US-China trade deal still possible despite claims of breakdown

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SolarWorld has claimed that talks to find a settlement in the ongoing US-China trade row ended in July however PV Tech understands hopes for a deal have not been entirely extinguished.

The Department of Commerce will announce its final determination on duties next week with the US International Trade Commission then required to rubber stamp those duties in early 2015 should it rule that subsidised, dumped Chinese solar products caused injury to US manufacturers.

The Solar Energy Industries Association (SEIA) had presented the basis for a settlement and the respective countrys' industries were understood to be talking.

However, Desari Strader, head of government affairs, SolarWorld Americas told PV Tech there had been no talks since July.

“We have the same policy across the board, we are always willing to talk,” she said. “From our side there is always something to be gained by talking, but you can only talk with those that are wiling to sit at the table and talk and these guys have not wanted to sit at the table and talk for months now, since July.”

This has been refuted by others involved in the talks. PV Tech understands that there have been six meetings involving SolarWorld, Chinese manufacturers and their respective legal teams since July. These have been held in five different US cities and included one on the first day of the Solar Power International event in Las Vegas in October and another in Washington DC two weeks ago.

“We don’t know why they are saying this,” said John Smirnow, vice president of trade & competitiveness at SEIA. “It is just an attempt by SolarWorld to denigrate its opponents by saying one thing in public and another behind closed doors.

“Another example of that, at SPI there were comments made by SolarWorld attacking SEIA. We work closely with SolarWorld in attempting to facilitate this negotiated solution and we said, what are you doing, we haven’t attacked you, we disagree with your litigation approach but we haven’t attacked you, and they sent us an email apologising and saying that their quotes were taken out of context and that they appreciated what SEIA was trying to do to broker a solution. Now in public they are denigrating us,” Smirnow said.

On the table

Strader said that the talks had been centred on “the basics” of any trade settlement including a quota and minimum import price (MIP).

“We were talking the basics for quite a while and were actually not that far apart, but the big caveat was: will the Chinese government support this and there was absolutely no support from the Chinese government,” she said.

Smirnow refused to comment on the industry-to-industry talks that the SEIA is facilitating, but was prepared to discuss the government-level discussions.

“We understand, at SolarWorld’s request, that the US government put a proposal on the table for not one but four MIPs based on module output and efficiency – again, an attempt by SolarWorld to focus in on what serves them period, without considering what is best for the industry,” said Smirnow.

Under this proposal, two MIPs for higher and lower efficiency modules would be established for 60- and 72-cell panels.

Smirnow remained confident that all parties, including SolarWorld, would prefer a settlement.

“They have been open to a negotiated solution and they have attended multiple meetings. I believe SolarWorld really wants a negotiated solution, I believe the Chinese really want a negotiated solution and the industry wants one too. What we could be seeing now, as we go into the end game we’ll be seeing what cards everyone has next week, maybe they are trying to position this as best they can,” he said.

“I’m still holding out hope that a negotiated solution is possible. We’ll continue trying to keep the industry together. I still think both parties remain interested in finding a middle ground but we won’t let the litigation or disputes played out in the press, curtail our efforts to continue to find a negotiated solution,” added Smirnow.

Although time has run out for some routes to a pause in the duties proceedings, Smirnow said that the two governments have “broad discretion” to find a solution.

Companies are diversifying their manufacturing base and looking for new suppliers in answer to the case, with expansions in Malaysia, Mexico and Singapore making the headlines.

Smirnow warned that as this process continues, the incentive for Chinese firms to settle diminishes.

“There will be less and less of an incentive for a negotiated solution. That’s why if SolarWorld keeps overplaying its hand, other people will benefit and SolarWorld will not,” he said.

Strader said she believed that some Chinese producers are more motivated to find a deal than others.

“You have to look at who has the motivation,” she said. “Trina doesn’t really need a settlement; they’re huge, on scale and capacity. If you’re Yingli and you’re having trouble producing cash up front for the duties, you probably want a settlement, if you’re Canadian Solar, they have a development pipeline sorted now, so I don’t know how much they need one either.”

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