27 july 2013

EU, China Reach Agreement on Solar-Panel Dispute

The Agreement Averts a Broader Trade War.

By ART PATNAUDE And GABRIELE STEINHAUSER, The Wall Street Journal, July 27, 2013

BRUSSELS—The European Union and Chinese solar-panel producers reached agreement on a multibillion-dollar antidumping dispute, leaders on both sides of the deal said Saturday, bringing an end to months of fierce negotiations.

"I can announce today that I am satisfied with the offer of a price undertaking submitted by China's solar-panel exporters, as foreseen by the EU's trade defense legislation," EU Trade Commissioner Karel De Gucht said. "This is the amicable solution that both the EU and China were looking for."

The China Chamber of Commerce Import and Export of Machinery and Electronic Products, which led the negotiations on behalf of Chinese producers, agreed that Chinese solar panels would be sold at a minimum price of 56 euro cents per watt when imported to the EU, an EU diplomat said. The tariffs apply to solar panels and their main components, wafers and solar cells.

"The price undertaking agreement reflects the wishes of the majority of the Chinese industry and the bilateral consultations of China's solar-products industry to continue exports to Europe and to maintain reasonable market share," the Chinese Chamber of Commerce said in a statement.

The minimum price is voluntary and any exporters who decide not to participate will still be hit by the EU's antidumping tariffs. The tariffs, currently at 11.8%, are set to increase to an average of 47.6% on Aug. 6.

The EU diplomat said that the minimum-price deal would only apply to imports of solar panels that produce up to 7 gigawatts a year. Any imports that exceed that ceiling will still be hit by the tariffs.

The antidumping negotiations with Chinese solar-panel producers have been the most far-reaching for the European Commission, the EU's executive arm in charge of the bloc's trade policy. Some observers feared that they could trigger a broader trade war between two of the world's biggest economies.

"We are confident that this price undertaking will stabilize the European solar-panel market and will remove the injury that the dumping practices have caused to the European industry," Mr. De Gucht said.

The deal will now be brought for a consultation among EU member countries before going to all 28 EU commissioners for approval. Further details on the arrangement can only be released following the commission's adoption, the commission said in its statement.

The deal could still face pushback from the European solar-panel industry, which has been demanding a higher minimum price.

"Trade between China and Europe is very big," China's Ministry of Commerce said Saturday in a statement on its website, citing spokesman Shen Danyang. Mr. Shen noted the EU is China's largest export market for solar products, and that the deal is in line with the common interests of both sides.

—Wayne Ma and Matthew Dalton contributed to this article.

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