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Solar products: Canada and U.S. announce trade agreement

Canada and the United States announced Thursday a memorandum of understanding (MOU) to resolve a dispute over trade in solar products under the Mexico-United States-Canada Agreement (USMCA).

“The MOU promotes greater integration of North American solar supply and reaffirms both countries’ commitment to prohibit imports of solar products produced in whole or in part with forced or compulsory labor,” the U.S. Trade Representation (USTR) said in a statement.

The MOU also contains a mechanism to ensure that imports of solar products from Canada do not undermine the existing U.S. safeguard measure on solar imports.

Ambassador Katherine Tai and Minister Mary Ng will sign the MOU on July 8, 2022.

“Addressing the climate crisis has been a top priority since day one of the Biden Administration and we have continued to forge a clean energy transition that protects our planet,” Tai said.

She then added, “Reaching this agreement with Canada will promote greater deployment of solar energy in the United States using products from one of our closest allies, and foster a more resilient North American supply chain for clean energy products made without forced labor.”

Solar products

In early 2018, the U.S. imposed the solar safeguard measure to support the domestic solar industry’s efforts to adjust to import competition, primarily attributable to excess solar cell and module capacity from Chinese producers in China and around the world, and exacerbated by China’s non-commercial practices.

The safeguard measure was put in place after the U.S. International Trade Commission (USITC) determined that the domestic solar industry was severely injured by increased imports.

Then, on February 4, 2022, President Biden extended the solar safeguard measure for an additional four years and directed the U.S. Trade Representative to enter into agreements with Canada and Mexico on trade in solar products.

On February 15, 2022, a USMCA panel issued its report, which found that the previous Administration’s decision to include imports from Canada in the solar safeguard measure was inconsistent with certain USMCA rules.

The MOU with Canada constitutes a resolution of this pending dispute.

The text of the U.S.-Canada MOU on trade in solar products will be available shortly after it is signed.

 

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