(Reuters) - "The United States slapped new import duties on solar panels and other related products from China on Tuesday (Tue Jun 3, 2014) after the Commerce department ruled they were produced using Chinese government subsidies, potentially inflaming trade tensions between the two countries."

Solar Trade Dispute: Let’s Hold China Accountable

Written by Gordon Brinser ... Publication: Solar Power World ... Monday, April 9, 2012

The Coalition for American Solar Manufacturing, which SolarWorld leads, is striving to remove unfairly traded imports from the U.S. market as a first step toward rekindling robust international competition, growth in U.S. renewable-energy manufacturing jobs and steady and sustainable gains in efficiency and affordability.

	Unless markets operate on principles of robust and fair trade and competition, without the negative effects of illegal overseas subsidies, there is no free trade. Moreover, the promises of solar energy manufacturing – energy security in a clean-energy world, growth in domestic manufacturing jobs

and their rich economic payoff, and solar made entirely according to high environmental standards – will shift beyond the United States’ reach.

SolarWorld and CASM believe in investing, producing and employing in the United States, which are both environmentally friendly and cost-effective. Why shouldn’t we? The National Renewable Energy Laboratories recently published a presentation concluding that Chinese producers face a 5% cost disadvantage, compared with U.S. producers, in manufacturing and delivering solar products to the U.S. market, when transoceanic shipping costs are included.

We believe in a future where technology and industry that American scientists and entrepreneurs invented and developed can thrive again on U.S. soil, employing Americans under decent and safe working conditions, producing solar according to high environmental and labor standards, and providing U.S. consumers with a reliable, accountable and secure source of energy. Our ability to do so should not depend on the actions of a foreign government’s five-year industrial plan.

Many longtime solar-industry participants – our coalition represents 150 employers of more than 14,500 U.S. employees – fully grasp the serious concerns posed by China’s centrally planned industrial strategy, launched just as solar is poised to go mainstream. Others, especially recent entrants, have misstated why SolarWorld Industries America filed trade petitions Oct. 19 to hold the Chinese solar industry accountable to the laws of international trade.

They have fixated on short-term pricing – as if China, having invested billions of dollars in mounting an export campaign to sell product at artificially low prices to wipe out competition, will hold prices low after it has succeeded. This fixation persists even as manufacturers around the world – including China – struggle under the weight of excessive manufacturing capacity that the Chinese government sponsored in its drive to flood foreign markets. Only companies that can count on long-term, strategic government sponsorship can hold out at such artificially low pricing.

It shouldn’t be this way. Government has no business intervening in foreign marketplaces. In fact, international and U.S. trade laws prohibit it, and we have asked the federal government to investigate China’s trade practices and subsidies and, if necessary, remove this distortive interference.

Sustainable competition, not a government-underwritten monopoly, optimizes efficiency, innovation and cost and price reduction long term.

The trade cases are founded on a core consensus within the world trade arena: While subsidies are not inherently improper, it is illegal for a nation to use them to ramp up production to grow well beyond the needs of domestic consumption, and then dump exports at prices below production costs into a foreign economy and thereby harming that foreign economy’s market and industry.

This is precisely what China is doing. Their strategy has unfolded at least since 2009, when the chief executive of a Chinese solar producer, now the world’s largest, acknowledged it in The New York Times in 2009.

China now has enough solar manufacturing to produce roughly 16 times more product than its domestic market demand. Virtually all of its production goes overseas. China’s subsidies – too numerous for even its own government to count – are fueling its export drive. Further, China is subsidizing its anticompetitive campaign using a variety of export subsidies, including guarantees, credit and insurance – all explicitly illegal.

Of course, short-lived profits from unfair trade can handsomely benefit a small number of people in a targeted country – but almost never the end-user. With solar, unfortunately, end users have not seen anything like the 40 to 50 percent declines in wholesale prices that have come since 2010. Moreover, neither the environment nor the American consumer will be long-term winners if China is allowed to continue violating international trade law.

Those who have built their fortunes on dumped and subsidized Chinese solar imports argue that the future growth of the U.S. solar industry depends on these illegally traded products. They are wrong from economic, environmental and rule-of-law perspectives.

The U.S. solar market and solar installations will continue to grow, with or without China’s unfairly traded goods. Solar is here to stay. The only question is whether U.S. solar manufacturing will be allowed to play a role, as its invention in the 1950s, in refining crystalline silicon solar manufacturing, innovating its products and leading the industry forward. In the alternative, China will dominate a new generation of technology that will reduce America’s dependence on fossil fuels. We will see our increasing dependence on our Far East energy source eclipse our future potential for greater energy security.

Chinese domination of this market would pose both short and long-term trouble. With little, if any, transparency China has exhibited a cynical approach to international trade in concrete ways, including its intractable currency manipulation, monopolistic tactics on rare earths, woeful environmental legacy, and horrendous safety record on consumer products, from pet foods to baby formula to drywall.

Until SolarWorld filed its trade cases last October, China’s strategic plans for solar unfolded precisely to plan, a testament to the Chinese government’s ability to execute its carefully controlled central planning. Indeed, even as champions of Chinese imports tout equipment and raw material exports that, until recently, headed East in impressive volumes, China’s government has made strides to corner these markets as well.

China’s plan to dominate the solar industry is straightforward enough to outline. First, provide billions of dollars of domestic subsidies to build massive excess manufacturing capacity. Then reap capital from U.S. stock exchanges without meeting U.S. securities requirements for transparency or accountability. Export as much product as possible while neglecting to develop a desperately needed domestic solar market. Overproduce solar by employing dirty energy and abusive environmental practices . Ship these so-called green products to the U.S. market in a manner that maximizes their carbon footprint. Sell them at prices so low that they undercut U.S. producers poised to sustainably and responsibly meet all domestic demand. Tap U.S. taxpayer subsidies while barring non-Chinese companies from access to the Chinese market or its subsidies. Drive U.S. producers to go out of business or stage hundreds of layoffs (at a dozen plants in the past two years). Purchase the production equipment of the failed manufacturers for pennies on the dollar. Finally, cement control over the formerly robust U.S. supply chain, including production of equipment and raw material.

These policies are as economically unsound as they are environmentally regrettable.

But in challenging China’s illegal trade practices, SolarWorld and its U.S. allies are on the right side of the law – and history. Solar manufacturing can and should take place in the major markets where it is sold. Domestic factories can and should grow thousands of jobs for decades to come. Legal and fair international competition can and should produce sustainable price declines. Solar manufacturing, of all things, can and should embrace sustainable environmental practices.

Most industry participants believe these outcomes warrant the struggle. SolarWorld has deep U.S. roots and many long-tenured U.S. solar-industry employees, together boasting industry relationships built over more than 35 years. For our leadership on this issue, we are proud to say we have broad support from hundreds of companies and thousands of U.S. workers, including many spread throughout the very segments – distributors and installers – that the Chinese importers claim to represent.

They, like us, are unwilling for the U.S. solar industry to raise the white flag. We are confident our trade petitions will benefit the entire U.S. solar industry when they restore a place for fair and legal trade, high production standards and robust world competition.

We are willing to fight for this all-American vision.