The following article relates to the recent disagreement between the USA and other states against China and its exports of more affordable solar energy technologies.
The points relevant to the legal aspects of international trade in energy commodities are the compliance of subsidies with the WTO system, of countermeasures by the aggrieved parties, and whether any dumping of goods (i.e., the intentional flooding of a importing market with goods sold below the price sold in the exporting economy in order to annihilate domestic competition) in the US market is taking place.
There has been ongoing agitation from sectors of the US solar panel industry to secure US Govt protection through additional duties on Chinese imports of solar panels. They argue that Chinese imports are non-WTO compliant due to gov’t subsidies and the occurrence of dumping. The proposed duties are modest ranging between 2.9-c.5%.
The influx of more competitive Chinese imports has been blamed for the recent folding of three significant US-based manufacturers of solar panels. The US solar panel industry, however, is divided given the benefits of affordable solar energy technologies to US consumers, and, overall, the environment – for instance, there had been a 40% decrease in the price of these technologies between 2006 and 2011.
The US Department of Commerce and the International Trade Commission (ITC) has yet to confirm the proposed duties. In relation to the allegations of dumping – that’s to say, that the Chinese imports are intentionally provided at prices lower than what they may be available in China in order to stymie US competition – the US Department of Commerce is expected to issue a preliminary ruling. It should be noted, however, that these determinations may also be subject to review by the WTO DSB, should China decide to refer the matter to it. Predictably, these countermeasures would be assessed against the specific WTO countermeasures, subsidies, and antidumping provisions.
ICTSD • US-China Solar Subsidies Spat Sparks Interest from New Players.
There have been developments with a preliminary WTO ruling re subsidies and countervailing measures – see this.
The US Commerce Dept., has recently pronounced on the situation finding that Chinese imports amount to dumping by a large margin.
The EU has also taken steps to argue against what it perceives as dumping on the part of China – see the May 2013 ICTSD newsitem on this – see the following ICTSD article also about the Chinese complaint at the WTO re EU feed-in tariffs on renewables.
In terms of solar panel imports from China and investigations by the European Commission on whether these breach trade rules, the solar panel industry in the EU is split; manufacturers want countervailing duties alleging dumping and subsidisation on the part of China in order to level the playing field for them, whilst other players in the WU solar panel industry see such duties potentially harmful not only for the cause of environmental protection and the take-up of renewable energy production methods but also job loss subsequent to rising prices of solar panels and so on.
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