Commission considers anti-dumping duty on Chinese solar glass imports

The European Commission launched today (Thursday 28 February), an anti-dumping investigation into imports of solar glass from China. According to the relevant official announcement, “The initiation is based on a complaint lodged by the association European Union ProSun Glass, which claims solar glass from China is being dumped in the EU at prices below market value and causing material injury to the EU solar glass industry”. The same source clarified that the investigation could take up to 15 months, “although under trade defence rules the EU could impose provisional anti-dumping duties within nine months if it considers these necessary”. Solar glass is a special glass used mainly for the production of solar panels. It is an essential component not just of solar panels, but of many solar energy products. This is a different investigation than the ongoing one over the imports of solar panels and equipment launched by the European Commission last September. The EU solar glass market is valued at less than €200m. The investigation The Commission says it is legally obliged to open an anti-dumping investigation when it receives a duly substantiated complaint from EU producers, which provides ‘prima facie’ evidence that exporting producers from one or more countries outside the EU are dumping a product on to the EU market and causing material injury to the EU industry. EU ProSun Glass, an ad hoc association representing European solar glass manufacturers, lodged just such an anti-dumping complaint on 15 January 2013. EU ProSun Glass’s collective output represents considerably more than the 25% of Union production required by law. The Commission also notes that the EU ProSun Glass is not formally affiliated with EU ProSun, a separate coalition of solar equipment manufacturers which launched the solar panel complaint last year. The Commission observes, “it found that the complainant brought sufficient elements showing: (1) possible price dumping by the exporting producers on the EU market; (2) injury suffered by the Union industry; and (3) a possible causal link between the dumped imports and the   injury suffered by the Union industry. The Commission concluded that there was sufficient prima facie evidence to warrant the opening of an investigation”. What next? The EC will send out questionnaires to various interested parties, such as exporting producers, Union producers, importers and associations. It will ask for information relating to the exports, production, sales and imports of solar glass. Once the interested parties have responded to the questionnaires, the Commission will verify the data, often by going to the premises of the companies. On the basis of the information it has collected, the Commission will establish if dumping has taken place and whether the injury claimed is a result of the dumped imports. This examination will also include consider possible other factors that might have contributed to the injury. In addition, the Commission will carry out the so-called “Union interest test”. The Commission will consider whether the potential imposition of measures would be more costly to the EU economy as a whole than the benefit of the measures would be to the complainants. All that means the Commission would take into account the possible cost from retaliating measures imposed by China on European Union products. Within nine months of the start of the investigation, the Commission will issue its provisional findings. There are three possible scenarios: (a) impose provisional anti-dumping duties (normally for a six months period); (b) continue the investigation without imposing provisional duties; or (c) terminate the investigation. Throughout the investigation, all interested parties have a right to make their views and arguments heard by sending in comments to the Commission and/or taking part in hearings. The Commission takes account of the comments received and addresses these in the remainder of the investigation. The European Council is legally obliged to take a final decision over the imposition of any definitive measures within 15 months of the investigation being started. In the present case, that means before 28 May 2014. Solar panels As noted above the European Commission has initiated a similar anti-dumping investigation on solar panels and equipment of Chinese origin in September 2012. The nine month period provided by the EU procedure for the decision to impose the duty or not expires on June 2013. This is a much broader issue given that the value of solar panels and equipment imported in the EU from China, are of a much larger value. The European Sting has been monitoring this last affair very closely. Only yesterday the Sting wrote: “The problem is, however, that the Chinese authorities do not seem to take this issue lightly. Towards the end of January, the Chinese Ministry of Commerce announced the imposition of anti-dumping duties with effect as from 1 February on two products originating from the EU and the US. Imports into China of the widely used solvents ethylene glycol monobutyl and diethylene glycol monobutyl ethers, produced by a number of European and American companies, will be penalised with anti-dumping duties ranging from 9.3% to 18.8%. This is obviously a reaction to the recent anti-dumping investigations and measures introduced by the EU and the US against very important Chinese products and companies. The Chinese officials, after announcing this decision, commented that in no way they wish to start a trade war”. It is obvious that the intentions of the Chines authorities were clarified by the swift imposition of anti-dumping duties, on solvents imported in China from the EU and the US. It is for this reason that today’s Commission announcement states the general interest point, by noting that, “The Commission will consider whether the potential imposition of measures would be more costly to the EU economy as a whole, than the benefit of the measures would be to the complainants”. In short the Commission says that it will take into account the cost of possible counter action by the Beijing authorities against EU products imported into China. Obviously, if this cost to the EU economy as a whole appears of a greater value than the possible damage to the plaintiffs in the solar glass case, then the final decision for the imposition of anti-dumping duty may be withheld.