Canada Disappointed By Latest US Trade Dispute Finding

by Mike Godfrey, Tax-News.com, Washington

12 January 2018

The Canadian Government has described the US Government's preliminary countervailing duty ruling on imports of Canadian uncoated groundwood paper as "unjustified."

In a preliminary determination released on January 9, the US Commerce Department stated that exporters of uncoated groundwood paper from Canada had received countervailable subsidies ranging from 4.42 percent to 9.93 percent. The determination follows a petition filed by North Pacific Paper Company.

Reacting to the decision, Canadian Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr said: "We are deeply disappointed with the unjustified countervailing duty rates announced by the the US Department of Commerce. Any duties will have a direct and negative impact on US newspapers, especially those in small cities and towns, and result in job losses in the American printing sector."

As a result of the decision, Commerce will instruct US Customs and Border Protection to collect cash deposits from importers of such materials, based on these preliminary rates.

Freeland and Carr said that the Canadian Government is "committed to helping our forest industry enhance existing trade relationships and diversify trade with new international markets."

They explained that they will continue to work with the industry, and with Canada's provinces and territories, "to defend this vital sector against unfair and unwarranted US trade measures and practices."

US Commerce Secretary Wilbur Ross said the preliminary decision "allows US producers to receive relief from the market-distorting effects of potential government subsidies while taking into account the need to keep groundwood paper prices affordable for domestic consumers."

In 2016, imports to the US of uncoated groundwood paper were worth an estimated USD1.27bn.

Commerce will announce its final countervailing duty determination on or around May 22. If both it and the US International Trade Commission make affirmative final injury determinations, Commerce will issue a countervailing duty order.

Ross said Commerce "will continue to evaluate and verify the accuracy of this preliminary determination while standing up for the American business and worker."

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