Trade panel panel okays China solar panel unfair trade probe

WASHINGTON Fri Dec 2, 2011 11:52am EST

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WASHINGTON (Reuters) - A U.S. trade panel on Friday approved an investigation into charges of unfair Chinese trade practices in the solar energy sector, setting the stage for possible steep U.S. duties.

The U.S. International Trade Commission voted 6-0 that there was a reasonable indication that SolarWorld Industries America and other U.S. producers have been harmed or are threatened with injury by the imports.

The vote allows the Commerce Department to continue an investigation that could lead to both countervailing and anti-dumping duties on solar cells and panels from China.

Countervailing duties are imposed to offset government subsidies, while anti-dumping duties are used to negate unfair pricing practices.

SolarWorld and its coalition partners have alleged Chinese producers are undercutting U.S. prices by as much as 250 percent.

A preliminary decision on countervailing duties could come as early as January, although Commerce can delay a decision until March if it needs more time to complete its investigation.

U.S. imports of the solar products from China totaled $1.5 billion in 2010, up from $640 million in 2009.

"This is a positive step in restoring a competitive and sustainable international market" for solar energy products, said Gordon Brinser, president of SolarWorld.

SolarWorld is the U.S. arm of SolarWorld AG, one of Germany's largest solar product manufacturers.

Brinser blames the lower-priced Chinese product for the company's decision to close its Camarillo, California production facility and lay off close to 200 workers.

"We've seen direct harm ourselves from (China's) irresponsible market behavior," he told Reuters on Thursday.

A final decision on duties is a year away, although preliminary duties -- in form of bonds or cash deposits that importers are required to post -- often have a chilling effect on trade.

Shortly before the commission vote, a group of 59 U.S. lawmakers sent President Barack Obama a letter expressing their support for substantial duties on the Chinese imports.

"We urge you to take all available measures to expeditiously investigate these allegations and take swift and appropriate action based on those findings," the lawmakers said.

SolarWorld is asking the Commerce Department to find "critical circumstances" in the case, which would allow duties on some imports to be imposed retrospectively.

(Reporting by Doug Palmer; Editing by Andrea Ricci and Vicki Allen)

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