David Bellm

January 29, 2014

4 Min Read
Department of Commerce considers possible dumping by Chinese and Indonesian Coated Paper producers

Appleton Coated LLC, NewPage Corporation, and Sappi Fine Paper North America - together with the United Steelworkers (USW) -- commended the U.S. Department of Commerce for its preliminary dumping duty determinations against certain coated paper imports from China and Indonesia.

If these preliminary determinations are upheld at the end of the process tariffs will be imposed on imports of certain coated paper to offset the impact of the unfair advantage caused by the dumped products. The determination placed dumping margins on Chinese coated paper ranging from 30.82% to 89.71% with an all China rate of 135.80%. The Department found that a single rate of 10.62% should apply to all Indonesian coated paper producers.

The result of the Department's actions will be the immediate requirement for importers of covered paper from the subject countries to post a bond or deposit cash in an amount equal to the announced margins pending final resolution of the cases later this year.

The companies and the USW filed unfair trade cases on September 23, 2009 with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission alleging that certain coated paper from China and Indonesia had been dumped and subsidized resulting in injury to the domestic industry and its employees. The paper products covered by the petitions include coated paper in sheet form used in high-quality writing, printing and other graphic applications, with a GE brightness rating of 80 or higher and weighing up to 340 grams per square meter.

The decision by the DOC supports the allegations in the petitions that imports from these two countries are being dumped. Dumping occurs when a foreign producer sells into the U.S. market for less than the price that a producer charges in its home market or when its U.S. prices are below the cost to produce the product.

Today's decision follows the Commerce Department's determination on March 1, 2010 that Chinese and Indonesian coated paper producers benefitted from a variety of subsidies and the International Trade Commission's earlier preliminary decision finding that the domestic industry had been injured by Chinese and Indonesian paper imports.

In addition, the DOC noted that it is reviewing the Petitioners' allegation that undervaluation of China's currency provides a subsidy, as well as other new subsidy allegations in the China subsidy investigation, which could make a difference in the rates assessed in the final determination.

Leo W. Gerard, USW international president, said, "Commerce's announced dumping margins will begin to address Chinese and Indonesian unfair and predatory trade practices in this sector. It's high time that paper sector dumping is addressed. The loss of jobs and resulting community impact has been devastating. China's and Indonesia's practices are unacceptable and the tariff margins come as welcome news."

"Commerce's recognition of the impact that dumped coated paper products have had sends a message that our government is interested in restoring a competitive market in coated paper. From day one, our goal has been to restore a level playing field and that's what our case is all about. Dumping has had a dramatic adverse impact on our industry and our economy as a whole and Commerce's decision opens the door to addressing this unfair practice," said Mark Gardner, president and chief executive officer of Sappi Fine Paper North America.

Tom Curley, president and chief executive officer of NewPage Corporation, said, "The determination announced today by the Department of Commerce will help restore fair competition to our marketplace. Dumping and subsidies have distorted our markets, placing domestic manufacturers at a distinct disadvantage. We're proud of our product offerings and we're not afraid to compete fairly with anyone, domestic or foreign."

John Cappy, president and chief executive officer of Appleton Coated LLC, said, "Dumping has benefitted Chinese and Indonesian producers at the expense of producers here in the U.S. Our companies have worked hard to build sustainable businesses by investing in our people and equipment to remain competitive and by supporting sustainable forestry to preserve our resources. Our employees deserve a chance to compete without fighting unfair subsidies and dumping by foreign competitors."

The domestic industry has experienced capacity reductions and under-utilization resulting in the loss of jobs in communities all across the country. The petitions show that unfairly traded imports from China and Indonesia are a significant contributor to that underutilization of capacity, mill closures and resultant job loss.

The three companies employ about 6,000 production workers represented by the USW at 20 paper mills operating in seven states.

SOURCE: Appleton Coated; NewPage Corporation

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