EU trade chief slams fears of tariff war

De Gucht says escalating solar panel dispute 'stupid' for Brussels and Beijing

PUBLISHED : Friday, 21 June, 2013, 2:40pm
UPDATED : Saturday, 22 June, 2013, 3:00am

The European Union's trade chief expressed confidence yesterday that Brussels and Beijing can reach a speedy agreement in a bitter dispute over solar panels that sparked fears of a debilitating trade war.

"I trust that we can come to a solution in the coming days or coming weeks," the EU trade commissioner, Karel De Gucht, said at a press conference in Beijing.

His remarks came after the European Commission, the EU's executive arm, imposed an average tariff of 11.8 per cent on solar panel imports from the mainland, which will rise to more than 47 per cent in August if negotiations fail to resolve the dispute.

Beijing hit back at the tariffs by launching an anti-dumping and anti-subsidy inquiry into sales of European wine, which analysts said could hit wine exports from France and Italy, stoking fears that the dispute was escalating.

De Gucht dismissed trade war fears, however, saying that an escalation "would be stupid for both sides".

He also suggested that the August deadline was a key factor in the push for a settlement.

"We should reach an agreement so as to have a solution which can be implemented by the 6th of August," he said, referring to the date the tariffs are set to increase.

The solar panel tariffs, introduced this month on a provisional basis, have sparked divisions among EU nations, which will vote in December on whether to make them permanent.

Tao Jingzhou, managing partner of the law firm Dechert China said De Gucht's eagerness to resolve the dispute may be an effort to save face before EU member states vote against the tariffs

"He may also have realised that it is better to reach a reconciliation with China than have the European Commission's decision to impose the anti-dumping tax vetoed [by the member states]," Tao told AFP.

"It mainly depends on how China builds up its alliance in the EU. The better it is done, the more likely the European Commission will take a step back," Tao said.

De Gucht said he had "taken notice" of member states' differing opinions, adding: "It's up the commission to negotiate an agreement [with Beijing]. Apart from that, I have no feelings about what the member states have been saying."

He spoke after talks with Gao Hucheng, the minister of commerce, at the annual meeting of the two sides' joint economic and trade commissions. Earlier yesterday, in an appearance with De Gucht, Gao said: "Both sides have the wish and goodwill to address the solar panel issue" through discussions about prices.

Though De Gucht insisted that the solar panel issue was not included in the discussions at the meeting, he said negotiators travelled to Beijing to continue talks on the issue.

In addition to solar cells, the EU and China are also involved in disputes covering other products including steel pipes.