An interview with SolarWorld Americas Head of Corporate Communications and Sustainability Ben Santarris on the DOC trade ruling

Ben Santarris. Image source: SolarWorld
Ben Santarris. Image source: SolarWorld

Ben Santarris represents SolarWorld Industries America Inc. as head of corporate communications and sustainability for the Americas. He works at the company’s headquarters in Hillsboro, Ore., which he joined as public affairs manager in late 2008.

He worked the previous eight years as a business journalist at The Oregonian, the last several years as business editor. He previously worked in various news editing and reporting roles in Bellingham, Wash., Seattle, Pennsylvania, Connecticut and Boston.

 

Solar Server: Can you summarize for our readers the specific grievances which have been addressed by both the AD and CVD rulings?

Ben Santarris: Yes, the Coalition for American Solar Manufacturing contends that China has so pervasively and generously subsidized all facets of business life for Chinese solar manufacturers that it has enabled them to sell at artificially low prices in foreign markets in ways that will undermine and destroy the domestic producers there.

We have seen so far 14 crystalline silicon solar manufacturers in this country either downsize and lay off workers or shut plants in the last couple of years. If you include thin-film producers, the number would be higher than 22 companies. That is a lot of American workers that are going without jobs. And this is not a matter of competition, but a matter of Chinese policy on exports.

The world community has agreed that this type of behavior is illegal, and that is because a government should not be able to intervene directly into the marketplace of a foreign country and hurt the industry in that economy. There is nothing wrong with competition; there is nothing wrong with subsidies. If they are used together, however, to underwrite exports and to use exports as a battering ram to break down competition in a foreign economy, that is not OK.

 

Solar Server: SolarWorld has stressed that trade action was necessary as the Chinese government supports an export-driven PV industry. The Center for Science and Environment in India has accused the U.S. government of subsidizing PV exports in a similar manner through the Export-Import Bank and the Overseas Private Investment Corporation. How would you respond to such allegations?

Ben Santarris: I really can't respond. These cases are so complex, and you would  have to really study the instance to understand. If India really has a concern on that front, it has a WTO-embraced right to bring a complaint.

I know that the Indian manufacturing industry is also talking about bringing a case against Chinese solar manufacturers. Those are not cases I’m involved in, and so I can't comment on the merits of those claims.

Solar Server: I guess the question is, how is Chinese government support fundamentally different from the actions of the U.S. government and other governments when they support exports?

Ben Santarris: I can really only comment on what is going on in our own industry. In our own industry, there are subsidies, all of which are available to suppliers of any national origin in our country, and they are not used by producers to be able to sell at artificially low prices in China. Conversely, the Chinese market is not open to American producers, or Western producers, nor are any of its subsidies. The only case that I am involved in is the one that U.S. solar manufacturers have brought against China, and I can't really comment on any other dispute.

It's a question of how subsidies are used, and how are they open. No Chinese subsidies are open to U.S. producers. All U.S. subsidies are open to all Chinese producers or producers of any other nationality. The Chinese subsidies are used  to heavily underwrite production and export of Chinese products into the United States.

And since the converse cannot be true, I don't understand where there is any ambiguity. The legal problem is using subsidies to underwrite harmful, destructive export campaigns. And that is what we are alleging, and now the Commerce Department has found for a third time to be true in our case.

 

Solar Server: I will note that loans offered through the Export-Import Bank are only open for U.S. products.

Ben Santarris: You are free to editorialize about it; I simply don't know. Early in this case, SolarWorld was accused of having accepted subsidies in Canada because a lender from India received loans from the Ex-Im Bank. That's absurd; we were not the project developer and therefore we received no loans.

That would be like saying that someone who is building a house and has bought lumber at a lumber store, that the lumber was subsidized because the home builder got a cut-rate loan from a bank. It's simply the wrong relationship to analyze.

 

Solar Server: Your opposition in CASE alleges that this trade action will lead to a trade war, and has noted that the Chinese are investigating U.S. exports of polysilicon. Can you comment the potential impacts of retaliatory actions by the Chinese government?

Ben Santarris: I can only say that it is an unfortunate practice that the Chinese have made, and it is an unfortunate misuse of the trade laws that the Chinese have made, that if any industry believes that there has been illegal trade practices, that they can expect a retaliatory threat, if not a retaliation in fact, to any legitimate case they might bring.

This whole concept of a trade war is nonsense. We have been the subject of a trade war for several years, since China has been aiming 95% of its production outside of its borders, since it is illegally subsidized, since it is being dumped at artificially low prices.

The trade war started when the Chinese government mandated that its industry would dominate this industry, and has followed suit. So where does it stop?

If you are not supposed to use the trade laws to hold a government accountable to its agreements under the WTO, then what are you supposed to do? Turn your back on your employees, your industry, your market, your mission and your shareholders and say. OK, well, we shouldn't try to seek any remedy because there might be retaliation by the Chinese government?

It's simply not a rational response.

 

Solar Server: Multiple market researcher firms have noted that the preliminary U.S. tariffs have caused Chinese PV manufacturers to source cells from Taiwan and have coincided with increased U.S. PV imports from Malaysia and other Asian nations.

If Chinese PV producers can legally comply with this ruling by easily sourcing cells from other nations for the U.S. PV market, how does this ruling benefit the U.S. PV industry?

Ben Santarris: It's a big question whether they can legally do that. Our contention is that if the trade practices are illegal, then the trade action should include not only cells but modules manufactured in China. And today the Department of Commerce decided that it couldn't close that loophole that it created when it redefined the scope in those terms.

Many Congress members and leaders have raised questions about how will the administration enforce these orders now that the loophole has not been closed. Now that the Department of Commerce has given its final determination today, we will be interested to see what answers the Administration gives those Congress members.

 

Solar Server: Does SolarWorld have any plans to take legal action to close that loophole?

Ben Santarris: Regardless of what answer the Congress members get to their concerns, any order from this case will be difficult to enforce until the loophole is closed. We immediately would move toward circumvention proceedings that would block the Chinese manufacturers from trying to circumvent the order.

Now that can take place only after a final order is written. You can't have circumvention before any order is written to circumvent. And that won't happen until and unless the International Trade Commission votes on November 7th on whether the industry has been harmed. At that point, the remedies that the Commerce Department has issued today would go into effect.

 

Solar Server: If these tariffs are upheld through the ITC, what do you think will be the long term impacts will be for both the U.S. and global PV industries?

Ben Santarris: I think it depends largely on what happens in the enforcement phase. How will this loophole be addressed? How strenuously will enforcement unfold?

It is important to remember that we are at a crossroads in the industry. The industry lies in ruins. The biggest company in the world, Suntech, is in a world of trouble. Not only did it lose a billion (USD) dollars in sales last year and it is on the hook for more than USD 2 billion in debt, but it has a matter of fraudulent assets totaling USD 690 million.

And by the way, we still have Western manufacturers going out of business or closing plants at a rate of one per week. So trying to guess the future beyond this week is extremely difficult to do. And anyone who makes a prediction, I think, is assuming they know more than they do.

Our goal all along is simply to get the distortions from the government of China out of the marketplace of the United States. The market keeps evolving and changing quickly along the way. So making a prediction about the future is not easy to do.

Meantime, SolarWorld is investing USD 27 million in new technology and manufacturing processes in Oregon to pull further ahead in the technology race. We obviously believe in U.S. manufacturing and workers.

 

by Solar Server International Correspondent Christian Roselund
October 10th, 2012