US Federal Agency Votes to Advance Solar Trade Probe

28 September 2017

The US International Trade Commission (ITC) said last week that a large influx of imported crystalline silicon photovoltaic cells and modules have caused “serious injury” to American solar producers, advancing the investigation to its next phase.

The agency determination, which saw a unanimous 4-0 vote, was part of an ongoing safeguard probe under Section 201 of the Trade Act of 1974, and was launched earlier this year in response to a request from Suniva Inc. and SolarWorld, two solar manufacturers based in the United States but whose parent companies are based abroad.

The request described a “disintegrating domestic industry” due to an unanticipated increase in imports from lower-cost overseas manufacturers in recent years, leading various domestic producers to request bankruptcy protection or significantly downscale their manufacturing efforts.

Their call for “urgent” relief has been backed by some lawmakers from Oregon and Georgia, the states where Suniva and SolarWorld’s have based much of their US production.

Going forward, a public hearing is now planned for early October, with a final report and recommendations due by mid-November, which will then be sent to the White House for a decision on next steps.

According to a US ITC fact sheet, the agency’s recommendations could take a number of forms, including duties, quotas, negotiations with the relevant countries, and tariff-rate quotas. Whatever the outcome, it would have to be time-bound, though this could go up to eight years in total.

Industry views mixed

Trade tensions on solar manufacturing are far from new, with investigations being conducted by the US, EU, China, and others in recent years in response to concerns of potentially unfair trading practices within this rapidly growing sector.

However, this new probe differs from more recent anti-dumping and countervailing duty investigations, given that it looks at imports from across the US’ trading partners, rather than focusing on a particular country, and also does not require a finding of “unfair” practices.

It does require that the federal agency release additional findings at the country level, however, for those partners that have trade accords in place with the North American nation.

SolarWorld had been one of the companies backing earlier, similarly high-profile probes into alleged dumping and unfair subsidies of solar products from China, with cases that had divided the American solar industry and raised tensions with Beijing.

Those cases did ultimately lead to the imposition of duties, which were subsequently revised in 2015. (See Bridges Weekly, 10 October 2012 and 16 July 2015)

The latest probe has also drawn a mixed reaction from the wider US solar industry, with some companies warning that imposing a global safeguard on imports could lead to higher prices of inputs into other solar manufacturing processes, along with hurting investments and jobs at a massive scale across the sector.

“An improper remedy will devastate the burgeoning American solar economy and ultimately harm America’s manufacturers and 36,000 people currently engaged in solar manufacturing that don’t make cells and panels,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA).

“Analysts say Suniva’s remedy proposal will double the price of solar, destroy two-thirds of demand, erode billions of dollars in investment, and unnecessarily force 88,000 Americans to lose their jobs in 2018,” she continued.

The SEIA describes itself as a US association for businesses working in the solar sector, with over 1000 member companies across the American solar value chain.

However, officials from SolarWorld Americas claim that thousands of jobs have already been lost from an influx of cheap imports, especially from China, and pressed for trade actions to address the problem.

“In the remedy phase of the process, we will strive to help fashion a remedy that will put the US industry as a whole back on a growth path. We will continue to invite the Solar Energy Industries Association (SEIA) and our industry partners to work on good solutions for the entire industry,” said Juergen Stein, SolarWorld Americas President and CEO, in a statement.

ICTSD reporting; “Solar panel imports ‘harm US producers,” BBC, 22 September 2017; “Is the US solar industry about to tear itself apart?” BBC, 21 September 2017; “Solar panel maker wins trade commission finding, tariff decision to go to Trump,” ARS TECHNICA, 23 September 2017.

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