Europe Clashes With China over Solar Panels

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - A trade war between Europe and China could be looming following a decision by the European Commission (E.C.) to impose anti-dumping levies on solar panels, cells and wafers imported from China.

The Commission said the decision "follows a thorough and serious investigation and extended contacts with market players" over the past nine months. In an effort not to disrupt the busy solar power market, the Commission said it will phase in the new duties, at a rate of 11.8% until August 6, after which they will jump to an average of 47.6%. The high level of the duty is needed to "remove the harm" caused by the dumping of cheap Chinese solar products on the European market, the E.C. declared. In 2011, China exported solar panels and their key components worth around €21 billion ($26.9 billion) into the European Union (E.U.).

The Commission said it is willing 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. If successful, it will suspend the provisional duties until a long-term solution can be agreed.

The Commission launched its first of two anti-dumping investigations against Chinese firms in September last year, following complaints from EU ProSun, an industry association representing around 20 solar companies. It is the E.C.'s largest ever anti-dumping investigation into allegations that Chinese solar panel firms were dumping solar panels and components into the European market at below cost prices. For additional information, see September 12, 2012, article - European Anti-Dumping Probe into Chinese Solar Firms.

Last month, the Commission launched an anti-subsidy probe into allegations that Chinese solar glass makers were being subsidised by Chinese authorities before being sold on in the European Union (E.U.) at prices below market value. For additional information, see May 3, 2013, article - Europe Probes 'Cheap' Chinese Solar Glass.

"There will be two steps: as of 6 June, a tariff of 11.8% will be imposed on all Chinese solar panel imports. Two months later, as of 6 August, the average tariff will be 47.6%," explained E.U. Trade Commissioner, Karel De Gucht. "Overall, the duties will range from 37.2% to 67.9% at that stage. Those Chinese companies which have co-operated will face lower tariffs. Those which have not co-operated will face higher tariffs." He added: "It is a one-time offer to the Chinese side, providing a very clear incentive to negotiate. It provides a clear window of opportunity for negotiations, but the ball is now in China's court. Our action today is an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping. This jeopardizes at least 25,000 current jobs. Furthermore, the dumping threatens the sector's very survival by damaging current and future investment -- especially in the critical area of Research and Development."

According to the Commission, the "fair sale price" of a Chinese solar panel would actually be 88% higher than the current price for which they are sold on the European market. By flooding the market with under-priced solar panels, Chinese firms have captured an 80% share of the E.U. market for solar panels. The Commission noted that China is producing one and half times the amount of solar panels the world needs and claimed "they are simply producing too much".

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