Anyone who thinks Europe has a prayer of greater fiscal unity should take a look at a chart showing where member countries stand on imposing tariffs.
For the past few years, the EU has been running incentives to promote greater solar power use. The knock-on effect was that China suddenly began pumping out solar panels like crazy to meet the demand.
Recently, though, some EU countries with solar panel manufacturers of their own said the “bringing” had become “dumping.”
As a result, the EU approved a new 47% duty on Chinese solar panels yesterday.
But there was a huge divide between the two camps: more than half the EU’s 27 countries had concerns about the measure, according to Der Spiegel.
Per VoxEU’s Simon J. Evenett, Angela Merkel had said, “Germany will do all it can so that this won’t lead to import tariffs … That’s not something we believe in.”
Meanwhile, France’s industry minister commented: “Countries that use protectionism, and China is one of them, should accept reciprocal rules.”
Below is the aforementioned chart, from Evenett, explaining how this happened. It shows the history of member countries’ votes on antidumping bills from 1991 to 2003.
The pattern of countries that voted for and against may look familiar to you:
Yes, those were the PIGS, Europe’s economic basketcases, who voted overwhelmingly in favour of tariffs. It appears this breakdown has not changed in the intervening years.
This seems like a pretty basic question for a regional economy to answer: are you trying to lower the cost of finished goods, or intervene in the market to protect native businesses?
There’s no right answer of course: the U.S. imposed its own solar duties on China last year, despite the same kinds of counter arguments the Germans make: firms who purchase lots of solar panels are going to take a hit to their bottom line.
But it’s another sign that Europe will not soon grow closer together.
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