ITC hearing marks beginning of end to US-China trade case

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Witnesses from SolarWorld, Trina, Yingli, SunEdison, Gintech and the Solar Energy Industries Association (SEIA) gave evidence in Washington on Monday as the US-China trade row approaches its conclusion.

An International Trade Commission (ITC) hearing today will see evidence for and against the imposition of anti-subsidy and anti-dumping duties as both sides debate whether Chinese imports have damaged the domestic US solar sector.

The Department of Commerce is expected on 16 December to make its final decision regarding punitive duties in the cases. Preliminary anti-subsidy duties of up to 35% were announced in June and anti-dumping rates of up to 165% were revealed in July.

However, if the ITC rules that no damage was done to the US industry, the DoC’s final tariffs will not be imposed. The ITC is expected to give its verdict in January.

The draft witness list correct as of Thursday 4 December, show that the argument for duties had called witnesses from SolarWorld, Silicon Energy, US Senator for Oregon Ron Wyden and Congressman Rick Nolan (Rep-Mn.).

The argument against has called witnesses from the SEIA, a host of tier-one Chinese manufacturers, US firm SunEdison and a number of Taiwanese manufacturers.

After duties were imposed on Chinese products in 2012, the latest case deals with Chinese products that used Taiwanese cells in order to sidestep the criteria in the prior case.

SolarWorld Americas’ president Mukesh Dulani told the hearing that despite some recent improvements for the US solar industry, its recovery was fragile.

“I have no doubt that the US industry’s condition would immediately worsen again if final duties are not imposed,” he said. 

Congressman Nolan, whose state is home to module manufacturer Silicon Energy, said:

“…It is possible that the future is very bright for the domestic solar industry. US solar demand is growing, and US producers are developing and making excellent products to meet that demand. However, your work today is critically important to this recovery.  Without these cases, the harm to the US industry and its workers will continue and worsen.”

Making the case against duties, Richard Wiener, of Sidley Austin, the firm representing Chinese manufacturers said: “If SolarWorld succeeds, the burgeoning US solar industry will grind to a halt, because the domestic industry cannot satisfy US solar demand and because solar electricity would be uncompetitive at SolarWorld’s desired prices. SolarWorld places in peril US climate change goals and 143,000 American solar jobs, all without benefiting US CS [crystalline silicon] PV manufacturers.

A major pillar of the case regards the ‘scope’ of the products involved. The origin of a module has previously been dictated by where the cell was produced. The latest investigation includes Taiwanese cells in an effort to stop Chinese firms from avoiding the 2012 duties on their products.

SEIA VP for trade and competitiveness, John Smirnow, warned that adjusting this rule, as suggested by SolarWorld, could set a dangerous precedent. SolarWorld wants modules’ origin to be determined by whichever country provided two out of the wafer, cell or module elements.

“Unfortunately, Commerce is seriously entertaining [SolarWorld’s]’s ‘two out of three’ proposition or something even more expansive. Two out of three is nothing more than a veiled attempt to circumvent US AD/CVD laws by folding separate and distinct products from multiple countries into a single investigation.  It’s wrong and it’s a dangerous approach from a trade policy perspective.  

A further question mark hangs over the current case's process as a result of the alleged hacking of SolarWorld’s computers by hackers with links to the Chinese People’s Liberation Army. DoC, on request of SolarWorld, is still considering how to fold these allegations into the inquiry.

In an apparent nod to the cyberhacking case, Senator Ron Wyden, of SolarWorld’s home state of Oregon said: “US innovation and efficiency started the world-wide growth of solar and will continue to fuel that growth so long as unfair trade practices are fully addressed. Let us not allow the innovation economy to be undermined by innovative cheating on trade. Trade enforcement must keep pace with the times.”

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