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Originally published September 23, 2013 at 5:58 PM | Page modified September 24, 2013 at 6:39 AM

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Solar-industry group offers plan to end China tariff fight

The trade dispute threatening the 500-employee REC Silicon plant in Central Washington might be diffused with a proposed settlement offered by the Solar Energy Industries Association.

Seattle Times business reporter

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Help could be on the way for REC Silicon and its 500 workers in Moses Lake.

The Solar Energy Industries Association (SEIA) proposed Monday a way to end a U.S.-China solar dispute that threatens the viability of REC’s massive industrial complex in Central Washington.

Under the proposal, China would drop its preliminary tariffs on U.S. raw material for solar panels, while the U.S. gradually would scale back its duties on Chinese solar panels.

REC, a member of the trade group, said it supports the proposal. Gov. Jay Inslee called it a creative solution that would help ensure Chinese and American industries “play by the rules and are not burdened by unwarranted restrictions.”

U.S. Sen. Patty Murray, D-Wash., another proponent, warned that unless a resolution is reached, hundreds of the plant workers could lose their jobs.

But there are critics of the plan. Among them is Timothy Brightbill, a Washington, D.C., lawyer who brought a trade case in 2011 against Chinese manufacturers on behalf of seven U.S. solar-panel makers, including the U.S. division of Germany-based SolarWorld, which operates a plant in Oregon.

“We’re very skeptical of any arrangement with the Chinese industry, given their history of unfair trade practices,” Brightbill said.

Norway-based REC ranks among the world’s top five producers of polysilicon, the main material in solar panels.

REC’s Moses Lake operation found itself in the cross-hairs of a global trade dispute this past summer when China imposed preliminary duties on polysilicon imports from the U.S. and South Korea.

REC received the steepest tariff rate, 57 percent.

The move was seen as retaliation for tariffs the U.S. government imposed last year on Chinese solar panels after finding they had been sold at unfairly low prices.

But the ruling left a major loophole that allows Chinese manufacturers to still enter the U.S. market duty-free. Because it applies only to panels made from Chinese solar cells, many manufacturers can skirt the U.S. tariffs by buying their parts elsewhere, mainly from Taiwan.

SEIA’s proposal calls for a new U.S.-based “Solar Manufacturing Settlement Fund,” which would benefit American solar companies by giving them money to expand production and pay down their debts, said John Smirnow, vice president of trade and competitiveness at SEIA.

Instead of paying “third-country” cell producers to get around the U.S. tariffs, Chinese manufacturers would channel some of that money into the fund. Details on how the money would be distributed haven’t been worked out.

Also, the Chinese government would agree to end its antidumping case against polysilicon imports from the U.S., and the U.S. would phase out its antidumping duties against Chinese solar panels.

Smirnow said the proposal beats ongoing discussions among government officials to solve the dispute by raising U.S. prices of Chinese solar panels.

“Our concern is that any increase in prices is not good for consumers,” he said.

REC general counsel Francine Sullivan said SEIA’s proposal is a step in the right direction.

“Any resolution needs to not add cost and be a win-win for China and the U.S.,” she said. “I think this is a path forward to that.”

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com. On Twitter: @amyemartinez

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