Trade war over N.S. paper mill?
A substantial aid package crafted to breathe life into a beleaguered Cape Breton paper mill could trigger a trade war between Canada and the United States, and the mill's former parent company NewPage Corp. could lead the charge.
Verle Sutton, an industry watcher and player in the world of publication-grade paper, told The Chronicle Herald that the restart of the paper mill by Pacific West will flood the market with cheap paper.
“The restart of the Port Hawkesbury mill will increase North American capacity of SCA (supercalendered paper) by roughly 35 per cent,” he said.
The situation could leave cross-border paper producers crying foul over unfair competition.
Sutton said NewPage Corp. is the most likely candidate to launch a tariff action under the North American Free Trade Agreement.
“NewPage will still have the most efficient SCA machine in North America. However, the subsidized paper coming into the U.S. from Nova Scotia will lead to very low SCA prices, and result in lower coated groundwood prices as well. This will cut deeply into the company’s profits.”
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