China-EU PV dispute launches WTO dispute settlement procedure

On November 5th, China proposed to negotiate with the EU and its related member states under the WTO dispute settlement mechanism on the PV subsidy measures of some EU member states, and officially launched the WTO dispute settlement procedure.

Shen Danyang, a spokesperson for the Ministry of Commerce, said in a statement that the laws of some member states of the European Union stipulate that if the main components of a photovoltaic power generation project are originally produced in EU countries or EEA countries, the electricity produced by the project can obtain a certain amount or Proportion of feed-in tariffs.

The Chinese side believes that the above subsidy measures violate the provisions of the WTO Agreement on national treatment and MFN status, constitute an import substitution subsidy prohibited by the WTO Agreement, and seriously affect China's PV product exports and damage China's legitimate rights and interests as a WTO member. The Chinese government has the right and responsibility to strive for a fair international trading environment for its PV companies.

Shen Danyang pointed out that vigorously developing renewable energy such as solar photovoltaics is conducive to solving the severe challenges of energy security and climate change facing all mankind and is in the common interest of all countries. Countries should focus on the long-term, strengthen industrial cooperation, and open up international trade, and should not adopt trade protectionist measures for short-term interests.

Shen Danyang reiterated that China firmly opposes all forms of trade protectionism and will firmly exercise the rights of WTO members and safeguard legitimate rights and interests.

China’s move can be preemptive. Earlier on September 6, the European Commission issued a formal announcement to launch an anti-dumping investigation against Chinese photovoltaic cells. The case involving more than 20 billion US dollars is the biggest trade dispute between China and the EU, and the largest trade dispute in the world.

Subsequently, on September 25, a group of more than 20 European solar photovoltaic system companies filed a complaint with the European Union, accusing China's solar photovoltaic system companies of receiving government subsidies and demanding punitive import tariffs.

According to the regulations, the EU will decide whether to open the case within 45 days and is now close to the time window. It is somewhat unexpected that the Chinese Ministry of Commerce has resorted to the EU to subsidize PV products to the WTO.

A domestic PV company official told reporters that this should be one of China's means of countering the EU. The EU's anti-UV products against China, the amount involved and the impact on the industry are very huge, superimposed on China's polysilicon double-country against the EU. The Ministry of Commerce is gradually explaining to the EU and the WTO through laws and facts that the PV industry in China and Europe is closely related, and trade protection is not conducive to the development of the photovoltaic industry in the two economies.