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Germany wants to avoid Eu-Sino trade war

During a visit to Beijing, the German Chancellor sought to find a political solution to the anti-dumping (AD) and countervailing duty (CVD) dispute involving China’s photovoltaic manufacturers.

Merkel is hoping to avoid an Eu-Sino trade war.

Flickr/World Economic Forum

According to German news agency, dpa, in a bid to ease political tensions, German Chancellor Angela Merkel (Christian Democratic Union) is hoping to find a solution to avoid a solar trade dispute between Europe and China.

Reportedly, after a meeting with Chinese Premier, Wen Jiabao, Merkel stated that she wants to reach a negotiated settlement and "not always resort to the same weapons for legal disputes". It has been said previously that German government officials do not expect a trade war with China.

This sentiment clashes with that of newly-appointed German Environment Minister, Peter Altmaier’s, who stated at the end of July that he would be for the implementation of anti-dumping lawsuits, should there be evidence of unfair competition. At the time, it was reported that he was seeking to raise the issue with Merkel during their China visit. Following today’s news, it seems his previous comments have not been taken on board by the Chancellor.

While the U.S. has already launched an AD and CVD investigation into imports of photovoltaic products from China at the behest of a SolarWorld-led consortium, and has issued preliminary tariffs, in Europe the possibility of an investigation is still being mulled over by the European Commission.

Again led by SolarWorld, EU ProSun was launched at the end of July to spearhead a European trade complaint against China due to "unfair competition". The European Commission had 45 days from the lodging of the compliant to decide whether it will open the trade case or not. If it does go ahead, a preliminary judgment is expected to be made no later than 2013 and punitive tariffs could apply retroactively, as is the case in the U.S.

China has already retaliated by launching its own AD investigation into solar grade polysilicon imports from the U.S. and Korea, and is considering calls for similar action in Europe.

Following a separate investigation, MOFCOM has further concluded that 6 renewable energy subsidies in the U.S. violate provisions made under the WTO Subsidy and Countervailing Measures Agreement and the Article 3 of 1994 General Agreement on Tariffs and Trade. It is now seeking to have them cancelled.

The potential trade dispute in Europe has, to date, attracted controversy. Just last week, the International Photovoltaic Equipment Association (IPVEA) criticized the filed complaint and has called for the industry’s associations to unite. Germany-based VDMA Photovoltaic Equipment also stated that German manufacturers of photovoltaic components, machinery and equipment for photovoltaics view the anti-dumping proceedings "with great concern".