Québec welcomes the World Trade Organization’s decision concerning countervailing duties

Supercalendered paper

QUÉBEC CITY, July 6, 2018 – The Government of Québec and the federal government just won a victory against the US administration. The World Trade Organization (WTO) ruled in favour of Canada and Québec by judging the decision of the United States Department of Commerce (DOC) to impose countervailing duties on Québec and Canadian supercalendered paper exports to be unreasonable.

The WTO decided that the US did not respect the rules of international trade and recommended that the US administration revise its decision, taking into account the recommendations of the WTO.

In March 2015, the DOC launched an investigation on countervailing duties on Canadian exports of supercalendered paper. This investigation led to the imposition, in October 2015, of significant tariffs for Canadian producers, including a tariff of 17.87% for Resolute Forest Products.

Québec has worked with the federal government to challenge the decision of the DOC before the bodies of the WTO.

Dominique Anglade, Deputy Premier, Minister of Economy, Science and Innovation and Minister responsible for the Digital Strategy, and Luc Blanchette, Minister of Forests, Wildlife and Parks and Minister responsible for the Abitibi-Témiscamingue and Nord-du-Québec regions, are satisfied with this decision and hope that US authorities will implement it without delay in order to eliminate the countervailing duties on Resolute Forest Products’ supercalendered paper.

Quotes:

Resolute Forest Products is the only exporter of supercalendered paper in Québec, and the tariffs imposed by the DOC were threatening the profitability of its manufacturing facilities in Dolbeau and Kénogami. This decision is extremely important for our forest industry since it shows that we are able to take on protectionism. We remain very active on this issue and we will continue our efforts with the industry and the federal government to prevent the US administration from imposing these unfair and inexplicable countervailing duties.

– Dominique Anglade, Deputy Premier, Minister of Economy, Science and Innovation, and Minister responsible for the Digital Strategy

Today’s decision is a real victory for Québec and the industry. This is a clear sign that our supercalendered paper manufacturing facilities in Kénogami and Dolbeau have been overtaxed by the DOC. We now have to do everything we can to settle this dispute for workers, families, communities and members of the forest industry who are affected by this overtaxing.

– Luc Blanchette, Minister of Forests, Wildlife and Parks and Minister responsible for the Abitibi-Témiscamingue and Nord-du-Québec regions

Key points:

• In March 2015, the DOC launched an investigation on countervailing duties on Canadian exports of supercalendered paper. The investigation was notably launched after the Government of Nova Scotia provided the Port Hawkesbury Paper (PHP) mill with an aid package of about $140 million.
• Resolute Forest Products is the only exporter of this type of paper in Québec.
• On October 14, 2015, the DOC issued its decision, after which Canadian exports of supercalendered paper were hit with countervailing duties:
  • 17.87% for Resolute Forest Products;
  • 20.18% for PHP;
  • 18.85% for Catalyst Paper, of British Columbia, and Irving Paper, of New Brunswick.
• The dispute of the DOC’s decision was referred to the bodies of the WTO in March 2016. On July 5, 2018, the WTO released its decision, which ruled entirely in favour of the arguments submitted by Canada.
• On March 20, 2018, Irving Paper and PHP agreed to a settlement with Verso Corporation, the company that had originally filed the complaint with the DOC. Verso Corporation submitted a request to withdraw its complaint, but the DOC has still not indicated that it intends to finish with the issue and refund tariffs already paid.
• If the DOC were to give way to the request of Verso Corporation, administrative reviews would cease, tariffs paid since 2015 would be refunded and the DOC would close its file.