The ongoing international trade dispute centered on solar imports is getting more complicated.
In the latest twist, China has reached a deal to end its dispute with the European Union. The settlement proposes setting a minimum price 0f $0.74 per watt for Chinese-made solar panels in EU, so they won’t undercut European producers. The deal applies to solar panels, as well as wafers and solar cells.
“I can announce today that I am satisfied with the offer of a price undertaking submitted by China’s solar-panel exporters, as foreseen by the EU’s trade defense legislation. This is the amicable solution that both the EU and China were looking for,” says EU Trade Commissioner Karel De Gucht.
The two sides have been talking actively since May, when the EU agreed to follow the US lead and imposed anti-dumping tariffs on Chinese imports.
“The price undertaking agreement reflects the wishes of the majority of the Chinese industry and the bilateral consultations of China’s solar-products industry to continue exports to Europe and to maintain reasonable market share,” says the Chinese Chamber of Commerce in a statement.
But the deal apparently leaves the US in the cold: behind closed doors, it has been trying to negotiate a more comprehensive arrangement that would apply across all three economies, reports The New York Times (NYTimes).
“The administration has been doing the right thing on this, pushing for talks and trying to get a joint settlement with Europe, but the Europeans have not had the same attitude and instead are pursuing talks with China independently of the US, which has stalled progress on US-China talks,” a US Senate aide with knowledge of the talks, told the NYTimes.
The proposed agreement between the EU and China is by no means a done deal. It is subject to approval by all 28 EU commissioners and is already being criticized by European solar companies, which plan to challenge it in court if it goes forward.
Milan Nitzschke, the president of EU ProSun, an industry group that has been pushing for the European tariffs, told the NYTimes that the proposed settlement price is almost at parity with the current dumping price and will offer no remedy for local manufacturers. The agreement “is contrary in every respect to European law,” says Nitzschke.
The minimum price under the settlement actually is voluntary, covering 90 of the 140 Chinese companies that were part of the original investigation – which are responsible for about 60% of the panels sold in Europe. Any Chinese exporter that doesn’t agree to it will have to pay the EU’s anti-dumping tariffs, set to increase to an average of 47.6% on Aug. 6.
“The terms may be set with the EU, but we all know that China’s excess production will continue to be targeted at other markets — the US and elsewhere,” Michael Wessel, a trade lawyer who has advised the United Steelworkers union on solar panels, told the NYTimes. “Rather than abide by the terms of its WTO commitments, once again, China has bullied others into submission.”
The EU is the biggest market for Chinese solar exports. In 2011, the market was worth $27.4 billion, reports the NYTimes.
News of the settlement came just days after China adopted tariffs on polysilicon imports from the US and South Korea, but exempted EU imports in deference to the ongoing settlement negotiations.
China’s tariffs — up to 57% for US makers, and 48.7% for South Korean companies — counter the 2012 US decision to impose duties of up to 250% on Chinese solar panels, for “dumping panels below cost.”
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