Chinese PV leading company JinkoSolar announced to exit European Union’s (EU’s) Price Undertaking (UT) agreement, or the “Minimum Import Price” (MIP) measurement on September 8. JinkoSolar’s withdrawal added pressure on the EU of how to cope with the trade dispute.
JinkoSolar’s decision was made on basis of careful strategic consideration. The company believes that the UT agreement is no longer conducive to the ongoing expansion of its business in the EU, expressing that trade protectionism only harms fair competition in the market, hinders the development of the entire PV industry, and hurts PV consumers.
"After carefully reviewing our EU operations, we believe that the current MIPs no longer accurately reflect the current market price environment given that average selling prices (ASPs) in all major EU markets continue to decline, and seriously erode our competitiveness in those markets,” stated Xiande Li, Chairman of JinkoSolar. “We feel our competitiveness and market power were being unfairly hampered and have opted to withdraw from the UT agreement.”
Chinese companies that are not covered by the MIP agreement will be imposed anti-dumping duties and anti-subsidy duties, which for JinkoSolar were 41.2% and 6.5%, respectively.
Trina Solar was the previous leading company that proactively announced to exit the EU MIP agreement. In December 2015, Jifan Kao, Chairman and CEO of Trina Solar, described the UT agreement as an “unfair agreement” so the company would voluntarily withdraw from it. Kao claimed that EU’s measures to China’s solar imports were unable to reflect the declining ASPs of solar products in the European market, neither do it help improve Trina Solar’s business expansion in the market.
Trina Solar stated that EU’s UT violated the market mechanism, and JinkoSolar shares similar options with Trina.
EU launched the MIP arrangement in August 2013 and the measure was originally scheduled to be expired after December 2015. However, EU ProSun accused that some Chinese PV manufacturers had violated the agreement, thus the EU Commission accepted and extended the measure by 15 month to March 2017. Meanwhile, the Commission has been conducting investigations on alleged violations and has removed more than 10 Chinese companies from the MIP agreement.
In 2015, Taiwanese and Malaysian PV companies were involved in the trade dispute between China and the EU as they were alleged of helping Chinese companies to circumvent the MIP restriction or anti-dumping and anti-subsidy duties. Ultimately, 21 Taiwanese and five Malaysian companies were certified as “genuine manufacturer” and were free from anti-circumvention duties.
This July, 35 European solar companies jointly sent a letter to the EU Commission, advocating to terminate the trade measures to China’s PV imports. They believed these duties and limitation were actually harmful to Europe’s PV industry.