EU, China solve solar panel dispute through price undertaking

EU Trade Commissioner Karel De Gucht attends a press conference on solar panel dispute between EU and China in Brussels, Belgium, July 29, 2013. The European Union (EU) and Chinese solar panel exporters have agreed to end the trade dispute through setting a minimum export price, Karel de Gucht said Monday. (Xinhua/Gong Bing)

The European Union (EU) and Chinese solar panel exporters have agreed to end the trade dispute through setting a minimum export price, EU trade commissioner Karel de Gucht said Monday.

Under the deal, producers accounting for about 70 percent of Chinese solar panel exports to the EU have agreed to set a minimum price for them, De Gucht said at a press conference without specifying what the price is.

"The Chinese suppliers have agreed to voluntary undertaking where they commit to keeping the prices above a certain floor. In return, the companies who participated in the engagement do not have to pay the anti-dumping duties," he said.

"This undertaking would apply only for an annual volume that covers only part of the European market," said the Commissioner without giving the figure for the volume.

"Any Chinese exports exceeding this annual volume, the average anti-dumping duties of 47.6 percent will have to be paid as of Aug. 6," he said.

On one segment of the market which cannot be satisfied by European supply, a minimum import price applies for Chinese imports to eliminate the downward pressure on prices, De Gucht said.

"The other segment of the market where European supplies have been competing with competitors from the rest of the world would be protected by the 47.6 percent anti-dumping duty."

The undertaking agreement would be effective until the end of 2015, De Gucht told reporters.

The agreement, described by the Commissioner as an "amicable solution," will stabilise the European solar panel market and will remove the injury that the European industry has suffered, De Gucht said.

The announcement came nearly two months after the European Commission decided on June 4 to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China.

Starting from June 6, EU imports of Chinese solar products was subject to a punitive duty of 11.8 percent until August 6, from when on, the duty will be raised to 47.6 percent if the two sides can not sort out the dispute through negotiation.

The statement came two days after De Gucht announced Saturday that the EU and China had reached an "amicable solution" to the solar panel dispute after weeks of intensive talks.

In response to a question as to why the EU has dropped its original aggressive position, De Gucht said, "We were not interested in a solution leading to shortage of supply in Europe and to overly negative effect on downstream industry and on consumers."

Solar panel deployment is important for Europe's ambition to reduce CO2 emissions and exactly because of the ambitious climate policy in Europe over the previous years, European demand was exceeding the capacity of European supply, he said.

"In short, Europe will continue to rely on solar panel import to an important extent," De Gucht added.

The Commissioner has also refuted allegations that the EU have given in to China in the negotiations and the agrement would destroy the European solar industry, saying that, "I disagree."