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ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Summary of the Picture is needed
CHINESE SOLAR PANELS Although voluntary export restraints are no longer allowed under WTO rules, this only applies to an agreement negotiated by governments and imposed onto exporters. Recently, a European Union-China trade dispute over a surge in Chi- nese exports of solar panels was resolved by the Chinese producers "agreeing" to limit their exports to EU countries below 7 gigawatts-worth of solar panels per year-along with a minimum price floor for those units. EU solar panel makers were disappointed, as this agreement forestalled the imposition of 47 percent anti-dumping duties on all Chinese solar panel imports (the threat that generated those concessions by Chinese solar panel producers). However, the imposition of the anti-dumping duties would have triggered a significant retaliation from China, whose officials had already drawn up a list of European products-includ- ing luxury fashion goods and wines-that would be subjected to stiff import duties into China. Chinese producers were persuaded to agree to the export limit and price floor instead, since this would allow them to keep the higher prices charged in the European Union. The main losers are European consumers, who will pay substantially more for solar power (and the environment).
Transcribed Image Text:CHINESE SOLAR PANELS Although voluntary export restraints are no longer allowed under WTO rules, this only applies to an agreement negotiated by governments and imposed onto exporters. Recently, a European Union-China trade dispute over a surge in Chi- nese exports of solar panels was resolved by the Chinese producers "agreeing" to limit their exports to EU countries below 7 gigawatts-worth of solar panels per year-along with a minimum price floor for those units. EU solar panel makers were disappointed, as this agreement forestalled the imposition of 47 percent anti-dumping duties on all Chinese solar panel imports (the threat that generated those concessions by Chinese solar panel producers). However, the imposition of the anti-dumping duties would have triggered a significant retaliation from China, whose officials had already drawn up a list of European products-includ- ing luxury fashion goods and wines-that would be subjected to stiff import duties into China. Chinese producers were persuaded to agree to the export limit and price floor instead, since this would allow them to keep the higher prices charged in the European Union. The main losers are European consumers, who will pay substantially more for solar power (and the environment).
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