EU sees end to China solar row

Published Jun 21, 2013


Beijing - The European Union's trade chief expressed confidence Friday that Brussels and Beijing can reach a speedy agreement in a bitter dispute over Chinese solar panels that sparked fears of a debilitating trade war.

“I trust that we can come to a solution in the coming days or coming weeks,” EU Trade Commissioner Karel De Gucht said at a press conference in Beijing.

His remarks came after the European Commission, the EU's executive arm, imposed an average tariff of 11.8 percent on solar panel imports from China - which will rise to more than 47 percent in August if negotiations fail to resolve the dispute.

China hit back at the tariffs by launching an anti-dumping and anti-subsidy inquiry into sales of European wine, which analysts said could hit wine exports from France and Italy, stoking fears the dispute was escalating.

De Gucht dismissed trade war fears, however, saying that an escalation “would be stupid for both sides”.

He also suggested that the August deadline was a key factor in the push for a settlement.

“We should reach an agreement so as to have a solution which can be implemented by the 6th of August,” he said, referring to the date the tariffs are set to increase.

The solar panel tariffs, which were introduced this month on a provisional basis, have sparked divisions among EU nations, who will vote in December on whether to make them permanent.

De Gucht's eagerness to resolve the dispute may be an effort to save face before EU member states vote against the tariffs, Tao Jingzhou, managing partner of law firm Dechert LLP China said.

“He may also have realised that... it is better to reach a reconciliation with China than have the European Commission's decision to impose the anti-dumping tax vetoed (by the member states),” he told AFP.

“It mainly depends on how China builds up its alliance in the EU - the better it is done, the more likely the European Commission will take a step back,” Tao said.

De Gucht said he had “taken notice” of member states' differing opinions, adding: “It's up the commission to negotiate an agreement (with China)... Apart from that, I have no feelings about what the member states have been saying.”

He spoke after talks with Gao Hucheng, China's minister of commerce, at the annual meeting of the two sides' joint economic and trade commissions.

Earlier Friday in a joint appearance with De Gucht, Gao said:

“Both sides have the wish and goodwill to address the solar panel issue” through discussions about prices.

Though De Gucht insisted that the solar panel issue was not included in the discussions at the annual meeting, he said negotiators travelled to Beijing to continue talks on the issue that had begun recently in Brussels, though declined to give specifics.

In addition to solar cells, the EU and China are also involved in disputes covering other products including steel pipes.

Total trade between the two sides fell 3.7 percent year-on-year in 2012, with China's imports from the bloc rising 0.4 percent to $212 billion, while shipments in the opposite direction tumbled 6.2 percent to $334 billion, Chinese customs data showed.

The EU decided this month to challenge China at the World Trade Organization after Beijing slapped duties on some steel products.

Beijing has launched a probe into imports of EU wine and chemicals amid accusations of “dumping” - or selling goods below cost - while the EU has threatened an investigation into China's telecom equipment firms.

De Gucht had said earlier this month that Chinese panels were being sold at up to 88 percent below cost in the European market. Complaints from European companies had triggered a probe.

According to Chinese industry figures, China exported $35.8 billion of solar products in 2011, more than 60 percent of them to the EU, and imported $7.5 billion-worth of European solar equipment and raw materials.

De Gucht said that China was entitled to investigate EU wines.

“I trust that there is no problem, and I trust also that Chinese people want to carry on drinking excellent European wine,” he said. - Sapa-AFP

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