| Abstract: | At the end of July 2013 the photovoltaic (PV) trade conflict between China and the European Union was resolved through a compromise whose key elements are price and quantity undertakings promised by China. A minimum price and a maximum export quantity should help to calm PV markets for the time being. Yet the fundamental disequilibria which led to the trade conflict persist. China needs to address its huge domestic excess capacity by reducing subsidies for PV production while vigorously promoting installation. Industrial countries need to address the mismatch between national PV subsidisation policies and the dynamics of global PV markets. If unresolved, further trade conflicts will be inevitable. In solving their bilateral problems, China and the EU have largely bypassed the WTO regime for conflict resolution, thus further revealing the weaknesses of this regime. |
