The European Union published details of the EC’s negotiated compromise in the trade dispute, which goes into effect on Aug. 6, in its Official Journal on Saturday. The EU announced on Friday that it had accepted the compromise.
In its decision the EC provides details on how it reached the negotiated minimum price at which the modules can be imported free of duty. The Commission first checked to see whether a minimum price could be linked to indexes of certain commodities. Photovoltaic modules offer no simple correlation between commodity prices and retail prices, however. The EC therefore used indexes compiled by Bloomberg and pvXchange.
On the impact of the minimum price, the Commission writes: "In order to assess whether that price undertaking removes the injurious effect of dumping, the Commission has analysed, inter alia, the current export prices and the level of provisional duty. On that basis, it was concluded that the price undertaking removes the injurious effect of dumping."
As announced on Friday, specific minimum prices will not be made public, confirming that the process is not very transparent. According to media reports on Friday, the minimum price ranges between 0.56 and 0.57 per watt, with the ceiling on imports from China set at 7 GW.
The role of the China Chamber of Commerce
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) will organize and monitor the commitment of the Chinese manufacturers that have signed on to the minimum price agreement. The importing company must submit a certificate issued by the CCCME at customs. Chinese manufacturers that do not participate in the voluntary agreement or cannot produce the certificate will have to pay the announced duties. The import volume of the participating manufacturers will be "at annual levels corresponding roughly to their current market performance."
In addition to the decision, the Official Journal lists the companies that have agreed to the commitment in the appendix.
Several questions remain open for the industry:
- Imports of participating companies will reflect current annual levels. But what is the correct annual level in such a fast changing market?
- What happens if the targeted annual level is exceeded, and how will individual producers, in this context, be coordinated?
- Price indexes compiled by Bloomberg and pvXchange were used for the negotiated minimum price. The document does not explain how changes in the minimum price will be negotiated.
- How will modules be treated that are not manufactured in China nor the EU, but that contain Chinese cells?
The EU’s Official Journal can be found here. The first part documents the decision on the imposition of duties; the latter part details the compromise and lists the participating Chinese manufacturers.
Translated by Edgar Meza