On 31 of December, SolarWorld USA — the largest US producer — announced plans to take further steps to counter ongoing, anticompetitive trade practices surrounding crystalline silicon solar products from China and Taiwan. Specifically, SolarWorld submitted anti-dumping and anti-subsidy cases with the US International Trade Commission and the US Department of Commerce against China and Taiwan, to close a loophole in trade remedies issued a year ago this month. According to SolarWorld, the loophole enables Chinese producers to evade duties averaging about 31 per cent by assembling modules from cells manufactured in third countries. As a result, SolarWorld said, China has continued to improperly subsidize its export-intensive campaign and sell below production costs in the US market as a means to seize greater share.
“We’re finishing the job of presenting the facts to our trade regulators to prevent China from further damaging yet another manufacturing industry and another rich base of employment,” said Mukesh Dulani, president of SolarWorld Industries America, Inc., based in Oregon. “China obviously recognizes the key importance of solar-technology manufacturing to future economic competitiveness, but we do, too. Therefore, we are once again simply asking our trade regulators to investigate the facts and apply the well-established laws that enable free trade, robust competition and lower long-term pricing. If fair competition can be restored, the US industry will return to growth.”
SolarWorld states that it is “acting on behalf of the domestic industry,” with support from the Coalition for American Solar Manufacturing (CASM), a broad cross-section of solar employers united in their support for free and fair trade according to well-established laws and rules, sustainable manufacturing according to the West’s high environmental and quality standards, and domestic manufacturing industry and employment for Americans. Since SolarWorld filed the first cases, it says China’s anti-competitive campaign has forced a number of additional CASM members out of business. CASM’s 241 member organizations employ about 18,350 Americans, SolarWorld stated.
However, not all US-based solar industry associations believe SolarWorld’s petition strategy is the best solution. For one, SEIA — the Solar Energy Industries Association — firmly asserts that more litigation is not the answer. “We oppose [the petition’s] escalation of the US-China solar trade conflict,” said Rhone Resch, president and CEO of SEIA. “Trade litigation is a blunt instrument and, alone, incapable of resolving the complex competitiveness issues that exist between the US and Chinese solar industries. It’s time to end this conflict, and negotiations must play a role.”
For more than a year, SEIA has been working to encourage the US and Chinese governments, as well as other key industry stakeholders, to find common ground. SEIA went so far as to put forth a settlement proposal of its own. Among the highlights of SEIA’s proposed solution:
- Chinese companies would agree to create a fund that would benefit US solar manufacturers directly and help to grow the US market. Money for the fund would come from a percentage of the price premium Chinese companies are currently paying to third-country cell producers to get around US trade sanctions, reducing costs and supply chain distortion for Chinese companies.
- The Chinese government would also agree to end its antidumping and countervailing duty investigations on US polysilicon exports to China, and remove the threat of artificial cost increases in a key raw material in the solar value chain, benefiting not just Chinese solar companies but all users of solar energy.
- In return, the US antidumping and countervailing duties orders would be phased out.
- The proposal also calls for a safeguard mechanism designed to offset any surge of Chinese solar modules into the US market.
- As an added step, SEIA believes the US government should take all steps necessary to ensure that federal procurement opportunities are provided to domestic solar manufacturers in recognition of the importance of US solar manufacturing to the nation’s long-term energy security.
SEIA believes its proposal provides a mutually satisfactory resolution which recognizes the interests of all solar stakeholders and not just one segment of the industry. In fact, when SEIA presented its proposal back in September, it received kudos from the likes of prominent US Governors and Senators who represent States with a vested interest in strengthening their respective solar power industries. Sadly, though, SEIA believes the US and Chinese governments have neither adopted SEIA’s proposal as the basis for negotiations nor put forth any meaningful offer to resolve the broader conflict.
“It’s time for both governments to get in the game and end this conflict,” SEIA’s Resch declared. “We urge the United States and China to immediately commit to serious, results-driven negotiations.”
SEIA is not the only industry association in opposition to litigation as a means to resolve the protracted trade dispute. In the past, the Coalition of Affordable Solar Energy (or “CASE”), has been critical of SolarWorld’s attempts to resolve the matter through the courts. Any policies that support protectionism through hefty tariffs and other measures, CASE says, actually increase barriers to trade and hurt US industry.