EU Commission secure minimum price and volume on Chinese solar panel imports

Planned EU curbs on Chinese solar panels would last less than half as long as normal trade protection, marking a victory not just for China but for Germany, the UK, and other free-market proponents in the EU’s biggest dispute of its kind.

European Trade Commissioner Karel De Gucht said yesterday the agreement he sealed with China over the weekend setting a minimum price and a volume limit on EU imports of Chinese solar panels will expire at the end of 2015.

Chinese manufacturers that take part would be spared EU tariffs meant to counter below-cost sales, a practice known as dumping.

Along with China, EU governments including those of German Chancellor Angela Merkel and UK Prime Minister David Cameron, have warned against European levies on imports of the renewable- energy technology.

The EU’s 28 nations must decide by Dec 5 whether to turn the negotiated deal into a package of “definitive” anti-dumping measures. These typically last for five years rather than the shorter period foreseen in De Gucht’s plan.

“We allow a certain intervention in the market hoping, and we are trustful, that this will lead to a stabilisation of the market,” De Gucht said yesterday in Brussels. “If the European solar industry wants to continue selling solar panels, they will have to be competitive with the rest of the world. That’s a free market.”

The EU effort to restrain Chinese competition against European producers such as Solarworld has jumped to the top of the political agenda in Europe’s capitals and Beijing, as China’s manufacturers and European importers warn about price rises.

The case covers EU imports of crystalline silicon photovoltaic modules or panels, and cells and wafers used in them — shipments valued at €21bn in 2011.

In retaliation, the Chinese government is threatening to impose punitive duties on imports into China of polysilicon — a material used in solar panels — and wine from Europe.

He said China agreed to allow “a window for discussions” with European polysilicon and wine producers in an effort to avoid possible punitive duties against them, due as soon as February next year.

“The Chinese government has promised to facilitate such discussions,” he said.

He said another controversial trade issue — Chinese shipments of mobile-telecommunications equipment to Europe — didn’t feature in the solar-panel talks. In May, the European Commission said it was prepared to probe possible Chinese subsidies to telecom-network makers such as Huawei Technologies Co, and the possible dumping of the equipment in the EU — steps that could result in punitive EU duties.

De Gucht signalled the EU-China agreement on solar panels should be a model for the telecom case, which affects such European companies as Ericsson.

“The solution we have found is targeted and innovative,” De Gucht said. “We will need such a constructive approach also for other cases affecting trade between the EU and China.”

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