Brussels, 29/07/2013 (Agence Europe) - European Commissioner for Trade Karel De Gucht has agreed with the Chinese government on a price which will enable Chinese exporters to avoid heavy anti-dumping duties.
On 27 July, after six weeks of negotiations, De Gucht made the amicable agreement with China official on the solar panel issue - an issue which ran the risk of a trade war between the EU and China. European and Chinese negotiators agreed on a price commitment which will enable exporting Chinese businesses to avoid anti-dumping duties on their solar panels. Anti-dumping duties have been applied provisionally since June.
Following an anti-dumping investigation initiated in September 2012, the EU has been applying provisional duties on Chinese solar panels since 6 June, but the duties have only been 11.8% as the Commission decided on a two-stage response in order to encourage Beijing to negotiate. Without an amicable solution, the average tariff was due to rise to 47.6% on 6 August - with the lowest duties (37.2%) for Chinese businesses which cooperated in the investigation, and the heaviest duties (67.9%) for those that did not.
“After weeks of intensive talks, I can announce today 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”, De Gucht stated on Saturday 27 July, after he had tied up the final details of an agreement with his Chinese counterpart, Gao Hucheng. “We are confident that this price undertaking will stabilise the European solar panel market and will remove the injury that the dumping practices have caused to the European industry. We have found an amicable solution that will result in a new equilibrium on the European solar panel market at a sustainable price level”, De Gucht added.
The terms of the price commitment were offered by Chinese exporting businesses, which were represented during the talks by the Chinese Chamber of Commerce. These terms take the specific and unique circumstances of the solar panels market and its recent evolution into account, the Commission explained on Saturday, stating that the agreement aims to establish a balance between eliminating the dumping that has been noted and ensuring the stable supply of solar panels to the European market.
“The Chinese suppliers have agreed to a voluntary price undertaking where they commit to stop dumping and keep prices above a certain floor. In return, those companies who participate in this engagement do not have to pay the anti-dumping duties. This undertaking will apply only for an annual volume that covers part of the overall European market. For the rest, so for any Chinese exports exceeding this annual volume, the average anti-dumping duty of 47.6% will have to be paid as of 6 August”, De Gucht told press on Monday 29 July. On one segment of the market, which cannot be satisfied by European supply, a minimum import price will apply for Chinese imports. By setting a floor price, the downward pressure on prices should come to an end. In the other segment of the market, European suppliers will have to compete with competitors from the rest of the world, but will be protected from Chinese imports by the 47% anti-dumping duty, De Gucht stated.
“I have heard some voices arguing that we have given in to China and that this agreement will destroy the European solar panel industry. I disagree. When the undertaking enters into force, European suppliers will see the shield against Chinese dumping go up from 11.8% in force today to 47.6% for those exporters who are not participating in the undertaking. These exporters make up to 30 % of the current Chinese exports. The other 70 % of Chinese suppliers participating in the undertaking will save the anti-dumping duties for a significant volume of sale. However, this relates to a market segment which European suppliers could not cover in any event”, De Gucht stressed.
The details of the agreement will be published later because the agreement must first be adopted officially by the Commission on 2 August. The member states will be called to give their opinion before the end of the year. However, according to several media sources, the agreement provides for a minimum price of €0.57 per watt and an annual export ceiling of Chinese solar panels to the EU of 7 gigawatts.
The Chinese government has welcomed the agreement, saying that it is ready “to promote more trade and cooperation with the European party in the domain of the photovoltaic industry”.
On Saturday, the association of European manufacturers, EU Pro Sun, rejected the agreement which is based on a floor-price which, in EU Pro Sun's view, is only at the current level of Chinese dumping. (EH/transl.fl)