EU and China negotiating on trade despite solar disputes

November 13, 2012
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European Commissioner for Trade Karel De Gucht has announced that the European Union will commence negotiations on trade market access with China.

This comes to the fore at a time when the EU and China are embroiled in what could turn into a trade war, with the two trading blocs launching tit-for-tat investigations into apparent solar equipment subsidies.

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In an interview with foreign affairs journalist, Lénaïc Vaudin d’Imécourt on viEUws, a digital platform on EU policy development, De Gucht said that despite the hostilities between the EU and China over their respective solar industries, negotiations on trade generally were still open. 

“What we have been proposing to the Chinese, and they have agreed, is to have negotiations on a fully-fledged investment agreement. For the first time ever China will be ready to negotiate about market access. Whether we would now engage in a free trade agreement, I think we’d better try to have this kind of new generation investment treaty first,” he said.

The commissioner said that China was a country “that wants to move up the value chain, so they are testing how far they can go and that results in a number of cases. I’m not interested in a trade war with China either…but if we have to impose duties we will do so”.

However, De Gucht pointed out the relative insignifance of the solar trade in a global context. “We should not exaggerate this. When you look at the global trade figures, it’s only a little bit more than 1% that is disputed between us. So it’s not as if we’re quarrelling all the time about trade between China and the European Union.”

When pushed on whether China had leverage over the EU because it is buying up European debt, the Commissioner said: “I think we have leverage on each other. The world has become very interdependent. China couldn’t prosper without the European market – it would be in shambles – and vice-versa.”

Nevertheless, in order to resolve this situation where the Chinese have been accused to dumping solar panels in Europe, the Commissioner maintained that the first move would need to come from China.

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