After the landmark deal announced over the weekend on solar panels, China and the European Union are now looking to drop wine dumping accusations through “window for discussions”, EU’s trade chief told on Monday.
EU Trade Commissioner Karel De Gucht told in a news conference “There is a window for discussions between the European Union and Chinese (wine) producers.” “The Chinese government has promised to facilitate such discussions,” he said.
Solar panel deal laid the foundation
The agreement to resolve the dispute amicably follows the settlement a few days back over the dumping of Chinese solar panels in Europe, which was the biggest trade dispute between two giant economies, says a report from Reuters.
EU-China solar panels deal announced on Saturday came after months of difficult negotiations. The agreement gets the backing of 90 Chinese solar companies, which account for almost 60 percent of the EU market, of not sell their offerings below a certain price floor. Presently, Chinese company account for 80 percent of the EU market.
Last month, EU held Chinese solar manufacturers guilty of dumping, or selling their products below cost, and as a punishment imposed on an average 47 percent provisional duties on the contracts before August 6.
Wine inquiry by China would have impacted EU
China in a response to EU’s punitive duties on solar panels started an anti-dumping inquiry into European wine sales, resulting in retaliatory duties on exporters in France, Spain and Italy.
Any punitive actions over the inquiry into European wine sales from China would have seriously hampered EU’s wine industry as China is the biggest importer of Bordeaux wines, whose demand jumped 110 percent in 2011.
China, which imports around $2.6 billion worth of wine per year, gets two-third of its wine from the European Union. Germany’s Wacker Chemie, which is second biggest maker of polysilicon globally, would have been deeply impacted by any tariffs from China.
Deal was expected
The deal between the two trade giants was expected. Earlier this month, a report from Reuters did hint about the deal, owing to which many Chinese solar stocks gained significantly. Major Chinese solar stocks like Yingli Green Energy Hold. Co. Ltd. (NYSE:YGE), JA Solar Holdings Co., Ltd. (NASDAQ:JASO), ReneSola Ltd. (NYSE:SOL) reported strong gains.
Also, Goldman Sachs upgraded the outlook on major U.S. solar stocks like First Solar, Inc. (NASDAQ:FSLR), SunPower Corporation (NASDAQ:SPWR), and MEMC Electronic Materials, Inc.
However, as of now there has been no confirmation over the freeze of the EU wine investigation. Chinese industry association, which filed a wine complaint, has not received any information on the freezing of the probe.