Today, Congressman Mike Michaud, a former papermaker, urged the U.S. government to examine the details of the financial package offered by the provincial government of Nova Scotia to a paper mill in Port Hawkesbury. Michaud sent a letter to United States Trade Representative Ron Kirk asking him to obtain complete information about the province's rescue package and to determine whether it is consistent with Canada's NAFTA and WTO commitments. If violations are found, Michaud urges expeditious action.
"I want to get all the facts on this deal and make sure Canada is living up to its commitments under current trade laws," said Michaud. "The massive financial package put together for this mill has raised a lot of questions. As a former papermaker, my chief concern is about the impact these actions could have on Maine's mills and workers."
In August of 2010, Michaud joined Kirk for a tour of the Verso Bucksport mill, which, along with mills in Madison and Jay, could be impacted by the mill in Nova Scotia because they produce the same type of paper.
"You toured the Verso Bucksport mill in August 2010 and saw firsthand the importance of that mill to the surrounding community and to the state's overall economy," wrote Michaud in the letter he sent today. "Nova Scotia's support of the Pacific West Commercial facility will disadvantage Maine's mills at a time when the U.S. paper industry is already facing challenges from countries like China who do not play by the rules."
The full text of the letter Michaud sent today can be found below.
September 26, 2012
The Honorable Ron Kirk
United States Trade Representative
600 17th Street NW
Washington, DC 20508
Dear Ambassador Kirk:
I am writing to request your assistance in responding to the recent financial package offered by the provincial government of Nova Scotia to a paper mill in Port Hawkesbury. Specifically, I am asking your help in obtaining complete information about the province's rescue package and in determining whether this package is consistent with Canada's NAFTA and WTO commitments.
According to news reports, Nova Scotia offered Pacific West Commercial a $125 million aid package as an incentive for the company to purchase the former NewPage Port Hawkesbury paper mill. The package reportedly includes millions of dollars in forgivable loans, more than a million dollars for worker training, reduced energy costs, funds to maintain the supply of wood fiber, land purchases, among other forms of assistance. Maine's paper industry believes the size and scope of Nova Scotia's assistance is likely to lead to a decreased market share for the state's mills.
The Port Hawkesbury mill produces supercalendered paper, which is used primarily for magazines and catalogs. Mills in Madison, Jay, and Bucksport, Maine produce the same type of paper as well as paper that competes with supercalendered grades, but our mills operate without the support of government subsidies. You toured the Verso Bucksport mill in August 2010 and saw firsthand the importance of that mill to the surrounding community and to the state's overall economy. Nova Scotia's support of the Pacific West Commercial facility will disadvantage Maine's mills at a time when the U.S. paper industry is already facing challenges from countries like China who do not play by the rules.
I ask that you contact the Canadian government in order to obtain complete information from Nova Scotia regarding each element of this financial aid package and provide that to Members of Congress whose paper industries may be affected by this deal. In addition, I ask that you evaluate the provisions of the deal and determine whether or not they are consistent with Canada's WTO and NAFTA commitments. If USTR determines that the package is not consistent with their trade obligations, I urge USTR to raise the issue with the Canadian government as quickly as possible in all available forums.
It is my hope that any violations by Canada of its trade agreement obligations resulting from the Port Hawkesbury deal can be worked out expeditiously and without having to engage through protracted, formal procedures that require Maine's mills to first demonstrate injury before they can be initiated.
Thank you for your consideration of this time-sensitive request.
Member of Congress