[UPDATE] Merkel and Li pledge to defuse EU-China solar trade dispute

During Li’s two-day visit to Germany – the only EU member state he chose to visit on his first foreign trip – the Chinese premier and Merkel talked about the solar dispute among other trade issues. The two heads of state also signed a series of business agreements.

On Sunday, the pair expressed their support for free trade. Merkel said: "Germany will do all it can to prevent permanent import duties being implemented." Li said prospective anti-dumping duties would "harm both sides" and he would like to see "both a two-way dialogue and consultation” to find a solution. "We hope that the EU won’t use protectionist trade measures for such small a cause," Li added.

The European Commission is planning to impose anti-dumping (AD) duties of 47% on Chinese solar imports from June 6 and can override the objections of EU member states to the imposition of these provisional duties.

A source close to the EU-China dispute told pv magazine, a majority of the EU anti-dumping committee – between 14 and 15 of the 27 member state representatives – is against the duties. In fact, there might be a total of 17 member states that have expressed their opposition to the AD duties, German newspaper Handelsblatt, reported today (Monday). On Friday the committee delivered non-binding comments on the trade case to the commission.

On Thursday, more than 40 Chinese solar companies took to the streets to protest over EU duties and representatives of Trina Solar, Yingli and Canadian Solar held a press conference in Beijing to oppose trade penalties, according to Chinese news agency Xinhua. In a joint statement the three solar giants said AD duties would hurt China’s solar industry and have a negative impact on the EU economy and employment, Xinhua added.

According to the agency, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCIEMEP) announced on Wednesday the first-round of negotiations with EU representatives to solve the EU trade dispute had failed. The Xinhua report added the EU had invited Chinese chamber officials to the talks but turned down the price proposals offered.

The Alliance for Affordable Solar Energy (AFASE) urged Merkel to help find a "conciliatory solution" to the trade dispute in a statement released on Friday. Otherwise, jobs would be lost and the solar industry would suffer, the lobby group added.

In line with EU legal procedures, on June 6, when the commission issues provisional findings, there will be three possible outcomes: the imposition of provisional AD duties for six months; an extension of the investigation without provisional duties; or a termination of the investigation.

In the event of the investigation continuing, the next deadline would be on December 5 when a decision will be made by the European Council whether to implement final AD duties on Chinese solar imports for five years or to dismiss duties.