SEIA unveils roadmap to U.S.-China dispute settlement

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The U.S. Solar Energy Industries Association (SEIA) on Monday unveiled a plan it says could settle the ongoing trade dispute between the United States and China.

Among the main points of the roadmap would be a fund created by Chinese companies that would benefit U.S. solar manufacturers directly and help to 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.

In addition, the Chinese government would agree to end its anti-dumping 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.

In return, the U.S. anti-dumping and countervailing duties orders would be phased out. The proposal also calls for a safeguard mechanism designed to offset any surge of Chinese solar modules into the U.S. market.

"This proposed settlement is a win all the way around," said SEIA President and CEO Rhone Resch. "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. 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."

SEIA said it had been working behind the scenes for months in Washington, D.C., and Beijing to resolve the current conflict and head off an escalation of trade sanctions, adding that there was currently "no end in sight to the ongoing solar trade dispute between the United States and China."

SEIA has 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. SEIA also maintains that 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.

A key provision of the settlement calls for the establishment 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.

The Institute would also serve as the primary vehicle for fostering long-term collaboration between the U.S. and Chinese solar industries, including joint research and development projects as well as collaboration on environment, health, safety and codes and standards initiatives.

SEIA’s 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 (WTO) eventually ruled against the United States and – as part of the settlement – a fund was established to compensate Brazilian farmers. Today, the U.S. 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."

SEIA is also pushing for the U.S. government "to 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."

The association said the plan "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."

U.S. Senator Patty Murray from the state of Washington welcomed SEIA’s efforts.

"It’s abundantly clear that the solar trade dispute between the United States and China is already costing jobs and stifling the critically important solar industry, so I’m pleased that American industry leaders have put forward a commonsense proposal to resolve this problem," Murray said.

"The ever-expanding solar energy industry supports thousands of good-paying jobs in Washington state, and continued development of solar technology is vital for our environment and the economy, so I’ll continue working with all the parties involved to find an equitable solution for American businesses and consumers."

If unresolved, the dispute could result in hundreds of lost jobs at REC Silicon’s state-of-the-art facility in Moses Lake, Washington.