In a major development, Trina Solar announced its withdrawal from the European Union (EU) Price Undertaking (UT) — to protect its business in Europe.
The solar major, however, will service EU customers through its overseas manufacturing facilities.
“We believe the current iteration of the UT agreement misinterprets the rules and scope of the original UT, and adversely affects the execution of our global expansion strategy,” said Jifan Gao, chairman and CEO of Trina Solar.
Trina Solar said the prohibition of manufacturing modules in overseas facilities, regardless of whether the modules will be sold to the EU or to non-EU markets is a misapplication to the UT agreement.
Trina Solar says the current Minimum Import Price (MIP) does not reflect the market trends in the solar sector, particularly as average selling prices in major markets continue to decline.
The solar company alleged that Chinese companies that are party to the UT have lost their competitiveness to their non-Chinese peers in selling to EU markets.
“We believe our withdrawal from the UT will allow us to better develop our business in the region through our tariff-free overseas facilities and to regain market share under a more flexible pricing strategy,” said Jifan Gao.
The background
On December 5, 2013, the European Council imposed anti-dumping (AD) and anti-subsidy (AS) duties on solar cells and solar panels imported from China. The European Commission accepted a UT whereby Chinese companies would sell solar cells and solar panels in the EU at a price above a fixed MIP.
Chinese manufacturers that did not accept the terms of the agreement faced high AD and AS duties, which for Trina Solar were 47.7 percent and 3.5 percent, respectively, to be applied for a period of two years beginning on December 6, 2013.
Trina Solar chose to join the UT as a participating company and has duly complied with its terms and conditions. The current interpretations of the UT agreement by EU Commission unfairly limit the company’s growth potential in the European region, and are disruptive to its expansion strategy.
Recently, the EU Commission decided to initiate review investigation during which the AD&AS and the UT measures will remain in force. Trina Solar believes this is contrary to the principles of free and fair trade and it is in its best interest to exit the UT.
Rajani Baburajan
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