AGREEMENT REACHED

U.S. competitors complained of subsidies, resulting in duties imposed on Canadian glossy paper manufacturers in 2015

Port Hawkesbury Paper wins salvo in WTO ruling.

Business Minister Geoff MacLellan lauded the decision by the World Trade Organization that largely favoured Canadian producers of glossy paper in a dispute over duties imposed by the United States government.

The ruling by the WTO came down on Thursday morning and has had a direct impact on companies producing supercalendered paper for export to the U.S. The paper is used largely for magazines, catalogues, corporate brochures and advertising inserts.

“This is a perfect example of how a rule-based trade environment works properly,” the minister said Friday.

“As a province and as a nation we adhere to very fair and reasonable rules with our international trading partners and this is an example, a situation when our processes and our rules are applied.”

MacLellan said the decision was important in defending the country’s “trade rights.”

Port Hawkesbury Paper, owned by Vancouver-based Stern Partners Inc., had a 20.18 per cent duty imposed on products shipped south of the border dating back to August 2015.

In January, following a preliminary administrative review on supercalendered paper from Canada, the U.S. Department of Commerce adjusted the duty rate for Port Hawkesbury Paper to 15.65 per cent.

The trade skirmish resulted from a complaint lodged by two American companies producing supercalendered paper, which argued Canadian paper is unfairly subsidized.

In the case of Port Hawkesbury Paper, at issue was the aid package it received in 2012 valued at about $124.5 million from the province to reopen the mill after a year-long sales process, as well as a special electricity rate that it receives.

The company employs approximately 330 at the mill and supports 400-500 jobs in trucking and harvesting of wood in Nova Scotia.

Port Hawkesbury Paper development manager Marc Dubé did not return a request for comment Friday.

The Department of Commerce has yet to issue a comment on the ruling.

Global Affairs Canada spokesman John Babcock told The Canadian Press by email that the government acknowledges the WTO ruling that the U.S. breached its obligations when it made its countervailing duty determination.

He said Canada requests the U.S. implement the panel’s findings promptly, rescind the duty order and refund all duties collected since it went into effect.

All of the money collected from the duties have been held in trust since first being implemented nearly three years ago.

Last year, a NAFTA review panel also ruled in Canada’s favour with a unanimous decision to order the Department of Commerce to reconsider its duties against Canadian mills that produce glossy paper.

Other Canadian companies hit by the duties were Montrealbased Resolute Forest Products, the J.D. Irving mill in New Brunswick and Catalyst Paper of British Columbia.

MacLellan said he nor anyone from his department has spoken with officials from Port Hawkesbury Paper since the WTO ruling was released.

Without an indication on what the reaction from the U.S. government might be, he said Nova Scotia respects the appeal process.

“We don’t interfere or make calls to our political counterparts on the U.S. side. We let these things unfold in the independent nature as they should.”

Exports of supercalendered paper from Canada to the U.S. were valued at $959 million in 2014.