Death By a Thousand Paper Cuts

Apparently the Bush administration and the ITC have never conceived of what America will be like when all her paper mills are silent, when she's unable to make anything anymore because everything is made in China.
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Though beauty may be in the eye of the beholder, injury is not. A bloodied nose, a foreclosed home, the loss of health insurance are all clearly harmful events.

For a paper-making company like NewPage Corp. of Dayton, Ohio, the loss of 20 percent of its business - especially to a competitor who's cheating - is an injury. The 2,300 United Steelworkers who lost their jobs at American mills making glossy paper since 2004 as Asian companies dumped their wares on the U.S. market at below cost suffered injury.

Somehow, however, in a Clintonian legal parsing of the word "injury," the U.S. International Trade Commission failed to see the injury here.

In a 5-1 decision last week, the ITC abolished anti-dumping and anti-subsidy duties imposed earlier this year on glossy paper imported from China, Indonesia and South Korea because it determined the U.S. industry "is neither materially injured nor threatened with material injury" by the imports.

The ITC did not dispute the impropriety, or possible illegality, of subsidies that foreign governments provide to Asian paper companies, only that those subsidies resulted in harm to American paper companies. Establishing harm is necessary to impose duties.

So, American worker, here's what the Bush Administration and the ITC are saying to you: it's okay that the Chinese, Indonesian and South Korean governments provide their countries' paper companies with subsides covering up to 44.25 percent of the cost of the paper, a calculation made by the U.S. Commerce Department earlier this year. It's just fine that Chinese companies sold their glossy paper in the U.S. at nearly 100 percent below the fair market value and at prices cheaper than they would sell the paper in China. (Let's make this clear: they pay to ship it across the Pacific to the U.S., then sell it for less than what they hawk it for on the mainland.) And it's perfectly dandy that the Asian companies sold the paper at prices that were lower than their manufacturing costs - a practice commonly called dumping.

By contrast, when the U.S. Commerce Department looked at this case earlier this year, it didn't seem to think those practices were consistent with fair trade.

NewPage filed a complaint with Commerce about the subsidies, and the United Steelworkers joined with the paper company seeking relief from the unfair foreign competition. Later, the Sierra Club and the USW asked Commerce to investigate whether Indonesian paper companies benefit from an unfair subsidy by making high gloss paper from trees illegally logged in Indonesian forests that are being stripped at alarming rates by what amounts to modern day wood pirates. It is, of course, cheaper to make paper from stolen trees.

The Commerce Department decided China, Indonesia and South Korea were breaking the rules and imposed the anti-dumping and anti-subsidy duties on glossy paper imported from those countries. The surcharges made the imported glossy paper more costly, giving American companies and workers a fair chance to compete for the business. After a preliminary decision in the spring, the Commerce Department decided Oct. 18 to make the duties permanent.

Then, within a month, the ITC turned that upside down.

The international law firm of Vinson & Elkins represented the Chinese government and several paper companies. A partner at the firm, Daniel L. Porter, told the New York Times, "The ruling sends a message to industries clamoring for tariffs to make sure they can show they are injured from imports."

Show that injury! Cough up some blood, America! Prove you're not faking it! Just because you've lost 20 percent of your business, laid off 19 percent of your workers, watched imports rise 177 percent, and documented foreign competitors charging prices lower than it costs to make the paper, that's not reason enough to believe there's real, like, suffering or something!

Maybe the actual pain starts when 30 percent of the business is lost and 29 percent of the workers furloughed. Maybe it's 40 and 39 percent. Only your ITC knows for sure.

And so the American paper industry will suffer death by a thousand cuts with the full consent of the Bush Administration and the ITC. First goes the glossy paper bit by bit, then newsprint or copy stock or whatever the Asian companies want. Each cut, so small, the ITC contends, it's painless. No injury. Apparently it's never suffered a paper cut.

Apparently the Bush Administration and the ITC have never conceived of what America will be like when all her paper mills are silent, when she's unable to make anything anymore because all of her paper, furniture, clothes, computers, shoes, pet food, toys, appliances, all of her everything, is made in China. Some with a little hidden gift of toxic lead. The nice thing about lead poisoning is that it makes you stupid, so you won't even know you've suffered an injury. So it will be a win-win for the ITC.

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