EU, China solar panel trade battle subsides
The European Union and China have come to an agreement to head off a potentially devastating trade war sparked by EU antidumping duties recently placed on Chinese imports of electricity-generating solar panels.
On Saturday, EU Trade Commissioner Karel De Gucht and his Chinese government counterpart, along with the Chinese Chamber of Commerce, reached an “amicable solution” that they say will help restore the European Union’s suffering solar panel manufacturers and satisfy China’s exporters.
“I believe that this solution will remove the injury for European industry. It is equivalent to imposing provisional duties for all Chinese exporters. The effect will be that the European industry will have the space to regain its previously held market share. We restore stability with a sustainable price level in the European market,” he said in a statement.
The Chinese solar panel suppliers agreed to a voluntary price undertaking where they commit to stop dumping their products on the European market and keep prices above a certain floor. In return, those companies who participate in this engagement do not have to pay the antidumping duties, De Gucht explained.
“This undertaking will apply only for an annual volume that covers part of the overall European market. For the rest, so for any Chinese exports exceeding this annual volume, the average antidumping duty of 47.6 percent will have to be paid as of 6 August,” he said.
“It means that on one segment of the market, which cannot be satisfied by European supply, a minimum import price applies for Chinese imports. By setting a floor price, the downward pressure on prices should come to an end,” De Gucht added. “In the other segment of the market, European suppliers will have to compete with competitors from the rest of the world, but as far as Chinese imports are concerned, are protected by the 47 percent antidumping duty.”
Yet some segments of Europe’s solar sector accused the EU trade negotiators of rolling over to the Chinese government and industry.
“I disagree,” De Gucht said. “When the undertaking enters into force, European suppliers will see the shield against Chinese dumping go up from 11.8 percent in force today to 47.6 percent for those exporters who are not participating in the undertaking. These exporters make up to 30 percent of the current Chinese exports.
“The other 70 percent of Chinese suppliers participating in the undertaking will save the antidumping duties for a significant volume of sale. However, this relates to a market segment which European suppliers could not cover in any event,” he said. “According to economic prognosis, the future market for solar panels in Europe will grow. Consequently, the annual import volume for which the undertaking applies relates to a market share in Europe which is considerably less than the current 80 percent held by China. That constitutes an important safeguard of protection for European suppliers.”
De Gucht asked the European Commission to adopt the proposal on Aug. 2.
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