EU levy on Chinese solar panels

The European Commission on Tuesday said it would begin to apply a provisional staggered system of duties on Chinese solar imports, in anticipation of possible talks with Beijing.

EU Trade Commissioner Karel De Gucht said that an average levy of 11.8 percent would be applied from June 6, with the levy rising to 47.6 percent on August 6, unless a solution could be agreed.

"I want a fair solution with China," De Gucht said, adding that the EU was keen to pursue a course of negotiation with Beijing. "The ball is now in China's court. I want an amicable solution with our Chinese partners."

The EU accuses China of subsidizing the solar products, the European Commission claiming that panels were being sold at 88 percent below cost price. The industry association EU ProSun says China now holds about 80 percent of the EU market, with European companies having suffered in the face of the cheaper Chinese imports.

Longer-term threat

According to EU law, formal discussion towards a negotiated settlement can only begin after duties are introduced. Should the negotiations fail to resolve the disagreement, the duties would be put in place for a five-year period, from December

The introduction of tariffs is not supported by all EU members, with Germany - the bloc's biggest player in the solar sector - among the skeptics. Berlin is concerned that imposition of levies could prompt retaliatory action on the part of Beijing, which would affect its sales in China.

The Chinese government last month warned Brussels that, if it went ahead with provisional duties, it would "take necessary steps" to defend its national interest.

While Beijing was not specific, Chinese Prime Minister Li Keqiang warned that the imposition of punitive tariffs would hurt European consumers, although he stopped short of a direct threat of retaliation.

rc/msh (AFP, AP, dpa, Reuters)