* Trade chief to discuss solar panels on sidelines of Beijing meeting
* EU seeks a negotiated settlement with Chinese solar companies
* EU member states concerned about Chinese retaliation in dispute
By Ethan Bilby
BRUSSELS, June 18 (Reuters) - The European Union's top trade official will discuss a dispute with China over solar panels at a meeting in Beijing on Friday, with the EU looking to negotiate a settlement to the spat and avoid a costly and debilitating trade war.
The European Commission, the EU's executive, accuses China of dumping billions of euros of solar panels in Europe at below the cost of production. It imposed punitive tariffs on China's imports on June 6, despite the majority of EU member states opposing the move, partly out of fear of retaliation.
"It is expected that EU Trade Commissioner De Gucht and Chinese Minister of Commerce Gao (Hucheng) will discuss this issue in the margins of the (meeting)," EU trade spokesman John Clancy said in a statement on Tuesday, referring to Friday's annual EU-China trade and investment meeting.
Clancy said technical-level negotiations between the EU and China on the dispute were already under way in Brussels, although the issue was not officially on the agenda for Friday's meeting in Beijing.
The statement confirms a Reuters story last week that said De Gucht would travel to China to seek a negotiated solution. Such a solution is expected to involve setting a minimum price at which Chinese companies can sell in Europe.
Many European countries, led by Germany, are opposed to the Commission's imposition of duties, worrying that it will lead to retaliation by Beijing. Within 24 hours of the EU duties being applied, China launched its own investigation into EU wine.
That move would appear to target southern European states such as France and Italy, which supported the solar action.
European trade ministers from Germany, Britain and other free-trade-supporting nations have urged De Gucht, a Belgian lawyer who has chief responsibility for negotiating trade issues for the EU, to find a solution to the solar dispute quickly.
De Gucht softened his earlier plan to levy punitive tariffs averaging 47 percent immediately, and went ahead with tariffs at 11.8 percent for two months, leaving a window for Brussels and Beijing to negotiate. If a deal cannot be struck by December, the EU's higher tariffs will apply for up to five years.
The Commission launched the investigation into solar imports from China after a complaint by Germany's SolarWorld. The probe found that illegal trade practices let China secure 80 percent of Europe's solar energy market, the world's biggest.
The Chinese panels are made by suppliers including Yingli Green Energy, Suntech Power Holdings, Trina Solar and Canadian Solar.