Trina exits EU price undertaking

Trina Solar said Friday that it was withdrawing from the European Union’s price undertaking (UT) and would continue to service EU customers through its overseas manufacturing facilities.

The European Commission accepted the UT, in which Chinese companies agreed to sell solar cells and panels in the EU at a price above a fixed minimum import price (MIP) after it had imposed anti-dumping and anti-subsidy duties on PV imports from China. Chinese manufacturers that did not accept the terms of the agreement faced high AD and AS duties, which for Trina Solar were 47.7% and 3.5%, respectively, to be applied for a two-year period beginning Dec. 6, 2013.

While Trina initially chose to join the UT, it has taken issue with the European Commission’s current interpretation of the agreement, which it says “unfairly limit the company’s growth potential in the European region, and are disruptive to the company’s ongoing global expansion strategy.”

In addition, the EU Commission said recently that it would initiate a review of the situation but maintained that the AD and AS and UT measures would remain in force.

Trina Chairman and CEO Jifan Gao, said, "We believe the current iteration of the UT agreement misinterprets the rules and scope of the original UT, and adversely affects the execution of our global expansion strategy.” Specifically, Gao said the prohibition of manufacturing modules in overseas facilities, regardless of whether the modules would be sold to the EU or to non-EU markets was “an obvious misapplication to the UT agreement.” He added that the MIP did not reflect current market trends in the solar sector, “particularly as average selling prices in major markets continue to decline at a faster than expected rate, with downward pressure anticipated to continue for the foreseeable future.”

As a consequence, the Chinese companies that remain in the UT have lost their competitiveness to non-Chinese rivals in the EU, he added.

“With our recognized brand name, advanced technology and established customer base, we believe our withdrawal from the UT will allow us to better develop our business in the region through our tariff-free overseas facilities and to regain market share under a more flexible pricing strategy,” Gao said, adding that Trina would continue its commitment to “fair market competition and a balanced trading environment that would help to achieve our mission of benefitting mankind with clean energy."