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Solar Energy Industries Association
February 5, 2014

TO:     All SEIA Members

From: Rhone Resch, President and CEO

Re:     SEIA’s Response to New U.S. Trade Investigations

On December 31, 2013, SolarWorld Industries America (SolarWorld) filed antidumping (AD) and countervailing duty (CVD) petitions against crystalline silicon PV products from China and Taiwan.  In response, the U.S. government initiated formal investigations.  While SEIA supports a rules-based trading system and the right of manufacturers to file AD/CVD petitions, we strongly oppose these investigations.

Just because a party has the right to litigate, doesn’t mean they should.  Many times, there are better alternatives to litigation, such as mediation.  In this case, a negotiated settlement ― which addresses SolarWorld’s competitiveness concerns while ensuring the continued growth of the U.S. solar market — is the clear better alternative to litigation.  SEIA will, therefore, continue the work it began 18 months ago to reach a negotiated solution while opposing any further escalation of the U.S.-China solar trade conflict, including the new U.S. investigations against China and Taiwan.

  1. Why We Oppose These Investigations

We oppose these investigations because they could significantly increase the cost of solar energy in the U.S. market, which, in turn, would have a severe adverse impact on the entire U.S. solar industry.  And certainly, a negotiated solution is a much better alternative to litigation.  The recent growth of the U.S. solar industry is, in part, attributable to the tremendous drop in PV module prices.  Indeed, just last week the National Solar Jobs Census 2013 (2013 Solar Census) revealed that U.S. solar employment grew by over 20 percent from 2012-2013 and that total employment now stands at nearly 143,000.

If imposed, the tariffs sought by SolarWorld, in excess of 165 percent for China and 75 percent for Taiwan, could result in a sharp increase in the cost of solar energy in the United States.  Solar energy would then become less competitive with other energy sources like natural gas and wind and the demand for solar would fall, resulting in a significant loss of jobs across the solar supply chain.

Importantly, SolarWorld is the sole petitioner in the new investigations and represents only a very small portion of the more than 32,000 U.S. solar manufacturing jobs and an even smaller portion of the more than 143,000 total U.S. solar jobs.  With respect to manufacturing, the 2013 Solar Census makes clear that most U.S. solar manufacturers are benefitting from solar energy’s increased cost competitiveness, and manufacturers “remain optimistic about future employment growth, with over 50% of firms expecting an almost 9% increase in employment over the coming 12 months.”  2013 Solar Census.  The new investigations, however, are already beginning to cloud this optimism. 

  1. Coordination of the Industry’s Response

Since the initiation of the original investigations in 2011, SEIA has worked to achieve a negotiated solution which recognizes the interests of the entire solar supply chain and not just a handful of manufacturers.  Indeed, over the past 18 months, SEIA’s Trade Committee developed a settlement proposal which has received broad support within the industry and is, we believe, the best path forward.  SEIA has also held a series of webinars, organized conference programs, drafted written materials, held member phone calls, and issued a variety of materials to educate members and the public on the broader U.S.-China solar trade conflict and the need for a negotiated solution. 

More recently, and given the potential for these investigations to cause serious harm to the overall U.S. solar industry, SEIA’s Federal Policy Committee adopted the following Trade Committee recommendations:

  • Publicly oppose SolarWorld’s new trade petitions;
  • Provide informal assistance to respondents’ (defense) counsel in the U.S. International Trade Commission’s (USITC) preliminary investigation;
  • Continue to publicly oppose any effort to impose minimum prices and/or quotas on the U.S. market;
  • Increase efforts to establish industry-led negotiations based on SEIA’s settlement proposal;
  • Build congressional support for SEIA’s settlement proposal or an outcome that takes into account consumer interests and supports increased deployment of solar in the United States; and
  • Tailor SEIA’s PR efforts to (i) oppose any new litigation or responsive trade measures, whether in the United States or China, and (ii) elevate support for a negotiated settlement.

Upon adoption of the above policy direction in early January 2014, SEIA staff immediately contacted member respondent companies and their counsel with an offer of assistance.  Staff has subsequently provided a variety of support measures including, for example, direct industry and trade expertise, industry data, and research reports.  SEIA’s Trade Committee is also holding daily phone calls and communications to ensure close coordination of the industry’s response.

  1. Communication to Members

SEIA’s first public statement regarding the new petitions made clear that the industry opposes any further escalation of the U.S.-China solar trade conflict.  SEIA also published a CEO blog post, “Expanded Trade Dispute Would Harm US Solar Industry.”  On January 8, 2014, SEIA held a members-only webinar to provide an overview of the petitions and potential implications for solar importers and consumers.  The webinar New U.S. Solar Trade Petitions – Potential Implications & SEIA’s Response has been archived to SEIA’s webpage and can be accessed at SEIA Trade Webinar Archive.  The archive includes a 1.5 hour audio presentation, Q&A, and power point presentation.

On February 18, 2014, SEIA will host another webinar to provide a summary of the USITC’s February 14, 2014 preliminary determination, discuss any next steps by the U.S. Department of Commerce, and highlight importers’ rights and responsibilities in the event duties are imposed.  SEIA will also provide an update on U.S. market implications and SEIA’s advocacy efforts in support of settlement discussions.  You may register for the February 18th webinar at Trade Update – What Happens After the USITC’s Preliminary Vote?  I encourage you to participate.

