EU Decides Against Anti-Subsidy Duties on Chinese Solar Panels

The European Union decided against imposing preliminary anti-subsidy tariffs on Chinese solar panels, opting to wait another four months to assess whether the levies are warranted in the biggest EU trade fight of its kind.

The European Commission waived the right to impose provisional EU duties to counter alleged trade-distorting government aid to Chinese solar-panel manufacturers. The commission, the 28-nation EU’s regulatory arm, will study whether “definitive” anti-subsidy levies should be applied by Dec. 8.

The commission approved Aug. 2 an agreement with China to curb EU imports of solar panels as part of a parallel probe into below-cost sales, a practice known as dumping. The accord, which took effect Aug. 6, sets a minimum price and a volume limit on EU imports of Chinese solar panels until the end of 2015. Chinese manufacturers that take part are being spared provisional EU anti-dumping duties as high as 67.9 percent.

“The provisional anti-dumping measures and the price undertaking on the same products already remove the injury suffered by the union industry,” John Clancy, the commission’s trade spokesman, said in a statement yesterday in Brussels. “The decision not to impose any provisional anti-subsidy measures does, however, not prejudge the final outcome of the anti-subsidy investigation. The commission will continue working actively on the case.”

Subsidy Cases

The commission is engaged in a political balancing act as it seeks to limit Chinese competition against European manufacturers such as Solarworld AG. (SWV) The renewable-energy dumping and subsidy cases cover EU imports of crystalline silicon photovoltaic modules or panels, and cells and wafers used in them -- shipments valued at 21 billion euros ($28 billion) in 2011.

With Chinese companies such as Yingli Energy (China) Co. and Wuxi Suntech Power Co. controlling 80 percent of the EU solar-panel market and China’s government opposed to any trade protection in Europe, some European governments including those in Berlin and London have expressed opposition to anti-dumping duties to boost import prices. That led in June to commission negotiations with China on a settlement of the dumping case.

EU governments, acting on a commission proposal, have until Dec. 6 to decide whether to accept the anti-dumping agreement as a definitive measure. The end-2015 timeframe of the anti-dumping accord is less than the usual five-year period for definitive EU trade protection. EU Trade Commissioner Karel De Gucht said on Aug. 2 that the pace of change in the solar-panel market justifies the shorter period of protection.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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