EU, China request WTO consultations over U.S. safeguards on solar cells

The requests from the European Union and China for consultations on tariffs from the United States on solar cells are the first step in the World Trade Organization (WTO) dispute process and follow similar requests by Taiwan and South Korea.    The European Union and China this week issued separate requests for dispute consultations at the World Trade Organization (WTO), after the U.S. in January decided to impose broad global safeguard duties on solar cells from various countries.
   The EU formally requested consultations, the first step of the WTO’s dispute settlement process, on Wednesday, one day after China’s request. The complaints follow other consultation requests by Taiwan and South Korea in January.
   Pursuant to a global import safeguard investigation under Section 201 of the Trade Act of 1974, President Trump last month ordered a duty of 30 percent on solar modules and cells in the first year of the tariff, to decrease by 5 percent each subsequent year, with duties to end in 2022.
   The first 2.5 gigawatts of solar cell imports imported in every year of the remedy are exempt from the higher tariffs.
   As for the countries that filed WTO complaints, 60 days of consultations are required, after which the respective governments can request the formation of a dispute panel to formally adjudicate the matter.
   “The aim of the consultations is, inter alia, to exchange views and seek clarification regarding the proposed measures and reaching an understanding on ways to achieve the objectives set out in Article 8.1 of the Agreement on Safeguards,” the EU said in its request.
   That article, among other things, states that WTO members “proposing to apply a safeguard measure” should “endeavor to maintain a substantially equivalent level of concessions and other obligations to that existing under GATT 1994 between it and the exporting Members which would be affected by such a measure.”
   The EU’s request states that the U.S.’s notification to the WTO of its safeguard decision identified the EU and “in particular its Member State Germany” as a major exporter of solar cells.
   China accused the U.S. of breaching its WTO obligations through its assessment of the safeguard tariff.
   In its request, China notes that it is exercising its right to discuss potential compensation for any adverse effects the safeguard might have on its trade in solar cells.
   “However, in the process of these consultations, China reserves the right to raise additional issues, make further factual and legal arguments, and pursue any other remedies provided for under the Safeguards Agreement and the Understanding on Rules and Procedures Governing the Settlement of Disputes,” the request notes.
   China said it hopes consultations can start either on Friday or Monday. The Office of the U.S. Trade Representative didn’t immediately respond to a request for comment.
   Additionally, China on Tuesday requested WTO consultations over U.S. global safeguard tariffs ordered for large residential washer imports last month, again saying it would discuss possible “trade compensation” due to any adverse effects the U.S. measure could have on Chinese trade in the product.
   Trump approved an in-quota 20 percent safeguard tariff for large residential washer imports in January.
   The first 1.2 million finished washers imported during the first year of the tariff will be subject to a 20 percent tariff, while imports within that threshold in year two and year three will incur tariffs of 18 percent and 16 percent, respectively.
   Imports in excess of 1.2 million finished washers in the first, second and third years will require tariff payments of 50 percent, 45 percent and 40 percent, respectively.
   China requested consultations on the U.S. washer safeguard measure start either on Friday or Monday as well.