U.S. Department of Commerce Rules for Fair Trade; USW, Sierra Club Challenge Subsidies from Illegal

[Omaha Steve]

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WASHINGTON--(BUSINESS WIRE)--

News From USW: The U.S. Department of Commerce today ruled that paper products imported from Indonesia are unfairly benefiting from unfair trade subsidies provided by the Indonesian government; the government allows logging companies to pay less than market prices for timber from government-owned forests, allowing the companies to gain an unfair trade advantage.

The ruling comes after the Sierra Club and the United Steelworkers (USW) intervened in the case in an effort to curb the trade of illegally logged timber and wood products that violate Indonesian law and undercut the U.S. paper industry. The case marks the first time the Commerce Department has responded to environmental allegations in such a case by investigating whether lax enforcement of environmental laws should be considered as a subsidy that could be met with countervailing duties.

“The U.S. Department of Commerce is finally taking a serious look at the impact that weak and poorly enforced environmental laws have on our economy,” said Carl Pope, Executive Director of the Sierra Club. “Illegal logging has devastating environmental and social impacts- accelerating global warming and increasing the risk of deadly landslides, but it is also depressing timber prices worldwide.”

Illegal logging produces artificially cheap fiber for use in paper products. A recent study by the United Nations Environment Program found that 88 percent of the logging in Indonesia is performed in violation of that country’s own laws. The current case, investigated by the Department of Commerce, concerns coated free sheet paper, a product used in expensive catalogues and corporate reports. At least nine paper companies have experienced shutdowns or mass layoffs in the last decade as a result of the import of coated free sheet products.

“These unfair trading practices have cost U.S. jobs by forcing mill closures and the shutdown of paper lines. Today’s ruling is the right direction for American workers, but much more still needs to be done to bring about fair trade,” said Leo Gerard, USW President. “For example, China imports most of its timber, yet there is still no real way to determine if the imported wood- which is used to make paper products exported to the U.S.- has been harvested illegally.”

FULL story at link.