Solar

SolarWorld counsel Brightbill discusses second round of trade litigation against Chinese manufacturers

What is the impact of SolarWorld Industries' trade cases against Chinese solar panel manufacturers on the United States' solar industry? During today's OnPoint, Timothy Brightbill, a partner at Wiley Rein and lead counsel to SolarWorld, defends SolarWorld's second round of litigation and explains why he believes higher tariffs against Chinese manufacturers are necessary. He also weighs in on how vulnerable the U.S. solar industry is to competition from the Chinese market.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Timothy Brightbill, a partner at Wiley Rein. Tim is the lead counsel to SolarWorld Industries. Tim, thanks for coming back on the show.

Timothy Brightbill: Thank you, Monica. Great to be here.

Monica Trauzzi: So, Tim, you're now into round two of SolarWorld's trade case against Chinese solar panel manufacturers. You're seeking even higher tariffs against the Chinese now. Why is SolarWorld pursuing this second round of litigation?

Timothy Brightbill: What we're really seeking to do is close a loophole that was left behind in the first trade cases from 2012, where duties of about 30 percent were imposed on Chinese solar cells and modules. Unfortunately, the Commerce Department decided at the time that Chinese modules made from non-Chinese cells were exempt from the duties. So that's why we filed this new case, simply to ensure the products that're almost entirely made in China would be covered by duties, since those products are also unfairly dumped and subsidized. So the case itself actually covers both Taiwanese products, where the cells are made there, as well as Chinese panels if the inputs also come from China.

Monica Trauzzi: So is the issue that the Commerce Department did not do enough that first time around, or have you seen significant shifts in the market itself that require an update?

Timothy Brightbill: The Commerce Department imposed proper duties to offset unfair trade, but by leaving that loophole, it made it very easy for China to bring products in, claim that the cells were made in Taiwan or a different country and not have to pay those duties at all. So, here in June and July, Commerce has now imposed additional duties going up to 50, 60 percent on the products coming in that were in the loophole. Now that loophole should be closed.

Monica Trauzzi: At what point do the tariffs become so high that the market is unfairly skewed in the direction of SolarWorld?

Timothy Brightbill: Well, actually the market is doing great right now. The projections are that the United States is on pace for another record year of solar installations, 6.5 gigawatts by the end of the year, so demand continues to expand, and the good news is with these tariffs we see a recovery in U.S. manufacturing. We see companies adding jobs. SolarWorld is adding production, the kinds of things that you would hope a trade case would do is bring manufacturing and jobs back here to the United States.

Monica Trauzzi: Despite those growth numbers, however, the Coalition for Affordable [Solar] Energy stands squarely against what SolarWorld is doing, and they say your continued litigation is contributing to uncertainty in the marketplace. If a large segment of the solar industry continues to push back against what you're doing and they embrace competition and they're seeing more certainty, why does SolarWorld continue on this path?

Timothy Brightbill: Well, we're ready to fight for what is right, and we embrace competition as well. What we don't embrace is unfair trade practices from China. So when there are billions of dollars of subsidies, those need to be offset, and the law says that the United States is fully within its rights to impose duties to offset those unfair trade practices. So, we're seeing the recovery now. We're seeing a level playing field, which was SolarWorld's goal, and that's what we're fighting for.

Monica Trauzzi: How vulnerable do you consider the U.S. solar industry to competition from the Chinese market?

Timothy Brightbill: Well, I think the U.S. industry can fully compete. The next generation of solar products will be from the United States, as long as the subsidies and the dumping don't overwhelm the U.S. production that's left behind.

Monica Trauzzi: So the Chinese government has asked the Commerce Department to end the dumping investigation under suspension agreement. Talk a little bit about what that is exactly and under what terms SolarWorld would agree to that.

Timothy Brightbill: These kind of negotiated settlements happen very rarely, especially with China, which has a record of breaking these kinds of settlements and negotiations. But if China were to put a proposal on the table, SolarWorld and the U.S. industry are willing to look at that as long as it has basic requirements. There should be a minimum price set there. There should probably be a quota on Chinese products coming in, and this agreement would have to be enforceable through determining the physical properties of these cells and modules coming in. So if it's enforceable and if it's fair, the U.S. industry will look at it.

Monica Trauzzi: And is there a specific timeline that you would be looking at for an agreement?

Timothy Brightbill: Well, under the law, the Commerce Department would have to complete those negotiations by the time of the final determinations in December. So there's a relatively short amount of time to see if all sides can reach some sort of agreement that's enforceable and fair to the U.S. industry.

Monica Trauzzi: What's the end point for SolarWorld in terms of litigation, and at what point do you allow the market to just simply choose winners and losers?

Timothy Brightbill: Well, we're going to continue to fight to be able to compete. We're also going to address not only the unfair trade practices but any unfair cyber-hacking practices of China as well. There's been a grand jury indictment from May. We want to be sure that the U.S. government takes a strong stand that the Chinese government, when it hacks U.S. companies, that will not be tolerated.

Monica Trauzzi: We'll end it there. This digs into a big debate within the solar industry. I thank you for your time.

Timothy Brightbill: Thank you very much.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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