July 28, 2010

Lawmakers Call on President to Investigate Chinese Paper Subsidies

China’s State-Subsidized Paper Industry Creates Unfair, Unlevel Playing Field for American Producers

Washington, D.C. – With the recent release of a report identifying how massive, known subsidies provided by China to its paper producers unfairly gouges a share of the U.S. market, more than 100 lawmakers from 30 states have called on President Obama to conduct an in-depth examination of China’s unfair subsidization of its domestic paper industry.  The lawmakers -- led by U.S. Senators Ron Wyden (D- Ore.) and Olympia J. Snowe (R-Maine) and U.S. Representatives Mike Michaud (D-Maine) and Thaddeus McCotter (R-Mich.) -- asked the President to use the study as the basis for action to remedy these unfair trade practices.     

According to a study conducted by the Economic Policy Institute, paper production in China has tripled in the last ten years, despite a global market that is saturated and the fact that China enjoys no market-based advantages over other producers.   The Institute indentified heavy state-provided subsidies that China’s paper producers receive, which provide them an artificial advantage over U.S. paper producers.   

“America’s paper industry is the most efficient in the world and is part of a supply chain that promotes sustainable forestry practices and good-paying jobs,” the lawmakers wrote in the letter.  “This industry should not be asked to continue to compete on the unlevel playing field that China has constructed through heavy subsidization of domestic production.”

Senator Wyden added, “American workers are fed up with foreign subsidies and they need to know that the U.S. government is on their side.  The investigation we are calling for is the first step toward achieving economic justice for our paper producers.”

Senator Snowe added, “China’s domestic paper subsidies are frankly unacceptable and destabilize components of the global trading system, putting Maine and our nation’s paper industry at a significant disadvantage. It is imperative that our government act swiftly not only to enforce current trade laws but also to implement new policies to guarantee our paper producers can fully compete in a fair, global market.”

“From my time as a paper mill worker, I know firsthand the consequences of unfair trade practices.  The paper mill I worked in for nearly 30 years shut down soon after I was sworn in as a member of Congress because our foreign competitors don’t play by the rules.  Communities in Maine and across the country that depend on the paper industry for their livelihoods need the Administration to address these foreign subsidies with all available resources,” said Representative Michaud.

Representative McCotter added, “We must fight communist China's predatory trade practices to defend American jobs, especially in our crucial manufacturing sector.”

The EPI study makes clear that the colossal subsidies that China’s paper industry enjoys is negatively impacting U.S. paper producers by forcing them to compete on an unlevel playing field.   The letter sent to President Obama strongly urges the administration to examine the practices of the Chinese government and to take action to remedy the situation.

China Paper Letter

Read the EPI Report