DealBook: U.S. Security Panel Clears a Chinese Takeover of Smithfield Foods

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Europe and China Agree to Settle Solar Panel Fight

The settlement essentially involves setting a fairly high minimum price for sales of Chinese-made solar panels in the European Union to try to prevent them from undercutting European producers. Those producers accused Chinese manufacturers of benefiting from enormous loans from state-owned banks and other government assistance that enabled them to charge prices that would otherwise be uneconomical.

“We have found an amicable solution that will result in a new equilibrium on the European solar panel market at a sustainable price level,” Karel De Gucht, the European trade commissioner, said in a statement.

The deal immediately met with ferocious criticism from the European manufacturers that had filed the complaint, and it complicates a similar dispute between the United States and China.

Mr. De Gucht’s decision in June to carry out his threat to impose tariffs on solar panels from China generated significant fears within the union about retribution from China. Chancellor Angela Merkel of Germany called for further negotiations to avoid harm to German exporters. European importers of solar products from China also opposed the tariffs.

At the time, Mr. De Gucht said he had been left with no choice but to impose the tariffs since his investigators found a systematic effort by Chinese companies to sell solar panels in Europe below the cost of making them, a practice known as dumping.

On Saturday, officials at the European Commission said they could not give details of the deal, including the price that Chinese exporters would pay to sell their panels in Europe, until the arrangement had been formally approved by the commission. But a European Union official, who spoke on condition of anonymity because the deal had not yet been formally approved, said the two sides had agreed to a minimum price of 0.56 euros per watt (74 cents), which would base any potential surcharge on the amount of electricity generated by each imported panel.

The European solar manufacturers who lobbied for tougher action against the Chinese exporters on Saturday promised to sue over the settlement.

The agreement “is contrary in every respect to European law,” said Milan Nitzschke, the president of EU ProSun, an industry group. A minimum price of 0.55 to 0.57 euros was at the level of “the current dumping price for Chinese modules,” the group said in a statement.

The arrangement would cover exports from 90 of about 140 Chinese exporters that were examined during the investigation, and that represent 60 percent of the panels sold in Europe, the government official said. Those 90 companies would no longer face tariffs that were put in place in June. Chinese exporters that did not agree to the terms will still face tariffs that are set to rise to 47.6 percent on Aug. 6 from the current level of 11.8 percent, the official said.

The Chinese government hoped from the start of the trade case with the European Union for a negotiated settlement instead of a legal battle. This deal comes as a relief, said He Weiwen, the co-director of the China-United States-European Union Study Center at the China Association of International Trade in Beijing.

The European settlement with Beijing in some ways complicates a similar dispute between the United States and China. The United States Commerce Department imposed final anti-dumping and anti-subsidy tariffs last spring on imports of solar panels from China. China responded on July 18 that it was preparing to impose tariffs of more than 50 percent on polysilicon, the main material for solar panels, on imports from the United States and South Korea.

The United States began trying in early summer to arrange a comprehensive deal among Beijing, Brussels and Washington that would set new global trade arrangements for solar panels in exchange for the removal of the American tariffs and the preliminary European tariffs. But faced with a complex process in the United States for removing tariffs once the Commerce Department has made them final, the European Union pushed ahead with its own negotiations with China, a Senate aide with detailed knowledge of the issue said on Friday.

“The administration has been doing the right thing on this, pushing for talks and trying to get a joint settlement with Europe, but the Europeans have not had the same attitude and instead are pursuing talks with China independently of the U.S., which has stalled progress on U.S.-China talks,” said the aide, who spoke anonymously because of the diplomatic sensitivity of the issue.

The Office of the United States Trade Representative, which is part of the White House, had no immediate response to the European deal, which was announced shortly before dawn in Washington.

Solar panels represent more than 6 percent of China’s exports to the Continent, making them one of the largest Chinese exports to the European Union. In 2011, Chinese exports of panels and their main components to the European Union were worth about 21 billion euros or $27.4 billion.

China grew from a tiny player in the global solar panel market five years ago to the world’s dominant producer now through a program of enormous lending by state-owned banks and a wide variety of manufacturing incentives by local and provincial governments. That has allowed Chinese producers to drive down the price of panels by three-quarters over the same period.

