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Germany supports China in trade dispute

Chancellor Angela Merkel pledges to do everything to prevent EC trade duties hitting Chinese solar panel companies.

Last Modified: 27 May 2013 18:25
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China denies accusations of 'dumping' solar panels in European market at low prices [Reuters]

Germany has come out in support of China as a trade dispute over the sale of solar cells and wireless equipment in Europe continues.

German economy minister Philipp Roesler said on Monday that Germany rejected proposals from the European Commission to impose heavy trade duties on China's sales of solar panels in Europe. 

"There is, from our point of view, no longer a need for penalties and therefore Germany today after the expiry of the deadline... voted 'no'," Roesler said in a speech attended by Chinese Premier Li Keqiang.

Countries that use protectionism, and China is one of them, should accept reciprocal rules.

Arnaud Montebourg, French industry minister

He added that Berlin had asked the EC to extend its deadline until Monday morning because Germany wanted to have the chance to "speak with our friends or partners".

"We are against protectionist measures, for open markets and fair competition," Roesler said ahead of a lunch with Li, on the final day of his visit to Germany, by far China's biggest European trading partner.

Li welcomed Germany's call for more time, saying it was because Berlin "wanted to hear" China's stance. "This position, that is what binds China with Germany and earns my appreciation," he said.

The EC accuses Chinese firms of selling solar panels at below cost in Europe, a practise known as "dumping", and plans to impose heavy trade duties on the country, making it far harder for China to gain market share.

The duties, averaging 47 percent, will come into force from June 6 for a trial period and could be withdrawn if both sides can reach a negotiated settlement. 

Roesler's speech comes after a pledge by Chancellor Angela Merkel on Sunday that Germany would do everything it could to prevent the trade dispute from escalating to the point where the EC imposed the import duties.

"I will, as head of the government, advocate that we, at the European level, as quickly as possible have intensive discussions with the Chinese side on the questions at issue," Merkel told a joint news conference with Li.

China has denied accusations of dumping and Li said he "resolutely" rejected the EU's plans to impose taxes on solar panels as well as to probe the country's telecom products.

He said the move would not only threaten jobs in China but affect the interests of European companies, consumers and industry and called for dialogue to resolve the disputes.

A survey conducted by Reuters indicates that the majority of EU countries oppose the levies, which were proposed by the EU's trade commissioner, Karel De Gucht.

'Balanced relationship'

Fearful of losing business in China, Germany, Britain and the Netherlands are among at least 14 member states who oppose the sanctions according to the news agency.

France and Italy are leading a group of countries who say De Gucht is right to go ahead with sanctions, arguing that China's rapid rise in solar panel output to more than the world's entire demand could not have happened without illegal state support.

"We want to see a balanced relationship between China and the European Union," said French industry minister Arnaud Montebourg.

"Countries that use protectionism, and China is one of them, should accept reciprocal rules."

The new premier also said on Monday that his government wants to attract foreign companies and is willing to undertake reforms to promote investment.

The continuing EU dispute has not prevented China signing a memorandum of understanding for a free trade agreement with Switzerland during a visit to Geneva on Friday.

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Source:
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