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ECJ okays EU trade defence measures targeting Chinese solar panels

 

The Court of Justice of the EU has ruled that antidumping and countervailing duties applied to Chinese solar panels in 2013 are in line with EU law in an appeals case.

The timing of the General Court decision comes just few days ahead of a planned move by the EU Commission to extend these duties for another eighteen months.

The court case was brought by 26 Chinese and Canadian solar firms in February 2014 to whom a 47.7 percent duty rate applies. The General Court rejected their claims that the Commission acted in contradiction to EU law by using different calculations for different product components, namely solar cells vs entire solar panels, according to where they were sourced.

“EU institutions were right to consider that, in determining the normal value of the products concerned (solar panels) in the exporting country, the term ‘exporting country’ did not necessarily have to be defined in the same way for the entirety of the product, irrespective of its origin”, a readout of the case says.   

The court also maintained that “the EU institutions were entitled to view photovoltaic cells and modules as a single product. The common specific feature of cells and modules is their capacity to convert solar energy to electricity, particularly since cells and modules are intended to be installed in photovoltaic systems”, the EU court maintained.  

Chinese companies that had agreed to a separate price deal with the Commission were not subject to the duties. But “major Chinese exporters have withdrawn from the undertakings and are now subject to the duties”, Edwin Vermulst, an antidumping lawyer in Brussels, explains. This makes the ruling painful for these companies.

The duties expired formally in late 2015. The EU has maintained these duties for the duration of an expiry review. In December 2016, the EU proposed to member states that these duties continue to apply for another two years.   

Here the Commission failed to obtain sufficient support from member states. The latter are split over the usefulness and costliness of the duties. There are rumours that China is pressuring individual member states to oppose the measures. The case has gone to an appeal committee in the Council, where member states, yet again, failed to muster any clear majority in favour or against the extension of these measures. The Commission has moved to shortening the duration of the duties by another six months.   

The ECJ ruling is expected to strengthen the Commission’s hand as the Council takes a final decision on the extension of these duties in the early days of March 2017.  

Emmanuel Maurel, a French MEP known for his hard-line stance on trade defence towards China told Borderlex: “it is vital to maintain in 2017 a photovoltaic industrial base in Europe. It’s a matter of energy supply independence”.

Critics of the EU’s trade defence measures against solar panel say the measures slow down the EU’s uptake of competitive renewable energy.   

Christofer Fjellner, an MEP who has actively campaigned against the measures, said: “Two weeks ago, we voted to strengthen the emission trading scheme to fulfill Europe’s climate commitments in the Paris agreement”. By extending these duties “the Commission and member states make it more expensive to switch to green energy. If we are serious about our environmental objectives, we must change our trade policy as well”, so Fjellner.

 

By Iana Dreyer and Hermine Donceel.