On 6 September 20121 , the European Commission has initiated an anti-dumping investigation into imports of solar panels and their key components (i.e. solar cells and solar wafers) from China on the basis of a complaint lodged by EU Pro Sun, an industry association on 25 July 2012. EU Pro Sun claimed that Chinese products were under-priced by 60 to 90 per cent thereby causing material injury to the Union industry.
China's solar exports to the EU reached €21bn last year, making the EU by far China's largest solar panel customer.
This is the most significant anti-dumping complaint the European Commission has received so far in terms of import value. Last spring, a similar complaint had already been filed in the United States, after the Department of Energy has estimated that Chinese producers have benefited in 2010 from $ 30 billion (€ 22.6 billion) in illegal subsidies from Chinese banks. The US investigations lead to set anti-dumping duties from 31 % to 250 % on the Chinese solar panels.
The EU investigation will take 15 months in full, although it is possible in compliance with trade defence rules to impose provisional anti-dumping duties within 9 months provided that conditions are met.
1. Background
1. The European Commission has to launch an anti-dumping investigation when it receives a complaint from a EU Industry which brings forward evidence that exporting producers are dumping a specific product into the European market and causing injury to the EU industry.
In the case at hand, EU Pro Sun, an association representing more than 20 European companies, in particular French, Italian and Spanish, producing solar panels and their components (i.e. solar cells and solar wafers), filed an anti-dumping complaint with the European Commission on 25 July 2012 against Chinese producers of solar panels such as YINGLI GREEN ENERGY, SUNTECH POWER HOLDINGS, TRINA SOLAR ET CANADIAN SOLAR.
China is the world's largest producer of solar panels. Approximately 65% of all solar panels are produced in China. The EU is China's main export market, accounting for around 80% of all Chinese export sales.
2. EU Pro Sun has highlighted sufficient proof pointing out:
(1) Likely price dumping by the exporting producers within the EU market;
(2) Injury suffered by the EU industry, and;
(3) Possible causal link between the dumped imports and the injury suffered by the EU industry.
At this stage, the European Commission has considered that there is sufficient prima facie evidence to open an investigation.
2. The purpose of the EU investigation
The investigation must conclusively demonstrate that:
• There is dumping by the exporting producers on the EU market;
• Material injury has been suffered by the EU industry concerned;
• The dumping is causing the injury;
• The imposition of measures is not against the EU economic interests (which are usually in a form of an anti-dumping duty).
3. The conduct of the EU investigation
4. The European Commission will send out questionnaires to diverse interested parties (e.g. exporters in the countries concerned, producers in the EU, importers and users in the EU) requesting information relating to, among others, the exportations, production, sales and importations of solar panels and their key components. Afterwards, the data will be assessed by the European Commission, usually by inspecting records at the companies premises.
Based upon the information gathered, the European Commission should decide whether there has been dumping and whether the alleged injury suffered by the EU industry has been caused by the Chinese dumped imports.
5. Within 9 months of the initiation of the investigation, the Commission may issue its provisional findings. There are three possible scenarios:
(1) The Commission could impose provisional anti-dumping duties (in general for a 6 months period);
(2) The Commission could continue the investigation without imposing any provisional duties whatsoever;
(3) The Commission could terminate the investigation.
All the concerned parties have the possibility to file comments with the European Commission and attend hearings in order to make their views and arguments heard. The Commission shall take account of the received comments throughout the investigation.
6. Before taking any decision on the imposition of measures, the European Commission has to apply the so-called "Union interest test". In this respect, the Commission will assess whether the potential imposition of measures would be overall more costly to the Union economy than the benefit of the measures would be to the claimants. Therefore, the Commission may suggest the European Council to:
(1) Impose definitive anti-dumping measures for a duration of 5 years;
(2) Close the file without measures.
7. The European Council must decide on the imposition of any definitive measures within 15 months of the investigation being started, i.e. before 5 December 2013.
4. Conclusion
8. Chinese companies involved - including YINGLI GREEN ENERGY, SUNTECH POWER HOLDINGS, TRINA SOLAR AND CANADIAN SOLAR - have threatened a trade war and requested the Chinese government to respond to the EU ongoing anti-dumping investigation.
"China expresses its deep regret" according to the Ministry of Commerce in a statement posted on the ministry's website and quoted by Reuters: "The restrictions imposed on Chinese solar panels would not affect only the interests of the Chinese and European industry, but ruin the good development of the solar industry and renewable energy in the world," inviting the EU to promote "consultation and cooperation".
However, China's ministry of commerce hinted at the possibility of retaliatory trade measures in its response to the EU announcement. In August, Chinese polysilicon manufacturers and winemakers separately filed trade complaints in Beijing against their EU counterparts
The next EU-China Summit to be held on 20 September should be "intense".
1Notice of initiation of an anti-dumping proceeding concerning imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in the People's Republic of China (2012/C269/04).
