Of the five U.S. International Trade Commission members, only one clearly understands the meaning of the simple word “injury.�

Only Charlotte R. Lane voted last week to sustain penalties against paper imported from three Asian countries because cheating by those foreign countries and companies had caused incredible damage to American companies and workers.

Her four fellow commissioners decided that a Dayton, Ohio paper company called NewPage Corp. and other U.S.  manufacturers of glossy paper used in magazines and catalogs had been neither “materially injured� nor “threatened with material injury� by subsidies that the Chinese, Indonesian and South Korean governments give to paper companies in their countries.

Subsidized imports have shut down 20 percent of the domestic paper industry. They’ve also forced massive layoffs by paper mills — a total of 19 percent of all United Steelworkers employed by paper companies since 2004.

Despite that, four commissioners saw no injury to an industry that lost a fifth of its business to competitors who cheated. They saw no injury to 2,300 American workers who lost their jobs to foreign firms who broke the rules.

Those rules are the ones dealing with fair trade and fair competition. Here’s what the U.S. Department of Commerce discovered when it investigated a complaint filed by NewPage against the Asian paper companies:  The Chinese, Indonesian and South Korean governments gave subsidies to their native paper companies covering up to 44.25 percent of their costs. This enabled the paper companies to sell the glossy paper at prices lower than manufacturing costs, a practice called “dumping.�

The foreign firms sold the paper in the U.S. at prices cheaper than what they auctioned it for in their home countries. Companies from Indonesia and South Korea were selling the paper at prices that were 8.63 percent and 31.55 percent lower. The foreign companies paid to haul glossy paper across the Pacific, then hawked it for less than what they did before they put it on the ships.

With those kinds of price supports, it’s no wonder that in one year –  2006 — Chinese exports of glossy paper to the United States rose 177 percent.

Based on those findings, the Commerce Department last spring imposed preliminary anti-dumping and anti-subsidy duties on the Chinese, South Korean and Indonesian paper imports. Those charges increased the price of the foreign paper enough to make competition with American companies more fair.

The United Steelworkers joined NewPage in its complaint against the Asian paper companies and later joined the Sierra Club when it asked the Commerce Department to investigate whether paper companies in Indonesia receive an unfair subsidy by manufacturing high gloss paper from illegally harvested logs. The timber from huge swaths of some Indonesian islands is being illegally logged. Getting raw material for free really cuts the price of the end product.

In October, Commerce decided there was sufficient evidence to make that preliminary anti-dumping and anti-subsidy duty order a final one.

A month later, four ITC members disagreed. They didn’t dispute the foreign cheating. Only that it had caused American harm.

That they and the Bush Administration can’t see the injury to America when she loses her ability to manufacture paper to unfair foreign competition is disquieting.

They’re content to let the paper industry go the way America’s toy and electronics and furniture and pet food industries have all gone. To China, to Indonesia, to South Korea, to anyplace where labor and environmental laws are not enforced.

Then, what happens if America, someday, actually needs to make something itself because of war or because of a boycott or barricade or unsafe manufacturing conditions in these foreign countries? What happens when American workers have lost those crucial high-level skills and American mills have rusted and collapsed? Will the U.S. be a powerful nation then?

Or will America have become nothing more than a paper tiger?

This entry was posted on Friday, November 30th, 2007 at 10:56 am and is filed under Politics, Economy/Budget, Foreign Policy, Labor .