EU and China close in on solar panel deal

Fri Jul 5, 2013 11:03am EDT
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By Robin Emmott, Ethan Bilby and Samuel Shen

BRUSSELS/SHANGHAI (Reuters) - The European Union and China are moving towards a deal to defuse a conflict over alleged dumping of solar panels in Europe, officials from both sides said on Friday, aiming to head off a damaging trade war in goods from steel to wine.

The European Commission, the EU's executive, accuses China of flooding Europe with billions of euros of cheap solar panels sold at below the cost of production, and has imposed duties that will jump up to punitive levels in August.

Brussels and Beijing have until then to find a solution in their biggest ever trade dispute. Europe's free trade-advocates Britain and Germany want to avoid angering China and risk business with Europe's second largest trading partner.

However, the impact of overcapacity and plunging prices on European solar firms was underscored on Friday as German group Conergy CGYGk.DE filed for insolvency.

Officials from Europe and China said more than two weeks of negotiations in Beijing were going well and they aimed to agree a minimum price for Chinese importers above their production costs, although numbers are still fluid.

"We remain highly optimistic about the direction we are moving in," said Sun Guangbin, head of a government-industry association authorized to represent Chinese solar companies in the talks.

The European Commission, which handles trade cases for EU governments, declined to comment, but four officials close to the negotiations told Reuters they were also very positive.

"The architecture of the deal is there," said one person who declined to be named because of the sensitivity of the talks. "The atmosphere in the talks is very business-like, there's a good chance of a deal before the August deadline."   Continued...

A man eats his breakfast as he walks under solar panels belonging to a solar power plant in Shenyang, Liaoning province June 5, 2013. REUTERS/Stringer