Analysis

China’s Uphill Battle in EU Solar Panel Case

Arief Budiman (Jakarta, Indonesia)

A top European Union last week rejected an appeal by Chinese solar panel companies to lift anti-dumping and anti-subsidy measures imposed by the bloc almost 4 years ago on imports of solar panels and related parts. “The court rejects all the applications and confirms all the definitive duties set by the Council,” the Luxembourg-based General Court of the EU said in a statement. Moreover, in an unrelated move, the EU executive decided to impose definitive anti-dumping duties on Chinese imports of heavy steel plates.

In December 2013, the EU imposed definitive duties on about a half of Chinese imports of solar panels from China to last for two years, which has become one of the biggest-ever trade disputes over dumping and unfair trade under the World Trade Organization international trade rules. The EU’s decision was a result of extensive investigations by the Commission, which found that the Chinese companies had been selling solar panels in Europe below their market price and had been receiving illegal subsidies, thus harming EU solar panel manufacturers.

26 Chinese companies affected by anti-dumping duties challenged the EU Council’s decision in 2014, arguing that the court should scrap the regulation, citing procedural inaccuracies in the anti-dumping investigations. The companies can still appeal that decision to the Court of Justice, Europe’s highest court. In the meantime, the EU executive said that it was locking in place the temporary duties, taxing Chinese heavy steel plate imports with duties ranging from 65% to 73%. “The Commission has responded forcefully and quickly to unfair competition, while at the same time ensuring that the rights of all interested parties have been protected,” the Commission further said.

The EU currently has more than 40 anti-dumping and anti-subsidy measures, targeting unfair imports of steel products, out of which 18 deal with Chinese imports. The European sector has suffered from overcapacity that has led to thousands of jobs losses and caused steel manufacturers around the world to seek government protection from tumbling prices.

In spite of this, in another separate but related development, EU Member States have rejected a plan to extend tariffs on Chinese solar panels, rebuffing the EU Commission as it seeks to tighten penalties against China for dumping products on European markets. The rejection of the Commission’s proposal is the first time that the executive has been dismissed since its powers to impose anti-dumping tariffs were introduced.

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