Fabian Demicoli

EU imposes provisional anti-dumping tariffs on Chinese solar panels


The European
Commission has yesterday decided to impose provisional anti-dumping duties on
imports of solar panels, cells and wafers from China. This
decision follows a thorough and serious investigation and extended contacts
with market players. As the market for and imports of solar panels in the EU is
very large, it is important for this duty not to disrupt it.

Therefore, a
phased approach will be followed with the duty set at 11.8% until 6 August
2013. From August on the duty will be set at the level of 47.6% which is the
level required to remove the harm caused by the dumping to the European
industry.

The
European Commission reiterates its readiness to pursue discussions with Chinese
exporters and with the Chinese Chamber of Commerce in order to find a solution
in line with Article 8 of the Basic Anti-Dumping Regulation so that provisional
duties can be suspended and a negotiated solution achieved.

Background

The
decision came after a nine month investigation, launched in September 2012,
during which the Commission found that Chinese companies are selling solar
panels to Europe at far below their normal market value, which causes
significant harm to EU solar panel producers. The fair value of a Chinese solar
panel sold to Europe should be 88% higher than the price to which it is
actually sold. The dumped Chinese exports exerted undue price pressure on the
EU market, which had a significant negative effect on the financial and
operational performance of European producers.

The
provisional duties are far lower than the 88% rate at which the panels are
being dumped because the EU applies the so-called 'lesser duty rule', imposing
only enough duty needed to restore a level playing field. The provisional duty,
in addition to restoring fair competition, will ensure the continued
development of an innovative green energy sector in the EU.

The
Commission will now continue its investigation and hear the views of all
interested parties. It remains ready to intensify talks with China to find
alternative satisfactory solutions through a negotiation.

On 5
December at the latest, the EU will have to decide if definitive anti-dumping
duties will be imposed for a duration of five years.

On the
solar panel market

Highly
innovative EU companies are currently being exposed to immediate threats of
bankruptcy because of unfair competition from Chinese exporters, who have taken
over more than 80% of the EU market and whose production capacity currently
amounts to 150% of global consumption. In 2012, China's excess capacity was
almost double total EU demand. The Commission's assessment indicates that
imposing provisional measures will not only secure the existing 25,000 jobs in
EU solar production, but also create new jobs in the sector.

In the
short term, some jobs could be lost among companies installing solar panels.
However, as the situation of EU producers improves and imports from other
countries increase, these jobs could be recreated.

Any job
losses would in any case be substantially less than the 25,000 jobs in the EU
solar production industry that are likely to be lost forever if measures are
not imposed.

The
decision should also contribute to creating a level playing field for Europe's
renewable energy industry, which is essential to the EU's renewable energy
targets. Unfair trade in solar panels does not help the environment and is not
compatible with a healthy global solar industry.

The
Commission believes that a market that faces dumped imports will drive local
producers out of business and discourages EU producers from developing
cutting-edge technologies in the renewable energy sector.

On the
investigation

During
the investigation, the Commission assessed the level of duty needed to
counteract the injurious effects of dumping. This means the level of the duty
is never punitive in nature: it was fixed at the strict minimum necessary to
restore a level playing field for the EU industry concerned. By systematically
applying the 'lesser duty rule', the EU goes beyond its WTO obligations. This
is in contrast to other WTO members like China and the US which always apply
the full dumping found.

As in
every other investigation, the Commission carried out the so-called "Union
interest test". The EU is the only WTO Member to systematically carry out
such tests. The Commission provisionally considered that any potential negative
effects of the measures would be outweighed by the economic gains for the Union
producers.

The
investigation will continue and definitive measures, if any, would have to be
imposed within 15 months of initiation, i.e. 5 December 2013.

In
parallel, the Commission is open to discuss alternative forms of measures which
would be equivalent to the 47% duty. Both WTO and EU law offer this possibility
in the form of a price undertaking – a commitment not to sell below an agreed
price.

A
parallel anti-subsidy investigation on the same product is on-going, following
a complaint lodged by the same complainant. It was initiated on 8 November
2012. Provisional anti-subsidy measures, if any, should be imposed by 7 August
2013. The decision on definitive anti-subsidy measures will be due in December
2013.

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