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Study Documents Impact of Chinese Paper Subsidies

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The United Steelworkers (USW) union, Pittsburgh, Pa., USA, says that a study released this week documenting illegal subsidies to Chinese paper producers strengthens the argument that "U.S., policymakers must intervene now to preserve the domestic paper industry and hundreds of thousands of good-paying jobs." The report, "No Paper Tiger: Subsidies to China's Paper Industry from 2002-2009," released by the Economic Policy Institute (EPI) documents $33 billion in government subsidies to the Chinese paper industry for pulp, coal, electricity, and recycled paper, enabling the Chinese paper industry to sell its products at artificially low prices.

"That falsely low-priced paper dumped on the U.S. market makes American-manufactured paper appear uncompetitive, forcing plant closings, killing jobs, and damaging communities," USW noted. "With so many Americans out of work, we cannot continue to hemorrhage paper manufacturing jobs because China violates international trade laws with massive subsidies to its industry," said USW International President Leo W. Gerard.

USW pointed out that "China's government-controlled economy enables it to subsidize industries in ways never considered in market-controlled economies like the U.SA. In addition, government subsidization of industry violates international trade regulations." Gerard added that "There are too many industries—glass, paper, tire, tubular steel—where China upsets the global market by grossly and systematically subsidizing its production.

"Free trade must be fair and rules-based or manufacturing in North America will further deteriorate, throwing millions more Americans out of work," Gerard continued. "The only solution is for U.S. lawmakers to demand China obey international trade laws or to impose sanctions on Chinese imports that will have that effect."

The USW and three paper companies—Appleton Coated LLC, NewPage Corp., and Sappi Fine Paper North America—this year won a legal suit seeking relief from the effects of the Chinese subsidies in the coated paper sector.


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