EU, China Hope For Negotiated End To Solar Dispute

Following discussions on June 21 at the annual joint committee in Beijing, which was co-chaired by the European Trade Commissioner Karel De Gucht and the Chinese Commerce Minister Gao Hucheng, it appears that both sides intend to resolve the currently difficult trade relations between the European Union (EU) and China by negotiation.

The major difficulty in EU-China trade relations has arisen from the provisional anti-dumping duties imposed by the European Commission earlier this month on around EUR21bn (USD27.6bn) of Chinese exports of solar products to the EU.

After the meeting, Gao emphasized that the importance of that trade dispute lay not only in the amount of goods involved, which is obviously substantial, but also in the need for cooperation by China and the EU in both the manufacturing and installation sectors of the solar industry, a sector which is of additional importance on new energy and environmental grounds.

He further pointed out that both the Chinese Prime Minister Li Keqiang and the President of the European Commission José Manuel Barroso, together with the German Chancellor Angela Merkel, have specifically called for a solution to be found to the solar product dispute through consultation and dialogue. Gao hoped that the two sides "can continue to take a pragmatic and flexible attitude and strive to reach a mutually-acceptable price undertaking agreement."

On his part, De Gucht confirmed that the European technical team is working on the price undertaking consultations in a genuine fashion, and that the EU hopes to solve the dispute as soon as possible.

He issued a word of caution in that "it is early days in the negotiation process. This kind of issue is rarely solved overnight. Everyone should be very careful not to jump to any conclusions – one way or the other – simply because there is no hard news on this issue today. On the contrary, I believe that both sides have now engaged in a sincere way to work towards an amicable solution."

In addition, according to De Gucht, at the top of the joint meeting's agenda was the prospective EU-China investment agreement, the launching of negotiations on which was agreed at the summit meeting in February 2012. He stressed that an investment agreement would "improve the protection of EU investments in China as well as Chinese investments in Europe, thus improving legal certainty for investors. That will benefit both China and Europe."

However, while De Gucht added that a future agreement must cover better market access and conditions for European companies and reduced barriers to investing in China, Gao countered that China is willing to work together with the EU to prepare for investment agreement negotiations, but that the EU has also to develop "an open, equitable and fair environment" for Chinese enterprises investing in Europe.

June 25, 2013

Source: Tax News