US trade representative starts NAFTA inquiry into subsidies for Port Hawkesbury Paper
A trade representative in the United States has started a NAFTA inquiry to determine if improper subsidies were given to Port Hawkesbury Paper.
The Nova Scotia government provided the new owners with a $124.5 million aid package and spent an additional $36.8 million to keep the mill hot idled until a sale agreement could be reached.
Ron Kirk, United States Trade Representative, plans to request information from the Canadian and Nova Scotian governments to verify details of the assistance given to the mill.
Kirk was prompted by Maine’s Congressman Mike Michaud who is concerned about job losses in Maine.
The closest U.S. supercalendered mill to the Cape Breton Island mill is UPM’s mill in Madison, Maine. The mill produces the same grade of supercalendered mill as Port Hawkesbury Paper. It employs about 240 people and produces 220,000 tons a year.
“We need to get to the bottom of this deal to ensure that no current trade laws have been violated,” said Michaud. “I greatly appreciate Ambassador Kirk’s commitment to investigate this matter. This deal could have a significant impact on our paper mills and the critical jobs and small businesses they support.”
The U.S. will investigate to see if the deal is compliant with Canada’s commitments under the North American Free Trade Agreement and the World Trade Organization.
The U.S. plans to also raise the issue later this month at meetings of the World Trade Organization’s Committee on Subsidies.
Separate from any formal federal investigation, U.S. paper manufacturers could petition the U.S. International Trade Commission to impose tariffs on the Canadian paper imports, as some companies successfully did in 2010 in regards to cheap paper imports from China and Indonesia.
U.S. launches trade inquiry into aid for Cape Breton paper mill (The Globe and Mail)
U.S. to investigate subsidies to Cape Breton mill (CBC)
U.S. trade ambassador to investigate Canadian paper deal (Morning Sentinel)
US to investigate Nova Scotia paper mill deal for ‘possible subsidies’ (Bangor Daily News)
Michaud praises commitment to act and quick response to his request (Mike Michaud)
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