October 25, 2012

Officials concerned Canadian paper subsidies could hurt Maine

The U.S. Trade Representative’s office raised the issue Tuesday during a committee meeting of the World Trade Organization in Switzerland.

By Kevin Miller kmiller@pressherald.com
Staff Writer

WASHINGTON – European officials joined U.S. trade representatives earlier this week in expressing concerns that Canadian subsidies to re-start a Nova Scotia paper mill could put mills in Maine and elsewhere at a competitive disadvantage.

click image to enlarge

Longtime employee Walter Smith stands outside the Madison Paper Industries mill in this Nov. 2011 file photo. U.S. officials are concerned that Canadian subsidies to their paper mill will hurt Maine business.

Michael G. Seamans / Staff Photographer

The U.S. Trade Representative’s office raised the issue on Tuesday during a committee meeting of the World Trade Organization held in Geneva, Switzerland. European Union officials also questioned the $125 million rescue package for the mill in Port Hawkesbury, N.S.

“The United States expressed concern that the assistance package could cause competitive harm to U.S. producers and workers,” Nkenge Harmon, deputy assistant U.S. trade representative for public and media affairs, said in a written statement. “The United States looks forward to further dialogue with Canada with the aim of ensuring that any assistance provided is consistent with Canada’s international trade obligations.”

The discussion at the WTO comes about three weeks after the Obama administration’s trade ambassador, Ron Kirk, agreed to look into the issue.

“I can assure you that we will work speedily to obtain the facts of this matter,” Kirk wrote in a letter to U.S. Rep. Mike Michaud, D-District 2. “Based on what we find, we will consider all feasible and effective options – doing so aware that this is a time-sensitive matter.”

Michaud’s office said Thursday that the congressman was “pleased the USTR is taking action, especially given its potential impact on Maine jobs.”

Pacific West Commercial purchased the former NewPage mill and recently resumed operations there with the help of the financial package from the Canadian government. The mill makes the same type of paper produced at the UPM mill in Madison.

Maine is the second-largest papermaking state in the nation after Wisconsin and the industry supports thousands of jobs directly. So representatives from paper companies in Maine and across the country had expressed concerns that loans, lower electric rates and other subsidies from the Canadian government could allow the Port Hawkesbury mill to sell paper at artificially low prices.

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