EU, China work toward settling their rift on solar panels as EU duties set to jump in August

BEIJING, China – The European Union’s trade commissioner said Friday that the EU and China are seeking a negotiated settlement to resolve a solar panel dumping dispute before tariffs on Chinese imports spike in early August.

Karel De Gucht told reporters in Beijing that there had been no breakthroughs so far in talks and warned that such disputes are rarely resolved overnight.

However, De Gucht said that the EU is intent on reaching a settlement based on commitments from the Chinese side to eliminate the harmful effects to European producers of the alleged unfair sale of Chinese panels.

“As I have stated time and time again during the course of the investigation, the EU has only one wish: to find a negotiated settlement on the basis of ‘undertakings’ that can remove the injury caused by the dumping on our market: nothing more, nothing less,” De Gucht said.

The European Union last month raised duties to just under 12 per cent on Chinese-made solar panels, cells, and wafers.

That is due to jump to an average of 47 per cent on Aug. 6 “which means we should reach the agreement so as to have a solution that can be implemented” by that date, De Gucht said.

De Gucht has said Chinese dumping was threatening 20,000 jobs in Europe.

In response, China expressed its “resolute opposition” to the punitive European tariffs and announced a trade investigation into European wine imports worth $1 billion.

Technical-level discussions on a negotiated settlement began in Brussels earlier this week.

Speaking at the same news conference, Chinese Commerce Minister Gao Hucheng described the ongoing talks as “positive and constructive.”

“Both sides have the wish and good will to properly address the solar panel case through talks, and both sides are working toward this end,” Gao said.

The European duties are a blow to financially strapped Chinese manufacturers struggling with excess production capacity and a price-cutting war.

European imports of Chinese-made solar panels totalled 21 billion euros in 2011. That far exceeds the value of European wine exports to China, although Beijing’s focus on the sector appears targeted at pressuring France, Spain and Italy, the biggest wine exporters whose governments have also strongly supported the anti-dumping tariffs.

China accounted for 8.6 per cent of European Union wine exports last year, according to EU figures. France was the biggest exporter to China, selling wine worth 546 million euros.

Last year, the United States imposed anti-dumping tariffs of up to 250 per cent on Chinese solar panels following similar complaints.

Dumping means selling a product abroad at a lower price than at home but some governments also take action if the price is deemed to be below production cost or unfair in some other way.