Friday, May 24, 2013

EU and China to negotiate trade settlement on solar panels

A heated dispute between China and the European Union over solar panel imports has been growing into a trade war, and the U.S has begun talks with the countries to try to facilitate a settlement.

European officials informally confirmed that the EU was preparing to levy anti-dumping tariffs of up to 67.9 percent on Chinese-subsidized solar panels and related equipment.

The U.S., which also charges high duties for Chinese solar, is trying to negotiate a deal that would set quotas on Chinese exports and minimum prices for solar-energy equipment, industry insiders told Bloomberg.

The resolution that is being negotiated, according to The New York Times, would divvy up the global solar panel market into a series of regional markets. It would increase the price of Chinese solar panel exports, by requiring Chinese companies to charge more while limiting the total number of solar panels they could ship.

In exchange, Chinese companies would no longer be charged steep taxes on their exports of solar panels, reports the NYT. The United States is already collecting tariffs totaling about 30 percent while the European Union is expected to impose similar tariffs of about 50 percent on June 5, and may backdate them to March 5.

Europe has long been the largest global supplier of solar equipment. Over the past decade, Chinese imports have captured more than 80 percent of the market, shipping roughly $30 billion a year in solar panels to the West.

An EU investigation launched in 2004 concluded that Chinese manufacturers benefited from government subsidies, which China denies. Without tariffs, China will have a “solar monopoly, with disastrous consequences for European manufacturers, suppliers, and customers,” said Milan Nitzschke, president of EU ProSun, a group representing the European solar industry

The U.S. has an interest in settling the dispute because of its own troubles with the Chinese solar industry. Last year, Washington slapped tariffs of up to 250 percent on Chinese-made solar energy cells after determining they were government subsidized.

In return, China has accused the U.S. and Europe of subsidizing polysilicon, a material used in solar panels, and it is planning to impose duties on polysilicon imports.

For more of the Business Week story: businessweek.com

For more of The New York Times story: nytimes.com

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