* EU partly drops threats against China in dispute
* EU's De Gucht says illegal subsidies remain a problem
* Seeks resolution by EU-China meeting in June/July
* Mobile network equipment imports worth 1 bln euros/year
(Adds value of imports, background on trade disputes)
BRUSSELS, March 27 The EU's trade chief
partially defused a long-running telecoms trade dispute with
China on Thursday by dropping part of its complaint and offering
negotiations in the coming months to reach a full solution.
Karel De Gucht said the European Commission would no longer
pursue an anti-dumping investigation into imports from China of
equipment for mobile telecom networks, worth an annual 1 billion
euros ($1.38 billion) per year.
The Commission, the EU's executive, would still look into
the issue of illegal subsidies, although would not formally
launch an investigation while talks with Beijing continued.
"I would like to have a solution by the next economic and
trade committee meeting with China that we should have (at the)
end of June or beginning of July in Brussels," De Gucht said.
The main Chinese exporters are world No. 2 telecoms
equipment maker Huawei and the smaller ZTE.
De Gucht said the Commission's move reflected its belief
that the essence of the problem with the Chinese competition was
However, he also said the decision not to pursue the
anti-dumping part of the action was a significant step towards
resolving the entire issue.
The softening tone follows China's decisions in the past
week to end investigations into imports of EU wine and
polysilicon, used in solar panels, and comes days before the
visit to Brussels of Chinese President Xi Jinping.
De Gucht said last May that the Commission had decided in
principle to open both an anti-dumping and anti-subsidy case
against China on the telecoms issue, although no formal
investigation was launched.
"We have decided to drop the telecoms case with respect to
anti-dumping," De Gucht, the EU's trade commissioner, told a
news conference on Thursday, referring to EU accusations that
Chinese telecom equipment makers sell their products at below
the cost of production in Europe, breaking world trade rules.
"There are a number of demands we would like to see
fulfilled before we can decide on the subsidies case," he said,
adding this was where "the real problem" lay.
Brussels believed European manufacturers Ericsson
, Nokia Siemens Networks and Alcatel-Lucent
have suffered as a result of cheap Asian imports but
that the companies would not make formal complaints for fear of
Chinese reprisals, according to EU documents seen by Reuters.
Last year's threat of action came at a time of heightened
EU/China trade tension, with the chief cause of conflict the
Commission's plan to impose duties on 21 billion euros of
imports from China of solar panels.
China and the European Union eventually agreed last July
that the EU would allow in a certain number of panels from
China, equivalent to about half of EU demand, at a set minimum
The EU now has 31 ongoing trade investigations, 20 of them
involving China, although these cover imports of no more than a
few hundred million euros.
($1 = 0.7254 Euros)
(Reporting by Philip Blenkinsop and Robin Emmott; editing by