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Michael Michaud

Working Together to Help Maine's Economy
By Representative Mike Michaud
Jul 31, 2010 - 12:07:53 AM

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A significant part of our economy in Maine, especially in the northern part of our state, is based on our natural resource based industries. Our paper mills, pulp operations, saw mills, loggers, and haulers not only support the jobs in their own operations, but also support the small businesses they work with, which in turn support even more. The economic ripple effect is significant and that's why I have been so concerned about unfair foreign trade practices that have been hurting our domestic paper industry.

A recently released study by the Economic Policy Institute (EPI) documents the known subsidies that China's government provides its paper industry and the ensuing exponential growth of production and export sales of Chinese paper. These events correspond to an increasing U.S. trade deficit with China in paper. The EPI study shows that paper production in China tripled over the last ten years, despite global overcapacity, saturated markets, and no inherent advantage in the marketplace. This report makes clear that the rise of China's paper industry is less related to market forces than to a decision by China's government to implement an industrial policy that promotes domestic paper production.

Paper companies in Maine have been directly affected by China's practices and have joined with their workers to file petitions with the federal government to help stop these unfair subsidies. I have been actively supporting this effort and am hopeful that the outcome of these petitions, which is expected this fall, follows the preliminary determinations that support our industry's claims.

But in addition to these important filings on behalf of our paper companies and workers, it's crucial that the highest levels of our government not only be aware of the situation, but are moved to action. That's why I worked with Senator Snowe to organize a joint, bipartisan House-Senate letter to President Obama highlighting the need for his attention, and that of our entire government, to this problem that directly affects our state's economy and the economies of many communities throughout the country. I was pleased that Senator Snowe and I were able to get over one-hundred lawmakers on our letter, including Senator Collins and Representative Pingree.

America's paper industry is the most efficient in the world and is part of a supply chain that promotes sustainable forestry practices and good-paying jobs. We told the President in our letter that this industry should not be asked to continue to compete on the unlevel playing field that China has constructed through heavy subsidization of its domestic production.

We also highlighted the fact that production in the U.S. has declined while China's has surged. In fact, from 2002 through the end of 2009, U.S. employment in the paper and paper products sector dropped 29 percent, from roughly 557,000 workers to 398,000.

To that end, we urged the President to carefully examine the practices employed by the Chinese government to provide its paper industry an artificial and unfair advantage in the U.S. market, and determine the extent to which these practices cause or threaten to cause harm to American producers. Such an analysis should be conducted to identify China's unfair trade practices in the paper industry and apply all appropriate and necessary remedies to combat those identified.

From my time as a paper mill worker, I know firsthand the consequences of unfair trade practices. The paper mill I worked in for nearly 30 years shut down soon after I was sworn in as a member of Congress because our foreign competitors don't play by the rules. Communities in Maine and across the country that depend on the paper industry for their livelihoods need the Administration to address these foreign subsidies with all available resources. Many in Maine still rely on the paper industry - both directly and indirectly - for their livelihoods and the chance for a decent wage.

The EPI study makes clear that the colossal subsidies that China's paper industry enjoys are negatively impacting U.S. paper producers by forcing them to compete on an unlevel playing field. I am hopeful that the President will devote all resources necessary to level the international playing field so that our workers and businesses can do what they do best: grow, create jobs, and continue to produce the best products in the world.

Representative Mike Michaud

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