China fires trade salvo back at US over renewables subsidies

May 26, 2012

China's Ministry of Commerce (MOFCOM) said Thursday that the US provided unfair government support and subsidies to its renewable energy companies, violating World Trade Organization (WTO) rules and creating barriers to trade.

Six renewable energy programs concerning wind, solar and power generation industries in five US states violated the WTO Agreement on Subsidies and Countervailing Measures and the General Agreement on Tariffs and Trade (GATT) 1994, the predecessor of the WTO, and distorted normal trade, the ministry said in a statement on its website.

The subsidies or refunds by the five states to the energy companies or users with budget ranging from USD100,000 to USD137 million are prohibited subsidies under the WTO subsidies agreement, and violate the regulations on national treatment under the GATT provisions, the ministry said in a separate document attached to the statement.

The six programs are Renewable Energy Cost Recovery Incentive Program of the state of Washington, Commonwealth Solar II program of Massachusetts, Ohio Wind Production and Manufacturing Incentive Program, Renewable Energy Incentive Program and Renewable Energy Manufacturer's Incentive Program of New Jersey and Self-Generation Incentive Program of California.

The ministry did not say in the statement whether it would take any measures against the US trade violations it had uncovered. Normally, the China Bureau of Industry Injury Investigation under MOFCOM would announce duties on product imports in question following the ministry's initial ruling.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) as well as under the All-China Federation of Industry & Commerce filed a petition related to the US measures last November.

"The US government's subsidies to its energy equipment manufacturers have greatly affected China's domestic manufacturers," Wang Yuehai, executive secretary-general of the CNECC, told the Global Times.

According to the China New Energy Chamber of Commerce, the value of multicrystal silicon China imported from the US reached USD2 billion in 2011 while photovoltaic solar equipment imports from US reached USD3 billion.