China calls new US duties unfair

The decision by the United States to impose preliminary duties on Chinese coated paper and phosphate salts was unfair and discriminatory, a spokesman for China's Commerce Ministry said in a statement seen yesterday.

The US Commerce Department on Tuesday hit Chinese coated paper companies with countervailing duties ranging from 3.92 to 12.83 per cent to offset government subsidies, and in a separate action, levied Chinese companies that produce or export potassium phosphate salts with a preliminary duty of 109.11 per cent.

"Frequent" countervailing probes by the United States into Chinese products have "unfairly restricted normal exports", Chinese Commerce Ministry spokesman Yao Jian said in a statement seen on the ministry website.

"The fundamental reason for American coated paper producers and other industries' difficulties is the drop in demand due to the financial crisis. The United States wants to transfer those difficulties to Chinese producers which China cannot accept," Yao said.

"China believes that if the United States wants to expand its exports, it should open its markets and fight protectionism together with the rest of the world."

The final duties on China could be higher if the US Commerce Department accepts the industry's argument that Beijing subsidises coated paper exports by maintaining an undervalued currency against the dollar, a plaintiffs' lawyer said.

If the department agrees to that, it would be the first time that US countervailing duty laws have been used against China's exchange rate regime. That makes the paper case potentially more politically explosive than other trade spats.

The United States on Tuesday also levied a 17.48 per cent duty on Indonesian coated paper in the same case.

Asia Pulp & Paper (APP), a major exporter of coated paper from both China and Indonesia, said it was disappointed with the ruling and would continue to fight the duties.

In a similar case brought by US producers a few years ago, the US International Trade Commission blocked final duties from going into effect.

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