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A worker walks past rolls of paper at the Catalyst Paper distribution centre in Surrey, B.C., in this 2014 file photo. Catalyst is one of three mandatory respondents in the U.S. countervailing investigation into possible unfair subsidies in Canada for newsprint exports to the U.S.

DARRYL DYCK/The Globe and Mail

Eight American senators have joined a campaign by politicians and publishers to tout the virtues of U.S. community newspapers as the Department of Commerce prepares to announce its decision Tuesday on whether to impose countervailing duties against Canadian newsprint.

The senators warn that U.S. newspapers, especially those in towns and small cities, would be hurt by duties if the department decides to punish Canadian producers of newsprint and other types of uncoated groundwood paper.

"Uncoated groundwood paper demand is in steady decline in both the United States and Canada. It is market erosion, not unfair trade, causing today's competitive turmoil and job losses in the newsprint and commercial printing sectors," the eight senators said in their the letter sent on Thursday to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.

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Georgia senator Johnny Isakson signed the letter, along with seven of his colleagues. The group joins a wide range of senators and members of the House of Representatives – Republicans and Democrats – who have sided with newspaper publishers instead of newsprint producer North Pacific Paper Co., also known as Norpac.

Groundwood from Canada is subsidized and being dumped at below market value, according to Norpac. Norpac, which is based in Longview, Wash., complained to the Commerce Department in August that U.S. paper manufacturers are being hurt by Canadian groundwood.

An official with the Commerce Department confirmed that it will publicly issue the preliminary ruling on Tuesday. The department had been slated to decide on anti-dumping duties on Jan. 16, but at the request of Norpac in December, that ruling has been postponed until on or about March 7.

The U.S. International Trade Commission issued a preliminary ruling in September that the U.S. groundwood industry is being injured by Canadian shipments, and the Commerce Department has been scrutinizing the trade issue since August.

Newsprint, book pages, directory paper and other products used in commercial printing are types of uncoated groundwood paper from Canada being investigated.

Norpac operates only one mill in Longview, employing about 260 people, compared with more than 600,000 newspaper publishing and commercial printing jobs at various locations across the United States, Mr. Isakson and his fellow senators said. "When Commerce issues its preliminary determination this month, we urge the Department to fairly assess the potential impacts any punitive duties on uncoated groundwood paper could have on hundreds of thousands of American jobs and the local news lifeline for rural small towns," the letter says.

Mr. Isakson added his own views in a personal commentary released by the Georgia Press Association. "I don't know what I would do on Sunday mornings without my morning ritual of walking to the end of my driveway, picking up my copy of the Marietta Daily Journal," he said. "My staff and I scour the community newspapers of Georgia first thing each day to ensure that I'm up-to-date on the latest news so that I can do my job effectively."

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Others seeking to prevent U.S. duties on Canadian newsprint include the Ohio News Media Association, Mississippi Press Association and Tennessee Manufacturers Association. "The industrywide shift from print newspapers to digital news consumption – not imports from Canada – has caused a decline in demand for uncoated groundwood paper," the Tennessee Manufacturers Association said in a letter last month to the Commerce Department.

Norpac, which is owned by hedge fund One Rock Capital Partners LLC of New York, said subsidies in Canada include the Ontario government providing Montreal-based Resolute Forest Products Inc. with what amounts to breaks on electricity rates and also unfair financial assistance.

Resolute, Montreal-based Kruger Inc. and Catalyst Paper Corp. of Richmond, B.C., are the three mandatory respondents in the countervailing investigation into possible subsidies in Canada. Resolute and Catalyst are the two mandatory respondents in the anti-dumping probe. Connecticut-based White Birch Paper Co., which has three Quebec paper mills, is the voluntary respondent in both the countervailing and anti-dumping cases.

Industry observers say Norpac's push for countervailing duties against newsprint appears to have less momentum than the U.S. lumber lobby's successful case for countervailing tariffs against Canadian softwood lumber. Norpac is hoping to collect more information over the next several weeks to bolster its argument for anti-dumping duties to combat what it sees as Canadian newsprint being sold for "less-than-fair-value" in the United States.

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