EU and China : Solution found on the solar panel issue

After months of discussion, China and the European Union reached an amicable agreement on a minimum price to be set on Chinese solar panels in the EU.

On July 27th, European Union Trade Commissioner, Karel De Gucht, announced that the issue that raised between E.U and China few months ago over Chinese solar panels has been settled. Few months ago, a group of European solar panels manufacturers, EU ProSun, filed in a case against Chinese solar panels manufacturers to the European Union Commission. The group accused Chinese to sell their product below their cost of production, which is call a dumping and is unlawful regarding EU and WTO trade laws.

In June, after the European Commission led an investigation on this subject, the EU Trade Commissioner, Karel De Gucht, announced tariff would be apply on Chinese importation of solar panels on EU soil. This custom duty would be as high as 47%. Chinese government was quick to respond this to this threat to its solar panels as they open an investigation on alleged dumping on European wine. To avoid a trade war, discussion between the two parties went on throughout June and July. Finally an agreement on a minimum price on Chinese solar panels has been found. Chinese solar photovoltaic will be sell at 0.56€ (0.74$) per watt at minimum.
The European association, EU ProSun, indicated this issue would not be as favorable as they expected for European companies, that the EU commission failed to protect European companies and failed to apply European trade laws. Indeed, the price agreed on the deal is only 25% lower than Chinese prices a year ago. It will still be difficult for European solar panels makers to catch up with Chinese companies as they detain about 80% of the European market. However, experts expect Chinese market share to decrease to 60-70%.
On the Chinese side, only small manufacturers will suffer from this new regulation. A third of Chinese manufacturers raised their voices against this agreement and do not agree to respect the minimum price. If the case, they will have to pay the 47 percent tariff or stop to export their solar panels to Europe.
On the American side, this settlement makes it difficult to pursue negotiation with EU on the trans-Atlantic trade agreement. The US government tried to persuade EU to side with them in order to discuss the solar panels issue with Chinese. Few months ago, US found China unlawful with the World Trade Organization law on dumping. As a result, Chinese solar panels are taxed with a 30% tariff.
This issue showcased the difficulty for the European Union to avoid internal conflict when several EU members have different priorities. Germany strongly opposed to the establishment of a tariff on Chinese solar panel as it tries to protect its biggest company, first supplier to Chinese gigantic industry.
Apart from the protagonists of this issue, a third party plays its card right. After the US established tariff on solar panels manufactured in China, Taiwanese solar panels industry became more flourishing. Indeed, the US only mentions that the tariff would apply on solar panels which major components are assembled in China. Therefore, Taiwan is excluded from this regulation. Since last fall, when the tariff has been effective, Taiwanese manufacturers saw their stock sold out faster than before and they growth rate increased more and more every months. Chinese solar panels manufacturers Hareon announced it will open a large plant in Taiwan which will allow the company to bypass the tariff. It can also be applied on the minimum prices on Chinese solar in the EU.

- By Greenshine New Energy, solar street lights, solar parking lot lights and solar outdoor lights supplier.

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