Mixed Reception For EU Duties On Chinese Solar Imports

The announcement that substantial anti-dumping duties (ADs) will be placed on Chinese exports of solar panels and solar cells into the European Union (EU), has raised expressions of concern, not only from within China, but also, particularly from the European solar installation industry.

It was decided that the EU ADs will be imposed in two stages, starting with 11.8 percent for the first two months (until August 6) and followed by 47.6 percent for another four months. In total, therefore, the provisional duties will be in place for a maximum of 6 months, prior to a possible five-year final determination.

The European Commission (EC) has said that it remains ready to intensify talks with China to find alternative satisfactory solutions through a negotiation, and has also tried to reassure those companies installing solar panels of the effect if prices were to increase in the products they use.

It seems to have calculated that, while, in the short term, some jobs could be lost within companies installing solar panels, those jobs could be recreated and would, in any case, be substantially less than the jobs that could be lost forever in the EU solar manufacturing industry.

For their part, of course, EU ProSun, the coalition of European solar manufacturers, expressed relief "that the EC finally introduced concrete measures against Chinese dumping that has already cost thousands of jobs and over 60 factory closures in the European solar industry. … Now the Chinese government must put forward proposals that result in dumping being stopped permanently. In the absence of a serious offer from Beijing, we believe that many more European countries would vote for the permanent imposition of duties compared with the last vote for provisional measures."

Support for the EC was also found from within the center-right European People's Party, the largest political group in the European Parliament (EP). Its spokesman in the EP's International Trade Committee, Daniel Caspary welcomed the decision as, "by introducing lower punitive tariffs on Chinese solar panels, the EU is taking a step closer to China. The EC is making a gesture in order to avoid an all-out trade war. This is a fair offer made in a spirit of partnership."

"Now it is up to the Chinese Government to demonstrate its will to deepen the economic partnership with the EU and take the necessary measures to prevent local producers from using dumping products to break into the European market," he added.

However, the Alliance for Affordable Solar Energy (AFASE), a coalition of over 600 companies in the solar retail and installation industry, regretted the EC's decision to ignore the considered positions of 18 out of 27 member states voting against duties, based on all the facts available to them. Even though the EC has set the preliminary duties lower than expected for the initial two months, AFASE stressed that any level of tariffs will seriously damage the European solar industry.

It pointed out that the decision to impose duties was also taken "despite warnings from hundreds of European solar companies, 15 European photovoltaic associations, various trade associations such as the Federation of German Industry (BDI), the German Federation of Wholesale and Foreign Trade, and the World Wide Fund For Nature."

"We call on both parties to come to an agreement within the next two months that avoids price increases, taking into account the interests of the EU upstream and downstream solar industry," Thorsten Preugschas, CEO of German Soventix GmbH, said. "We need to be clear about one thing. The current market development leaves no room for price increases. Therefore already duties as low as 11.8 percent will put a halt to most of the (solar) projects in the EU and cause severe damage to the European solar value chain."

Stefan Mair, a member of its Executive Board, added that "the BDI regrets the further escalation of the AD procedure to solar panels between the EU and China. The imposition of provisional EU punitive tariffs must now be used to find a negotiated solution by the end of the year."

The EC's decision to impose ADs was also contrary to the statements of Chinese Premier Li Keqiang and German Chancellor Angela Merkel, following a meeting in Berlin on May 26, that both countries intended to avoid the imposition of EU duties in trade and to resolve all trade conflicts by negotiation.

June 7, 2013

Source: Tax News