But Chinese manufacturers have expanded faster than the market, and the largest of them now face severe financial difficulties.

James Kanter reported from Brussels and Keith Bradsher from Hong Kong.

Rail Safety Law Doesn't Pre-empt Common Law Damage Claims, Panel Rules

A divided panel of the U.S. Court of Appeals for the Third Circuit has ruled that the Federal Railroad Safety Act doesn't pre-empt the common law claims brought by a Delaware County mall against railroad giant CSX.

DealBook: Senate Panel Advances White’s S.E.C. Nomination

T.J. Kirkpatrick/Getty ImagesThe Senate Banking Committee cast a 21-to-1 vote in favor of Mary Jo White.

Mary Jo White cleared an important hurdle on her path to becoming a top Wall Street regulator, as a panel of lawmakers overwhelmingly backed her nomination on Tuesday.

Dismissing concerns about Ms. White’s close ties to Wall Street, the Senate Banking Committee cast a 21-to-1 vote in her favor, sending the nomination to the full Senate. The committee’s broad bipartisan support for Ms. White, President Obama’s pick to lead the Securities and Exchange Commission, suggests she is poised to sail through the Senate in the days ahead.

In contrast, the committee offered muted support for another financial regulator, Richard Cordray, who is in line to lead the Obama administration’s new consumer protection watchdog. Mr. Cordray eked out a 12-to-10 vote along party lines on Tuesday. Every Republican voted against him, a reflection of the entrenched political battle lines plaguing the agency.

And even Ms. White faces some skeptics. While every Republican on the committee supported her nomination, a lone Democrat balked. Senator Sherrod Brown, an Ohio Democrat who opposed Ms. White, continued to sound alarms about her turns through the revolving door connecting government and private practice. He noted that Ms. White, a former federal prosecutor who spent the last decade representing big banks like JPMorgan Chase and UBS, could carry conflicts of interest.

“I don’t question Mary Jo White’s integrity or skill as an attorney,” Mr. Brown said in a statement. “But I do question Washington’s long-held bias toward Wall Street and its inability to find watchdogs outside of the very industry that they are meant to police.”

To avert potential conflicts, Ms. White agreed to recuse herself for one year from most matters involving former clients, though such steps present a potential hindrance to her authority. Ms. White also vowed “as far as can be foreseen” never to return to Debevoise & Plimpton, the firm where she built a lucrative legal practice.

Mr. Brown added on Tuesday that Ms. White “will have plenty of opportunities to prove me wrong. I hope she will.”

The otherwise lopsided vote in favor of Ms. White came as little surprise. At a confirmation hearing last week, she received a friendly reception during two hours of testimony. Even one of the committee’s Republicans, Senator Tom Coburn of Oklahoma, declared his intention to support Ms. White.

On Tuesday, the committee’s ranking Republican, Senator Mike Crapo of Idaho, praised Ms. White’s experience, saying, “I fully support her nomination.”

Republicans took a harsher view of Mr. Cordray, nominated to become director of the Consumer Financial Protection Bureau. In January, when the White House named Ms. White to the S.E.C. spot, it reappointed Mr. Cordray to a position he had held for the last year under a temporary recess appointment. The Senate last year declined to confirm him in the face of Republican concerns about the new agency – opposition that persisted on Tuesday.

While Republicans have expressed support for Mr. Cordray, they stand in stark opposition to what they see as his unchecked authority over the bureau. They have vowed to oppose his nomination, or any appointment to run the bureau, unless the White House turns it into a bipartisan panel.

Mr. Crapo explained that his opposition to Mr. Cordray reflected a “broader debate over the structural” setup of the bureau. “Where is the transparency? Where is the accountability?”

The banking committee’s tepid approval of Mr. Cordray leaves his next step unclear and his agency in limbo. The White House could strike a deal with Republicans, but they have little incentive to do so. For now, Democrats are portraying the Republican opposition as an affront to consumers, leaving conservatives in a politically sensitive position.

Yet Democrats could seek to avert a broader assault on the bureau. Corporate groups are challenging Mr. Cordray’s recess appointment in the courts, an attack that could jeopardize a number of rules the agency has enacted.

