Crisis, averted: EU and China manage to avoid a solar-powered trade war
posted at 1:01 pm on July 27, 2013 by Erika Johnsen
Over the past few months, the European Union and China have been in a bit of a tiff over their mutual involvement in the global solar-panel trade. Europe’s been feeling mighty upset that China has been in the habit of dumping cheap solar panels into the European market and royally messing things up for Europe’s domestic solar manufacturers, because China so heavily subsidizes their own solar industry that their producers are able to sell their panels at below-market prices. Ergo, the European Union threatened to impose duties on imported solar panels, and then the Chinese got ticked off, and then China threatened to impose tariffs on European wine imports — anyway, it was bad.
But, lo and behold — compromise, via the WSJ:
The European Union and China have reached an agreement on a multi-billion dollar trade dispute over solar panels, the EU said Saturday, bringing an end to weeks of fierce negotiations.
“I can announce today that I am satisfied with the offer of a price undertaking submitted by China’s solar panel exporters, as foreseen by the EU’s trade defense legislation. This is the amicable solution that both the EU and China were looking for,” said EU Trade Commissioner Karel De Gucht in a statement.
A price undertaking is a measure taken by an exporter to raise the price of a product in order to avoid anti-dumping duties.
The disagreement, which had threatened a broader trade war, involved EU import tariffs on China’s solar-panel equipment. Tariffs of nearly 48% had been set to start Aug. 6, the date the European Commission, the EU’s executive arm, set for the new tariffs to take effect.
The whole saga, of course, is pretty ridiculous, because what the EU and China were really fighting over is their race to see who can out-subsidize the other on the green energy front the fastest. Despite the EU’s accusations, plenty of EU countries have offered all kinds of shameless special treatment to their domestic solar industries, anywhere from direct subsidies and loan guarantees to tax credits and renewable quotas. Neither body has at all managed to build a healthy market; the solar industry still very much lives and dies but how much government assistance they receive.
It’s the same reason I’ve often scoffed whenever President Obama talks about needing to make the appropriate “investments” to make sure that China doesn’t get ahead of us and win the green-energy game, and that they somehow subsidize the solar industry but what he deems to be too much. Like we have room to talk.