EU and China resolve amicably solar panel trade dispute

Karel De Gucht, Member of the European Commission in charge of Trade, gave a press conference on 4 June 2013 following the EC decision to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China. (EC Audiovisual Services, 04/06/2013).

Karel De Gucht, Member of the European Commission in charge of Trade, gave a press conference on 4 June 2013 following the EC decision to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China. (EC Audiovisual Services, 04/06/2013).

Exactly ten days after the European Sting predicted on 19 July that most likely EU and China would soon settle their long time dispute on solar panels, Commissioner De Gucht confirmed last Saturday: “We found an amicable solution in the EU-China solar panels case that will lead to a new market equilibrium at sustainable prices”. In detail the Sting wrote “There is information though that the EU Trade Commissioner De Gucht may be convinced to drop the 47.6% super anti-dumping levy on Chinese solar panel imports, scheduled to be imposed as from 6 August”.

The agreement

The whole idea of this agreement is that instead of the EU imposing a large anti-dumping levy on imports of solar panels of Chinese origin, this country’s producers participating in the agreement undertake the obligation to increase their selling prices. Obviously this price increase would be lower than the 47.6% super anti-dumping levy threatened to be imposed by the EU as from 6 August.

The Sting has been following this affair for many months. From the very first moment this newspaper doubted that the solar panel case could lead to an all-out economic confrontation, let alone trade war, between those two economic superpowers. There is so much at stake in the EU-China relations that not even at the most difficult moment of this case the Sting didn’t believe that the solar panel case could lead to a major commercial conflict between the two world powers.

Difficult moments

The difficult moment was when the Chinese Ministry of Commerce (MOFCOM) issued a decision saying that, “In accordance with the examination results above and the provisions of Article 16 of the Regulations of the People’s Republic of China on Anti-dumping, the Ministry of Commerce decided to initiate an anti-dumping investigation against imports of wines originated in the EU starting from July 1, 2013”. This action came after the European Union announced that as from 6 August the Union will impose a super anti-dumping levy of 47.6% on solar panel imports of Chinese origin.

In any case the dispute is now over, after EU Trade Commissioner Karel De Gucht clearly stated that “After weeks of intensive talks, I can announce today (27 July) that I am satisfied with the offer of a price undertaking submitted by China’s solar panel exporters, as foreseen by the EU’s trade defence legislation. This is the amicable solution that both the EU and China were looking for…Upon consultation of the advisory committee composed of Member States, I intend to table this offer for approval by the European Commission.”

The presentation of the offer by the Chinese exporters resulted after many weeks of intensive talks. Actually the talks intensified following the imposition of a small provisional anti-dumping duty on EU imports of solar panels from China as from 6 June. The duty was planned to be imposed in two steps, starting with 11.8% on 6 June and 47.6% on average on 6 August. As a matter of fact the negotiating teams were flown to Beijing to continue their talks during the 27th EU-China Joint Committee at the end of June.

As the Commission explains, the “price undertakings are a form of an amicable solution in trade defense proceedings permitted by the WTO and EU laws”.  In reality it is an alternative form of a measure. A duty is replaced by a price increase undertaking which will constitute from now on the base of a minimum import price. Those exporting Chinese companies participating in the price undertaking will be subject to its term, that is to substantially raise their selling prices while exporting to the EU. Their exports will be exempted from the anti-dumping duties but the firms will undertake the obligation not to sell at lower prices than the undertaking.

Undoubtedly this agreement on the solar panel issue is a major breakthrough in the overall relations between EU and China. The affair has taken large dimensions due to    exploitation by a number of international media which ‘could see’ severe repercussions in the EU-China relations from this dispute. At the same time the core of the matter was not at all small for both sides. In China the solar panel industry, the largest by far provider of the global solar energy sector, suffers from excess over capacity and is currently under severe pressures with large producers threatened with bankruptcy.

EU side

On the EU side the solar energy production boom which was fuelled by oversized subsidies in many countries, like Greece and Germany, had come to a dead-end. No EU country could continue subsidising solar energy production at that levels. So the EU solar energy industry had to cool down. However the severe reduction foreseen in EU solar energy investments could completely destroy the home production of expensive panels, which could sell easily in the good times. That’s why the Commission intervened, to save the EU home production of solar panels by forcing the Chinese to substantially raise their selling prices.

