EU Commission closer to imposing anti-dumping duties on Chinese solar panel imports?

Visit of José Manuel Barroso, President of the EC, to the Joint Research Centre in Ispra (EC Audiovisual Services).

Visit of José Manuel Barroso, President of the EC, to the Joint Research Centre in Ispra (EC Audiovisual Services).

According to well-informed Brussels sources, the European Commission secured last week a non-binding authorisation by the EU member states, to impose anti-dumping measures on imports of solar panels and components originating from China. The same sources say, however, that the Commission denied that this will lead to an immediate imposition of such measures and characterised this development as a standard procedural step. Incidentally, EU’s trade spokesman John Clancy said in a statement that this step, “should not be interpreted as suggesting anything – it is simply an administrative procedure”. In reality, this statement doesn’t exclude anything, given that all anti-dumping duties are imposed in accordance to administrative procedures.

Standard procedures

The European Sting has been following this issue for quite some time. On 6 September 2012, the Commission introduced an anti-dumping investigation on imports of solar panels and components originating from China. At that time, the Commission said it had accepted complaints from EU producers that solar panels imported from China are sold at dumbing prices.

Always following its standard procedure, the Commission sent out questionnaires to various interested parties (e.g. exporting producers, Union producers, importers and associations), asking for information relating to the exports, production, sales and imports of solar panels and their key components. By now, almost all interested parties have responded. All those data are currently under examination by the Commission.

On the basis of the information collected, the Commission will establish if there has been dumping and whether the injury allegedly suffered has been caused by the dumped imports. This examination will also include looking at possible other factors that could also have contributed to the injury suffered. In this way, the discretional powers of the Commission over the whole affair are substantially increased.

In any case, the Commission after 9 months from the initiation of the investigation, that is, from September 2012 (consequently before June 2013) has to issue its provisional findings. This may happen earlier if the Commission feels that all the relevant data are available. 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”.

Towards a trade war?

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.

Despite that comment, this was a direct warning from Beijing that the “Atlantic” penalisation of Chinese products will not be accepted any more. On many occasions over the past years, the European Union and the United States have being imposing anti-dumping duties on sales of a large number of products of Chinese companies.

The EU-US trade agreement

Things, however, are even more complicated after the announced willingness by the EU and the US to start negotiations to conclude a bilateral Free Trade Agreement (FTA). To this effect, last week, Brussels and Washington issued a joint statement signed by the US President Barack Obama, the European Council President Herman Van Rompuy and European Commission President José Manuel Barroso. With it, the EU and the US announced their decision to conclude a bilateral FTA by the end of 2014. This development set off the alarm all over the business world. Reports from South Korea say that this country and Chine will suffer large losses, if the EU and the US conclude a far reaching bilateral FTA.

Given all that, the way Brussels is to handle the Chinese solar panel issue will signal if the Union is to change its trade relations strategy, with the Asian nations after deciding to conclude an FTA with the US. At this point, it must be noted that the EU has so far concluded only one such agreement with a third country, being it with South Korea.

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Comments

  1. We do not need a trade war. Quostion is simply to find correct things to do in correct places….

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