US mediates in EU-China solar trade spat

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The US Solar Energy Industries Association (SEIA) has expressed its support for the US government’s role as mediator in negotiations between the European Union and China to resolve anti-dumping case against Chinese manufacturers.

The US is rumoured to have brought to the negotiating table an offer to suspend its own duties on Chinese exports whilst setting a quota on Chinese exports and a minimum price for solar products, according to Bloomberg.

Carol Guthrie, US trade representative told PV-Tech: “Our goal is to support a healthy global solar industry in conditions that foster the adoption of renewable energy and continued innovation and a level playing field for all. Toward those ends, we will continue to work with industry and our trading partners to explore ways to resolve concerns.”   

Guthrie confirmed: “Active negotiations have not yet begun.”

Michael Froman, a White House adviser and President Barack Obama’s nominee to head the US trade office, informed senators that the US is exploring talks with China and the EU, according to Bloomberg.

The US is looking to avoid giving Chinese producers a way to bypass paying taxes to the US by sending partially assembled solar equipment to the US and exporting to the EU thereby avoiding paying not only European but also US duties. 

However Jodie Roussell, Director of Public Affairs, Europe, for module manufacturer Trina Solar told PV-Tech that products from the US would “not offer the same benefit of cost rationalisations and economies of scale compared to Chinese producers. Also, these producers are increasingly attracted by growing demand in their neighbouring markets that is significantly stronger than in the EU.”

Importers of Chinese cells into the US have already been accused by the Coalition for American Solar Manufacturing, complainants in the US Department of Commerce’s case against Chinese manufacturers, of evading duties due to a loophole present in the US trade law which does not exist in EU law.

However, EU officials warn that European negotiators have already met with representatives from the Chinese government and not reached a satisfactory resolution.

Germany’s vice chancellor and economy minister Philipp Rösler was reported yesterday to have attacked the European Commission’s plans to impose anti-dumping duties on Chinese solar panels as a “grave” mistake.

John Smirnow, vice president of the SEIA said industry trade associations took part in a meeting at SNEC to put forward a joint policy position dubbed the Shanghai Solar Declaration, “which strongly encourages the United States, China, the European Union and other nations to engage in multilateral trade negotiations aimed at ending this costly and disruptive dispute”.

Smirnow said in a statement, “After expressing our intentions to the White House, we are very encouraged that these long-needed negotiations appear ready to proceed. Simply put, it’s time for everyone to work together toward a fair resolution of these cases.

“There is clear evidence that disputes within one segment of the industry affect the entire solar supply chain. What’s more, they cause a ripple effect throughout the economies of the United States, Asia and Europe. In addition to resolving current disagreements, we hope this process will also lead to the creation of a pro-competitive, collaborative framework for preventing future trade conflicts and ensuring the adoption of balanced and equitable agreements in the future.”

However, although the SEIA may be encouraging dialogue between the EU and China, the reaction to the US involvement in the trade case has not been mirrored across the pond.

Milan Nitzsche, president of EU ProSun, who lodged the complaint with the European Commission last year against Chinese manufacturers told PV-Tech that “SEIA in the USA doesn't represent the manufacturing industry”.

“It is striking that the Shanghai declaration does not mention in any instance what the whole issue is about – the Chinese dumping. However the solution to the problem is very simple. Dumping must be stopped in order to get back to a level playing field and sustainably growing markets.”

Nitzsche added: “If the EU foregoes the customs duties, China will never agree on negotiations and the destructive dumping will never stop.”

A spokesman for the Alliance for Affordable Solar Energy, an association lobbying the Commission to not impose duties told PV-Tech: “Over 530 companies supporting AFASE welcome a solution that avoids price increases, taking into account the interests of the EU upstream and downstream solar industry.

“Moreover, if a negotiated solution is to be found, no provisional anti-dumping duties should be imposed as these duties will immediately put a halt to most of the PV projects in the EU and cause severe damage that no negotiation concluded after the imposition of provisional duties can ever repair,” said the spokesman.

He continued: “Punitive tariffs – no matter at what level – could cause irreversible damage to the entire European PV value chain.”

According to the market analysts at IHS, China's exports to the EU currently average €0.52 per watt; however a 47% anti-dumping duty could result in components costing €0.74 per watt, higher than the European average price of production components.

The Trina spokesman said: “Following price increases for Chinese products, EU and other non-Chinese modules would be offered at substantially increased prices, leading to significantly weakened demand, thereby affecting the entire PV value chain.

“The majority of the European solar industry would be the losers of an initiative driven by only a few sector representatives following their individual interests. The growth of solar energy in the EU depends on the reduction of the cost of solar installations. Around 70% of the PV supply chain´s value in the EU market is created in Europe according to the European Photovoltaic Industry Association, EPIA.

“The negative effect of duties would exceed by far their small positive impact on European manufacturers. The reason being that the majority of the jobs in the European solar industry are situated before or after the manufacturing of solar wafers, cells or modules.

“What is more, their production capacity is very small and far from being capable to meet demand as currently forecasted with or without the imposition of duties,” concluded the spokesperson.

US President Barak Obama is expected to meet with President Xi Jinping of China on 7-8 June when the preliminary determination from the European Commission will have been announced. The White House said President Obama and President Xi will hold in depth discussions on a wide range of bilateral, regional and global issues, although it is yet to be confirmed whether the EU-China trade case will play a part in their meetings.

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