Exclusive: New twist in EU-China trade row could spread tariffs to new countries

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EU ProSun is preparing to request the European Commission to start a formal investigation into whether Chinese module makers are breaking the rules set out in the agreed trade settlement, PV Tech has learned.

The so-called anti-circumvention investigation is the next step for a trade complainant that believes that measures introduced to deal with their complaint are being avoided. Existing trade measures can be extended to additional countries in order to close these loopholes.

“According to our estimations, more than 50% of solar imports from China [since the settlement] circumvent European anti-dumping measures in one way or another,” Milan Nitzschke of EU ProSun told PV Tech.

“Therefore we plan to file an anti-circumvention complaint. The standard commission practice in such proceedings is to register all imports from concerned third countries, which may be used for transshipments, [through] European custom authorities to ensure the possibility to subsequently impose duties on the imported goods.”

This could mean further scrutiny, and possibly even punitive duties, on imports from Malaysia, South Korea and Taiwan.

Edmond McGovern, a barrister with experience of EU trade law, shed some light on the most common circumvention methods and the commission’s investigation process.

“Typically parts are shipped to a third country to be assembled or sometimes they will just pass through a third country,” McGovern said.

“If you get a successful outcome from the investigation, the commission will then apply the original duty to the goods it is has found to be circumventing it.

“As soon as an investigation starts a register of imports covered by the new investigation begins. If the commission finds evidence of circumvention, duties can be applied retroactively to those [third-party] products,” he told PV Tech.

McGovern said anti-circumvention cases are limited to a nine-month period and said complainants and their legal teams will have a reasonable idea of whether they have a case before asking the commission to start an investigation.

The request, which EUProSun hopes to complete this year, would force the commission to formally consider whether such an investigation is necessary.

In June EU ProSun gave the commission what it claimed was clear evidence of breaches of the price undertaking, the negotiated mechanism that ended the long-running trade dispute between the EU and China. The EU eventually dismissed it.

The price undertaking is set to expire in December 2015. Its agreement ended what was the largest trade dispute, by value, between the two parties. 

The EU and China recently concluded a long-running trade dispute in telecommunications market that was viewed by some as a softening of stance by the EU.

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