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Solar panel deal can help settle other China disputes: EU
by Staff Writers
Brussels (AFP) July 29, 2013


China and the EU can now look at other trade disputes after reaching an "amicable solution" over imports of Chinese solar panels, a key step in easing fears of a trade war, a top European Union official said on Monday.

"We will need such a constructive approach between China and the EU also for other cases affecting our trade," EU Trade Commissioner Karel De Gucht said.

"I sincerely hope that the solution we found in the solar panels case will set the tone for these discussions."

De Gucht announced the accord on Saturday as the two sides, which are major trading powers and partners, remain locked in a series of tit-for-tat disputes on other products ranging from steel pipes and telecoms equipment to wine and chemicals.

The Commissioner said that although telecoms were not mentioned in the talks, Chinese anti-dumping probes into imports of EU wine and polysilicon -- a key component for solar panels -- were touched on.

China would not impose punitive tariffs on EU polysilicon before April 2014, De Gucht noted, and "within this period there would be a window for discussion" between Brussels and Beijing.

Similarly for wine, there would be no Chinese punitive action before June next year and again this would allow "a window for discussions," he said.

"This is exactly what has been agreed" during the solar panel talks, he added.

France notably said Saturday in welcoming the deal that it hoped that in return, "the Chinese authorities will end their anti-dumping probe into imports of EU wine."

De Gucht defended the agreement, which runs to end-2015, as the best possible even as solar panel manufacturers complained they have been sold out and importers said they will suffer higher prices as a result.

The twin objectives were to "remove the injury to European industry caused by illegal dumping and at the same time ensure that European users and customers benefit from cheap supply of solar panels."

To do this, Chinese exporters agreed to a minimum price which will provide a floor for the market up to a certain threshold of imports, De Gucht said, declining to give detailed figures until the deal is formally approved by all 28 EU member states on August 2.

Diplomatic sources said earlier the minimum panel price would be equal to 56 cents per watt of power they produced, applied to the first seven gigawatts of solar panels imported.

Any imports above that limit would incur an average anti-dumping tariff of 47.6 percent, the sources said.

In June, after months of recriminations, Brussels imposed an emergency anti-dumping tariff of 11.8 percent on imports of Chinese solar panels in its largest ever such action, rising to an average 47.6 percent if no settlement was reached by August 6.

Lobby group EU ProSun, which had pushed for the June levies, said Saturday it would take Brussels to court as the deal violated European law and sounded the death-knell for the industry by handing China some 70 percent of the market.

The downstream parts of the industry however opposed the tariffs, saying they needed cheap Chinese imports when it came to installing solar energy systems as opposed to making the actual panels.

"The numbers mentioned ... aren't sustainable," the AFASE group said, arguing that 56 cents per watt would represent "an increase of 20 percent or more" on current rates and jeopardise their business.

De Gucht said that the accord would ensure a supply of Chinese solar panels at a minimum price which would then allow space for European manufacturers to win back lost ground as the overall market grows.

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

Bilateral trade last year was worth nearly $550 billion (415 billion euros), with China enjoying a significant surplus.

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