An agreement has been reached by the European Commission and the Chinese authorities in relation to the recent imposition by the EU of provisional anti-dumping duties on Chinese solar panels imports.

Following complaints filed by European solar panel manufacturers, the European Commission launched an anti-dumping investigation into exports by Chinese solar manufacturers of solar panels into the EU. This investigation culminated in a decision by the Commission to impose provisional anti-dumping duties on Chinese solar panels at the rate of 47.6 per cent as of August 6, 2013. For the two-month period from June 6, 2013 till August, duties were set at 11.8 per cent in the hope that negotiations would lead to an amicable solution with the Chinese authorities on the matter.

Despite acrimonious dissent on the part of some European solar panel manufacturers, it seems that some type of agreement has now been reached. The European Commission has received signed commitments from a large number of Chinese solar panel exporters to voluntarily cease the dumping and to maintain prices above a certain minimum. This commitment is not meant to fix prices at specific levels but rather to prevent them from falling below a certain minimum price. In return, those companies which are participating in this price undertaking will not have to pay anti-dumping duties. This undertaking will, however, apply only to an annual volume that covers part of the overall European market. Any Chinese exports exceeding this annual volume will still incur the average anti-dumping duty of 47.6 per cent as of August 6, 2013.

Any Chinese exporters not participating in the undertaking are also still obliged to pay duties at 47.6 per cent.

This deal, the European Commission has contended, will mean that the prices of 70 per cent of Chinese solar panel suppliers to Europe will increase while an anti-dumping duty of 47.6 per cent will still be imposed on the rest of the exports until 2015.

This agreement was intended to serve a dual-fold purpose: eliminating illegal dumping into the European market while at the same time ensuring a stable solar panel supply to the EU market in such a way as to meet the ever increasing demand of such a product by European consumers.

However, not everyone took a liking to the agreement reached, with some European solar panel manufacturers condemning the deal as being inadequate to safeguard them from their Asian counterparts. On the other hand, environmentalists have welcomed the compromise as being one that ensures a constant supply of environment-friendly products to European consumers.

Europe is China’s most important trading partner. Tensions between the Chinese and the European economies are there to stay as long as China seeks to increase the supply of the sophisticated products which European manufacturers produce and to export same into the European market. With both sides seeking to protect their own industries from unfair competition, allegations and imposition of anti-dumping duties by both the Chinese and European authorities will invariably take place. Constructive negotiations and compromises with the aim of reaching an amicable solution could, in most cases, be the only way forward in order not to disrupt the sound trading practices which exist between Europe and China.

mariosa@vellacardona.com

Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.