China’s Trina Solar pulls out of European pricing scheme

Trina Solar, a global leader in photovoltaic modules, solutions, and services, has announced its withdrawal from the European Union Price Undertaking (UT) and will continue to service EU customers through its overseas manufacturing facilities.

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. Subsequently, 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 Minimum Import Price (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% and 3.5%, respectively, to be applied for a period of two years beginning on December 6, 2013.

At the time, Trina Solar chose to join the UT as a participating company and has duly complied with its terms and conditions. However, according to the company the current interpretations of the UT agreement by EU Commission unfairly limit its growth potential in the European region, and are disruptive to the Company’s ongoing global expansion strategy.

Furthermore, the EU Commission announced recently 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.

Mr Jifan Gao, Chairman and Chief Executive Officer of Trina Solar, commented: “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. In particular, 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 an obvious misapplication to the UT agreement.

“Furthermore, we believe the current MIP does not reflect the ongoing market trends in the solar sector, particularly as average selling prices in major markets continue to decline at a faster than expected rate, with downward pressure anticipated to continue for the foreseeable future.

“Consequently, the Chinese companies that are party to the UT have lost their competitiveness to their non-Chinese peers in selling to EU markets. With our recognised brand name, advanced technology and established customer base, 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.

“However, I would like to emphasise our continued commitment to fair market competition and a balanced trading environment that would help to achieve our mission of benefiting mankind with clean energy.”