Both Sides in Asian-Paper Debate Are Lobbying U.S. Printers

U.S. printers are hearing environmentally themed messages from both sides on the question of whether to buy Asian paper.

Ten North American environmental groups, including Greenpeace, the Sierra Club, and ForestEthics, issued a letter to various printers and paper buyers today asking them not to buy paper from Eagle Ridge Paper, claiming the merchant is a division of Asia Pulp and Paper (APP).

The letter claims that APP “is obtaining pulp and paper products from operations having adverse climate, human rights, and biodiversity impacts in Indonesia,” reports The Paper Planet. APP established Eagle Ridge as a front in the U.S., the letter adds, after APP “lost hundreds of millions of dollars in contracts” from such companies as Office Depot and Staples “because of its poor environmental and social record and its reported links to illegally obtained wood.”

Meanwhile, an APP-backed organization called Save Printer Jobs is urging U.S. printers to oppose anti-dumping penalties on coated paper from Indonesia and China. The U.S. Department of Commerce is scheduled to issue a preliminary ruling March 1on the case, which was brought by NewPage, Sappi, Appleton Coated, and the United Steelworkers union.

“A tariff on imported coated paper from China and Indonesia will hurt the U.S. printing industry” by driving up paper prices, the organization claims. “Higher costs will force many publishers to seek cheaper printing options in Canada and Mexico – or forgo printing some products all together.”

Save Printer Jobs also notes the “hypocrisy” of American mills claiming they are being hurt by government-subsidized Asian paper after the U.S. industry received about $9 billion in black liquor credits during 2009. NewPage and SAPPI received more than $400 million last year in black liquor credits, which critics claim is an abuse of a program that was intended to encourage production of new, environmentally friendly fuels.

“How can giant mills claim, with a straight face, that they are victims rather than perpetrators of market distortion?” Save Printer Jobs asks. “The giant mills and their hedge fund backers won’t give the taxpayers back their money from 2009, but it is not too late to stop their effort to slap an unwarranted tariff on imported paper that will raise costs for the printing industry and eventually drive U.S. printing jobs overseas.”

Some of the 10 organizations involved in today’s letter about Eagle Ridge have also opposed U.S. subsidies for black liquor, a pulp byproduct commonly used as a power source by pulp mills.

Related articles:

• Subsidized U.S. Mills Fight Back Against Subsidized, Cross-Dressing Coated Papers discusses the original filing of the antidumping case.
• Illegal Logging in Indonesia: Not Funny describes Indonesia's destructive forestry practices.
• Black Liquor Scorecard: $4.7 Billion Through September details what 21 publicly traded companies received in black liquor credits through the 3rd Quarter. Some of the companies have not reported 4th Quarter numbers yet.

Subsidized U.S. Mills Fight Back Against Subsidized, Cross-Dressing Coated Papers

Two paper companies benefiting from multimillion-dollar U.S. government subsidies went on the attack today against subsidized coated paper from China and Indonesia.

NewPage and SAPPI, along with Appleton Coated, announced that they have filed "antidumping and countervailing duty petitions" covering imports of paper for sheetfed presses "having a GE brightness of at least 80."

"Under the antidumping and countervailing duty statutes, the International Trade Commission is expected to make a preliminary injury determination in November 2009 and the Department of Commerce is expected to issue preliminary determinations in the countervailing duty and antidumping duty cases in December 2009 and March 2010, respectively," the statement says. It says that relevant imports of coated paper increased 40% in the first half of 2009 versus the first half of the previous year even though shipments by U.S. mills declined about 38%.

NewPage led a previously successful antidumping effort against coated-freesheet paper coming from Asia, but some Chinese and Indonesian mills have skirted the resulting tariffs by including enough mechanical pulp in their papers to have them classified as coated groundwood rather than coated freesheet. The more generic "GE brightness of at least 80" is obviously intended to close the loophole for such coated-groundwood papers cross-dressing as coated freesheet.

Through the second quarter, NewPage had received $120 million and SAPPI $37 million this year in "black-liquor" tax credits from the federal government. The amounts are likely to double before the program expires at the end of this year. The credits are a sort of accidental subsidy of kraft pulp, the main ingredient in high-brightness coated papers. Appleton Coated is apparently not eligible for the credits.

To be fair, the black-liquor program is temporary, while the Indonesian and Chinese competitors are allegedly receiving more permanent government help in a variety of ways -- tax subsidies, input subsidies, cheap timber, loans, grants, etc.

The statement makes several references to environmental practices, sustainability, and the like. But it makes no direct mention of Indonesia being the international poster child for rape-and-pillage forestry or of the questionable environmental practices of some Chinese paper mills.