A Chinese industry association has claimed an offer made to resolve a dispute over solar panels dumping was rebuffed by the EU

Solar panel trade war threatens to escalate

The European Commission has rejected Chinese claims that talks to resolve a dispute over solar panels dumping had broken down.

EU regulators agreed to impose solar panel duties earlier this month to guard against what they see as dumping of cheap goods in Europe following an investigation launched by a complaint from German manufacturer SolarWorld.

The dispute has the potential to impact €21bn worth of imported Chinese solar panels, cells and wafers from manufacturers such as Trina Solar, Yingli Green Energy and Suntech Power Holdings.

Despite the decision to impose the imports, EU trade chief Karel De Gucht, who proposed the move, is hoping for a negotiated solution before an EU deadline in December to cement the levies for up to five years.

But a Chinese industry association authorised to represent Chinese solar companies told reporters in Beijing on Wednesday that it had made an offer during a visit to Brussels but was rebuffed by the European Commission.

"These claims are simply wrong and misleading for one simple reason, no formal negotiations are yet on-going between the EU and China in the solar panel anti-dumping case," EU trade spokesman John Clancy said in a statement yesterday.

The Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) said on its website that "because the European side did not show sincerity to solve the problem through negotiations, this first round of negotiations ended in no result and broke down".

Clancy responded: "These technical preparatory talks have nothing to do with a proper negotiation." He said the Commission could not comment on the content of those discussions.

He added that according to EU law, formal negotiations could begin only after "preliminary findings" from the investigation are published in the EU's Official Journal.

CCCME made an offer for producers to voluntarily raise their prices to avoid duties during informal talks last week, a Chinese source familiar with the negotiations said.

"They have shown no flexibility, so it makes China very angry. It is quite rare for the export chamber to hold this type of press conference."

He said that EU regulators had insisted that they would accept only a price level consistent with the amount regulators say Chinese firms undercut European producers, which would amount to a mark-up of 47 per cent.

"If they have carried out their tariff and they still insist on the high level of the price offer, then there is no need for us to negotiate, and China will have to respond in another way," the source said.

Beijing says the duties would seriously harm trade ties and that it is expected to decide in June whether to levy its own duties on imported European solar-grade polysilicon, a raw material used in solar panel production.

The source said it was also possible that China could open an anti-dumping investigation into EU wine, but pressure on the Chinese government by the Chinese solar industry and domestic media could lead to a larger response.

"If the EU side really cares about the 47 per cent tariff in June, then that kind of response is not enough," he said. "They will want to really hurt the EU."

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