Q: What are you filing today?
A: SolarWorld is filing antidumping and countervailing duty petitions with the U.S. Department of Commerce and the U.S. International Trade Commission (ITC). The petitions demonstrate that Chinese manufacturers are illegally dumping crystalline silicon solar cells into the U.S. market and are receiving illegal subsidies. The petitions are supported by the Coalition for American Solar Manufacturing (CASM).
Q: Who is CASM?
A: CASM is a coalition of seven solar companies that sustain thousands of U.S. jobs, directly and indirectly, and manufacture solar cells and panels in the United States. The coalition is led by SolarWorld, the largest U.S. solar manufacturer. Taken together, CASM companies represent a significant majority of U.S. production, with manufacturing sites in virtually all regions of the United States: Northwest, California, Southwest, Midwest, Northeast and South.
Q: Why is CASM filing this case now?
A: China’s predatory and illegal aggression is crippling the U.S. industry, and it is incumbent on SolarWorld and CASM to hold China accountable to world and U.S. trade laws in defense of American production and jobs. The companies and workers that make up CASM can compete with any solar producers in the world, but should not be forced to compete against the massive shipments of illegally dumped and subsidized imports supported by the entire Chinese government.
Q: What level of support do you have in the solar industry?
A: CASM represents a significant majority of U.S. crystalline silicon cell and panel manufacturing.
Q: Are all solar products covered in this case?
A: No. CASM is asking for relief only for makers of crystalline silicon cells, whether they are imported just as cells or assembled into modules or panels. These cases exclude thin-film products made from cadmium telluride, copper indium gallium selenide and amorphous silicon. This case also does not cover non-PV technologies such as solar thermal.
Q: How, specifically, have the alleged dumping and subsidies hurt U.S. employers?
A: The aggressive dumping as well as massive illegal subsidies from the Chinese government have cost the U.S. industry thousands of jobs in Arizona, California, Massachusetts, Maryland, New York and Pennsylvania, and have forced more than seven companies to close or downsize in the past 18 months. Chinese exports of solar cells and solar panels to the United States have risen more than 350 percent from 2008 to 2010. In July 2011 alone, imports of Chinese crystalline silicon PV panels and modules exceeded the volume imported in all of 2010. This surge has been the primary cause for a 40 percent decline in world prices over the past year.
Q: What are the next steps in the antidumping and countervailing duty cases?
A: Commerce has 20 days to decide whether to initiate the cases. If Commerce initiates, it will send questionnaires to the parties in the case. Commerce would then be expected to reach a preliminary determination and calculation of dumping margins in four to six months. If Commerce finds in favor of the petitions, it will begin collecting duty deposits equal to the antidumping and countervailing duty margins found. After the preliminary determination, Commerce will move into the final investigative phase which will include onsite audits and potentially a public hearing. Usually, Commerce issues a final ruling between two and six months after the preliminary determination.
The ITC will send questionnaires to domestic producers, foreign producers and importers immediately after the filing. Twenty-one days after the filing, the ITC will hold a preliminary conference where parties present testimony and answer questions. The ITC is required to make its preliminary injury determination within 45 days of the petition filing. Like Commerce, the ITC conducts a final investigation. A final injury determination usually occurs 12 months after the filing of the petition.
The petitions also request that Commerce retroactively impose duties on imports of Chinese products, due to a massive surge of cells that importers had reason to know were illegally dumped or subsidized or both. If Commerce finds “critical circumstances,” duties will be imposed on cell imports from China three months earlier than they would be imposed otherwise.
Q: What is dumping and what are illegal subsidies?
A: For purposes of antidumping investigations, dumping occurs when a foreign company sells a product in the United States at less than fair value. For purposes of countervailing duty investigations, illegal subsidies are financial assistance from foreign governments, provided to foreign manufacturers, that unfairly benefits the production, manufacture or exportation of goods in that country.
Q: When will the cases be concluded?
A: CASM believes the complete Commerce and ITC investigations will take about a year.
Q: Even if you win these cases, can American companies really compete against Chinese manufacturers?
A: Absolutely. Chinese manufacturers have no cost advantage over U.S. producers. Labor accounts for only 10 percent of solar panel production costs, and China actually imports U.S. raw materials and equipment to produce their solar cells. Further, China’s extra shipping costs and comparatively lower labor productivity make any Chinese cost advantage impossible without illegal subsidization and dumping.
Q: The Solar Industries Industry Association (SEIA) recently issued a report that says the American industry is strong and a net exporter to China. This case seems to say just the opposite. What is the real story?
A: CASM believes the U.S. industry has been significantly harmed by Chinese imports in ways that the SEIA report did not fully address. The SEIA report focused on the American advantage in the export of raw materials and less on the negative impact of Chinese subsidies for finished product. Without relief, U.S. production will continue to significantly dissipate at the loss of thousands more U.S. jobs, and exports of raw materials and equipments will go the same way.
Q: What kind of political support do you have?
A: There is broad and bipartisan political support for SolarWorld’s trade remedy cases. Further, CASM is confident that there is strong support in Congress and in the Obama administration for creating and sustaining green technology manufacturing jobs in America and for ensuring that our trading partners play by the rules they agreed to follow when they signed binding international agreements.
Q: How is this case different from last year’s complaint filed by the United Steelworkers?
A: The SolarWorld petition is much narrower and more specific. The steelworkers last year requested that the Office of the U.S. Trade Representative self-initiate a World Trade Organization case to halt potentially illegal Chinese activities related to the entire renewable energy industry.
Q: Why did you not file a Section 421 case?
A: There are a number of reasons why dumping and subsidy petitions provide a stronger remedy against China’s unfair trade practices. First, relief measures can be applied to Chinese goods sooner than under a Section 421 China safeguard action. In a Section 421 proceeding, relief is not imposed until the president authorizes it, which can occur between eight and twelve months after a 421 case is initiated. Further, authority under Section 421 expires after 2013, whereas an antidumping or countervailing duty order will remain in effect for at least five years. Finally, the Commerce and ITC processes are quasi-judicial, and their findings are based on and reviewable under U.S. and WTO law.
Q: Will this case go to the World Trade Organization?
A: If Commerce and the ITC find in favor of the petitions and apply penalties on Chinese manufacturers, the Chinese government could appeal to the World Trade Organization by objecting to the U.S. government findings on trade remedies.
Q: If successful, how will this case impact American consumers?
A: CASM believes this action will ultimately be advantageous to American consumers and workers. A successful outcome will mean more jobs in the United States. Moreover, the petitions demonstrate, Chinese manufacturers, with the assistance of government subsidies, are selling their solar panels at unfairly low prices to seize market share. If they gain a de facto monopoly of the U.S. market, thousands more American workers could lose their jobs.