the case, the petitioners are only targeting China and Indonesia right now for strategic reasons. I fully expect them to go after other importing nations if they succeed in this case. It is an unpleasant reality we face as importers, and everyone pays the price. It hurts the fairness and balance of the market we all want, but we will not be deterred. We continue our work to have this case rejected on the merits and remain confident the Commerce Department and ITC will issue correct and fair final decisions that dismiss duties. Terry Hunley is acting president of APP North America. Asia Pulp & Paper (APP) is a major exporter of coated paper from China and Indonesia.
: The opinion expressed is that of the author and not Printing Impressions
or its parent company, NAPCO. Printing Impressions
reached out to representatives from the U.S.-based coated paper companies that filed the suit to present their side of this issue in a similar blog post. They elected not to participate at this time.
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