20130528_R4

Source: BBC Radio 4: Today Programme

URL: N/A

Date: 28/05/2013

Event: Chinese firms accused of "selling solar panels at below the cost of production in Europe"

Attribution: BBC Radio 4

People:

Paul Barwell: Chief Executive, Solar Trade Association
Simon Jack: Business journalist for the BBC
Justin Webb: Presenter, BBC Radio 4: Today Programme

Justin Webb: The Chinese premier Li Keqiang is in Europe at the moment - he's found himself in the middle of a trade dispute. Simon has that and everything else from the world of business.

Simon Jack: Thanks, Justin, thanks Evan. Good morning. It's not all smiles and handshakes for the Chinese premier - the European Commissioner for Trade is accusing Chinese firms of selling solar panels at below the cost of production in Europe. It's a practice known as "dumping", which can choke off local production, and they plan to impose duties of up to 50% from June 6th. Germany and Britain and the Netherlands are among 14 countries who oppose the Commissioner, Karel De Gucht's plans. Why is that? Paul Barwell is the Chief Executive of the UK Solar Trade Association. Good morning.

Paul Barwell: Good morning.

Simon Jack: Now, you've been lobbying for the Commission to withdraw its plans for the tariff, as well. Why?

Paul Barwell: Because the European solar industry has about 265,000 jobs at stake, and there's about 8,000 jobs in manufacturing, as part of a group of 42 companies called EU ProSun, who are trying to protect their interests. However, it's a real trade-off between them wanting to save their 8,000 jobs, where there's quite a high probability that we could lose anything up to 200,000 jobs of the total PV downstream sector. So it's going to be a real problem for us.

Simon Jack: Do you dispute that they are dumping? I mean, they currently produce, in China, more than the world's entire demand. Something - and have gone from zero to 80% of the European market in just a few years, some say that would be impossible without illegal state subsidy. You should be livid.

Paul Barwell: Well... [Laughs.] I mean, it is true that about 70-80% of product coming into Europe is derived out of China. But, you know, it has been a huge growth story from a Chinese perspective. You know, and it's high-quality equipment that they're manufacturing. Europe produce a lot of the machinery that was taken out to China to manufacture these panels and, you know, the argument as to whether they are dumping or whether they aren't dumping - it's very difficult to compare, because it is comparing the European cost of production with what is being produced out in India, because they can't use China as the comparison country because it's not classified as a market economy. So, you know, we're delighted that we've got good-quality low-priced equipment coming into Europe.

Simon Jack: Okay. What do you think will happen if the tariff is put in place? And in fact, it looks likely that it will go in, in June, and then it may or may not be repealed or scaled back in December. What do you think that will do?

Paul Barwell: Well, you're right. I mean, frustratingly, you know, it is 14 confirmed. We are also very confident that another three member states have also voted "No" for duties, including Germany and the UK. Four have abstained, that only leaves a few EU states that have actually voted for duties, and the reason for this is because it's the number of jobs that are at stake. It is the whole growth sector within Europe will be badly damaged if these provisional duties are put in place. And you're right, it does seem likely that Commissioner De Gucht, despite the democracy associated with the votes, will put these duties in place.

Simon Jack: It exposes quite an interesting problem in dealing with China, doesn't it. I mean, Germany, for example, is very much against this tariff - they rely on China for a huge amount of German exports, expertise and machinery. They initially supported this tariff but now it seems they'll do anything to avoid upsetting the Chinese.

Paul Barwell: I think that's right, yes. Which is interesting, because a lot of the 8,000 jobs from these 42 companies are from within Germany, so they started the initial lobbying for the European Commission to do this investigation. But if you look at all of the value chain - you know, all the installers, the inverter companies - you know, really the whole aspect of the value chain is at risk here.

Simon Jack: And it's interesting, isn't it, because the Chinese premier's only visiting Germany and Switzerland. Germany is lobbying hard to get this tariff removed, Switzerland are doing a bilateral trade deal with them. Interesting, Switzerland in 2008 refused to entertain the Dalai Lama. Is Britain still in the doghouse for having received the Dalai Lama, do you sense that's a real impediment to doing business?

Paul Barwell: Yes, I mean, there is a lot of politics going on, here. I mean, let's not forget, this is just one anti-dumping case. There is an anti-subsidy case coming, in a couple of months, on solar panels. There's also an even larger telecoms anti-dumping case. So what's going on here is that solar is being used as a pawn in this whole political process, and the precedent that's being set here is likely to be followed through with other anti-dumping cases.

Simon Jack: Okay. Paul Barwell, Chief Executive of the UK Solar Trade Association, many thanks for that.