The European Commission has reached a deal with China following a prolonged dispute on the ‘dumping’ of imports of solar panels, cells and wafers from China.

The EU has agreed with China’s offer of a price undertaking – a commitment made by exporters to respect minimum import prices – as foreseen by the EU’s trade defence legislation.

The presentation of an offer by more than 100 of China’s solar panel exporters results from weeks of intensive negotiations following the European Commission’s imposition of provisional anti-dumping duties on imports of solar panels from China on 6 June. The duties were foreseen to be imposed in two stages starting with 11.8 percent on 6 June and rising to up to 67.9 percent on 6 August in the absence of negotiations with China to address the problem.

Price undertakings can be considered a form of an amicable solution in trade defence proceedings permitted by the WTO and EU laws, and operate as an alternative form of measure to a duty. In the present case, the price undertaking will only apply to the first seven gigawatts of imported solar panels, with anything above this threshold incurring an average anti-dumping tariff of 47.6 percent and up to 67.9 percent for some exporters.

The Commission on 2 August 2013 adopted a decision to accept the price undertaking as well as a regulation exempting these participating companies from the payment of provisional anti-dumping duties. Both legal acts have been published in the Official Journal and enter into force on 6 August.

As a consequence, those Chinese companies participating in the price undertaking will be exempted from paying any anti-dumping duties as of 6 August, whereas those companies not participating will pay the increased anti-dumping duties that were announced in June.

The amicable solution that has now been reached is expected to result in a new equilibrium on the European solar panel market at a sustainable price level, according to a statement issued by the EU Trade Commissioner. Some European PV installers and project developers will welcome the result. However, the European solar manufacturers led by EU ProSun have already announced that they would appeal against the deal, fearing that effectively 70 percent of the EU solar market would be awarded to manufacturers from China. Most likely no legal steps will be taken before 6 December 2013, when the final measures will be imposed.