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.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

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

What meat consumption has brought to the environment and how herbal diets can help human health

The need to resume preventive policies for chronic noncommunicable diseases

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

Cameron postpones speech in Holland

4 things to know about the state of conflict today

We must treat cybersecurity as a public good. Here’s why

No hard drivers in sight to remodel the stagnating affairs of the EU

Trade deals’ pure realism: it may take 10 years for a post-Brexit agreement

This mobile laundry gives homeless people free showers and washes their clothes

A Sting Exclusive: “Paris and beyond: EU action and what COP21 should deliver”, Green MEP Keith Taylor discusses from Brussels 

EU budget: Commission helps prepare new Cohesion programmes with Regional Competitiveness Index and Eurobarometer

Business models inspired by nature are the future

Monday’s Daily Brief: Independent UN experts on Myanmar, UN chief renounces attacks in US, Libyan airport violence, UN spokesperson on Kashmir, and FAO and Italy on development

Extra mild ECB tapering of QE and zero interest rates keep euro low

Erasmus+ will finance existing UK-EU mobility in the event of no-deal Brexit

Fertilisers/cadmium: Parliament and Council negotiators reach provisional deal

Cédric in India

Collective action now, the only way to meet global challenges, Guterres reaffirms in annual report

OECD’s Gurría calls for overhaul of economic thinking to address global challenges

Parliament endorses landmark EU-Japan free trade agreement

Brexit: European Council adopts decision to extend the period under Article 50

Mark Zuckerberg will be at the European Parliament today to meet President Tajani and the political group chairpersons

Commission’s action against imports from China questioned

Sanctions on Russia to be the biggest unity test at this European Council

Yemen: Security Council backs new mission in support of key port city truce

Here’s the secret to financing a greener future

Art has the power to change the world, says this renowned Iranian muralist

The link between migration and technology is not what you think

Humanitarian Aid: €10.5 million for South and South East Asia

European Youth cries out: Sustainable Development Goals ambitious, but lack focus on youth

World simply ‘not on track’ to slow climate change this year: UN weather agency

Fuel crisis rapidly draining last ‘coping capacities’ of Palestinians in Gaza

Senior UN children’s advocate says they ‘should never be targeted by violence’

He died so I could live: UN peacekeeper pays tribute to fallen colleague

Promoting rule of law and fundamental rights in the EU

EU deserves the title of the Syrian affair merchandiser

Here’s what happened when one Guatemalan town went to war on plastic waste

EU-Turkey relations: Will Turkey manage to revive the EU accession process talks?

Is this really it for the gig economy? Read on

Palestine refugee crisis ‘expanding’; leaving highest number at risk this century across Gaza

Girls groomed for suicide missions fight back against the extremists of Lake Chad

Fighting cybercrime – what happens to the law when the law cannot be enforced?

EU’s tougher privacy rules: WhatsApp and Facebook set to be soon aligned with telcos

These are the fastest trains in the world

Banks get trillions and the unemployed ECB’s love…

Why is the Strait of Hormuz so important?

I’m not feeling lucky: The “Right to Be Forgotten” ruling puts Google inside a box

China is sending science students to live with rural farmers – and crop yields are skyrocketing

The EU threatens to occupy Libya militarily; is another colonial war brewing?

Brexit: visa-free access to the EU for UK nationals and to the UK for Europeans

5 key concepts for blockchain newbies

This is how we make basic income a reality

Margrethe Vestager, EU Commissioner in charge of competition policy, during a recent press conference in Brussels / Berlaymont. (Copyright: EU, 2018 / Source: EC - Audiovisual Service / Photo: Jennifer Jacquemart)

EU opens investigation into Qatar Petroleum over potentially restrictive gas contracts

The Parliament rejects cultivating the wrong seeds of the Commission

Poliomielitis: climatic changes and impossibility in border control

World response to AIDS epidemic at a ‘critical juncture’

The EU tells the bare truth to the UK that there is no such thing as easy divorces

Insurer CEOs Reveal Marketing Strategies that Communicate the True Value of Insurance Products & Services to the Customer

UN health agency highlights lifestyle choices that can prevent onset of dementia, as millions more succumb each year

Here’s how to close the $176 billion health financing gap

More Stings?

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