SEMI Statement on the Recent China Solar Trade Case Ruling

Now is the Time for a Renewable Energy Free Trade Agreement

The preliminary determination of the U.S. Commerce Department to impose tariffs of between 31 and 250 percent on solar imports from China marks an inflection point for the global solar industry.  While SEMI supports the rule of law, there can be no doubt that these tariffs may have a serious effect on the adoption of solar PV in the U.S.   With a majority of U.S. solar panels coming from China, implementing these tariffs will result in higher prices on U.S. solar products, disruption of utility and other large-scale solar projects, increased risk for continued trade friction and retaliatory trade action, and most importantly, reduced adoption of solar power.

SEMI had taken a neutral position in the China trade dispute, encouraging all parties to work together on measures that would eliminate all trade and investment barriers to solar energy.

Now is the time to take an active position urging for the establishment of a global free trade agreement for renewable energy products.  This will not be an easy achievement nor will it be accomplished anytime soon.  However, a free trade agreement on PV and renewable energy products must be our ultimate goal in order to sustain a healthy global industry focused on replacing fossil fuels with clean, renewable energy sources.

The key model for such an agreement can be found in the World Trade Organization's Information Technology Agreement (ITA), currently celebrating its 15th anniversary.  In 1996, the ITA was adopted by 29 participating countries establishing the goal to eliminate all tariffs on information technology products and manufacturing equipment. The number of participants has grown to 70, representing 97 percent of world trade in information technology products.  At the time of its adoption, semiconductors and information technology had undergone years of similar trade friction as policymakers around the world attempted to encourage the development of new IT industries and promote domestic manufacturing.  The ITA was the culmination of the widespread recognition that free and open trade ultimately benefits companies and consumers in all countries.

The current trade dispute is just one instance of growing trade barriers that are proliferating and encumbering the deployment of renewable energy.  Other trade and market barriers have arisen in areas related to investment, government procurement, local content requirements, and conflicting standards and certification requirements.  PV solar and other renewable energy industries must begin the long and difficult process of developing a comprehensive and holistic world trade agreement that promotes free and open trade and accelerates adoption of renewable energy.