China Launches WTO Case Against EU Over Solar Dispute

China has filed an official complaint with the World Trade Organisation over alleged subsidies provided by some EU members towards the solar panel industry, reported the New York Times on Monday, in retaliation to an anti-dumping investigation by the EU against China earlier this year.

China has filed an official complaint with the World Trade Organisation over alleged subsidies provided by some EU members towards the solar panel industry, reported the New York Times on Monday, in retaliation to an anti-dumping investigation by the EU against China earlier this year.

According to Commerce Ministry spokesman Shen Danyang, the EU subsidies had “seriously damaged China’s photovoltaic exports,” claiming that China was also being discriminated against, despite being a WTO member.

[quote]”China considers that the measures are inconsistent with the WTO rules on national treatment and most-favoured-nation treatment, and constitute import substitution subsidies that are banned by the WTO,” wrote a statement by the Commerce Ministry, as cited by Xinhua.[/quote]

Although the Commerce Ministry did not name the specific countries targeted in the WTO case, the Financial Times believed that the solar power generation programmes in Italy and Greece may be involved. In 2011 and 2012, both nations authorised high “feed-in tariffs” to encourage solar power generators, on the proviso that the main components in the installations were produced within the EU or the European Economic Area.

“The Chinese government has the right and the responsibility to fight for a fair international trade environment for China’s solar industry,” added Shen in a statement.

But the NYT speculated that China’s move may have been motivated by the EU’s decision on September 6 to open its largest ever anti-dumping investigation into the imports of Chinese solar panels. Though the Chinese Commerce Ministry tried to dissuade the EU from the investigations, the EU proceeded nonetheless, prompting a similar investigation by China over European imports of polysilicon, the main raw material for solar panels, last Thursday.

Around 57 percent of China’s solar exports, worth around $20 billion, went to the EU last year, while some $7.5 billion worth of solar equipment went the opposite way. The start of the conflict began when the EU accused Chinese firms of dropping their prices by nearly 30 percent after a long period of over-supply.

On Monday, a WTO official confirmed to AFP that China was indeed bringing up cases against the EU in regards to Italy and Greece.

“China is claiming that certain measures affecting the renewable energy generation sector relating to the feed-in tariff programmes of EU member states, including but not limited to Italy and Greece, include domestic content restrictions and are inconsistent with the WTO rules,” he said, without offering more details.

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In the meantime, China’s Commerce Ministry have also urged fellow WTO members to put aside trade frictions over solar energy, emphasising the need for renewable energy in broader environmental concerns.

[quote]“Developing solar photovoltaic renewable energy is conducive to resolving the serious challenges of energy security and climate change facing humanity, in line with the common interests of all countries…States should focus on the long term, to strengthen industrial cooperation and the liberalization of international trade, rather than taking trade protectionist measures because of short-term interests,” a statement said.[/quote]