EU Commission retracts on the Chinese solar panel case

Press conference by Karel De Gucht, Member of the European Commission, on the amicable solution in the EU/China solar panels case, (EC Audiovisual Services).

Press conference by Karel De Gucht, Member of the European Commission, on the amicable solution in the EU/China solar panels case, (EC Audiovisual Services).

In an unexpected move the European Commission announced on Wednesday 7 August that it “…continues anti-subsidy investigation on solar panels from China…”, and this only a few days after Commissioner Karel De Gucht, responsible for foreign trade had announced on 27 July that the issue had been concluded ‘amicably’ between Brussels and Beijing. In contrast to that De Gucht said last Wednesday that “in this case, the investigation will continue without provisional measures and the Commission will continue working actively on the case in order to arrive to definitive findings that are due at the end of this year”.

According to this announcement the anti-subsidy investigation will be running in parallel to the EU’s anti-dumping investigation on solar panels as was initiated on 8 November 2012 upon a complaint by the Union industry. However the two investigations had been running in parallel for many months now and understandably the ‘amicable’ agreement between Brussels and Beijing adequately covered the damage to the European solar panel industry. De Gucht himself on 27 July has stated “We found an amicable solution in the EU-China solar panels case that will lead to a new market equilibrium at sustainable prices”. What made the Commission to retract so openly, risking more counter action from Beijing?

The answer has to be looked for in the way the major international media interpreted De Gucht’s ‘amicable agreement’. Commentators concluded that the European Commission had bowed to the will of Berlin. On 27 May the European Sting writer George Pepper stressed that “The visit of the new Prime Minister of the People’s Republic of China and party secretary of the State Council, Li Keqiang to Germany paid tangible dividends. After meeting with the German Chancellor Angela Merkel he got an official and public promise from her that Berlin will intervene in the Brussels procedures, to cool down European Commission’s aggressive action against alleged Chinese state subsidies to a number of companies and their possible price dumping practices in EU markets.“

On that occasion Keqiang’s visit to Europe was restricted only to Berlin. Germany is not only the largest by far EU exporter to China. Many German giant automotive and other engineering firms are making a large part of their profits from their sales in China. It is too much of a risk for Berlin to start a trade war with Beijing. That is why Merkel came out so openly backing Beijing over its trade disputes with the European Commission. Consequently world media interpreted De Gucht’s ‘amicable’ arrangement with Beijing as a capitulation of the European Commission to the will of Berlin.

Seemingly this proved to be too much for the Commission to stomach and the EU’s executive arm had to do something to mitigate the exposure. To this effect De Gucht now tries to separate the anti-dumping from the anti-subsidy investigation over the Chinese solar panel selling prices. The dumbing issue however has been resolved ‘amicably’ on 27 July with the Chinese producers having agreed to raise the selling prices of their solar panels exported to the EU and the Commission agreeing that this was enough “to lead to a new market equilibrium at sustainable prices“.

Now however De Gucht says that “The agreement on an undertaking announced on 27 July 2013 is based on the provisional measures imposing anti-dumping duties. The undertaking entered into force on 6 August. The Commission has expressed its readiness to follow the necessary procedures to include the anti-subsidy investigation into the undertaking at the definitive stage, should such action be warranted”.

In short the Commission now backtracks on its decision and says what the Chinese accepted under the ‘amicable agreement’ might not prove enough and the EU may increase the undertaking. This means that the obligation the Chinese producers have already undertaken on 27 July to increase the selling price of their products might not lead to a sustainable arrangement in the EU solar panels markets. Consequently the Commission may “include the anti-subsidy investigation into the undertaking at the definitive stage, should such action be warranted”. In any case the deadline for the imposition of definitive duties in both cases (anti-dumping and anti-subsidy) is 5 December 2013.

