Following the U.S. Department of Commerce's (DOC) preliminary decision to impose tariffs on Chinese solar cells and modules imported into the U.S., the European Union (EU) may undertake a similar investigation into solar technology imported from China.
However, according to a new report from IHS iSuppli, it is unlikely that the EU will impose countervailing duties on China. Why is that the case?
‘EU laws set a higher standard than comparable laws from the United States before duties can be enforced,’ explains Glenn Gu, senior PV analyst at IHS." This means that Europe will be less inclined to actually slap on duties, and thus will not experience the same disruption in PV cell supplies expected in North America."
During the five-year period from 2007 through 2011, 122 anti-dumping cases were initiated by the DOC. A total of 72 – or 59% of these cases – involved China. Among all the cases involving all countries besides China since 2000, about half were denied or terminated, meaning that no countervailing duties or other penalties were imposed.
But for cases concerning China, only 16% were denied or terminated, with the majority of the cases then proceeding forward.
Unlike in the U.S., however, China accounted for just 42% of all the cases filed by the EU during the period from 2007 through 2011, amounting to only 37 cases in total. The EU historically has been less inclined to impose countervailing duties on Chinese imports. And while the European body has followed the U.S.' lead in initiating anti-dumping investigations in the past, the EU has rarely imposed duties, the report notes.
One major reason why the EU is less inclined than the U.S. to impose countervailing duties is the stricter set of legal requirements that must be met. To prove dumping, it must be shown that the activity in question meets Europe's community-interest test.
Under EU law, duties can be imposed only if the dumped imports are confirmed to have caused – or that they will cause – injury to an industry within the community. Conversely, it must be shown that the imposition of anti-dumping duties will not injure community concerns.
Finally, EU authorities must respect basic procedural requirements, including the right to due process of the aggrieved parties.
Such requirements present high hurdles that must be overcome before the EU can impose duties, the report concludes. As a result, it appears unlikely that Europe will actually slap countervailing duties on Chinese-made PV products that might result in supply disruptions for the region.