WTO Rules U.S. Countervailing Duties on Solar Panels Violate Global Trade Rules


cellsManThe World Trade Organization (WTO) ruled Monday that U.S. countervailing duties imposed on a range of Chinese products, including solar panels, violated global trade rules by imposing punitive import duties.

Monday’s ruling by the WTO’s Dispute Settlement Body (DSB) stems from China’s August 20, 2012, request for the DSB to formally establish a panel to hear China’s grievances with the U.S.-imposed countervailing duties.  

The DSB’s three-member panel found that the countervailing duties imposed by the U.S. are inconsistent with certain aspects of the WTO’s Subsidies and Countervailing Measures Agreement (SCM Agreement), which is a fundamental element of the global 1994 Marrakech accord that also set up the WTO.  A summary report issued by the panel, as well as the panel’s complete report, can be found on the WTO’s website here.

The panel recommended that the U.S. “… bring its measures into conformity with its obligations under the SCM Agreement.”

As expected, the findings were welcomed by China, which immediately issued a statement through its foreign trade ministry MOFCOM that was distributed by Beijing’s trade mission in Geneva.

“China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises,” the English-language statement said.

The ruling on Monday follows WTO’s decision last week, which also went against the U.S. when the WTO found that the U.S. failed to make duty adjustments that would have avoided double remedies in 25 countervailing and antidumping investigations against China between 2006 and 2012.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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