Print PDF

New Assessment Proposed on Imports of Paper and Paper-Based Packaging

Monday, September 16, 2013
Sandler, Travis & Rosenberg Trade Report

The Department of Agriculture’s Agricultural Marketing Service is proposing to establish a Paper and Paper-Based Packaging Promotion, Research and Information Order. The AMS will conduct a referendum on this issue Oct. 28 through Nov. 8, and the order will be implemented if it is favored by a majority of current U.S. manufacturers and importers voting in the referendum who also represent a majority of the volume of paper and paper-based packaging represented in the referendum who were engaged in the manufacturing or importation of those products in 2012.

This order would aim to maintain and expand markets for the following kinds of products. The AMS notes that markets for these products declined by 15% between 2000 and 2010 due to factors such as decreasing use of office paper, increases in the use of digital forms of communication, and competition from other materials.

- printing, writing and related paper, which is coated or uncoated paper, including thermal but excluding carbonless paper, that is subsequently converted into products used for printing, writing and other communication purposes, such as file folders, envelopes, catalogues, magazines and brochures

- kraft packaging paper, which is coarse unbleached, semi-bleached or fully bleached grades of paper that is subsequently converted into products such as grocery bags, multiwall sacks, waxed paper and other products

- containerboard, which is all forms of linerboard and medium that is used to manufacture corrugated boxes, shipping containers and related products

- paperboard, which is solid bleached kraft board, recycled board and unbleached kraft board that is subsequently converted into a wide variety of end uses, including folding boxes, food and beverage packaging, tubes, cans and drums, and other miscellaneous products (paperboard does not include construction-related products such as gypsum wallboard facings and panel board)

The order would be financed by an assessment on importers and domestic producers that would initially be set at $0.35 per short ton or $0.0386 per kilogram. Entities that import or manufacture less than 100,000 short tons per marketing year, as well as organic paper and paper-based packaging, would be exempt from this assessment. The assessment is expected to generate about $25 million a year, which would be used to conduct marketing and educate consumers. The AMS states that if the new program preserves just 0.24% of the paper and allied products industry sales by slowing demand declines for some grades and/or increasing demand growth for others, the economy could gain 3,360 jobs.

According to Census data, in 2011 exports of the above products totaled about 11.5 million short tons, or 17% of domestic production. It is estimated that 18% went to Western Europe, 16% each went to Canada and Mexico, 11% went to the Far East and Oceania, 9% went to South America and 8% went to China. Of the 11.5 million short tons an estimated 46% was containerboard, 26% was paperboard, 22% was printing, writing and related paper, and 6%. was kraft packaging paper.

U.S. Customs and Border Protection data show that imports of the above products totaled 7.5 million short tons in 2011. Of that total, 58.6% percent was from Canada, 22.2% was from Western Europe, 9.8% was from China, Japan and the Far East, 2.7% was from South America and the remainder was from other countries. In terms of type, 72.0% of the imports was printing, writing and related paper, 13.1% was paperboard, 10.1% was containerboard and 4.8% was kraft packaging paper.

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines