U.S. Federal Team Starts Tour of Maine Forest Products Industry

 

"The Department of Commerce and our local partners have been communicating directly with the governor’s staff since the beginning of the EDAT process," spokewoman Breelyn Pete said in an email. She said in the July 19 response to LePage that "the U.S. Economic Development Administration will be a strong partner with industry and community leaders to develop a bottom-up strategy to drive innovation, job creation, and economic growth for the forest-based economy across the state of Maine."

 

 

 In the photo above (centalmaine.com), workers carry tools into the Madison Paper Industries mill in Madison on May 23, two days after the mill ended production. 

 

A spokesman for the commerce department said Wednesday that the federal department continues to review the decision to implement the tariffs, but it has been delayed by the large amount of information in the case.

Bennett did not respond when asked via email Wednesday whether any members of the governor’s staff will be participating in the EDAT tour this week.

Maine members of the team’s state planning committee include representatives from the forest products industry, University of Maine officials, and others, but no state government officials. The co-chairmen are Patrick Strauch, executive director of the Maine Forest Products Council; and Yellow Light Breen, president and CEO of the Maine Development Foundation.

Federal members of the team are from the U.S. Department of Commerce, the U.S. Department of Energy, and six other federal agencies. It’s the 30th such team that has been deployed nationwide.

Officials gathered Wednesday at the University of Maine to kick off the EDAT tour emphasized the importance of unity among state, local, and federal officials and industry leaders in coming up with a plan for future economic development.

"By working together, we hope to pave the way for new economic growth and jobs here in Maine," said Matt Erskine, U.S. deputy assistant secretary of commerce for economic development. "While not a silver bullet, this process is a valuable tool that will provide technical assistance connecting the region and state to key resources and spurring critical partnerships."

Erskine said Wednesday that such teams are frequently used in response to natural disasters and have "shown great results" in the past by developing economic plans that are rooted in a "bottom-up" approach starting with local industry and community leaders while also providing those groups with access to federal resources and insights they might not otherwise have.

The visit follows a request by U.S. Senators. Angus King (Independent) and Susan Collins (Republican) that the U.S. Department of Commerce deploy a team to Maine to help communities left in the midst of an economic crisis. Last month Erskine joined the two senators, along with U.S. Rep. Bruce Poliquin, in announcing $8 million in federal grants for the paper and forest products industry, including the money to oversee the tracking of the team.

"We support the team’s ongoing assistance to local industry stakeholders and the effort to strengthen the future of Maine’s forest economy," King and Collins said in a joint statement issued this past Wednesday night. "As always, we will continue to press the Commerce Department to assist the forest products industry."

Donna Cassese, chairwoman of the Maine Pulp and Paper Association and a member of the team’s Maine committee, said after this past week's opening session that the industry is excited about the opportunity to use federal resources to grow and maintain the state’s forest products industry and attract new business.

"We all want to grow together," she said. "I’m very hopeful. I think this is Maine’s opportunity to step up and say ‘this is what we need to do.' '"

Other Maine team members also said they were excited about the possibilities. Strauch said the three-day visit is a chance to "share the opportunities and challenges the forest economy faces" as he and others described challenges that include lack of transportation infrastructure, an aging workforce, and high cost of doing business.

But they also touched on Maine’s strengths, including its plethora of natural resources and access to New England and Canadian markets. The tariffs that LePage cited as a concern in his July letter were not discussed.

Neither King nor Collins was present at Wednesday’s opening remarks, but in a news release, King said he plans to attend a round table discussion with the team on Thursday in Orono. The discussion will focus on top challenges facing the forest products industry and opportunities to strengthen the forest economy, according to the release.

LePage in his letter, aside from the tariff issue, said that "high energy costs, unreasonable taxation and poor management of the tree growth program are major setbacks in Maine."

But he said the tariffs are the major sticking point.

"When the federal government acknowledges these tariffs are bad for business, then and only then will we be able to find common ground," he wrote.

In their statement Wednesday, King and Collins expressed similar concern.

"The formula the Department of Commerce used to impose onerous tariffs on Catalyst and Irving is indeed unfair to two companies that employ many Mainers," the statement said. "At our request, the Department of Commerce is examining Catalyst and Irving — a move sought by both companies. The Department should expedite that review because the Maine employees of Irving and Catalyst deserve a fair and fact-based investigation to determine the proper imposition of appropriate tariffs — if any are warranted.

The tariffs, approved by the U.S. International Trade Commission in November, were put in place at the request of Madison Paper Industries and Verso Corp. after they expressed concerns that illegal subsidies from Nova Scotia’s provincial government were creating unfair competition in the market for supercalendered paper, a glossy magazine paper that was produced in Madison before its mill closed in May and at Verso’s Duluth, Minn., mill.

While celebrated as a victory for Madison and Verso, the tariffs have been criticized for universally placing duties on supercalendered paper producers in Canada, including two companies with substantial operations in Maine: Catalyst Paper in British Columbia, which employs about 700 in Rumford; and Irving Paper in New Brunswick, which employs more than 450 people in Maine.

The department said in February that it would be reviewing its earlier order in the wake of concerns expressed by those companies, but it has not yet said what the outcome of the review has been.

A preliminary ruling originally was expected by August 1, but in June the department issued a statement saying the deadline would be extended until November 7 because of a large volume of information submitted in the "extraordinarily complicated" case.

Meanwhile, Catalyst said in a June news release that since the tariffs first were imposed, the company has incurred duties and associated legal costs of about $13.2 million.

"Catalyst rejects the allegation that we’ve received government subsidies, and we’re confident that a full and fair investigation by the U.S. Department of Commerce would confirm this," said Joe Nemeth, president and CEO for Catalyst in an earlier news release in October 2015 calling for the department to review its decision. Len Posyniak, SVP for human resources and corporate services for Catalyst, did not respond to a request for comment Wednesday.

A spokeswoman for Irving also did not respond to a request for comment Wednesday.

At a town hall-style meeting in Madison shortly after the announcement that the mill would close, LePage said he was dismayed the mill was shutting down, and also told the audience that he planned to look into whether the recent tariffs could hurt some Maine companies.

"It’s important we sit down and try and work something out so people and their communities don’t get devastated," he said at the time.