US: Parallel probes into whether punitive steps should be taken against China


The vote means that the USITC and the U.S. Department of Commerce (DOC) will proceed with parallel probes into whether punitive steps should be taken against the nation’s second-largest trade partner. Trade between China and the United States will likely exceed $400 billion in 2011.

In October, seven U.S. solar cell companies – led by SolarWorld Industries America, a subsidiary of Bonn-based SolarWorld AG – filed a petition with the DOC and the USITC, alleging that Chinese companies received illegal financial backing from their government and sold solar panels below-cost in the U.S. market. The seven American manufacturers of crystalline silicon solar cells and modules are now joined under the banner of The Coalition of American Solar Manufacturing (CASM).

"The ITC's unanimous ruling underscores what American solar manufacturers have argued for months: without any production cost advantage, dumping by Chinese solar manufacturers and massive subsidies by the Chinese government are enabling Chinese producers to drive out U.S. competition," said Gordon Brinser, president of Oregon-based SolarWorld Industries America Inc. and leader of CASM, adding, "Today's ruling further erodes the credibility of denials by Chinese manufacturers and their importer allies in this case."

In addition, CASM hailed a letter conveyed to President Barack Obama by six U.S. Senate Democrats and 53 House Democrats just before the vote, which emphasized the need to "ensure a level playing field for American businesses and workers – not just in the solar arena, but for all clean energy technologies – since many of the same issues confronted by the U.S. solar industry exist in other sectors as well. U.S. manufacturers and workers in the clean energy technology sectors are at a major competitive disadvantage as a result of these and other foreign government measures."

So far, CASM contends, China’s export drive has cost Americans about 2,000 direct jobs nationwide and many more at the subcontractor level. U.S. energy officials say China spent more than $30 billion last year to subsidize its solar industry. President Obama said last month that China has "questionable competitive practices" on clean energy and that his administration will proceed to enforce trade laws, when and if appropriate.

The U.S. concern about Chinese trade practices has been heightened by the controversy surrounding Solyndra Inc. – the Fremont, California-based solar panel manufacturer that received a $535 million federal loan guarantee before it filed for bankruptcy in September. Since then, the company has become a cautionary buzzword in the industry, representing the danger to American industry of unfair competitive trade practices, as well as the questionable due diligence surrounding U.S. Department of Energy loan guarantees.

In retaliation, two weeks ago, China's Commerce Ministry launched its own trade inquiry, into whether U.S. renewable energy subsidies represent an "unreasonable" trade barrier, in violation of World Trade Organization rules. Minister of Commerce Chen Deming stated, "Once there is any bad consequence from the investigation, we are ready to take measures."

At a Beijing press conference, the chairmen of China’s four largest solar companies – Suntech Power Holdings Co., Yingli Green Energy Holding Co., Trina Solar Ltd., and Canadian Solar Ltd. (which has factories in China) – appeared in support of their Ministry’s probe and warned that the U.S. anti-dumping and anti-subsidies investigation (and any restrictive punitive tariffs imposed as a result) would "unavoidably cause serious impairment to the sustainable development of the green energy industries as well as consumers' interests both in China and the United States."

The China-based solar executives also sharply rebuked SolarWorld, according to the Associated Press. "We applaud the support of the European Union and the U.S. government toward renewable energy. But we are very sorry that SolarWorld has applied such a double standard when they talk about subsidies," said Qu Xiaohua, chairman and CEO of Canadian Solar Ltd., claiming that the company receives funding from both the United States and Germany.

Finally, introducing another set of concerns to the mix, more than 100 U.S. solar companies and their employees formed The Coalition for Affordable Solar Energy (CASE) in advance of the United States International Trade Commission vote to argue that bargain-basement priced Chinese imports have promoted rapid growth of the industry and adoption of the technology by consumers. Participating companies include SunEdison, Recurrent Energy, Solar City, Solar Universe, and Westinghouse Solar.

"The solar industry is uniting in its opposition to SolarWorld's actions, which threaten to stall decades of solar industry growth and development," said Jigar Shah, co-founder of CASE and founder of Beltsville, Maryland-based SunEdison. We cannot prioritize three percent of American solar industry jobs over the remaining 97 percent. We cannot prioritize the fate of one company over the success of one of America's fastest-growing industries, particularly given its strategic importance to our nation's future."

"We demand a resolution to this trade dispute before irreparable damage is done to the great progress that has been made in the domestic solar industry toward making affordable solar energy a reality," said George Hershman, vice president of San Francisco-based Swinerton Builders Renewable Energy and a new CASE member. "We have over 1,100 employees working across the country who would be negatively impacted by higher solar panel prices. Let's not move backwards when together we can and should be making huge strides forward."

Results of the U.S. Department of Commerce’s preliminary countervailing duty investigation may be released as soon as January 12, 2012; its preliminary antidumping duty determination is scheduled to be announced on March 22, 2012.

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