14 March 2011

BPIF urges UK Government to vote against permanent tariffs on imports of Chinese paper

We have written to the Department of Business, Innovation and Skills (BIS) urging the UK Government to vote against the introduction of any anti-dumping or anti-subsidy measures in relation to Chinese imports of coated fine paper (CFP) into the European Union. Interim tariffs were introduced on imported Chinese paper last November, but there is still opportunity to influence matters before a final determination by the European Commission in May. With a vote by Member States on final measures now imminent, we have sought to highlight to the Government the damage that the introduction of permanent tariffs would cause to the competitiveness of the UK printing industry.

The Commission began its anti-dumping and parallel anti-subsidy investigation into Chinese imports of coated fine paper (CFP) into the European Union last year, at the instigation of European papermakers' organisation Cepifine.  We wrote to the EC Directorate General for Trade on 28 June last year to raise our concerns that the UK printing industry would be adversely impacted should any trade defence measures be implemented that had the effect of restricting competition in relation to the supply of paper. The UK is the largest importer of Chinese coated fine paper products, according Cepifine.

With UK paper prices escalating, printing may increasingly need to source some of their paper supplies from more competitive suppliers in China and any measure taken by the European Union to impose duties on imported coated fine paper, and thereby increase operating costs, could therefore risk undermining our members' international competitiveness. An imposition of trade defence duties threatens to result in the highly controversial practice of using anti-subsidy and anti-dumping remedies at the same time on the same product.

These duties would result in the following negative impacts for our industry:

• Prices will be driven artificially higher, which would further exacerbate cost increases faced by print companies. Printers are already facing severe competition from low-cost producers in the Far East and from electronic media alternatives, and so find it extremely difficult to pass these increases on without losing volume of orders
• European paper mills will lack incentives to modernise their production facilities, resulting in ageing capacity operating at higher costs (passed on to their customers of course, since supply will be more limited) and with a higher carbon footprint
• Jobs could be affected if costs have to be cut to remain competitive

At a time when we are facing significant economic constraints due to the state of the UK economy, the imposition of trade defence duties by the European Commission would make it far more difficult for our sector to remain dynamic and competitive in a global market. Our letter therefore asked the Commission to reject any calls made to impose anti-dumping and anti-subsidy duties, which we believe would have a devastating impact on the British printing industry.

Despite this, the European Commission announced that following their initial investigations, provisional anti-dumping duties of up to 39.1% would be imposed on imports of coated fine paper (CFP) from Chinese paper mills from 18 November.  These interim duties apply to CFP sheets (not rolls) of 70gsm to 400gsm and an ISO 2470-1 brightness of more than 84, for a provisional period of six months pending a final ruling this May.

A further concern is that the imposition of interim trade tariffs by the EU on imports of Chinese paper means that we no longer have a level playing field between imports of "white" Chinese paper (which carry a tariff) and imports of products printed in China (which do not). Given that publishers generally buy the paper used to manufacture their printed products, this creates a powerful additional incentive for them to source their printing in China rather than just their paper. In sectors already facing severe competition from the Far East, such as books for example, the last thing we need is further encouragement for European publishers to source print there. This is typical of the sort of unintended consequences that so often result from the market distortion created by protectionist measures.

 For more information call Andrew Brown on 020 7915 8378 or email [email protected]