* Brussels accuses China of selling solar panels below cost
* Officials considering imposing duties on Chinese imports
* Some countries, fearful of losing business, resisting move
* Positions show Franco-German split; Paris wants levies
By Robin Emmott and Ethan Bilby
BRUSSELS, May 27 A majority of EU governments
oppose a plan to impose hefty duties on solar panel imports from
China, a survey of member states showed on Monday, undermining
efforts by Brussels to pressure Beijing over its trade
The European Commission, the EU's executive, accuses Chinese
firms of selling solar panels at below cost in Europe - a
practice known as "dumping" - and plans to impose duties, making
it far harder for China to gain market share.
The duties, averaging 47 percent, will come into force from
June 6 for a trial period and could be withdrawn if both sides
reach a negotiated settlement.
It is the largest trade case the Commission has undertaken,
with about 21 billion euros of China-made solar panels sold in
The duties are being proposed by the EU's trade
commissioner, Belgian lawyer Karel De Gucht, who met with
Chinese Vice-Minister of Commerce Zhong Shan for an informal
meeting in Brussels on Monday.
The Chinese side described the meetings as "constructive"
and said the pair discussed solar duties as well as an EU threat
to open an investigation into mobile telecom equipment makers
Huawei and ZTE.
But Zhong said that either EU move would lead to a
definitive Chinese response.
"Such practices of trade protectionism are not acceptable to
China," a spokeswoman for the Chinese mission to the European
Union said in a statement, and would "seriously sour the climate
on bilateral trade and economic engagement."
"The Chinese government would not sit on the sidelines, but
would rather take necessary steps to defend its national
interest," if the EU went ahead, the statement said.
The fear of Chinese reprisal and potential loss of business
has led Germany, Britain and the Netherlands to be among at
least 14 member states to oppose the sanctions, diplomats told
The Commission said China was pressuring some EU countries
to oppose the duties.
"Commissioner De Gucht ... made it very clear to the
Vice-Minister that he was aware of the pressure being exerted by
China on a number of EU member states, which explains why they
are positioning themselves as they are in their advisory
positions towards the European Commission," the Commission said
in a statement.
The EU's 27 countries had until last Friday to submit a
formal, written response to De Gucht's plans. While the trade
commissioner would still have the right to impose the duties,
doing so in the face of member states' opposition would be hard.
The Commission statement said De Gucht told China's
vice-minister he wanted "to examine the possibility of a
negotiated settlement in partnership with the United States
should this become necessary."
Provisional duties will more than likely still go ahead on
June 6, once they are published in the European Union's official
journal, officials say, but the pressure to roll them back
before they become permanent in December will be intense.
The split underlines the depth of division in the EU over
how to deal with China, a critical market for many EU exporters
and the region's second biggest trading partner over all.
Reuters spoke to 21 of the EU's 27 countries and confirmed
that 15 opposed the duties, while six supported them. The other
six either declined to say or were unreachable.
France and Italy are leading a group of countries that say
De Gucht is right to go ahead with sanctions, arguing that
China's rapid rise in solar panel output to more than the
world's entire demand could not have happened without illegal
Chinese companies have captured more than 80 percent of the
European market from almost zero a few years ago.
De Gucht met China's deputy commerce minister for informal
talks in Brussels on Monday, a day after Chinese Premier Li
Keqiang and German Chancellor Angela Merkel, meeting in Berlin,
called for an end to the dispute, as well as another conflict
over Chinese telecoms companies accused of dumping in Europe.
Germany initially supported De Gucht's plans for duties, and
it was a German company, Solar World, that first
raised the complaint against the Chinese.
But rather than punitive measures, Merkel now appears to
favour a negotiated solution, wary of the potential impact on
German exporters if China were to take retaliatory steps.
"There is no need for more sanction measures," German
Economy Minister Philipp Roesler told a news conference on
Monday after talks with Li.
TRADE CHIEF'S STRATEGY
Although De Gucht says he had no intention of damaging
European business interests in China, he wants to show Beijing
that the Commission is serious about preventing dumping and that
China must play by international trade rules.
France shares that view.
"We want to see a balanced relationship between China and
the European Union," said French Industry Minister Arnaud
Montebourg. "Countries that use protectionism, and China is one
of them, should accept reciprocal rules," he told reporters.
EU officials told Reuters earlier this year they were
frustrated with the Chinese leadership's lack of engagement.
By levying provisional duties, the Commission feels it has
leverage, because under EU law the sanctions could be cemented
for up to five years from December if no solution is found.
According to a copy of the Commission's solar investigation
obtained by Reuters, the Commission found clear evidence of
dumping by Chinese producers.
"The Commission was presented with prima facie evidence that
dumping occurred. They can't just ignore that," said Stuart
Newman, a legal adviser to the Foreign Trade Association, a
lobby group based in Brussels.