BRUSSELS, June 6 (Xinhua) -- A leading Chinese solar panel manufacturer, Trina Solar, sounded alarm over the devastating effect of the European Union's (EU) decision to impose punitive duties against Chinese solar products.
"The decision to impose import tariffs, even at a rate of 11.8 percent, will irreversibly damage the EU solar industry," Ben Hill, president of Trina Solar Europe, told Xinhua.
As approximately 70 percent of the value added of every solar panel installation is local, the EU industry will suffer from the European Commission's decision, which only four EU countries support, Hill said.
The remarks came days after the Commission decided to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China.
Starting from June 6, EU imports of Chinese solar products would be subject to a punitive duty of 11.8 percent until August 6, from when on, the duty will be raised to 47.6 percent if China and the EU can not sort out the dispute through negotiation.
Hill said the Commission's decision also runs counter to the testimonies of thousands of EU photovoltaic (PV) downstream and upstream operators, who have already been feeling the effects of the market uncertainty caused by the investigation and have warned that preliminary duties would threaten their survival.
He cited the study result of Prognos, an independent European research institute, which concluded that duties of 20 percent would cost the European economy up to 175,500 jobs and 18.4 billion euros of value added over the next three years.
EU downstream and upstream companies, Hill argued, do not enjoy the comfortable profit margins that the Commission refers to in the results of its preliminary investigation.
Quite the contrary, the EU's PV downstream industry operates on single-digit profit margins and they will be unable to absorb the cost of duties without significant adverse effects for their business and consumers of solar energy, he said.
"We also regret that the European Commission has failed to recognise that the EU PV industry has been facing severe structural challenges and that this, rather than the price of imports from China, has been the main reason why many companies have been experiencing severe losses since 2011," Hill said.
EU producers failed to invest in the cost-cutting and product development that would have enabled them to remain competitive once public support measures were withdrawn, according to Hill
"Anti-dumping duties cannot and should not attempt to address these structural challenges and will only serve to aggravate the uncertain situation of the industry," he said.
The European Commission holds that the EU PV industry will be able to help stave off an increase in prices and subsequent fall in demand by purchasing solar products from other third countries such as the Republic of Korea, Japan or the United States.
Hill refuted the argument, saying that, "even if prices for solar products other third countries are below prices for EU solar products, they will still be higher than the prices that Chinese solar producers were able to offer due to economies of scale and advanced technology."
Trina Solar also firmly denounced the European Commission's allegation that it is dumping products in the EU market.
"The common street definition of dumping is selling products below cost -- Trina has not done this," Hill said, adding that the Commission has a different and unfair definition.
As China is not considered a market economy by the EU, the Commission compared if the EU sales price (of exporters to the EU) was lower than the sales price of Indian products in the India market, according to Hill.
"With this comparison, they judge that we are dumping. We will continue to challenge this," he added.
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