The Solar Energy Industries Association (SEIA) has offered an industry-based compromise between the U.S. and Chinese solar industries, which it said could serve as the centerpiece for "a fair, negotiated settlement of outstanding issues, benefit end users, and encourage the proliferation of solar energy in the United States and globally."
"It would actually lower costs to Chinese manufacturers for the export of solar cells and modules to the United States, and it would improve U.S. manufacturers’ ability to compete fairly on an even playing field," said SEIA President and Chief Executive Officer Rhone Resch in a statement. “It would also eliminate current and future litigation risks and costs for both Chinese and American companies. But just as importantly, SEIA’s proposed settlement would benefit American consumers, as well as all consumers of solar energy, by holding down costs."
For months, SEIA has worked with government officials in Washington and Beijing to try to resolve the current conflict and head off an escalation of trade sanctions over Chinese solar panel imports. SEIA warned U.S. negotiators that any settlement similar to the recently-announced EU-China agreement would represent a "blow to the U.S. solar industry because of an expected increase in solar prices." The association also believes any resolution of the U.S.-China solar dispute must recognize the interests of all stakeholders, including American consumers, and not just one segment of the industry.
SEIA’s proposal includes:
- Chinese companies would agree to create a fund that would benefit U.S. solar manufacturers directly and help grow the U.S. market. Money for the fund would come from a percentage of the price premium Chinese companies are currently paying to third-country cell producers to get around U.S. trade sanctions, reducing costs and supply chain distortion for Chinese companies.
- The Chinese government would agree to end its antidumping and countervailing duty investigations on U.S. polysilicon exports to China, and remove the threat of artificial cost increases in a key raw material in the "solar value chain," benefiting not just Chinese solar companies but all users of solar energy.
- U.S. antidumping and countervailing duties orders would be phased out.
- A safeguard mechanism would be designed to offset any surge of Chinese solar modules into the U.S. market.
A key provision of the settlement calls for the creation of the Solar Development Institute, which would be funded by Chinese manufacturers. The institute, in turn, would focus its resources on expanding the U.S. solar market for all participants and growing the U.S. solar manufacturing base.
SEIA said its proposal is based on a precedent set during a 2002 trade dispute between the U.S. and Brazil over allegations of unfair American subsidies on cotton. The World Trade Organization eventually ruled against the United States and – as part of the settlement – a fund was established to compensate Brazilian farmers. Today, the United States pays about $150 million a year to Brazil’s cotton industry to avoid being punished by the WTO.
“While we are encouraged that negotiations to resolve the solar trade dispute are continuing in earnest, the discussions appear to be focused right now on a minimum price and/or quotas,” said John Smirnow, SEIA vice president of trade and competitiveness. “This is a misguided approach. Any settlement which includes these components would represent a significant step backwards for the U.S. solar industry and the solar industry globally.”
As an additional step, SEIA said the U.S. government should take all steps necessary to ensure that federal procurement opportunities are provided to domestic solar manufacturers in recognition of the importance of U.S. solar manufacturing to the nation’s long-term energy security.
However, another U.S. solar trade group, which has fought hard against what it says are Chinese solar panel manufacturing trade abuses, is not convinced that the SEIA's plan will work.
“While we appreciate the efforts of the Solar Energy Industries Association, we are highly skeptical of any settlement with China or Chinese companies given their history of predatory market and trade practices,” said Gordon Brinser, U.S. president of manufacturing for SolarWorld Industries America Inc. and head of the Coalition for American Solar Manufacturing (CASM).
“SolarWorld fought and won trade cases against dumped and subsidized Chinese products only to see Chinese companies use any and all means to circumvent the orders and avoid the lawful payment of antidumping and countervailing duties. These trade orders against China will be in place for years to come. We have no intention of giving them up unless and until China’s unfair trade practices are stopped,” he said. “Worse still, the Chinese government has responded by filing retaliatory cases against other U.S. industries such as polysilicon, just as it did in the solar trade cases in Europe. Retaliation is not a strategy that the U.S. government should condone.”
Timothy C. Brightbill, a partner of the Washington law firm of Wiley Rein LLP and counsel to SolarWorld, said “We support the U.S. government’s efforts to negotiate a solution with China that addresses all of China’s continued dumping, subsidies, and unfair trade practices. However, SEIA’s proposal does not accomplish this goal.”