U.S. Presses Trade Action Against India on Solar Energy

February 11, 2014 by  
Filed under Green Energy News

The U.S. filed a second complaint
against India’s solar-energy policies at the World Trade
Organization, reviving a year-old dispute between the two
nations.

Today’s action follows a case the U.S. filed in February
2013 at the Geneva-based WTO, saying India’s requirements for
locally made components on solar-energy products violate global
trade rules.

“These domestic content requirements discriminate against
U.S. exports” of solar cells and modules, U.S. Trade
Representative Michael Froman said today at a news conference in
Washington.

Officials from the Indian Embassy in Washington didn’t
immediately respond to a request for comment.

The U.S., which has supported its own solar-manufacturing
industry through loan guarantees, exported $119 million worth of
solar-industry gear to India in 2011, and sales have declined
since then, according to the U.S. trade office. In 2012, India,
the second-largest export market for U.S. solar producers after
Japan, plans to expands its solar-manufacturing industry by 20
times by 2020, according to the agency.

The U.S. trade office notified India today that it’s
requesting consultations at the WTO to resolve the dispute. If
the matter isn’t resolved in 60 days, the U.S. can request
creation of a special panel at the WTO to hear the case.

‘Political’ Message

Rhone Resch, president of the Solar Energy Industries
Association, a Washington-based industry group, said the U.S.
action was “justified and necessary,” according to a
statement. The National Association of Manufacturers, another
Washington-based trade group, said it was an important step in
leveling the playing field for U.S. workers.

“The main message is political, that the U.S. will not
turn a blind eye to strategic government support for a local
manufacturing industry in the developing world,” Jenny Chase,
manager for solar insight at Bloomberg New Energy Finance in
Zurich, said in an e-mail.

She said the U.S. action may be a pre-emptive move aimed at
India’s proposal to close a loophole favoring First Solar Inc. (FSLR)
of Tempe, Arizona. The company’s “thin film” solar modules
avoid India’s local content requirements by not using
crystalline silicon to convert sunlight to energy, Chase said.

Trade between the U.S., the world’s largest economy, and
India, the third-biggest economy in Asia, has increased fourfold
since 2005, S. Jaishankar, India’s ambassador to the U.S., said
in an interview at Bloomberg’s Washington office on Jan. 30.
Commercial ties can expand the “relatively small economic
relationship” between the nations, he said.

To contact the reporter on this story:
Brian Wingfield in Washington at
bwingfield3@bloomberg.net

To contact the editor responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net

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