Paper, Citrus Producers Urge USTR to Press Complaint Against China at WTO
The U.S. Trade Representative should "vigorously defend" the Department of Commerce findings in its countervailing duties proceeding involving citrus and coated paper from China, said a joint filing by Appleton Coated, NewPage, S.D. Warren d/b/a Sappi Fine Paper North America, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. The USTR was seeking comments on the World Trade Organization dispute settlement proceeding (see ITT's Online Archives 12062122.)
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These investigations revealed that it is official Chinese government policy to use subsidies to create a domestic paper industry with substantial overcapacity in order to encourage the export of paper into overseas markets at unfair prices, the filing (here) said, with most subsidies exceeding ten percent of sales value. It said that "gives Chinese exporters an unfair advantage."
In the case of thermal paper, there were subsidies ranging from 13 to 137 percent, said Appleton Papers in its separate filing (here). It said the subsidies included low-interest policy loans from government-owned banks and other institutions, loans from state-owned shareholders, export subsidies, provision of land for below-market rates, provision of electricity for below-market rates, environmental subsidies, exemptions from land-use taxes and fees, income tax subsidies, VAT and tariff exemptions, and stamp tax exemptions.
In comments on the related Citric Acid and Citrate Salts from China proceeding (here), Archer Daniels Midland, Cargill and Tate & Lyle Ingredients said there were subsidies of 4-119 percent for Chinese industries, justifying the duties. That USTR filing cited similar types of subsidies as for the paper products.