Leaders oppose EU punitive tariffs

Block's move on Chinese solar panels, mobile telecom products sends a signal of trade protectionism

Premier Li Keqiang and German Chancellor Angela Merkel said on Sunday that the two countries oppose any punitive tariffs from the European Union on Chinese solar panels and mobile telecommunications equipment manufacturers.

The two leaders also called for negotiations to avoid a trade war between China and the EU.

They made the remarks two weeks before the EU is due to announce its preliminary verdict on the trade probes.

At a joint press conference with Merkel, Li said that China firmly opposes the EU's move to probe Chinese-made wireless telecom devices and any punitive duties on Chinese-made solar panels.

"The moves send a signal to the world of trade protectionism," Li said.

"They not only hurt Chinese companies and jobs, but also damage the interests of European industries, businesses and consumers."

The EU measures will "harm others without benefiting itself," he said.

He added that every country should work hard to maintain open trade relationships and avoid protectionist moves.

Merkel told Li that she would do everything possible to avoid entering into a kind of dispute, which finally would only end in mutual tariffs.

"Germany will work for this to be resolved as quickly as possible because we don't believe (that tariffs) would help us very much,'' said Merkel. "And that's why we should very intensely use the next six months, and Germany will do everything to ensure that the talks will really advance,'' she added.

Li thanked Merkel, adding that China also hopes that the talks between Beijing and Brussels will be able to avoid a trade standoff and yield "an amicable solution".

The probe against Chinese solar companies was started after German solar-panel company Solar World last year filed a complaint with the EU.

The 27-country bloc is the world's largest economy. As China's second-biggest business partner, bilateral trade reached about 430 billion euros ($555.9 billion) in 2012. Solar panel exports account for about 7 percent of China's total exports to the EU.

Li's visit to Europe came amid voting by EU member states on the solar panel issue.

EU members cast their non-binding votes on May 24 on the EU Commission's proposed anti-dumping duties on Chinese solar products. Li told a luncheon on Monday that Germany had voted against the proposal.

According to undisclosed sources, the EU Commission's trade officials are arranging further meetings this week to reach out to some of the member states to discuss the solar panel investigations.

The sources said that this indicates that the EU might indeed have already received 14 to 15 "no" votes.

While this does not prevent the EU Commission from imposing provisional anti-dumping duties, it does weaken its strategic position for the rest of the investigation and for possible settlement negotiations.

Hence, the EU Commission might attempt even in the next couple of days to encourage some EU member states to change their position.