SEIA’s public relations efforts to oppose the new investigations and encourage settlement will also include:

  • Additional SEIA staff and member blog posts and opinion editorials which (i) highlight SEIA’s opposition to the new investigations and the expected adverse impact of more litigation, and (ii) encourage support for negotiations;
  • A new webpage on SEIA’s website which highlights (i) the benefits of international trade and the global supply chain, and (ii) the expected harm to the U.S. solar industry from the escalating trade conflict; and
  • The use of social media tools to highlight SEIA’s opposition to any new investigations and the need for a negotiated solution to the broader U.S.-China solar trade conflict.
  1. Legislative and Executive Branch Outreach

Since the time of the original petitions in 2011, SEIA has had dozens of meetings with key legislative and Executive Branch officials, including Members of Congress and their staff, Cabinet members, and senior Administration officials from the White House, Office of the U.S. Trade Representative, U.S. Department of Commerce, U.S. Department of Energy, and U.S. Department of State.  Over the next few weeks, SEIA will build upon these advocacy efforts and organize additional meetings with Members of Congress, congressional staff, the White House, and the Office of the U.S. Trade Representative to highlight:  (i) SEIA’s opposition to the petitions; (ii) the expected adverse impact of new investigations on the U.S. solar industry, including other U.S. solar manufacturers; and (iii) the need for a negotiated solution to the broader U.S.-China solar trade conflict which recognizes the interests of all solar stakeholders.

SEIA will also actively encourage congressional and state-official letters to the Obama Administration in support of a negotiated solution, but one that recognizes the interests of all solar stakeholders.

  1. Research

SEIA’s Research Department was closely involved in the development of SEIA’s settlement proposal.  The Research Department has also worked with industry analysts to assess the impact of the 2011 trade investigations on the U.S. industry and is now in the process of estimating the potential impact of the new investigations.  The Research Department has also responded to several member requests for information and data used to defend against the new investigations.

Going forward, the Research Department will:

  • Continue to support respondents in defending against the new investigations;
  • Conduct a cost benefit analysis of various settlement proposals; and
  • Conduct new research and analysis to fully understand the adverse impact of new AD/CVD orders on the U.S. solar market.
  1. Settlement

SEIA’s trade-related work over the past two years has focused on achieving a negotiated settlement of the broader U.S.-China trade conflict which recognizes the interests of all solar stakeholders.  As noted above, SEIA has developed a mutually-satisfactory settlement proposal which seek to address U.S.-China competitiveness concerns while ensuring the continued growth of the U.S. solar market.  SEIA’s settlement proposal takes into consideration the interests of the entire solar supply chain and would result in termination of the:  (i) existing U.S. AD/CVD orders on PV modules containing Chinese cells; (ii) Chinese AD/CVD orders on U.S. polysilicon; and (iii) new U.S. AD/CVD investigations against solar products from China and Taiwan.

In working to develop a win-win solution to the broader U.S.-China solar trade conflict, SEIA has built important, collaborative relationships between U.S. and Chinese government officials and solar industry representatives, including SolarWorld.  These relationships will be critical in helping to achieve a negotiated solution.  SEIA will build upon this work by:

  • Increasing advocacy before the White House and Office of the U.S. Trade Representative in support of negotiations;
  • Identifying new opportunities for collaboration with China’s solar industry and government officials, e.g., the China Chamber of Commerce for Machinery & Electronics and the China Renewable Energy Industries Association; and
  • Continuing discussions with SolarWorld to (i) encourage SolarWorld’s active participation in negotiations, and (ii) identify potential settlement options, other than a minimum price/quota regime.
  1. Key Events Calendar

SEIA will continue to provide Member Updates at key decision points throughout the investigation.  As mentioned above, SEIA will host a webinar on February 18th to discuss the USITC’s preliminary determination and any next steps in the investigations, registration is available at Trade Update – What Happens After the USITC’s Preliminary Vote?  I encourage all of our members to participate.

For your convenience, we have included the following Key Events Calendar, assuming a full investigation.  Important dates over the next six months include:

  • February 14 – USITC preliminary determination (if affirmative, the U.S. Department of Commerce (DOC) will proceed with its preliminary AD and CVD investigations);
  • March 28 (estimated) – DOC CVD preliminary determination (potential CVD liability attaches upon issuance of an affirmative finding by the DOC); and
  • June 11 (estimated) – DOC AD preliminary determination (potential AD liability attaches upon issuance of an affirmative finding by the DOC).

Both the March 28 and June 11 dates noted above may be extended at Commerce’s discretion.

Petitions Filed December 31, 2013 December 31, 2013
DOC Initiation Date January 22, 2014 January 22, 2014
USITC Preliminary Determinations* February 14, 2014 February 14, 2014
DOC Preliminary Determinations** June 11, 2014 March 28, 2014
DOC Final Determinations August 25, 2014† June 11, 2014
USITC Final Determinations*** October 9, 2014 July 28, 2014†
Issuance of Orders**** October 16, 2014 August 4, 2014†

NOTE: Commerce preliminary and final determination deadlines are governed by statute.  For CVD investigations, the deadlines are set forth in sections 703(b) and 705(a)(1) of the Tariff Act of 1930, as amended (the Act).  For AD investigations, the deadlines are set forth in sections 733(b) and 735(a) of the Act.  These deadlines may be extended under certain circumstances.

†Where the deadline falls on a weekend/holiday, the appropriate date is the next business day.

* If the ITC makes negative preliminary determinations of injury, the investigations are terminated.

**The effective date of Commerce’s preliminary determinations may be applied retroactively by 90 days in the event (1) the Petitioner alleges critical circumstances, and (2) both the USTIC and DOC render affirmative critical circumstances determinations.  Petitioner, however, has not yet alleged critical circumstances.

***This will take place only in the event of final affirmative determinations from Commerce.

****This will take place only in the event of final affirmative determinations from Commerce and the ITC.

Calendar information provided by U.S. Department of Comment, International Trade Administration



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