China initiated proceedings against the EU with the World Trade Organisation yesterday (5 November), alleging that some member states are violating international trade rules with their subsidies to solar power.
The move is widely seen as a response to the anti-dumping probe launched by the EU against China in September. The probe is in response to complaints from European companies that Chinese companies are selling their photovoltaic components on the EU market for well below what it costs to make them.
The Chinese case, on the other hand, centres on the feed-in tariffs provided to installations that feed solar power into the grid. The Chinese government said in a statement that the plants using parts made in European countries are receiving extra subsidy, which violates WTO rules on national treatment and harms exports of Chinese solar parts. The statement did not specify which countries are involved.
The EU now has 60 days to come to a resolution with China. If no resolution can be reached, then China can ask the WTO to adjudicate. For the case against China, the Commission will make a decision about whether to take action against China by June 2013.