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Solar duties risk derailing China-EU trade ties

By Liu Jie (Xinhua)

10:28, June 05, 2013

(Cartoon by China Daily)

BEIJING, June 4 (Xinhua) -- The European Union's decision to impose punitive import duties on Chinese solar panels late Tuesday is not simply out of expectations, but it risks going out of the boundaries of the normal trade ties.

Despite China's repeated calls for negotiation, the EU has pressed ahead with duties ranging from 11.8 percent to 47.6 percent, dealing a heavy blow to China-EU trade ties which would have embarked on a much less bumpy road ahead.

The EU's protectionism sends the wrong message to China and the world. Instead of seeking a win-win solution to solve its domestic troubles, it is shifting the blame elsewhere.

EU Trade Commissioner Karel De Gucht said an incremental approach will allow a smooth transition for EU markets and serve as a "one-time offer" for the Chinese to negotiate, adding that he wants an amicable solution.

For China, the incremental duties, though temporary, are not likely to encourage an amicable response from China, as the EU has raised the stakes for further bargaining with China, unilaterally.

Prior to the announcement of the decision, a majority of the 27-nation bloc voted against the duties, demonstrating that most EU members are keenly aware of the grave consequences of the duties.

The Alliance for Affordable Solar Energy, a coalition of more than 450 European photovoltaic companies, called the proposed punitive tariffs "extremely disturbing," saying they would cause "irreversible damage" to Europe's entire photovoltaic value chain.

However, the duties still have been decided, which points to the bizarreness of the EU's decision-making mechanism, or simply the obstinacy of the European Commission, the EU's executive arm.

In fact, a majority of members' oppositions to the duties have put the European Commission in an uncomfortable position.

China has demonstrated a constructive attitude and made concrete efforts to negotiate with EU leaders on various occasions. As the EU's second-largest trade partner, China could have joined in efforts to help pull the bloc out of recession with the power of its massive demand.

But the EU has continued to test China's patience and limitations, a situation that is unrealistic for China to accept.

Protectionism on one side is bound to trigger protectionism on the other. The EU should hold accountable for a possible trade war if such an incident occurs.

One way or another, the duties will push up both enterprises' costs and Europeans' electricity bills, derailing Europe's solar energy efforts and doing more harm than good.

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