Merkel Urged to Defuse EU-China Solar Spat in Talks With Li

German Chancellor Angela Merkel was pressed to use a meeting with Chinese Prime Minister Li Keqiang to defuse a looming European Union trade conflict with China over its solar products.

Merkel, who meets Li on May 26 in Berlin, should speak out against EU import duties that may be imposed on Chinese solar products, the Alliance for Affordable Solar Energy, a Brussels-based lobby group, said today in an e-mailed statement. Merkel should “actively push” for a mutual solution as tariffs would hurt jobs and undermine solar energy growth, the group said.

The EU is poised to penalize imports of Chinese solar products after Solarworld AG, Germany’s biggest panel maker, lodged an anti-dumping complaint with the European Commission. Import tariffs would hurt manufacturers such as China’s Trina Solar Ltd. and raise costs to build power plants in Europe, the world’s largest market for solar products and one largely supplied by Chinese manufacturers.

Europe and China must try to find “amicable and fair” agreements on trade matters that both sides can live with, Merkel’s spokesman Steffen Seibert said today at a regular government press conference in Berlin. Merkel will raise solar and telecom trade issues with Li during his two-day visit to Germany, Seibert said last week.

Solarworld’s complaint and the ensuing EU inquiry that is expected to culminate in preliminary penalties highlight trade tensions with China over solar companies, which have grabbed market share from European rivals that once dominated the industry. Their fast expansion in recent years has led to a glut, gutting margins and tipping dozens of companies into bankruptcy, including Germany’s Q-Cells SE, once the biggest solar cell-maker.

Aside from the German-Chinese talks, the Obama administration has engaged in preliminary talks with the EU and China to settle the solar dispute, according to people familiar with the discussions.

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