Now the problem is what the Chinese reaction would be. Beijing may not hasten to react because there is plenty of time for negotiations until 5 December. If however Beijing accepts to re-negotiate the undertaking, it will be as if China is ready to increase its ‘contribution’. While commenting on the agreement of 27 July the Chinese Ministry of Commerce (MOFCOM) considered the whole affair as finally settled. According to the relevant press release issued on 5 August MOFCOM spokesman, Shen Danyang, “made comments to applause and welcome such agreement”. Now everything starts from the beginning.

the sting Milestones

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

EU Emissions Trading System does not hurt firms’ profitability

UN chief calls for ‘solidarity, compassion and action’ on World Refugee Day

Here’s how to check in on your AI system, as COVID-19 plays havoc

Amid ‘unprecedented combination’ of epidemics, UN and partners begin cholera vaccination campaign in DR Congo

To Brexit, or not to Brexit…rather not: 10 Downing Street, London

How debt for climate swaps could spur a green recovery

5 steps to safe and effective COVID-19 vaccine distribution

Rise in Caribbean children displaced by storms shows climate crisis is a child rights issue: UNICEF

New rules for audiovisual media services approved by Parliament

Making the most of our ‘extra time’ – for ourselves and society

MEPs call on Russia to stop illegitimate prosecution of Lithuanian judges

UN General Assembly celebrates 20 years of promoting a culture of peace

Four million have now fled Venezuela, UN ramps up aid to children who remain

UN highlights importance of skills development on World Youth Skills Day

China and the EU agree to protect each other’s food and drink specialities

One-sixth of the world’s economy has now pledged to cut CO2 to zero by 2050

What is an immunity passport and could it work?

The benefits of a cashless society

Innovative urban financing can make our cities stronger

70 years after the Universal Declaration of Human Rights, this is why we need dignity more than ever

UN-backed intercultural dialogue forum urged to keep working to ‘bridge gap between the like-minded’

How to prevent a suicide?

Parliament adopts deal to improve quality of tap water and reduce plastic litter

What we can learn from Asia’s courts of the future

Somalia advancing towards ‘inclusive and peaceful future’ for women, deputy UN chief

Sexual and Reproductive Health and Rights and ending HIV, one single goal

The third bailout agreement for Greece is a done deal amid European economies full of problems

How our global battle against coronavirus could help us fight climate change

FROM THE FIELD: Powering up health care in Sub-Saharan Africa

Outbreak of COVID-19: The third wave and the people

How can we ensure energy is clean, secure and affordable?

Do the giant banks ‘tell’ Britain to choose a good soft Brexit and ‘remain’ or else…?

Your smartphone may know more about your mental health than you

Innovations in reusable packaging need a playbook. Here’s why

Why cybersecurity should be standard due diligence for investors

State aid: Commission approves Danish support for Thor offshore wind farm project

Investment Plan for Europe: European Investment Bank to provide BioNTech with up to €100 million in debt financing for COVID-19 vaccine development and manufacturing

Commission takes further action to ensure professionals can fully benefit from the Single Market

Theresa May in search of a magic plan to invoke Article 50 and start Brexit negotiations now

Austerity ends in Eurozone, Germany is isolated

Do not take the EP’s consent on MFF for granted, says Budget Committee Chair

Sherpa climbers carried out the highest-ever spring clean. This is what they found

New UN data tool shows ‘mismatch’ between government aid and places modern slavery exists

Chart of the day: This is why we need to protect nature’s pollinators

The eyes of Brazil and the world turn to the largest rainforest and largest biodiversity reserve on Earth #PrayForAmazonia.

We need to change the fast fashion model. Here’s how

Coronavirus response: Commission welcomes agreement on crucial VAT relief for vaccines and testing kits

Lithuania finds the ways to maintain its energy security

Africa must use tech to chase corruption out of the shadows

Do the EU policies on agro-food smell?

More than 30 years of US trade with China, in one chart

Myanmar companies bankroll ‘brutal operations’ of military, independent UN experts claim in new report

Deadly violence at Israel-Gaza border escalates dangerously: UN chief condemns in strongest terms

What has a year of experiments taught us about basic income?

UNICEF warns of ‘lost generation’ of Rohingya youth, one year after Myanmar exodus

Eurozone needs more than some decimals of growth

UN Chief says ending poverty ‘a question of justice’ on International Day

FROM THE FIELD: Urban Mexico moves toward better livelihoods, cleaner cities

The Sting’s Values

Impacting society with digital ingenuity – World Summit Award proclaiming the top 8 worldwide

More Stings?

Speak your Mind Here

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

You are commenting using your 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