China retaliates, finds US in violation of free-trade rules

According to Bloomberg, China’s Ministry of Commerce has identified five U.S. states which have violated free-trade rules. Meanwhile, Reuters reports that the trade case looks likely to move to Europe.

Citing a statement released on the ministry’s website yesterday, May 24, Bloomberg reports that the Chinese body has identified renewable energy programs, including those for wind and solar, in the states of California, New Jersey, Massachusetts and Ohio that reporetdly violate the World Trade Organization’s (WTO’s) policies and trade treaties. The ministry declined to elaborate, however.

The preliminary findings of the investigation, which began last November, have determined that six measures in the U.S. constituted prohibited WTO subsidies. At the launch of the investigation, Reuters reported that the Ministry of Commerce said the U.S. measures “violated the United States’ commitments under World Trade Organization rules, and are an unreasonable barrier and restriction on China’s renewable energy industry, reducing the competitiveness of Chinese products in the U.S. market.”

In related news, following an interview with Suntech’s Zhengrong Shi, Reuters has today reported that the U.S. anti-dumping investigation could move to Europe. “Anti-dumping tariffs by Europe, which accounts for 70 percent of sales for Chinese solar companies, ‘would have a lethal impact on China’s solar industry’, wrote the news agency, who was quoting Shi.

“European companies are preparing themselves for a trade case, anti-subsidy and anti-dumping, against China and Chinese companies,” Milan Nitzsche, vice president of SolarWorld, additionally told Reuters on Tuesday, May 22.

On May 17, the U.S. Department of Commerce preliminarily ruled that the People’s Republic of China (PRC) had violated fair trade policies by “dumping” photovoltaic goods at prices geared to give an advantage to its own manufacturers.

As a result, Suntech and Trina Solar received preliminary dumping margins of 31.22 and 31.14 percent, respectively. Fifty-nine other China-based exporters each qualified for a separate rate of 31.18 percent. The remainder of PRC producers, who do business in the United States, but did not participate in the case, received a cumulative preliminary dumping margin of 249.96 percent.

In response, CEOs from China’s four largest photovoltaic launched the Solar Energy Promotion Alliance yesterday, in order to provide a forum for module manufacturers to meet and further develop their industry. They said the Chinese photovoltaic industry does not accept the way DOC has classified it as a “non-market economy”.

In related news, the Coalition for American Solar Manufacturing (CASM) has called on the U.S. solar-industry trade associations to “fulfill their pledges of neutrality in a solar-technology trade dispute by ceasing to endorse avenues for China to evade full accountability to well-established world trade laws and agreements.”

The move came after the Solar Energy Industries Association (SEIA), in response to the preliminary tariffs, called for immediate trade talks and new agreements. Gordon Brinser, president of SolarWorld Industries America Inc., stated, “As a SEIA member, I am extremely disappointed that SEIA would call for a premature settlement of our trade dispute. SEIA has maintained that it would take no position in this case, but its actions speak louder than its words.”

A final decision is expected to be reached on July 19 (countervailing tariffs) and on or before November 19 (dumping margins). However, as reporter Cheryl Kaften wrote, “But stay tuned. According to a report in World Trade Online, in a surprise decision that leaves the ultimate status of more than 25 active U.S. countervailing duty (CVD) orders unresolved, despite the passage of bipartisan legislation aimed at preserving them, a U.S. federal appeals court last week declined to overturn the retroactive application of its December 2011 ruling that the Commerce Department cannot apply countervailing duties against imports from non-market economies (NMEs). That could make the … decision moot.”


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