According to WTO’s documents, Taiwan and South Korea have launched a demand for consultation or even compensation for the recent US safeguard tariffs on solar products.
Lately, according to foreign reports, except China, Taiwan is the world’s second-largest country for the export of solar PV cell and was involved in the solar trade war between the US and China. Thus, the government has submitted a complaint with the US under the WTO agreements.
Theoretically, according to WTO regulation, for any country that imposes safeguard tariff, it should try to reach an understanding with the other party and exchange views. If the countries can’t reach an agreement, the exporting country has the right to contest the trade sanctions, which is similar to the requirements released by South Korea last week. John Deng, representative of Office of Trade Negotiations, also confirmed the information on 30th that the demand for consultation has been launched and Taiwan’s right can’t be abandoned.
Understand the Situation First
The Ministry of Economic Affairs indicated that Taiwan’s reaction is mainly a result of the US’s decision to impose tariffs without providing any clarifications or details. With the help of the WTO, Taiwan hopes to understand how the US’s government is expecting to carry out its annual exemption and tax rate calculations. Currently, according to the regulation, the US should make a response within 30 days.
Unfortunately, according to the records of the past, WTO has rarely had a successful case in these matters. The Ministry of Economic Affairs has recently admitted that it would not appeal against the WTO easily. Jen-ni Yang, Director-General of Bureau of Foreign Trade, emphasized that she is not sure whether an official compensation can be received. The purpose this time is to figure out the management and execution of the import quotas, she said. If they can’t reach an agreement by 60 days, the official lawsuit process will be triggered. During the consulting period, the dealers’ rights will be protected without being affected.
Impact Limitation
According to the Bureau of Foreign Trade, Taiwan’s PV cell business will be impacted the most once the US tariff goes into effect. In 2016, Taiwan took up nearly 45.7% of the US’s entire PV cell import volume. Yet, according to the head of Taiwan’s Ministry of Economic Affairs, Jong-chin Shen, over half of Taiwan’s solar battery capacity is being boosted by local demand. As there is still a chance that the US will offer some exemptions, the overall impact of the country’s tariffs on Taiwanese exports may be limited in the long run.
If the US does in fact choose to be tough with its tariffs, the overall supply, demand and planning of the global solar energy industry would be disrupted. It is noteworthy that if Canada and Singapore, which have signed FTA with the US, are able to get away with it, they may attract dealers investing plants there. However, the government hasn’t received this kind of information from dealers yet.
(Media Partner: TechNews / Photo Source: Changhua County Government)