Wednesday

5th Oct 2022

EU settles trade dispute with China, warns member states

The EU has defended a deal with China over solar panel imports amid criticism it has caved into Bejing's demands.

Karel De Gucht, EU trade commissioner, Monday (29 July) announced that an "amicable solution" had been found between EU and Chinese officials after the commission last month imposed anti-dumping tariffs on Chinese solar panels.

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  • A 'targeted and innovative' solution to the solar panel dispute with China, says Brussels (Photo: VELUX / ESTIF)

The tariffs - at 11.8 percent - were supposed to leap to 47.6 percent by 6 August if the two sides did on agree on a compromise that would see the price of solar panels from China raised.

Under the deal, reached Saturday and due to stay in place until the end of 2015, Chinese companies have agreed that a minimum price be set for their products.

The agreement applies to solar panels that produce up to seven gigawatts a year - about 70 percent of the market. Any imports above that ceiling will still be subject to the 47.6 percent tariffs.

The price agreement has already seen some strong criticism.

ProSun, representing the European solar panel industry, said it plans to take legal action saying the agreement is against EU law.

"A minimum price of between 55 and 57 euro cents would lie exactly at the level of the current dumping price for Chinese modules," it said.

But the commissioner responded by saying he thought they had "no case" and the "market situation" justified the deal.

He noted that the anti-dumping action taken in June was to "remove an injury" but that the onus was on European solar panel companies to make themselves "competitive."

Environment group WWF - with an eye on EU commitments to reduce its greenhouse gas emissions - welcomed the agreement.

“A trade war between both regions on clean renewable energy technologies is the last thing the world needed," it said in a statement.

De Gucht said he hoped the negotiations would "set the tone" for other brewing trade disputes with China, which is exploring European wine and polysilicon exports.

No bilateral trade discussions please

Meanwhile, he also indicated that member states shoud not undermine the commission when it comes to trade issues - with Germany leading public opposition to imposing tariffs.

"I believe that if everybody stays within their role then it can work. That also applies to the member states, they should better stay with their role."

"Staying in their role means they should not engage in bilateral discussions, be it with China or anybody else."

At the end of May, days before the commission was due to decide on tariffs, German chancellor Angela Merkel in a press conference with her Chinese counterpart publicly pledged to make sure there are "no permanent import duties."

Merkel backs China in EU trade row

Merkel has pledged her support to China in a trade row with the European Commission over solar panels and wireless equipment.

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