ROME (Reuters) - China and the European Union have found a way to end a long-running dispute over Chinese exports of telecoms equipment, resolving one of the most divisive issues between the major trade partners, the EU’s top trade official said on Tuesday.
EU Trade Chief Karel De Gucht told Reuters he would ask fellow commissioners to back his proposal to end the dispute over an annual 1 billion euros ($1.27 billion) of imports by Huawei [HWT.UL] and the smaller ZTE.
“I will in the coming days ask the college (of commissioners) to drop the case in the light of the agreement we have reached and the agreement itself will be made official in the coming days as well,” De Gucht said at the sidelines of a trade conference in Rome.
“It is off the table in an acceptable way. I think we made progress on this file,” he said, without giving details of the settlement.
Sources told Reuters last week that Beijing was considering a deal in which China would promise to limit its export credits Huawei and ZTE.
Both sides would also agree to monitor the market share of Chinese telecoms companies in Europe and European companies in China.
Rising imports have made the Chinese companies fierce competitors of European firms including Ericsson, the world’s biggest mobile telecommunications equipment maker, Nokia Networks [NOKI.UL] and Alcatel-Lucent.
According to an EU document, Huawei’s share of the European telecoms equipment market has risen from 2.5 percent in 2006 to 25 percent today, with prices some 18 percent below those of European rivals.
Europe is China’s most important trading partner and for the EU, China is second only to the United States.
Failure to reach a deal could have led to the EU launching an anti-subsidy procedure and imposing punitive levies on Chinese telecoms equipment exports.
Ties between the EU and China have been bedeviled by a series of damaging trade rows ranging from steel and wine to solar panels as China seeks to produce sophisticated products that compete directly with Europe.
Reporting by Philip Blenkinsop; Editing by Robin Pomeroy