Trade dispute with U.S. over paper products to end in Canada’s favour

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A years long trade dispute with the U.S. over Canadian paper products used for magazines and newspaper supplements is coming to an end in Canada’s favour.

Canadian producers of supercalendered paper could get millions of dollars in refunds after a U.S. company decided to drop its complaint alleging unfair subsidies north of the border.

This is the second positive trade development for Canada this week after Canada won another favourable outcome in the Boeing conflict.

Boeing announced it will not appeal a ruling by the International Trade Commission that Canadian aerospace giant Bombardier did not receive unfair subsidies.

“This is good news for Canada’s innovative aerospace industry and the thousands of people who depend on well-paying aerospace jobs on both sides of the border,” Foreign Affairs Minister Chrystia Freeland said in a statement Friday.

Paper review underway

Tariffs on some Canadian producers of supercalendered paper were introduced by the Obama administration in 2015.

The rate has changed over the years, but at one point it reached as high as 18.85%.

  • Irving paper has tariff reduced in NAFTA battle with U.S.

This week, American paper producer Verso announced it would seek what is called a ‘change of circumstance review’ from the U.S. Department of Commerce.

Essentially that means the company would like to formally drop its complaint.

Since 2015, Freeland has discussed the issue with her American counterparts on multiple occasions — including during a meeting with U.S. Commerce Secretary Wilbur Ross just last week.

The department now has to review the process and see if the Canadian companies that have been paying the tariffs qualify for refunds.

Millions of dollars are at stake for the firms, which are based in Canada’s Atlantic region and Quebec.

Global Affairs says approximately 1,500 Canadian jobs depend on the industry.

NAFTA progress

The two moves come as several significant trade challenges persist between Canada and the U.S.

NAFTA negotiations, which also involve Mexico, are progressing slowly with all sides trying to firm up dates for an eighth round of talks next month in Washington.

The U.S. negotiating team dropped a divisive demand this week that would have required all cars produced under the trade agreement to contain 50% American content.

The development is considered a significant turning point in the talks, with optimistic rhetoric emerging from the highest levels in all three countries.

Still, officials acknowledge there is much more work to be done behind the scenes.