EU, China settle solar panel dispute

The European Union and China have patched up a trade row that led to Beijing threatening action against EU wine imports. The two sides have reached an “amicable solution” over alleged dumping of Chinese-made solar panels.

Newly made solar panels dry at a factory of a photovoltaic company in Jiaxing, Zhejiang province Reuters/William Hong

Brussels and Beijing, whose total trade was worth 415 billion euros last year, have been slugging it out in several tit-for-tat disputes, ranging from steel pipes to telecoms equipment, not to mention wine, which is a major French export to China.

In June Beijing launched an inquiry into dumping and subsidies of European wine exports in response to the European Union’s decision to slap duties on its solar panels, which European manufacturers were being sold at way below cost price.

Brussels had imposed an emergency tariff of 11.8 per cent on them but was threatening to raise it to 47 per cent if agreement was not reached on 6 August.

On Saturday EU Trade Commissioner Karel De Gucht announced an “amicable solution” that he promised would lead to “a new market equilibrium at sustainable prices”.

The Chinese government welcomed the deal which it said "showcased pragmatic and flexible attitudes from both sides and the wisdom to resolve the issue" and which would also encourage "an open, cooperative, stable and sustainable economic and trade relationship".

The deal has agreed a minimum price for Chinese solar panels, said to be 56 cents per watt of power produced, according to diplomatic sources talking to the AFP wire service, and would apply to the first seven gigawatts of panels imported with any above taxed at 47.6 per cent.

Lobby group EU ProSun said it will take Brussels to court, claiming the deal violates European law and would “endanger the very existence of the European solar industry” by giving China 70 per cent of the European market.

Other parts of the industry opposed the tariffs on the grounds that they benefitted from installing the Chinese panels and some governments were loath to start a serious trade war.

France is Europe’s biggest wine exporter to China.