Canadian Solar demands end to US-China trade spat following WTO ruling

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Major PV company Canadian Solar has called on the US government to reconsider its “misguided” solar trade dispute with China following a WTO ruling that found flaws in earlier US duties on Chinese manufacturers.

The Canada-headquartered company, which has most of its manufacturing capacity located in China, said the World Trade Organization’s judgement earlier this week on aspects of the 2012 duties imposed by the US on Chinese suppliers threw into question the ongoing dispute between the two powers.

A WTO panel on Monday ruled that there were inconsistencies in the assumptions the US had made on the status of some Chinese companies, which in turn were used to justify anti-subsidy duties.

Canadian Solar said that in the light of the ruling, the US should  reconsider its latest preliminary countervailing duties on Chinese products

Thomas Koerner, president of Canadian Solar, Americas, said: “The WTO's ruling today is in alignment with the opinion of Canadian Solar as well as other organisations which represent the majority of the PV industry. The imposition of countervailing and potential anti-dumping duties is not only disruptive to a fair trade business environment but also damaging to an industry which seeks to support the United States' commitment to renewable energy deployment and sustainable development.

“We urge the government of the United States to re-evaluate its preliminary determination of countervailing duties and the misguided trade dispute at large, in order to uphold the universal values of free trade and competiveness which have fostered the environment in which we've witnessed consistent growth, year after year.”

However, the US arm of SolarWorld, which launched both the anti-dumping and anti-subsidy petitions that led to the 2012 and current trade actions against China, downplayed the significance of the WTO ruling to both cases.

Tim Brightbill, partner in the law firm Wiley Rein, which has represented SolarWorld, said: “[The] World Trade Organization decision upheld nearly all aspects of US subsidy law and practice. The vast majority of the subsidies that the US government found in SolarWorld’s original 2012 case were export subsidies, which were not impacted by the decision. As a result, the current countervailing duties on solar panels from that trade case will remain largely intact. Assuming the US government appeals the case, this will keep the current 14-15% tariffs in place until at least 2016 and then they would drop by no more than about 1 percentage point.

“Moreover, the panel’s decision has no impact on the current subsidy case where the Commerce Department has preliminarily applied average tariffs of 27% on Chinese panels. The WTO continues to hold China accountable for massive subsidies to its steel, solar and numerous other industries, which distort global trade and harm US and EU industries.”

In a briefing note sent out after the ruling, investment banking firm Roth Capital said it did not expect the WTO ruling to greatly impact either on the 2012 duties or on those currently under consideration.

It said if the US appealed the decision it would probably lose, but would probably find ways of demonstrating its compliance with WTO rules while maintaining its high duties on Chinese imports.

“Our understanding is that this decision will not have an impact on the July 24 AD case against China and Taiwan,” the Roth briefing note added.

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