SolarWorld solar blog

Solar trade case announcement: Try to keep complexity simple

Posted 21 October 2011 12:00 AM by Ben Santarris, Head of corporate communications and sustainability, SolarWorld Americas

When SolarWorld and a coalition of six U.S. solar cell and panel manufacturers revealed we’d filed a trade case against China’s state-sponsored solar industry this week in the U.S. Senate Energy Committee Hearing, more than 50 people, mostly reporters, filled the room.

To no one’s surprise, the group had lots of questions about the first such case in the renewable-energy field. In a crowded hallway after the news conference, a throng of reporters literally backed Tim Brightbill, our lead attorney from the D.C. law firm of Wiley Rein, against a corridor wall as they competed to mine details. After all, the case involves a tangled mesh of subsidies that have enable China to undercut normal pricing, seize market share and wipe out competitors and their jobs.

Tim was superlatively precise, but the scene made imminently clear that the case would pit the media requirement for brevity squarely against the complexity of the facts.

Sound bites, in other words, will have to be just that: bites.

Tim brightbill fielding questions from reporters about the solar trade case against China
Tim brightbill (right) of Wiley Rein fielding questions from reporters about the solar trade case against China  

In reality, the world of geopolitical competition, commerce and aggression is more than a little complex. First, the trade petitions themselves number in the several thousands of pages in detailing trade, technology, production, business as well as Chinese government subsidies – dozens of them salient, dozens more subtle. Second, companies vying in international trade mount their competition from economies of radically varying business structures, political systems and social values.

Take China. Though a fierce trade competitor, it remains a Communist-run authoritarian state with a centrally planned economy and industrial complex. Unlike in the West, banks, utilities and many companies are actually or effectively government agencies. Standards of labor, civil, safety and product-quality protections are minimal and even less well-enforced. Moreover, without transparency, there is little accountability.

Still, the West so far has let the China’s green industry mount an illegal drive to wreck western manufacturers and work forces who meet higher U.S. standards. Further, the subsidy-fueled Chinese industry exports almost all of its production into the wide-open U.S. market, where they and western employers benefit more or less equally from all government policies, protections, even incentives. By contrast, virtually no western production, effectively, can go into China.

As head of corporate communications for SolarWorld and the company’s hands-on manager of the case, I have worked on a team of talented government-relations, public-relations and legal colleagues and associates on efforts not only to bring the case but also to convey our position – briefly.

Ben Santarris, head of SolarWorld communications & sustainability, addressing the media at the announcement of the solar trade petitions against China
Ben Santarris, head of SolarWorld communications & sustainability, addressing the media at the announcement of the solar trade petitions against China

So, here, I wanted to clear up – briefly – three incorrect assumptions that I heard reporters and others bring to their coverage this week:

  • We’re complaining about cheap Chinese production. No. We believe Chinese production costs approximate our own. Labor makes up a comparatively small part of overall costs. The Chinese must ship halfway around the world. At least in the recent past, China has imported silicon feedstock and manufacturing equipment from the West. Our labor productivity is higher.
  • Chinese subsidies are no different from U.S. subsidies. No. Ours are fractional, narrow and transparent; theirs are all-encompassing, bottomless and typically hidden – in violation of WTO requirements. Further, the three remaining U.S. producers of solar cells – SolarWorld, Suniva and Solar Power Industries – have received no federal subsidies.
  • If low product pricing is good for solar, Chinese tactics must be good for solar. No. If China seals a world monopoly, it will gain power and motivation to set prices higher. No reasonable observer should imagine that if China were allowed to continue piling billions of dollars into subsidizing artificially low prices to secure a monopoly that it would leave prices artificially low after succeeding. Also lost would be our renewable-energy security and jobs as well as the industry suppliers and their employees who would no longer need to operate in the West.

We surely all can agree that these are interesting times. In that light, I argue that we must test our assumptions and recognize we must grapple with new realities. Along our struggle to defend high-standard green manufacturing and jobs in the West, I aim to bring you some new insights.