Real challenges behind the EU-China PV trade dispute settlement

This article addresses the implications and remaining challenges behind the seemingly happy ending of the recent EU-China trade dispute on solar products. First, the EU's choice of a specific trade defence measure - anti-dumping - was based on shaky arguments. Second, further trade disputes on green goods are very likely, in particular because China is increasingly implementing domestic support policies on green sectors, bringing down Chinese export prices. Third, trade defence measures could be adopted as an expensive option. Alternatively to this, the EU and China could consider setting up constructive and preventive mechanisms in order to stabilize trade and broaden their economic relationship. Policy relevance In July 2013 the EU accepted an undertaking by Chinese solar wafer, cell, and module manufacturers to fix minimum import prices for their products, along with a volume cap to be imposed on Chinese solar exports to the EU. In spite of the seemingly happy end of a trade dispute between the two major players in the renewables sector, we show that the possibility of trade disputes over low-carbon products in the near future cannot be ruled out. Drawing on the China-EU photovoltaic 'dumping case', we highlight some weaknesses in the EU's choice to resort to anti-dumping measures and emphasize the urgent need to invent new forms of trade dialogues between the EU and China as first-choice trade dispute settlement policies.