Trade War: SEIA drafts solution to China-US solar dispute

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US trade body the Solar Energy Industries Association (SEIA) has proposed a solution to the US-China trade dispute in the form of a ‘Solar Manufacturing Settlement Fund’, with funding to come from Chinese companies, to assist US solar manufacturers grow the US market.

After negotiations in Washington and Beijing, the SEIA has proposed funding is made available from the price premium Chinese companies currently pay third country cell producers, such as Taiwan, to avoid US sanctions.

The loophole of third party cell manufacturing countries that are used by Chinese module manufacturers, in order to avoid US dumping duties on cells, raises the end costs of modules, which is currently absorbed by US solar consumers and benefits third country cell importers. The SEIA propose this extra cell importing cost premium should be reimbursed into the US solar industry instead.

The SEIA also proposed China end its investigations into US polysilicon trading and phase out anti-dumping and countervailing US duties of up to 50%, as last week China’s Ministry of Commerce imposed anti-dumping subsidies on US imported polysilicon – as well as South Korean imports. Due to the recent reconciliation between the EU and China, no stipulation was placed on EU imports.

Also proposed is a safeguard mechanism to offset surges of Chinese modules into the US, and to establish a solar development institute, funded by Chinese manufacturers, to expand the US solar industry and foster collaboration between China and the US with joint research and development of projects.

The SEIA says the funding solution is a “win-win” scenario that will reduce costs and supply distortion in the US, lower costs to Chinese manufacturers by removing the need to import cells from third party countries, as well as reopening Chinese cell technology to US consumers, benefiting the Chinese industry as well as the US.

The SEIA is adamant any decision must represent consumers and not just industry voices; SEIA said it did not want a similar resolution as that agreed in EU-China dispute, which resulted in a rise in prices.

John Smirnow, SEIA vice president of trade and competitiveness, said a minimum price or quota such as the EU-China trade solution is “a misguided approach”. “Any settlement which includes these components would represent a significant step backwards for the U.S. solar industry and the solar industry globally” he said.

The draft solution is based on a previous trade dispute between the US and Brazil, whereby the US received cheap cotton from Brazil. The World Trade Organization (WTO) ruled the US set up a fund to compensate Brazilian farmers. The US currently pays approximately US$150 million to compensate the cotton trade with Brazil.

Earlier this month prominent US solar manufacturer SolarWorld also threatened to pursue legal action over lax policing of current Chinese trading regulations, after complaints a single China-wide duty should have been imposed, rather than individual rates depending on the supplier.

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