The U.S. Department of Commerce has ruled in favor of American paper manufacturers, including Sappi Fine Paper, which has a mill in Westbrook, on unfair-trade petitions filed against Chinese and Indonesian paper producers and exporters.

Sappi, along with NewPage Corp. of Rumford, Appleton Coated LLC of Wisconsin and the United Steel Workers Union, requested the investigation last year.

Unfair-trade cases were filed in September 2009 with the Department of Commerce and the U.S. International Trade Commission charging that certain coated paper from China and Indonesia had been “dumped” on the U.S. market and subsidized by those governments.

Mark Gardner, president and chief executive officer of Sappi Fine Paper North America, said the Department of Commerce ruling sends the right message, “that our government is interested in restoring a competitive market in coated paper.”

The International Trade Commission still has to make a final determination for the ruling to become law. That decision is expected on Oct. 19.

This week’s findings are a stunning reversal. Commerce officials said earlier this month that they had declined to investigate allegations that China unfairly subsidizes its currency to manipulate paper sales. The department said at the time that unfair-trade charges brought by U.S. paper companies did not meet the legal requirements for an investigation.

U.S. Rep. Mike Michaud, D-Maine, said the findings by the Department of Commerce are a positive step toward fair market practices.

“It means we are one step closer to crossing the finish line in this case,” said Michaud, who testified before the International Trade Commission last week. “Finding in favor of our manufacturers will help level the playing field, making it possible for our companies to survive and create and sustain jobs.”

Michaud said he worked for Great Northern Paper Co. for more than 29 years and he has seen the effects of trade deals, dumping policies and foreign-currency manipulation.

The manipulation lowers the value of Chinese and Indonesian currency on the international market and makes their products more attractive to foreign buyers.

If the Department of Commerce finds that Chinese exporters or producers received an unfair subsidy under international law, and the International Trade Commission determines that the U.S. paper industry was harmed, those imports would be subject to what officials call countervailing duties.

Countervailing duties are import fees imposed under World Trade Organization rules to neutralize the negative effects of government subsidies.

To date, none of that has happened, despite pleas for action to President Obama earlier this year from more than 100 members of Congress, including Maine Sens. Olympia Snowe and Susan Collins, and Reps. Michaud and Chellie Pingree.

The group asked the president to examine the “artificial and unfair advantage” they say China enjoys in the U.S. paper market and the impact it has on American jobs.

There are an estimated 1,200 jobs at Sappi mills in Skowhegan and Westbrook, and about 700 to 800 at the NewPage mill in Rumford, but not all of the mills make coated paper and not all of the jobs are affected by Chinese paper dumping, Sappi spokeswoman Amy Olson said.

Asia Pulp & Paper, the leading exporter of coated paper from China and Indonesia, says it has not dumped paper on the U.S. market illegally and expects its position to be vindicated.

 

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