US ups sanctions on China, others in paper dispute

WASHINGTON - The Bush administration is imposing further trade sanctions against China, South Korea and Indonesia in a dispute involving glossy paper.

The decision, announced Wednesday by Commerce Secretary Carlos Gutierrez, came a week after US and Chinese officials met for a second round of high-level talks aimed at lowering trade tensions between the two nations.

"This administration continues to aggressively and transparently enforce our trade laws to ensure a level playing field for American manufacturers, workers and farmer," Gutierrez said in a statement announcing the decision.

In the new ruling, the government determined that imports from the three countries of glossy paper - used in art books, textbooks and high-end magazines - were being sold in the United States at less than fair value, a process known as dumping.

The dumping penalties will be collected immediately although they will not become final until this fall after further investigations are conducted.

The preliminary dumping penalty for the paper products from China ranged from 23.19 percent to 99.65 percent. The dumping penalty imposed on imports of glossy paper from Indonesia was 10.85 percent while the penalty on South Korean imports ranged as high as 30.86 percent.

These dumping penalties will be imposed on top of economic sanctions levied in March after the administration found that paper companies from those three countries were receiving improper government subsidies that allowed them to undercut the price of American producers.

The March decision reversed 23 years of US trade policy by treating China, which is classified as a nonmarket economy, in the same way other US trading partners are treated in disputes involving government subsidies.

The paper case was brought by NewPage Corp., a Dayton, Ohio-based paper company which contended that its coated paper was facing unfair competition because of the government subsidies and sale of imports at unfairly low prices.

The government trade sanctions have received the support of the United Steel Workers union, which represents about 90 percent of the workforce in the US coated paper industry. The glossy paper is produced at 22 paper mills in 13 states.

The penalties in the case involving government subsidies are known as countervailing duties. In that case, the trade sanctions ranged as high as 20.35 percent for Chinese glossy paper imports, 1.76 percent for South Korean imports and 21.24 percent for Indonesia.

Chinese officials denounced the decision in the government subsidies case saying that it went against the consensus of both countries to resolve disputes through dialogue rather than imposing trade sanctions.

The second round of the Strategic Economic Dialogue, which was launched by Treasury Secretary Henry Paulson in December, was held in Washington last week.

Paulson and Chinese Vice Premier Wu Yi announced a series of modest agreements including the boosting of airline flights between the two nations. But they failed to make progress in one of the biggest rade irritants, the value of China's currency, which American manufacturers contended is being kept artificially low against the dollar to give Chinese companies unfair advantages against US firms.