Apparently the agreement struck this Saturday must be a just partitioning of damages.  Some Chinese and some EU solar panel producers will have either to close down or downsize. Why? Because with solar energy production subsidies severely cut down and the cost of investments going up, following the Chinese panel price increase, demand for panels will fall abruptly and producers will suffer.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

104 countries have laws that prevent women from working in some jobs

Humane leadership must be the Fourth Industrial Revolution’s real innovation

Making Artificial Intelligence ethical, safe and innovative

We need to rethink cybersecurity for a post-pandemic world. Here’s how

Warsaw wins 2020 Access City Award for making the city more accessible to citizens with disabilities

European Commission and International Monetary Fund strengthen cooperation to support sustainable development

Cyclone Idai: UNICEF warns of ‘race against time’ to protect children, prevent spread of disease in flood-ravaged Mozambique

Industry 4.0: Championing Europe’s fourth industrial revolution

Nuclear testing has ‘disastrous consequences’ for people and planet, General Assembly told

‘Score a goal’ for humanity, says Mohammed, celebrating winning link between sport and development

Visa Facilitation and Readmission: the European Union and Belarus sign agreements

How the powerful science of behaviour change can make us healthier

Number of migrants now growing faster than world population, new UN figures show

Thought AIs could never replace human imagination? Think again

‘Collective endeavour’ needed to strengthen peacekeeping further, says top UN official

Terrorism ‘spreading and destabilizing’ entire regions, Guterres warns States, at key Kenya conference

COVID-19 and natural disasters: €823 million in EU aid for eight member states

Coronavirus (COVID-19): The truth against the myths

Resolving Israel-Palestinian conflict, ‘key to sustainable peace’ in the Middle East: Guterres

The EU now has rules that say household appliances must be easier to fix

Being blinded by labels stops social change. Art helps us see a better future

Autumn 2019 Economic Forecast: A challenging road ahead

Zuckerberg preaches that Artificial Intelligence will protect Data Privacy in Facebook whereas Verhofstadt demands the big European state to take charge

Hunger and obesity in Latin America and the Caribbean compounded by inequality: UN report

MEPs: Juan Guaidó is the legitimate interim President of Venezuela

How many websites are there?

TTIP: why it is worth not to pull the covers over your head?

How 2020 taught businesses to place empathy before profit

The future of crypto-assets, from opportunities to policy implications

SMEs are driving job growth, but need higher investment in skills, innovation and tech to boost wages and productivity

EU seems to fail its moderate migration promises postponing them for end 2015

A new crop of EU ‘Boards’ override the democratic accountability and undermine the EU project

Invisibility outside the closet: health as a right for all

The Ecofin deceives the SMEs with the EIB €10bn capital increase

Coronavirus: Von der Leyen presents new preparedness and response measures

Syrian civilians must be protected amid ISIL executions and airstrikes: Bachelet

Everybody against Germany over the expensive euro

Concern rising over fate of Rohingya refugees sent home by India: UNHCR

Partnerships with civil society and youth ‘essential’ for a future that leaves no one behind: General Assembly President

Fertilisers/cadmium: Parliament and Council negotiators reach provisional deal

OECD survey reveals many people unhappy with public services and benefits

The EU checks the multinationals for tax fraud but Britain may sail out of the EU via Panama

Preparing medical students being digitally as well as socially responsible

South Africa still hasn’t won LGBTQ+ equality. Here are 5 reasons why

Stop wars disguised as peace missions

COVID-19 pandemic: The war inside our heads

Capital markets selloff: The financial moguls send messages to monetary authorities

Brexit mission impossible: Theresa May was so desperate that had to appoint Boris Johnson as Foreign Secretary

India’s economy is an ‘elephant that is starting to run’, according to the IMF

MEPs demand end to EU arms exports to Saudi Arabia

The Novel Coronavirus: The Truth against the Myths

Berlin vies for a Germanic European Central Bank

A Sting Exclusive: why the environment is important to your health, by UNEP’s Head for Europe

Eurozone needs more than some decimals of growth

Palliative care and Universal Health Coverage: how to advocate for the inclusion of palliative care in UHC

Strawberries and child support; a Thai partnership

Outbreaks and pandemics periods can be stressful, but how can we turn it to a positive life-changing experience?

Franchise India 2016, returns in 14th year 

The Peoples are missing from EU’s monetary union

Boosting adult learning essential to help people adapt to future of work

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s