The United States and Canada today announced a memorandum of understanding (MOU) to settle a dispute on trade in solar products under the United States-Mexico-Canada Agreement (USMCA). The MOU promotes greater North American solar supply integration and reaffirms both countries’ commitment to prohibit imports of solar products produced in whole or in part with forced or compulsory labor. The MOU also contains a mechanism to ensure that solar product imports from Canada do not undermine the existing U.S. safeguard measure on imports of solar products. Ambassador Katherine Tai and Minister Mary Ng will sign the MOU on July 8, 2022.

“Tackling the climate crisis has been a top priority from day one of the Biden Administration and we have continued to forge a clean energy transition that will protect our planet,” said Ambassador Katherine Tai. “Reaching this settlement 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.”

In early 2018, the United States 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 by Chinese producers in China and around the world and exacerbated by China’s non-market practices. The safeguard measure was established after the U.S. International Trade Commission (USITC) found that the domestic solar industry was seriously injured by increased imports. 

On February 4, 2022, President Biden extended the solar safeguard measure for an additional four years and directed the United States Trade Representative to conclude agreements with Canada and Mexico on trade in solar products. On February 15, 2022, a USMCA panel issued its report, finding that the prior Administration’s decision to include imports from Canada in the solar safeguard measure was inconsistent with certain USMCA rules. The MOU with Canada also constitutes a resolution of this outstanding dispute.

The text of the memorandum of understanding between the United States and Canada on trade in solar products will be available shortly after it is signed.