EU probes Chinese dumping of solar panels

New York Times

CHENGDU, CHINA — The European Union began Thursday the world’s biggest anti-dumping investigation in terms of value, a broad inquiry into whether Chinese companies have been exporting solar power products for less than it costs to make them.

The case covers imports from China worth $26.5 billion last year, a hefty 6.5 percent of all European imports of Chinese goods.

After exerting heavy diplomatic pressure for the European Union not to start the case, and after veiled threats to retaliate, the initial Chinese response Thursday was restrained.

Shen Danyang, the Commerce Ministry spokesman, said in a state- ment that China expressed “deep regret,” adding that the trade action would hurt not only industries in China and the European Union, but also the global development of clean energy.

The scope of the European investigation is unusually broad, applying not only to fully assembled solar panels, but also to imports of key components like solar cells and solar wafers.

If tariffs are applied, the breadth of the case would make it extremely difficult for Chinese companies to ship the components to Europe and then assemble them into finished panels there.

The anti-dumping case, which follows bankruptcies and factory closings by European and U.S. solar panel manufacturers, con- siderably expands a trade battle that has already become one of the biggest sticking points in trade relations between China and the United States.

The U. S. Commerce Department imposed preliminary anti- dumping tariffs in May of at least 31 percent on Chinese solar panels, in addition to preliminary anti-subsidy tariffs of 2.9 percent to 4.73 percent that were imposed in March.

The Chinese government has responded by accusing U.S. producers of polysilicon, the main material used in solar panels, of engaging in unfair trade practices and has threatened steep tariffs on the producers.

Alan Wolff, a trade official in the Johnson, Nixon, Ford and Carter administrations and one of the world’s most prominent trade lawyers ever since, said the EU’s anti-dumping case against solar panels from China was the world’s largest antidumping case ever, even adjusting for inflation.

The European Union trade case against Chinese solar panels differs from the U. S. solar panel case in several ways.

The European case is limited to anti-dumping, without i ncluding an anti-subsidy charge. By including solar wafers in addition to cells and fully assembled solar panels, the European case is also broader than the U.S. action, which covers solar panels for which either the cell was made in China or cells were assembled into the finished panel in China.