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EU, China Agree to End Solar Panel Trade Dispute

EU, China Agree to End Solar Panel Trade Dispute

European Union countries approved an agreement with China to curb imports of Chinese solar panels, ending the EU’s biggest commercial dispute of its kind.

EU governments endorsed an accord struck by their trade chief and China in July that sets a minimum price and a volume limit on European imports of Chinese solar panels until the end of 2015. Chinese manufacturers that take part will be spared EU tariffs meant to counter alleged below-cost sales, a practice known as dumping, and subsidies.

The verdict seeks to balance demands by European producers such as Solarworld AG for trade protection and opposition by China, some EU governments and Europe’s importers to levies on therenewable-energy technology. The two-year duration of the measures is less than half as long as the normal five-year period for EU anti-dumping and anti-subsidy protection.

European solar-panel manufacturers suffered “material injury” as a result of dumping by Chinese exporters and trade- distorting government aid to them, while trade protection must also take account of “the cost for other economic operators,” the 28-nation bloc said today in Brussels. The decision wraps up two inquiries begun more than a year ago and will take effect after being published in the EU’s Official Journal by Dec. 6.

Political Agenda

In Europe, which accounts for about three-quarters of the global photovoltaic market, more than two dozen manufacturers have sought protection from creditors since 2010 and many have shifted production to lower-cost plants in Asia.

The EU push to restrain Chinese competition jumped to the top of the political agenda in Europe’s capitals and Beijing this year as Chinese manufacturers and European importers warned about price increases. The dumping and subsidy probes covered EU imports of crystalline silicon photovoltaic modules or panels, and cells and wafers used in them — shipments valued at 21 billion euros ($29 billion) in 2011.

With Chinese companies such as Yingli Energy (China) Co., Wuxi Suntech Power Co. and Changzhou Trina Solar Energy Co. controlling 80 percent of the EU solar-panel market, China’s government threatened to retaliate by imposing punitive duties of its own on imports from Europe of polysilicon — a material used in solar panels — and wine.

In a further sign of the political sensitivity of the European dumping and subsidy cases, today’s EU verdict excludes wafers from the scope of the measures.

Minimum Price

The two-year trade protection is based on a provisional accord negotiated on July 27 by EU Trade Commissioner Karel De Gucht and China. That deal fixed a minimum price of 56 euro cents a watt for annual imports from China of as much as 7 gigawatts and exempted Chinese companies willing to take part from preliminary punitive EU import duties.

The pact covers more than 90 Chinese exporters that have about 60 percent of the EU solar-panel market. Participating producers include Yingli Energy, Wuxi Suntech, Changzhou Trina Solar Energy, Jiangsu Aide Solar Energy Technology Co., Delsolar (Wujiang) Ltd., ERA Solar Co., Jiangsu Green Power PV Co. and Konca Solar Cell Co.

After the preliminary deal reached by De Gucht four months ago on a minimum price and volume limit, “a number of additional exporters” in China requested to be included, the EU said today.

Flat Rate

The participating Chinese exporters will be exempted from anti-dumping and anti-subsidy duties being fixed definitively. Depending on the company, the two-year definitive anti-dumping levies range from 27.3 percent to 64.9 percent, while the anti- subsidy rates are from 3.5 percent to 11.5 percent.

The provisional anti-dumping duties, after an initial flat rate of 11.8 percent between June 6 and Aug. 6, ranged from 37.3 percent to 67.9 percent. No provisional anti-subsidy levies were introduced.

The July agreement angered EU solar-panel producers, which wanted the minimum import price to be higher and the volume limit to be tighter.

EU ProSun, which represents around 40 European solar-panel producers including Solarworld of Germany, said at the time that the provisional accord was unacceptable and vowed to file a lawsuit. The group lodged the complaints against China that led to the dumping and subsidy investigations by De Gucht’s department in the European Commission, the EU’s executive arm.

“Chinese companies were selling solar panels in Europe at far below their normal market prices and were receiving illegal subsidies, causing significant harm to EU solar panel producers,” the commission said in an e-mailed statement today. “The imposition of definitive measures needs to be seen in the context of the amicable solution reached with China.”

Copyright 2013 Bloomberg

Lead image: Hand shake via Shutterstock


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