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

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

This is how rice is hurting the planet

These countries have the most powerful passports

Paid paternity leave should be the norm in the US

Countries violate rights over climate change, argue youth activists in landmark UN complaint

Budget MEPs back €1.6 million to help 400 former workers of Carrefour Belgium

A new Europe for people, planet and prosperity for all

Ramped-up emergency preparedness, part of ‘changing the DNA’ of the UN’s health agency

Dramatic drop in South Sudan political violence since peace agreement signing

LGBTQ+: The invisible poor on our healthcare

The West and Russia took what they wanted from Ukraine

Zhua Zhou: Choosing The Future

Afghanistan: UN envoy urges further extension of ceasefire with Taliban, as Eid ul-Fitr gets underway

We have to fight for a fairer tech industry for women

Access to health in the developping world

War of words in Davos over Eurozone’s inflation/deflation

Secretary-General condemns attacks on UN peacekeepers in Mali

Replacement for United States on Human Rights Council to be elected ‘as soon as possible’

After music and TV, where will the streaming revolution take us next?

UN chief ‘following very closely’ reports of chemical weapons use in Syria’s Aleppo

Built by a woman: supporting the dreams of mum entrepreneurs

I accidentally went viral on TikTok. I learned we failed our youngest generation.

South African women’s fury at gender-based attacks spills onto the streets

UN sees progress in fight against tobacco, warns more action needed to help people quit deadly product

UN, global health agencies sound alarm on drug-resistant infections; new recommendations to reduce ‘staggering number’ of future deaths

An economist explains how to value the internet

This start-up is making a palm oil alternative from used coffee grounds

Joris in Indonesia

Here’s how tech is revolutionising transport for low-income communities in urban Africa

Algorithms are being used to convict criminals and decide jail time. We need to make sure they are fair

A record one million Syrians displaced over six months, during six key battles: UN investigators

IMF: The global economy keeps growing except Eurozone

1 in 13 young British people have PTSD. Here’s why

UN mission welcomes Afghan government’s announcement of Eid holiday ceasefire

Colombia: ‘Significant strides’ towards integrated peace, UN envoy tells Security Council

UN migration agency launches $10 million appeal to support hurricane recovery in The Bahamas

Millions of Bangladeshi children at risk from climate crisis, warns UNICEF

Merkel refuses to consider the North-South schism of Eurozone

Trump fines China with $50 billion a year plus some more…

E-commerce is globalization’s shot at equality

Restoring government control across Central African Republic is ‘key’ to lasting peace, stability – UN envoy

It’s time to ditch our obsession with trade deficits. Here’s why

From Policy to Reality: Discrepancies in Universal Health Care Systems across the EU

4 steps towards wiping out cervical cancer

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

The world invested almost $2 trillion in energy last year. These 3 charts show where it went

A Sting Exclusive: “China-Africa Cooperation Sets a Fine Example of South-South Cooperation”, by China’s Ambassador to EU

Growth is running out of steam. How do we prepare for the next crisis?

“There are many converging visions and interests between the One Belt One Road initiative and the Juncker Investment Plan”, Ambassador Yang of the Chinese Mission to EU highlights from Brussels

Greece leaves EU aid program, gets last 15 billion euro

Air pollution: How to end the deaths of 7 million people per year?

‘Stronger’ effort must be made to cement peace deal for South Sudanese women and girls: UN Women chief

The EU Parliament sidesteps the real issues about banks, while the US target the Eurozone lenders

“Beating pollution for our planet”, a Sting Exclusive by Mr Erik Solheim, the Executive Director of the United Nations Environment

Zimbabwe ‘facing worst hunger crisis in a decade’

First peaceful transfer of power in DR Congo ‘an extraordinary opportunity’ for advancing rights

Trade negotiations with US can start under certain conditions

The Impact of climates changes in health: a problem for all of us

As conflicts become more complex, ‘mediation is no longer an option; it is a necessity’, UN chief tells Security Council

MARKUP initiative to boost market access to Europe for East African SMEs

5 reasons to be more cheerful about the future of the oceans

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