‘Black liquor’ subsidy prompts trade action

Canada and several other countries are threatening to take the United States before the world trade body over so-called “black liquor” subsidies to American pulp mills.

OTTAWA — Canada and several other countries are threatening to take the United States before the world trade body over so-called “black liquor” subsidies to American pulp mills.

In a joint letter to Congress, Canadian ambassador to Washington Michael Wilson and his counterparts call on the United States to close a loophole that allows pulp and paper companies to take advantage of a tax credit for using alternative fuels.

They say American companies are reaping up to $8 billion a year by mixing in a pulp byproduct called black liquor with diesel fuel, qualifying for the credit, in contravention of World Trade Organization rules.

Some companies claim credits that amount to approximately 30 per cent of the selling price of pulp, the diplomats assert.

“It is clear that these credits amount to actionable subsidies and that any adverse effects caused by them could be subject to remedies in the WTO or through domestic countervailing duty investigations,” the letter adds.

The letter, issued Thursday, is signed by Wilson, the head of the European Commission delegation to the United States, and the ambassadors of Chile and Brazil.

The issue has been a sore point in the Canadian forestry sector, which believes it is a constant target for what the U.S. perceives as unfair subsidies, but which have repeatedly been discarded by trade dispute panels.

But while the Forest Products Association of Canada welcomed government action, it said the chosen course will be too little too late even if it does follow through and succeed at the World Trade Organization.

“By the time a WTO case were to be launched and concluded, the damage would be done,” said Marta Morgan, vice-president of trade and competition with the trade association.

Morgan would not say what specific measures Ottawa should adopt, but said it was critical it act quickly because with each day, the Canadian mills are being put at a competitive disadvantage in terms resources to pay down debt and to invest on new plants and equipment.

Just Posted

Two contentious Red Deer land rezonings are moved ahead by city council

Gunn Street and 51 Street land rezonings discussed

Open house on proposed addictions treatment centre to be held at former Red Deer nightclub

Community is invited to learn more about the $2-million project on May 2

Sri Lanka expats wait to reconnect amid social media block

NEW YORK — Viji Devadas hasn’t heard from her nephew in Sri… Continue reading

US expands probe into air bag failures to 12.3M vehicles

DETROIT — U.S. auto safety regulators have expanded an investigation into malfunctioning… Continue reading

New study suggests oilsands greenhouse gas emissions underestimated

New federal research suggests greenhouse gas emissions from Alberta’s oilsands may be… Continue reading

Oh, yes! Nurse, Raptors look to finish series with Magic

DENVER — In response to an early call, Toronto coach Nick Nurse… Continue reading

Delay of game calls, goalie interference top worst rules for NHLers: survey

The pace and excitement of 3-on-3 overtime isn’t just a thrill for… Continue reading

Avengers get epic send-off at ‘Endgame’ world premiere

LOS ANGELES — There were more than a few sniffles from the… Continue reading

Writers’ Trust launches program pairing rising writers with established mentors

TORONTO — The Writers’ Trust has launched a program that gives five… Continue reading

Family: A potpourri of Easter egg hunts, music and politics

The election is a thing of the past. Albertans have spoken. They… Continue reading

Sri Lankan-Canadians mourn victims of terrorist attack in their homeland

Sri Lankan-Canadians were gathering Monday to mourn those killed in a massive… Continue reading

Residents along Saint John River told to remain on alert as floodwaters rise

FREDERICTON — People who live along New Brunswick’s Saint John River are… Continue reading

Prince Edward Island voters to cast verdict on new electoral system

CHARLOTTETOWN — Canadians are expected to learn late Tuesday whether the cradle… Continue reading

Most Read