Collins, King, Poliquin Urge Commerce Secretary To Investigate Unfair Canadian Trade Practices In Paper Market

WASHINGTON, D.C. – In a letter today, U.S. Senators Susan Collins (R-ME) and Angus King (I-ME), and Congressman Bruce Poliquin (R-ME), urge the U.S. Secretary of Commerce to address and put a stop to unfair Canadian trade practices in the paper market. At issue are potentially illegal subsidies being provided by the provincial government of Nova Scotia to the Port Hawkesbury Paper mill in Nova Scotia. Yesterday, Madison Paper Industries, which owns a mill in Madison, cited these subsidies as a major reason why it is being forced to curtail production for at least two weeks later this month and temporarily lay off most non-salaried employees.

In their letter to Commerce Secretary Penny Pritzker, Senators Collins and King and Congressman Poliquin wrote, “Members of the Maine delegation have previously brought this matter to the attention of U.S. Trade Representative Ron Kirk, and we understand that the current Trade Representative Michael Froman raised this issue on several occasions with the Canadian trade authorities. Despite these efforts, the subsidies continue to flow from the Nova Scotia government to Port Hawkesbury Paper, putting U.S. jobs at continued risk.

“We respectfully ask that you do everything legally within your power as Secretary of Commerce to address this issue and put a stop to these unfair subsidies. The consensus for fair and open trade is predicated on having trade rules by which everyone lives.”

Following is the full text of the letter:

January 14, 2015

The Honorable Penny Pritzker

Secretary of Commerce

1401 Constitution Ave., NW

Washington, DC 20230

Dear Madam Secretary,

We write to bring to your attention a matter of significant concern to the people of the State of Maine. Yesterday, Madison Paper Industries (MPI), a mill in Madison, Maine, that produces supercalendered paper, announced that it will soon curtail production for a period of at least two weeks, requiring it to lay off most non-salaried employees temporarily. This comes on top of several other high-profile mill closures in the last year that have cost far too many men and women in Maine’s papermaking industry their livelihoods.

The President of MPI cited as a factor in the layoffs the unfair subsidies provided by the provincial government of Nova Scotia to a paper producer in Port Hawkesbury, Nova Scotia. These subsidies have put U.S. producers of supercalendered paper at a significant competitive disadvantage, and the excess production generated by them has caused the prices for supercalendered paper to plummet, reducing the sales revenue for U.S. producers.

The subsidies at issue are significant, reportedly totaling more than $125 million, and take the form of loans, grants, tax breaks, and reduced energy costs. Moreover, we understand from Madison Paper that the Canadian company, Port Hawkesbury Paper, has applied for $40 million in additional government aid from Canada’s Forest Industry Transformation Fund.

Members of the Maine delegation have previously brought this matter to the attention of U.S. Trade Representative Ron Kirk, and we understand that the current Trade Representative Michael Froman raised this issue on several occasions with the Canadian trade authorities. Despite these efforts, the subsidies continue to flow from the Nova Scotia government to Port Hawkesbury Paper, putting U.S. jobs at continued risk.

We respectfully ask that you do everything legally within your power as Secretary of Commerce to address this issue and put a stop to these unfair subsidies. The consensus for fair and open trade is predicated on having trade rules by which everyone lives.

Thank you for your attention to this important matter. We look forward to your response and to working with you to stop these unfair subsidies before irreversible harm is done to the U.S. industry.

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