Transcript of "William Morin - GW Solar Symposium 2012"
Solar PV and US-China TradeWilliam G. MorinSenior Director, Government AffairsApplied Materials, Inc.GWU Solar Symposium – Economic and Policy Barriers to the Development of Solar Energy | 12 April 2012 External Use External Use
Solar Trade Case: The Basics Dumping: foreign producer sells a product in the United States at a price that is below that producers sales price in the “home market" or price below cost of production Countervailable Subsidy: foreign government unfairly subsidizes industry via direct cash payments, tax credits, subsidized loans and other (not all subsidies are prohibited) Commerce: Import Administration (DoC-ITA) investigates foreign producers and governments to determine whether dumping or subsidization has occurred and calculates the amount of dumping or subsidies USITC: ITC determines injury, considering all relevant economic factors (including the domestic industrys output, sales, market share, employment, and profits) Both Commerce and the ITC must make affirmative determinations on subsidies/dumping and injury (respectively)2 External Use
Solar Trade Case: Timeline 19 October 2011: Coalition for American Solar Manufacturing (SolarWorld, Helios, MX Solar, And Four Unnamed US CPV cell and module manufacturers) files case 8 November 2011: USITC preliminary hearing o 7 Nov petition to change scope to include modules made in China 16 November 2011: Commerce initiates AD case 2 December 2011: USITC votes 6-0 to find material injury (not just “threat of injury”) to the domestic CPV industry 13 December 2011: USITC issues staff report explaining 6-0 vote 30 January 2012: Commerce Department announces preliminary “critical circumstances” in the CVD portion of the case (90 day retroactivity) o Comparison of May-Jul vs. Sep-Nov 2011 and May-Aug vs. Sep-Dec 2011 yielded import growth >15 percent (>15 percent = “massive”)3 External Use
Solar Trade Case: Timeline 20 March 2012: Commerce imposes preliminary CVDs of 2.90 percent (Suntech), 4.73 percent (Trina) and 3.61 percent (all others) o Limits scope to cells made in China; no thin-film 17 May 2012: Expected announcement of Commerce preliminary determination in AD portion of the case 4 June 2012: Commerce scheduled to make its final CVD determination 11 June 2012: Commerce could – but will not – issue final AD determination 19 July 2012: USITC scheduled to make its final injury determination (assuming a final affirmative determination from Commerce) 26 July 2012: CVD order issued (assuming affirmative final determinations from Commerce and USITC) 5 October 2012: latest date for Commerce final AD determination 26 November 2012: latest date for orders to issue4 External Use
Solar Trade Case: Industry Context As a $90+ billion global industry, the list of solar PV-related trade issues continues to grow Potential SolarWorld filing in Brussels China unfair trade investigations o US state incentives (DE, MA, MN, NJ, OR, WA) o US polysilicon manufacturers (potential) Japan/EU/Canada WTO dispute over Ontario FiT domestic content requirement India’s NNSM local content requirements and potential AD/CVD case against Chinese solar producers Growing use of local content requirements or bonus schemes o Malaysia, Italy, Ukraine, Buy America Customs issues – challenge to US Customs’ decision regarding tariff classification of AC-ready modules (and previous bypass diode issue)5 External Use
Solar Trade Case: US-China ContextNo shortage of bilateral tensions Strategic: Taiwan, South China Sea, North Korea, Iran, Syria, Sudan, cyber attacks, natural resource competition, … Economic: currency, debt, industrial espionage Trade: $300 billion trade deficit, industrial policies (indigenous innovation), IPR, discriminatory standards, sectoral disputes (raw materials, rare earths, tires, chickens, wind, autos, steel wheels, sinks, wire, …) o China’s tit-for-tat trade cases (autos, US renewable energy subsidies in 6 states; threatened polysilicon case) o Recent White House creation of Interagency Trade Enforcement Center Do we really need another log on the fire?6 External Use
Lose-Lose or Win-Win?“To jaw-jaw is always better than to war-war” ─Winston Churchill, White House, 26 June 1954 Litigation and enforcement are part of the rules- based international trading system – and so are negotiations “The future of renewable alternative energy, and in this case solar energy, is too important to be left to be ‘solved’ by litigation. …Beijing and Washington have the means to work out a mutually and globally beneficial way to work out a solution to the solar panel trade case.” ─Alan Wolff, The New York Times, 20 March 20127 External Use
Potential Negotiating Pathways Global Solar Industry Statement on Government Support and Trade Competition (SEIA-led initiative) o Proposes a proactive and collaborative approach o Recommends the WTO develop “WTO Best Practices for Solar Support Programs” APEC Initiative o Working with Chinese Renewable Energy Industries Association (CREIA) and national solar trade associations o Consensus-based, public-private dialogue o Development of government support best practices o Multilateral path to improve bilateral trade dialogue o Chemical Dialogue and Life Sciences Dialogue EGSA – Environmental Goods & Services Agreement Global Solar Council (work in progress)8 External Use
Potential Negotiating PathwaysWorld Semiconductor Council as Model? Global solar PV industry faces issues similar to those threatening the semiconductor industry a generation ago – o technology advances, o changing market dynamics, o Government incentive programs for R&D and manufacturing, o intense national competition, etc. Creation of World Semiconductor Council (WSC) in 1996 brought together the national trade associations and governments to agree on a common set of approaches and a dialogue to minimize disputes. Analogy not exact, but it could bring together industry and government to craft “the rules of the road” to benefit the entire global solar value chain9 External Use
A Jaw-Jaw FrameworkSubstitute “solar” for “semiconductor” in the WSC’s statement ofpurpose and the applicability of this template becomes apparent: “The purpose [of the WSC] will be to promote cooperative semiconductor industry activities, to expand international cooperation in the semiconductor sector in order to facilitate the healthy growth of the industry from a long-term, global perspective. WSC activities shall be undertaken on a voluntary basis and shall be guided by principles of fairness, respect for market principles, and consistency with WTO rules and with laws of the respective countries or regions of each Member. The WSC recognizes that it is important to ensure that markets will be open without discrimination. The competitiveness of companies and their products should be the principal determinant of industrial success and international trade.”10 External Use
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