BRUSSELS, July 30 The European Union's deal to
end a trade dispute over solar panels with China risks creating
a downward spiral of prices, further damaging the EU producers
it is designed to protect, their association said on Wednesday.
The EU agreed a year ago to allow up to 7 gigawatts per year
of Chinese solar panels imports free of duties at a fixed
minimum price of 0.56 euros ($0.75) per watt.
However, that undertaking includes a potential change to the
minimum price each quarter, based on a solar module price index
compiled by Bloomberg. The price was cut to 0.53 euros in April.
China's Chamber of Commerce for Import and Export of
Machinery and Electronic Products (CCCME) wrote last week to the
European Commission seeking to clarify certain aspects of the
undertaking, according to a document seen by Reuters.
EUProSun, which represents about 40 percent of EU producers
including Germany's SolarWorld, said CCCME's
clarification was in fact a rewriting of the deal and would
result in a continuous decrease of prices in Europe.
Milan Nitschke, EUProSun's president, told Reuters that
international prices had been stable since mid-2013, but the
minimum price had been cut because of the depreciation of the
dollar to the euro and a conversion of the dollar-denominated
Nitschke said the EU-China deal contained no reference to
currency conversion of the index, while there were references
elsewhere to exchange rate conversion of other items. China, he
said, was now seeking to rewrite the terms to include such a
"It was not in the undertaking. It is an index and it shows
what is happening in the industry, with prices already below
production costs. If we add another factor (currency), then we
distort it," he said.
EUProSun says the minimum price is designed to protect EU
manufacturers, but that it had failed to do so, with 20
companies having filed for bankruptcy, closed or been sold in
the past year.
The cut in the EU minimum price in April itself had an
impact on the index, Nitschke said, making a further reduction
in the minimum price more likely.
"Even if the currency goes the other way it is unlikely to
be enough because you have a downward spiral in operation," he
The European Commission was not immediately available for
($1 = 0.7462 Euros)
(Reporting by Philip Blenkinsop, Editing by Robert-Jan Bartunek
and Mark Potter)