EU, China Reach Deal to Resolve Solar Panel Trade Dispute

{{China and the European Union reached a deal on Saturday to defuse a multi-billion euro dispute over Chinese solar panels that threatened a wider trade war.}}

After six weeks of talks, the EU’s trade chief and his Chinese counterpart sealed the deal over the telephone, setting a minimum price for panels from China near spot market prices.

European solar panel manufacturers had accused China of dumping about 21 billion euros ($28 billion) worth of solar panels in Europe last year at below the cost of production, putting European businesses out of business.

Europe planned to impose hefty tariffs from August 6.

But, wary of offending China’s leaders and losing business in the world’s No. 2 economy, a majority of EU governments – led by Germany – opposed the plan, which led to the compromise deal.

“We found an amicable solution,” EU Trade Commissioner Karel De Gucht said.

“I am satisfied with the offer of a price undertaking submitted by China’s solar panel exporters,” he said, referring to an agreement for a minimum price for China’s imports.

Chinese Commerce Ministry Spokesman Shen Danyang welcomed the deal, hailing a “positive and highly constructive outcome”.

An EU diplomatic source said the agreed price was 0.56 euro cents per watt, near the spot price for Chinese solar panels in July in Europe, according to solar exchange pvXchange.

That may not satisfy EU solar manufacturers who say the price still constitutes dumping, but China has sold solar panels at as low as 0.38 cents per watt in Europe, according to the European Commission, which handles trade issues for EU states.

Under the terms of the deal, China will also be allowed to meet about half Europe’s solar panel demand, if taken at last year’s levels.

EU consumption was about 15 gigawatts in 2012, and China will be able to provide 7 gigawatts without being subject to tariffs under the deal, the EU source said.

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