As the Commerce Department prepares to make its first ruling in SolarWorld's trade case against Chinese solar manufacturers next week, how will its decision affect the U.S. solar industry? During today's OnPoint, Timothy Brightbill, a partner at Wiley Rein and the lead trade lawyer in the SolarWorld case, discusses possible action coming out of the Commerce Department and the broader implications for the U.S. economy.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Timothy Brightbill of Wiley Rein. Tim is the lead trade lawyer of Solar World's case against Chinese manufacturers. Tim, it's nice to see you again.
Timothy Brightbill: Monica, good to see you again.
Monica Trauzzi: Tim, we had you on the show a few months back when the trade case was first announced and you walked us through why this large group of manufacturers had filed. What's happened since that initial filing back in October?
Timothy Brightbill: We had a very positive ruling in December from the International Trade Commission, which found unanimously, on a preliminary basis, that the U.S. industry has been injured as a result of the dump in subsidized imports from China. So that was a good ruling in December. Unfortunately, that's been about the only good news for this industry because there are companies that are continuing to go bankrupt or lay off workers or go out of business altogether. In the last two years, 12 U.S. companies making these crystal and silicon solar cells and modules have gone out of business or bankrupt or had significant layoffs. Then we've also learned, unfortunately, that the United States is in a serious trade deficit on these solar products. We had a healthy surplus in the year 2010 and that has swung to a heavy deficit, a billion and a half dollars in the year 2011, which shows you just how quickly this industry can be harmed by the Chinese imports that are unfairly traded.
Monica Trauzzi: The Commerce Department has delayed its first ruling on the case to next week. What does that delay on the decision mean for the amount of money that can be collected from the offending parties?
Timothy Brightbill: Sure. Well, the decision will come out, as you say, next Monday. We have also got a positive ruling from commerce called the critical circumstances ruling, which would impose the duties retroactive 90 days. So basically, any goods coming into the country now or since the start of the year will be covered by some combination of anti-dumping and countervailing duties. So, the delays do put off the date when that can happen, so there was a surge of imports late last year, partially in an effort to beat these duties and, unfortunately, those duties, the duties will not apply until January or so.
Monica Trauzzi: So, what are you expecting from Commerce next week?
Timothy Brightbill: Well, we think we've put a very solid case forward. It's a straightforward legal case. Next week only deals with subsidies and we alleged more than 30 subsidy programs, some in the billions of dollars, benefiting Chinese manufacturers of solar cells and modules and also benefiting the raw materials that go into these products. So, we think we have a really strong case that the Chinese government is unfairly subsidizing the industry and that will just be part one. The dumping ruling is not due until May, that will be very important as well. So, I think the industry should watch really what are the combined duties from the subsidies when that comes out next week, as well as the dumping preliminary margin in May.
Monica Trauzzi: The folks in the industry who oppose what you're doing say that you represent just a small portion, a small percentage of manufacturers. What percentage do you feel that you represent in this case?
Timothy Brightbill: Well, we represent a majority of the domestic solar manufacturing industry. In order to file a case like this, you have to show that you represent a majority of domestic producers, so we clearly have that. And, in addition, our coalition-we have added, since the case was filed, a number of suppliers, a number of customers; in fact, more than 160 companies and about 15,000 workers total covered. So, we have very strong support not only from the manufacturers, which are the ones most directly affected, but also from customers, from equipment suppliers across the board. So, not everyone agrees with us, but we have a majority of the industry.
Monica Trauzzi: There's been some talk about a negotiated settlement. What are the prospects for that? Is that something that's likely?
Timothy Brightbill: It's very unlikely actually. Since China joined the World Trade Organization in 2001, the United States has not settled one of these trade cases with China. And we think this is a straightforward legal case, again, if we can show dumping, subsidies and injury to the U.S. industry as a resolve. So we are not looking for a settlement, we'd like this case to go through to its conclusion.
Monica Trauzzi: The opposing side actually says that by imposing these tariffs the U.S. could see job losses, it could be a hit to the economy. So, why would the Commerce Department rule in favor of something that might actually hurt the economy?
Timothy Brightbill: Well, actually, I disagree with that premise. This industry is growing. The solar industry demand has grown, doubled each of the last two years. Solar is growing in the United States. This is one of the strongest markets globally and, in fact, that's one reason why China has targeted the United States to take over this market. So, there's going to be job growth regardless of what happens. It's just that these unfair trade practices have-are limiting that job growth. I mean, we think that with fair trade in place this industry is poised to grow, to create good manufacturing jobs, the kind of jobs that the administration should want to have here in the United States.
Monica Trauzzi: And what kind of support do you think you have in Congress and the administration?
Timothy Brightbill: We have very strong support. I mean, this is a legal case, not a political case, but we have more than 60 members of Congress that have signed letters to the Commerce Department and to the president on this case. We feel like we have very strong support in the administration and Congress as well.
Monica Trauzzi: We'll be watching next week to see what happens with the Commerce Department. I thank you for coming on the show and for the update.
Timothy Brightbill: Thanks very much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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