While Ms. White faces far fewer obstacles to her nomination, significant challenges await her at the S.E.C. The agency, for example, is under Congressional pressure to complete new rules for Wall Street and take aim at financial fraud.

Ms. White, who as the first female United States attorney in Manhattan carried out an aggressive crackdown on terrorism and organized crime, vowed to now strike a hard line with Wall Street.

“If confirmed, it will be a high priority throughout my tenure to further strengthen the enforcement function of the S.E.C.,” she said at her confirmation hearing last week. “It must be fair, but it also must be bold and unrelenting.”

Ohio Senate panel advances asbestos lawsuit bill

COLUMBUS, Ohio (AP) - An Ohio Senate committee advanced a bill Tuesday aimed at curbing duplicate lawsuits over on-the-job asbestos exposure in a state with one of the largest backlogs of such cases in the nation.

U.S. Panel Calls Huawei and ZTE ‘National Security Threat’

The House Intelligence Committee said that after a yearlong investigation it had come to the conclusion that the Chinese businesses, Huawei Technologies and ZTE Inc., were a national security threat because of their attempts to extract sensitive information from American companies and their loyalties to the Chinese government.

The companies sell telecommunications equipment needed to create and operate wireless networks, like the ones used by Verizon Wireless and AT&T. Many of the major suppliers of the equipment are based outside the United States, creating concerns here about the security of communications.

Those concerns are most acute about Huawei and ZTE because of their close ties to the Chinese government, which the committee said has heavily subsidized the companies. Allowing the Chinese companies to do business in the United States, the report said, would give the Chinese government the ability to easily intercept communications and could allow it to start online attacks on critical infrastructure, like dams and power grids.

The release of the report comes as both presidential candidates have spoken of the importance of United States ties with China and have promised to act strongly on Chinese currency and trade practices that are damaging to American business interests.

Mitt Romney, the Republican presidential candidate, has called repeatedly during his campaign for a more confrontational approach to China on business issues, although he has focused his warnings more on Chinese currency market interventions than on the activities of the nation’s telecommunications companies.

President Obama has also taken a tougher stance on China recently. Late last month, Mr. Obama, through the Committee on Foreign Investment, ordered a Chinese company to divest itself of interests in four wind farm projects near a Navy base in Oregon where drone aircraft training takes place. It was the first time a president had blocked such a deal in 22 years.

The Obama administration has also filed a case at the World Trade Organization in Geneva accusing China of unfairly subsidizing its exports of autos and auto parts, the ninth trade action the administration has brought against China.

“We have a process that is not aimed at one specific company but using all the assets and parts of U.S. government aimed at protecting our telecommunications and critical infrastructure,” a senior White House official said.

The report was released on Monday morning at a news conference held by

Representative Mike Rogers, Republican of Michigan, the chairman of the House Intelligence Committee, and Representative C. A. Ruppersberger of Maryland, the top Democrat on the committee.

They said that the United States government should be barred from doing business with Huawei and ZTE and that American companies should avoid buying their equipment.

The report said the committee had obtained internal documents from former employees of Huawei that showed it supplied services to a “cyberwarfare” unit in the People’s Liberation Army.

The United States government, the report said, should go through the Committee on Foreign Investment in the United States, an interagency panel that reviews the national security implications of foreign investments, to carry out its recommendations. It also said that committee should block any mergers and acquisitions involving the Chinese companies and American businesses.

In the course of the investigation, the House committee said it had uncovered evidence of economic espionage — and officials said on Monday that they planned to hand over the evidence to the F.B.I.

Former and current employees for Huawei, the report said, told investigators for the committee that the company had committed “potential violations” in the United States related to immigration, bribery, corruption and copyright infringement.

Huawei has been the focus of criticism and security warnings for years, including by the Defense Department. Its expansion plans in the United States have faced resistance from Congress over questions about its ties to the military in China.

Huawei denies being financed to undertake research and development for the Chinese military, and its executives have repeatedly insisted that they have nothing to hide. The company issued an open letter to the United States government in February 2011, asking for an inquiry to clear up what it characterized as misperceptions about its history and business operations.

Michael S. Schmidt reported from Washington and Christine Hauser from New York. Keith Bradsher contributed reporting from Hong Kong, and Quentin Hardy from San Francisco.

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