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Solar panel anti-dumping UPDATE: 2 months for China and the EU to reach a deal?

  • United Kingdom
  • Competition, EU and Trade - Competition e-briefings

13-06-2013

On 4 June, the European Commission announced provisional anti-dumping duties averaging 47.6% which will be imposed on Chinese imports of solar panels. 

The provisional anti-dumping duties are effective from 6 June.  They apply at a reduced rate of 11.8% until 6 August, and will then rise to 37.2-67.9%, with importers that have co-operated with the Commission investigation subject to lower tariffs than those that have not.

According to the Commission, the fair value of a Chinese solar panel sold into the EU should actually be 88% higher (and in some cases up to 112.6% higher) than the price at which it is actually sold, but the Commission considers an anti-dumping duty of 37.2-67.9% is sufficient to cure the injury suffered by the EU industry.  The duty is an ‘ad valorem’ duty, meaning it is a percentage of the import value.

The amount of the duties is in line with that proposed by the Commission in early May.  But it will still come as a surprise to some.  There has been ongoing talk of a negotiated settlement involving the EU, China and the US.  Additionally, Germany – initially supportive of the duties – and Britain are leading the opposition to the imposition of punitive anti-dumping duties.

The Commission now has six months to complete its investigation.  The outcome could be ongoing anti-dumping duties, which would normally apply for a period of five years[1], and which may be higher or lower than the provisional duties.  The Commission has also indicated it is open to discussions with China about “other measures which would be equivalent to the 47.6% duty” – these other measures could take the form of price undertakings, i.e. undertakings not to sell below an agreed minimum price. 

In practice, China will be under intense pressure to negotiate a settlement within the next two months, since the higher duties applicable from 6 August will have a devastating effect on Chinese importers.  The Commission is also facing pressure from Member States and industry representatives.

Separately, the Commission is investigating whether the Chinese government is granting subsidies to solar panel producers which are causing injury to the EU industry.  A provisional decision is expected by 5 August 2013, and the Commission must complete its investigation by 5 December.  This investigation could also result in duties being imposed on solar panels imported into the EU, though should not result in ‘double jeopardy’, since a product cannot be subject to both anti-dumping duties and anti-subsidy duties aimed at dealing with one and the same issue.

See also our briefing published last month and the Commission press release



[1] In exceptional circumstances, these could apply with effect from 5 March 2013 – the date on which a Regulation to register imports of solar panels from China was published.

The 5 year period can be extended upon ‘expiry review’ by the Commission if there remains a concern that the dumping and injury caused by it will continue or recur.  Additionally, an interim review may be carried out (including at the request of a Chinese importer, after the measures have been in place for at least a year) if there is evidence the measures are insufficient/ineffective or no longer necessary.