EU Proposes Shorter Extension of China Solar Duties

The European Commission has softened its proposal to extend anti-dumping duties on imports of Chinese solar panels after opposition from a majority of EU countries, according to a document seen by Reuters.

The Commission, which oversees EU trade policy, recommends limiting the extension of measures to 18 months, from an original 24, and making clear that this period represents a final phasing out of duties that have been in place since 2013.

The proposal will be put to a meeting of the EU's 28 commissioners on Wednesday, a source said.

The Commission faces a delicate balancing act between the interests of EU manufacturers and those benefiting from cheap imports while also being concerned about the response from Beijing, seen as a possible ally in the fight against protectionism.

But Luc Triangle, general secretary of trade union federation industriAll Europe, expressed his concern.

"Bowing to China against the Commission's own assessment would create a fatal precedent also for other industries," he said.

The European Union and China came close to a trade war in 2013 over EU allegations of dumping by Chinese solar panel exporters.

To avoid that, both sides agreed to allow limited tariff-free imports of panels at a minimum price of 0.56 euros per watt, anti-dumping duties of up to 64.9 percent for those outside the agreement and anti-subsidy duties capped at 11.5 percent.

A majority of EU countries last month opposed the Commission's initial plan to extend anti-dumping duties for another two years, putting pressure on the EU executive to soften its position.

The EU governments did back a two-year extension of tariffs designed to counter subsidies. Under the new recommendation, they would also only be extended for 18 months.

The Commission has also proposed cutting the minimum price for panels to 0.46 euros/watt. In its new proposal this price could be steadily reduced.

The EU executive said in a paper sent in December to EU members that ending the measures would likely lead to a significant increase in dumped imports of solar cells and modules and job losses.

EU ProSun, a group of manufacturers including Germany's SolarWorld, said the measures had allowed EU industry to invest and recover and condemned the new proposal.

"It's a clear signal to China that in 18 months it could take over the industry," said EU ProSun president Milan Nitzschke.

SolarPower Europe, which represents those in the solar industry opposed to duties, has said the large majority of players wanted the removal of trade barriers, which would hinder the development of the European solar power generation industry.

The case is due to be settled by March 3.

(Reporting by Philip Blenkinsop)