U.S. Imposes High Duty on PV Products from China — Sets the Tone for Future Trade Interaction
By Taylor Sholler, SEMI Americas
On December 16, 2014, the U.S. Commerce Department announced a final determination in the antidumping duty (AD) and countervailing duty (CVD) investigations related to imports of certain crystalline silicon PV products from China. With the ruling, the Department imposed duties averaging 50 percent and set an aggressive tone for future interaction on an issue that has embroiled the two nations since 2012. While this decision was not a surprise to industry, it is a clear sign that a grand resolution will be a laborious undertaking.
The global solar industry is not unique in facing growing pains, of which trade disputes are a common symptom. Other technology and capital-intensive industries, ranging from aircraft to autos to semiconductors and more, have experienced similar bouts of upheaval. Economic downturns and high unemployment tend to exacerbate tensions among trading partners and present government policymakers – and industry – with tough choices for action. Among these actions are trade enforcement cases, which are an integral part of the global trading system. So, too, however, are trade negotiations.
Later this month, the last preparatory negotiations on the Environmental Goods Agreement (EGA) will take place in Geneva. Fourteen nations, accounting for 86 percent of the world’s trade in environmental goods, will come together to finalize goals and table specific items to be included in negotiations on an ambitious pact that seeks to reduce tariffs and liberalize trade on technologies needed to protect the environment.
The EGA was borne out of the 2012 APEC Economic Leaders' Meeting in Vladivostok, Russia, at which time an agreement to reduce tariffs on 54 environmental goods was reached. Representatives from all 21 APEC economies approved the list and committed to reduce applied tariffs on these goods to five percent or less by the end of 2015. Of the most valued products APEC leaders included, PV cells and modules near the top of the list.
In this vein, PV products are high on the list of priorities for U.S. negotiators of the EGA. SEMI has long supported the inclusion of solar items from both an environmental standpoint and as it relates to the global trading relationship. Both the U.S. and China are a party to the EGA. With solar’s inclusion, duties on PV exports to and from China will be eliminated and this strategy has the greatest potential to resolve the trade dispute and calm tensions between our two nations.
Global trade policies serve no less a fundamentally important function in the solar PV industry than in any other industry sector. Many companies throughout the PV supply chain are highly dependent on exports and work with a range of customers around the world. International market opportunities are critical to the success of this industry. Accordingly, SEMI has long advocated for a strong, effective and enforceable rules-based international trading system that promotes free and open trade with all parties acting in line with their commitments. A formalized, global accord such as the EGA is exactly what the market needs to reach its full potential. SEMI believes the solar industry would benefit greatly from duty-free in goods and services and will continue to work with U.S. officials to ensure a meaningful conclusion is reached in the negotiation of the EGA and that PV products are a mainstay of such an accord.
If you have thoughts or questions related to trade policy or want to know more about how your company can actively engage U.S. officials on solar trade, please contact Taylor Sholler, manager of Public Policy, SEMI Americas, at Tsholler@semi.org
March 17, 2015