EU Cites ‘Trade Justice’ in Tariff on China Solar Panels

The European Union’s trade chief vowed to tax Chinese solar panels next month in the largest EU commercial dispute of its kind, while urging China’s exporters to boost prices in return for an eventual end to the tariffs.

EU Trade Commissioner Karel De Gucht defended a proposal to impose provisional duties on Chinese manufacturers of solar panels for allegedly selling them in the 27-nation EU below cost, a practice known as dumping.

The EU levies, due by June 6, would be the preliminary outcome of a dumping inquiry that the European Commission opened in September and that German Chancellor Angela Merkel said May 26 shouldn’t lead to permanent duties against China. The commission is the 27-nation EU’s regulatory arm.

“The commission has a clear responsibility, and the commissioner for trade has a clear responsibility, to follow through in terms of trade defense on behalf of Europe,” John Clancy, spokesman for De Gucht, told reporters yesterday in Brussels. “It’s about trade justice and doing the right thing for Europe’s workers and European companies.”

The dumping investigation covers 21 billion euros ($27 billion) of EU imports in 2011 of crystalline silicon photovoltaic panels, and cells and wafers used in them. European companies including Solarworld AG (SWV), Germany’s largest maker of the renewable-energy technology, are demanding punitive levies to counter growing competition from China following similar U.S. trade protection. Europe accounts for about three-quarters of the global photovoltaic market.

Chinese Companies

The planned provisional duties will affect more than 100 Chinese companies and average 47.6 percent, an EU trade official said on May 8. The dumping probe is due to end in early December, by which time EU governments must decide whether to impose “definitive” anti-dumping duties for five years.

The Chinese government and a group of EU nations including the U.K. are fighting to prevent anti-dumping protection. Clancy, noting that EU governments play only an advisory role at the stage of provisional measures, cited the need for the commission to act “in the face of very clear potential dumping through an overcapacity in the Chinese market of solar panels.”

De Gucht spoke to Chinese Vice Minister of Commerce Zhong Shan May 27 about the solar-panel case at a meeting in Brussels. In an e-mailed statement afterward, De Gucht said China had exerted “pressure” on “a number of EU member states” in relation to the dumping inquiry and that he had made his awareness of this “very clear” to Zhong.

‘Specific Proposal’

De Gucht also said that he was ready to negotiate a settlement to the solar-panel dispute and that China had yet to make a “specific proposal” to this end. Clancy said any negotiated accord would require minimum-price pledges by Chinese exporters.

“We look forward to our Chinese partners engaging with us in a sincere manner to try and find an equitable solution, which would of course require price undertakings on behalf of the Chinese in order to re-balance and re-create a level playing field for European manufacturers of solar panels,” Clancy said yesterday.

The EU is also threatening to impose a separate set of duties on Chinese solar panels to counter alleged subsidies. That’s the focus of a second investigation in which the deadline for introducing any provisional anti-subsidy duties is Aug. 8 and for any definitive anti-subsidy measures is early December.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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