China hits out at ‘erroneous, dangerous’ WTO ruling in US solar cell row

China lambasted a World Trade Organization (WTO) ruling in a row with the United States over Washington’s measures to limit the import of solar panel cells, calling it “erroneous and dangerous” on Monday.

A WTO panel handed a victory to the US earlier this month, rejecting all four of China’s claims and saying the measures did not breach global trade rules. China said last week it would appeal the decision.

At the private meeting, China’s delegate expressed “deep concern with the systematically harmful findings made by the panel report,” according to a statement sent by the Chinese delegation.

“The erroneous and dangerous signal sent by this panel report to WTO members will lead to the abuse of safeguard measures and thus seriously undermine the rules-based multilateral trading system,” it added, saying the ruling could encourage protectionism.

The US imposed a system of tariffs and a quota in 2018 after US producers complained that imports of certain crystalline silicon photovoltaic cells had increased to such an extent that domestic industry risked serious harm.

The “safeguard” measures are due to be in place for four years, with annual reductions in the duty rates from an initial 30 per cent. The duties have applied to solar modules and, beyond a set quota, to solar cells.

China’s appeal will have no immediate effect since the top WTO dispute settlement body does not have enough judges to function. That is because the administration of former US president Donald Trump blocked judge appointments to the body and paralysed its functions.

“The United States is disappointed that China has now decided to press onward by appealing the panel report in spite of overwhelming evidence of the damaging effects of China’s non-market practices …,” the US delegate said at the same meeting on Monday.

Also, the WTO has set up a dispute-settlement panel on China’s anti-dumping duties on stainless steel imports following a complaint from Japan that the duties violate trade rules, the Japanese government said on Tuesday.

The panel was established on Monday in response to a request Tokyo made in August, arguing that China’s anti-dumping tax violates the WTO’s General Agreement on Tariffs and Trade.

In July 2019, China began imposing anti-dumping duties on stainless steel products from Japan, South Korea, Indonesia and the European Union, saying a surge in imports was hurting its domestic industry.