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Remarks by EU Trade Commissioner Karel De Gucht on the decision to impose provisional anti-dumping measures on imports of solar panels from China

European Commission - MEMO/13/499   04/06/2013

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European Commission

MEMO

Brussels, 4 June 2013

Remarks by EU Trade Commissioner Karel De Gucht on the decision to impose provisional anti-dumping measures on imports of solar panels from China

Good afternoon, ladies and gentlemen.

I would like to inform you that the European Commission has decided unanimously to impose provisional tariffs on solar panels imported from China in order to counter the dumping of these products on the European market.

This decision follows a detailed legal investigation over the past 9 months. Our conclusion has been reached after an examination of all the facts and after consultations with the many stakeholders concerned with this case.

The tariffs come into effect from 6 June for the next 6 months - until the end of the full investigation at the start of December this year. At that point a decision must be taken on whether to impose permanent duties for up to 5 years.

There will be two steps: as of 6 June, a tariff of 11.8% will be imposed on all Chinese solar panel imports. Two months later, as of 6 August, the average tariff will be 47.6%. Overall, the duties will range from 37.3% to 67.9% at that stage. Those Chinese companies which have co-operated will face lower tariffs. Those which have not co-operated will face higher tariffs.

This staggered response allows a smooth transition for our markets to adapt – and it is a one-time offer to the Chinese side, providing a very clear incentive to negotiate. It provides a clear window of opportunity for negotiations, but the ball is now in China’s court. It is clear that if China does not provide a solution by August, then the higher tariffs will apply.

In short, our action today is an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping. Our response is balanced, legal and justified within international trade rules and designed to prevent the situation turning fatal.

This is not protectionism. Rather it is about ensuring international trade rules also apply to Chinese companies – just like they apply to us. As you are aware, also the United States currently apply duties to Chinese exports.

With today's action the Commission takes up its role as the independent defender of European industry in the face of unfair trade practices from abroad.

And let me be very clear: my sincere aim since the outset has been an amicable solution. This is illustrated by the open-door policy I have had over the last year with our Chinese partners at their request – with numerous meetings at either my level or at the level of my services. I hope today's decision will now provide the space for such discussions to move forward in a formal manner.

Now, let me explain the facts behind why this decision has been taken at this stage of the investigation.

The simple question we have been asked to examine is whether Chinese companies are dumping solar panels which end up being sold at lower price than it costs to produce them in the first place.

The answer is simple: Yes – Chinese companies are dumping their underpriced solar panels on Europe. Our estimate of the fair sale price of a Chinese solar panel would actually be 88% higher than the current price for which they are sold on the European market.

Now, the next question to ask ourselves is whether this dumping is harmful for European companies?

Again the answer is simple. It’s clear that the dumping of these Chinese solar panels is clearly harming the European solar panel industry. This jeopardizes at least 25,000 current jobs. Furthermore, the dumping threatens the sector’s very survival by damaging current and future investment – especially in the critical area of Research and Development.

Last summer, the Commission received a formal and valid complaint from a grouping of European solar panel manufactures – which obliged us to launch an investigation as required by EU law.

What we have discovered on the basis of evidence gathered through on-the-spot visits is that Chinese exporters have been flooding Europe with solar panels due to an over-capacity within its own market.

They have captured 80% of EU market share, in a context of a massive overcapacity equalling 150% of total world consumption. In other words, it's producing today one and half times the amount of solar panels the world needs. They are simply producing too much.

Today's provisional measures aim to prevent this spillage onto our market and re-create a level playing field and fair competition once again. But most importantly today's action opens the door to negotiate an amicable solution through 'price-undertakings' within a short period of time.

In essence, the system is made stable again if Chines companies were to agree to re-establish fair pricing which reflects the true market value of these solar panels.

Let me be very clear: I want an amicable solution with our Chinese partners; that is also what Europe wants.

Before I conclude, I would just like to address a number of criticisms. In the run-up to today's decision certain parties suggested that today' trade defence measures equal 'protectionism'. That is simply wrong and misleading.

The truth is that our action is about ensuring fair competition and the respect of international trade rules to which both Europe and China have signed up to in the WTO.

At first glance, cheap and plentiful seems great – but ultimately this will lead to a 'race to the bottom' and everyone loses across the solar panel industry and its related services.

Even those arguing that cheap solar panels are good for sustainable energy and the environment must realize that you need to keep the solar panel industry 'sustainable' in the first place if you are going to see any benefits over time.

I needn't remind you that 'the rule of law' is the fundamental principle at the heart of the European Union.

Europe like all its partners must also respect international trade rules. But we must also not shy away from using the legal means allowed for redress when we face injury or harm. Both are equally important to ensure the system keeps working to everyone's benefit.

So allow me to underline for those of you who do not follow trade issues on a daily basis that it is the European Commission which has the responsibility on behalf of the EU to carry out its external trade policy. And that's for one very good reason – the Commission can ensure independence and work on behalf of everyone across Europe by seeing the 'big picture'.

Ladies and Gentlemen; I hope I have been able to draw for you this 'big picture' today.

I hope I have been able to explain exactly why this decision to impose provisional tariffs was necessary in the light of dumping that has the potential to destroy an important industry within Europe if we do not act today.

I hope too that everyone understands that I have a responsibility towards the European economy and I will shoulder that responsibility.

Let me end by once again stressing that I would prefer a negotiated solution and quickly – there is no reason for this to last months if there is a sincere desire by our Chinese partners to seek a solution through 'price-undertakings.' But it is the role of Chinese exporters and the Chinese Chamber of Commerce to now step forward with a solution that removes the injury to the European solar panel industry.

I look forward to engaging with them as soon as possible so we can work together to reach a satisfactory settlement which will be beneficial for all of us.

Thank you.


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