Europe deeply divided over China solar duties

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Europe deeply divided over China solar duties

Europe deeply divided over China solar duties
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On his first visit to Europe, China’s new prime minister has found he has a lot of support in a trade row between Brussels and Beijing over solar panels

Coinciding with Li Keqiang’s time in Berlin, Germany’s economy ministry officially told the European Commission it does not back the imposition of punitive import duties on solar panels from China.

Reuters reported at least 14 other member states also oppose the measures.

The Chinese prime minister said they would endanger jobs in China and harm European companies and consumers.

On a more general note, he added: “We stand together. If Europe stands together, if Europe prospers, if Europe remains stable and strong, this is not only good for the EU and Europe, but this is also good for China’s own development.”

Dumping accusations

The European Commission has said China has been selling its solar panels too cheaply at below cost and “dumping” them in Europe to corner the market, so proposes duties averaging 47 percent.

France, Italy and at least four other countries agree. They believe that China’s rapid rise in solar panel output – to more than the world’s entire
demand – could not have happened without illegal state support.

But fearful of losing business in China – Germany, Britain and the Netherlands are among those who oppose the plan. They say it is protectionism.

The EU’s 27 countries had until Friday May 24 to submit a formal written response to the plans. While Trade Commissioner Karel De Gucht would still have the right to impose the duties, doing so in the face of member states’ opposition would be hard.

In addition if the sanctions go ahead China could retaliate by imposing tariffs on other European goods.

Trial period

The duties will come into force from June 6 for a trial period and could be withdrawn if both sides can reach a negotiated settlement. Chinese officials were holding talks with EU officials in Brussels on Monday.

The case is the largest trade case the Commission has undertaken, with around 21 billion euros of China-made solar panels sold in the EU.

Although De Gucht says he had no intention of damaging European business interests in China, he wants to show Beijing that the Commission is serious about preventing dumping and that China must play by international trade rules.