EU-China Solar Row Escalates, Settlement Rumours Fly

The Sino-European spat over trade in solar panels has continued to escalate in recent weeks, with officials in Beijing warning that Brussels’ planned anti-dumping duties could have severe implications for their bilateral relationship. Meanwhile, conflicting news reports have also emerged over the past few days regarding whether a negotiated settlement aimed at defusing the row may soon be on the horizon.

Tensions between Brussels and Beijing on the solar trade subject have been running particularly high ever since reports emerged earlier this month of the European Commission’s plans to impose duties on solar panel imports from China. The provisional duties are set to average 47 percent, with a range of 37 to 68 percent.

The duties are expected to be approved by early June. The Commission must then determine whether to alter - or revoke - the final duties by December.

These particular duties are aimed at targeting the practice of dumping, which involves companies selling their products abroad at prices below normal market values, causing harm to the domestic industry of the importing country. They are the result of an investigation that the Commission launched last September in response to a complaint by the EU Pro Sun coalition, a group of 25 European solar panel manufacturers headed by the German-based SolarWorld.

The same coalition of companies that lodged the anti-dumping complaint has also asked the Commission to determine whether China’s producers had received unfair subsidies; the results of that investigation are expected by August.

The 27-country EU bloc is China’s main export market for solar panels, making up nearly 80 percent of all Chinese export sales, according to European Commission data. In 2011, for instance, the Asian country exported €21 billion worth of solar panels and their main components to the EU.

The US, for its part, already has both anti-dumping and anti-subsidy - also known as countervailing - duties in place on imports of Chinese solar cells, following a separate investigation conducted by the US Department of Commerce last year.

As Beijing rhetoric ramps up, Berlin warns against duties

Since the news broke of the Commission’s decision, Chinese officials have stressed that the imposition of these duties could have major ramifications for Brussels-Beijing trade ties. Commerce Ministry spokesman Shen Danyang warned last week, for instance, that such a move would “seriously damage” the bilateral relationship.

The implications of a trade fall-out with Beijing has also caused strains within the EU bloc, with Germany putting pressure on the European Commission to refrain from imposing the measures. The provisional duties, Economy Minister Philipp Rösler said on Sunday, 19 May, are a “grave mistake.”