The European Union’s trade chief, Karel De Gucht, yesterday (Thursday) submitted a proposal with negotiating directives to the council of the EU which has to approve it for the commission to start negotiations, a source close to the commission told pv magazine.
The goal of the investment pact is to reduce trade barriers and increase the volume of bilateral trade flows. Member states would also discuss how "to improve protection of EU investments in China, as well as Chinese investments in Europe."
If the EU council adopts the mandate, talks with China would begin soon afterwards but no negotiation timeline has been released yet.
A press statement from the commission added: "This is the first ever proposal for a standalone investment agreement since foreign direct investment became the exclusive competence of the EU under the Lisbon Treaty."
Trade relations are tense between China and the EU due to the commissions possible implementation of provisional anti-dumping duties of an average 47% on Chinese solar imports. Nevertheless, a source close to the commission told pv magazine: "There is no link between the negotiations for an investment agreement and the trade defense cases."
The Chinese Ministry of Commerce announced on May 17 it would wait until June to publish its own verdict on an anti-dumping investigation into U.S. polysilicon imports to China.
Meanwhile, German Chancellor Angela Merkel also plans to address the topic when the Chinese premier Li Keqiang visits Berlin on Monday (May 26).
According to EC figures, around 65% of all solar panels are produced in China. In addition, the EU is China’s main export market, accounting for around 80% of all Chinese exports.
"In 2011, European companies invested 17.5 billion in China and China invested 2.8 billion in the EU," added the press statement.
Read more on the global PV trade disputes in pv magazine‘s Trade cases feature.