A GROUP of free-trade-oriented northern European nations, consisting of Sweden, Denmark and the Netherlands has urged the EU Trade Commissioner Karel De Gucht to defuse the growing dispute with China over solar panel or risk a negative spiral that could choke exports.
The three countries said the EU chief should find a diplomatic solution with Beijing to avoid a tit-for-tat trade war, after Brussels imposed tariffs on Chinese solar panels and Beijing retaliated with an investigation into European wine.
"It is not the right way to go. When the one side begins to close up, the other continues. And then we have a negative spiral that doesn't stimulate trade," Swedish Trade Minister Ewa Bjorling said.
Mr De Gucht, who handles trade issues for the European Union's 27 countries, went ahead with sanctions against Chinese solar panels on 6 June, despite opposition from 18 of the bloc's governments, who fear retaliation from Beijing. The European Commission, the EU executive, accuses Beijing of dumping billions of euros' worth of solar panels below cost of production, unfairly winning 80 per cent of the EU market.
However, Mr De Gucht softened his earlier plan to levy punitive tariffs averaging 47 per cent immediately, and went ahead with tariffs at 11.8 per cent for two months, leaving a window for Brussels and Beijing to reach a negotiated solution.
The EU Trade Commissioner is expected to travel to Beijing to participate in talks with the Chinese, diplomats said, to try to agree on a solution by setting a minimum price at which Chinese companies can sell solar panels in Europe, as well as setting quotas on the number of solar panels that could be sold.
"Naturally we want a solution as quickly as possible. One where we don't lose trade with China, and same time makes sure there are reasonable prices on solar panels so that we can reach our climate goal," the Swedish Trade Minister said.
China responded to the EU's solar case with a decision to investigate accusations of dumping of EU wine, an apparent attempt to target France and Italy, the two countries most in favour of European tariffs on Chinese solar panels.
Danish Trade Minister Pia Olsen Dyhr said that trade cases could not be looked at in isolation. "I think it's important to have the general relationship between China and Europe in mind when you have these discussions," she told Reuters, explaining that legally, trade cases must serve the interest of the entire European Union.
In the latest trade response by the EU, it launched a WTO complaint against China's imposition of anti-dumping duties on imports of stainless steel tubes, six months after Japan filed a similar case.