China and EU Strike Deal on Solar Panel Imports
The world we live in today is one of globalized trade. Solar panel trade was recently in the news as a result of talks between the European Union’s trade commissioner, Karel De Gucht, and China. These talks were in response to China’s “dumping” of solar panels in European markets.
The term “dumping” refers to banks subsidizing an exported product so that manufacturers can sell their product below production cost. This practice is heavily frowned upon in international trade because it essentially allows one country to outcompete and destroy all of the companies in the same market in another country by artificially lowering its prices.
The two sides finally came to an agreement which sets a minimum price for Chinese panels of €0.56, or $0.74, per watt. Unfortunately, this price may still be too low for solar companies in Europe to compete with. It also appears that this agreement may be too late to save the European solar industry, as 15,000 solar jobs in Europe have already been lost.
The Obama administration came out with a criticism of the weak deal struck by Gucht, saying, “We believe there needs to be a global solution, consistent with our trade laws, that creates stability and certainty in the various components of the solar sector.”