Karel De Gucht

EU trade chief Karel De Gucht speaks at a press conference in Beijing in 2011

While almost everyone in Brussels was asleep last night – except EU foreign ministers fighting about Syria– the Chinese delegation to the EU put out what can only be described as its toughest response yet to the burgeoning trade dispute between Brussels and Beijing.

The statement, which we’ve posted in its entirety here, came after China’s trade representative Zhong Shan met in Brussels yesterday with the EU’s trade chief, Karel De Gucht, in a last-ditch attempt to head off two trade cases that are among the biggest and most politically radioactive the European Commission has ever attempted: punitive tariffs against Chinese solar panel imports and an anti-dumping investigation of Chinese telecommunications equipment.

In the statement, the Chinese delegation is pretty blunt: If De Gucht moves forward with the cases, there will be retaliation – and that retaliation could lead to a full-blown trade war:

If the EU were to impose provisional anti-dumping duties on Chinese solar panels and to initiate an ex-officio case on Chinese wireless communications networks, the Chinese government would not sit on the sideline but would rather take necessary steps to defend its national interest. Despite the heightened risk of the China-EU bilateral trade dispute widening and escalating, the Chinese government would nevertheless make a best effort for hope of reaching a consensus and avoiding a trade war, but this would require restraint and cooperation on the EU’s part.

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China’s solar panel manufacturers are facing an uphill battle in their legal fight against the EU, which last week targeted them as it launched the bloc’s biggest-ever an anti-dumping investigation. The case involves Chinese exports of solar panels, wafers and other products that totalled some €21bn last year.

More than half of such anti-dumping investigations result in tariffs being imposed, according to EU officials. Yet there are at least two technical factors at work in the solar dispute that could make the odds even worse for the Chinese. Read more

As with many things involving the European Parliament, there is an air of unreality about this week’s confirmation hearings of the nominees to the next European Commission.  It would be entirely mistaken to think that the process bears much resemblance to the kind of rigorous hearings that presidential appointees are obliged to undergo in the US Senate.  To judge from the proceedings so far in Brussels, the questions asked in the European Parliament’s committees are far less probing, and the nominees are able to get away with answers that are at best platitudinous, at worst utterly incoherent.

There are some honourable exceptions.  The best performance has been that of Belgium’s Karel De Gucht, the EU trade commissioner-designate, who wasn’t afraid to speak frankly about his opposition to a carbon border tax, a policy favoured among others by French President Nicolas Sarkozy.  Equally authoritative were Spain’s Joaquín Almunia, who will run the important competition portfolio, and Finland’s Olli Rehn, responsible for economic and monetary affairs.  This trio looks set to be the powerhouse of the next Commission, along with France’s Michel Barnier, the internal market commissioner-designate. Read more