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Proposed newsprint tariffs threaten small-town newspapers

Arlington, VA – Today, more than 1,100 newspapers in small and medium-sized communities across the United States signed a letter calling on Commerce Secretary Wilbur Ross to heavily scrutinize the anti-dumping and countervailing duty petitions filed in September by Longview, WA-based paper mill, North Pacific Paper Company (NORPAC).  NORPAC’s petition asks for steep import duties in excess of 50 percent on imports of uncoated groundwood paper from Canada.  Such duties, if implemented, could result in steep increases in the cost of newsprint, which would cause widespread harm to local newspapers.

The NORPAC petitions are based on incorrect assessments of a changing market and appear to be driven by the short-term investment strategies of the mill’s hedge fund owners, One Rock Capital Partners.

“This attempt by a Wall Street hedge fund to utilize the trade laws for a short-term return is inconsistent with the views of the broader U.S. paper industry, and is being pursued without any consideration for the significant negative impacts on news publishers serving readers in thousands of small U.S. cities and towns,” stated News Media Alliance President & CEO, David Chavern.

Chavern added, “The recent declines in the newsprint market have nothing at all to do with trade issues, and everything to do with a decade-long trend of readers shifting to digital platforms.”  Over the last ten years, there has been a 30 percent decline in print newspaper subscriptions, resulting in a reduction in the demand for newsprint from paper manufacturers.

The Department of Commerce will make a determination on January 8, 2018 regarding the NORPAC petition requesting countervailing duties. The determination on the petition for anti-dumping duties is scheduled for January 16. If the Department of Commerce makes an affirmative preliminary determination in either the countervailing duty or anti-dumping petition, Commerce will instruct U.S. Customs and Border Protection to begin collecting estimated duties on uncoated groundwood paper, at a preliminary rate established by the Commerce Department. Thus, even before there is a final determination in this case, duties will have an immediate impact on importers of newsprint.

“Facing increased newsprint costs, the operations of many small-town papers will be threatened,” stated Chavern. “This would only exacerbate the challenges already facing print newspapers and accelerate the decline of the newsprint industry – hurting all newsprint manufacturers and ultimately, hurting residents of local communities that rely on their local, community newspaper to stay informed.”

ACTION: Please Contact Your Senators / Representatives: The Alliance will be reaching out to select publishers in the weeks ahead to ask newspapers to contact their Members of Congress. At this stage in the process, we are encouraging newspapers to contact their representatives in the House of Representatives to sign an opposition letter to the Secretary of Commerce that is being organized by our champions on this issue: Reps. Ralph Norman (R-Rock Hill, SC), Chuck Fleishmann (R-Chattanooga, TN), Cathy McMorris Rodgers (R-WA) and Jamie Raskin (D-Bethesda, MD). 

In the meantime, click here to access more information and talking points for use in discussing this issue with your representative or senators, or with leading influencers in your community. 

If you have any questions on this initiative please contact Paul Boyle at paul@newsmediaalliance.org or at 571.366.1150. 

What: On August 30, 2017, the Department of Commerce announced the initiation of anti-dumping duty and countervailing duty investigations of Canadian imports of uncoated groundwood paper, which includes newsprint used by newspapers and other commercial publishers. The sole petitioner seeking protection is North Pacific Paper Company (NORPAC), which is owned by a hedge fund, One Rock Capital Partners that operates only one mill in Longview, Washington. NORPAC’s petition asks for steep import duties in excess of 50 percent. 

NORPAC’s petitions do not reflect the views of the paper industry in the United States. In fact, the petitions are opposed by other U.S. producers of newsprint and the American Forest and Paper Association, which represents the broader paper industry.

Why: If Canadian imports of uncoated groundwood paper are subject to duties, prices in the newsprint market will be shocked and the supply chain for newsprint could be disrupted. Duties may incentivize other manufacturers to raise prices or convert capacity from newsprint production to higher grade, more profitable, paper products. With fewer producers, newspapers would face even higher costs or a disruption in supply of a critical raw material.

When: Both Commerce and the International Trade Commission (ITC) will conduct separate investigations. Commerce will make a preliminary determination regarding countervailing duties on January 8, 2018. A preliminary antidumping decision is scheduled for January 16, 2018. If Commerce makes an affirmative preliminary determination in either investigation, the agency will instruct U.S. Customs and Border Protection to begin collecting estimated duties on importers of newsprint. Thus, even before the agencies make their final determination (which would come in late summer or fall 2018), duties will have an immediate financial impact on newspapers that import newsprint from Canada.

The News Media Alliance is taking the lead in this trade case, and has developed a legal, government relations and public relations plan for our industry’s opposition. Today, more than 1,100 newspapers representing small-to-medium sized markets have signed a letter to the Commerce Secretary Wilbur Ross, asking that he heavily scrutinize the anti-dumping and countervailing duty petitions filed by NORPAC.

The News Media Alliance is a nonprofit organization representing nearly 2,000 news organizations and their multiplatform businesses in the United States. Alliance members include print, digital and mobile publishers of original news content. Headquartered near Washington, D.C., in Arlington, Va., the association focuses on ensuring the future of news media through communication, research, advocacy and innovation. Information about the News Media Alliance (formerly NAA) can be found at www.newsmediaalliance.org.