US tariff on solar products threaten Durban talks

 

Xinhua, December 5, 2011

As nations are racking brains to reach an agreement on emission cuts at the ongoing global climate talks in Durban, the U.S. government's protectionist attitudes toward China's solar products could pull back the global green agenda by artificially charging green efforts with higher costs amid the world's economic woes.

Despite fierce opposition from China's government and "photovoltaic" (PV) industry, the U.S. federal trade panel on Friday unanimously voted to continue anti-dumping and countervailing probes on solar panels, the first such measure targeting new energy products. It also voted for a reasonable indication that U.S. producers have been harmed by the imports.

Such a conclusion, saliently under intensive pressure from a few interest groups, comes as expected, but it still betrays the insincerity of America, the world's top greenhouse gas emitter, in pushing climate talks while being indifferent to cutting emissions in an affordable way.

The success of China's PV industry owes more to its technological innovation and economies of scale than state subsidies. As producers have contended, they got land-use rights and loans at market prices. If considering the factor of a stronger yuan, their loan interest would stand even higher than the market average.

The availability of high-quality, low-priced panels in America is a blessing for the debt-ridden country's efforts to reduce emissions, and serves to avoid its green efforts being retarded by financial strains.

For the European Union, plagued by the global economic crisis, Chinese renewable energy products have the same significance.

Those undeniable truths, however, are outweighed by the "decent images" that the heavyweight U.S. solar panel makers are pursuing after they failed to sustain their businesses despite getting billions of U.S. dollars of federal loans, a scandal which aroused intense domestic controversy.

Citing Chinese imports as a key reason for its failure would only underscore their incompetence and heighten their embarrassment if the whole industry is disrupted by the steep duties that could be levied.

Alleging that the Chinese competition could endanger 100,000 U.S. jobs stands largely untenable, as a group of U.S.-based solar product firms that formed a coalition to counter the petition acknowledged that higher panel prices will make them lay off more jobs. Also, most American jobs in the solar industry are in sales and design instead of manufacturing.

While censuring Chinese producers benefiting from state subsidies, the U.S. makers applied double standards by selectively ignoring the millions of dollars in tax breaks and public subsidies that published data shows they themselves received.

Sadly, the protectionism of a few U.S. companies seems to be echoed by state provision, as the U.S. Senate has approved an amendment intended to ensure that "Buy American" requirements apply to all solar devices that power Defense Department property or facilities. Attaching the rules to a defense bill clears the way for asking contractors to use only domestically made panels.

As rich and poor countries continue in their spat at the Durban talks over funding and obligations in fighting climate change, the U.S. protectionist mind-set adds to the miseries of the negotiations, and offsets positive efforts made by other nations.

Although Chinese producers have said they would not pursue a trade war with the United States, it does not mean that they will not be wringing their hands over overt protectionism and unreasonable accusations.

But before any grave consequences are incurred, U.S. authorities need to calmly and objectively analyze their domestic industry, and avoid sacrificing the well-being of a bigger group in favor of winning votes for a handful of politicians.