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China launches EU wine dumping investigation as dispute over solar power products drags on

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(Globalpost/GlobalPost)

BEIJING, China - China's Commerce Ministry announced Monday it has launched a formal investigation into claims that European Union countries are selling wine at unfairly low prices, as a prolonged dispute over Chinese solar power products continues to affect trade relations.

The ministry said in a notice late Monday that it had accepted the complaint brought by the Chinese wine industry in May following a review. It said it would carry out an "open, fair, and transparent" investigation in compliance with Chinese law and World Trade Organization rules.

The wine complaint was filed with the ministry on May 15 after the EU raised duties to about 12 per cent on Chinese-made solar panels, cells and wafers over alleged dumping. The tariff is set to jump to an average of 47 per cent on Aug. 6 if an agreement is not reached.

Dumping generally means selling a product abroad at a lower price than at home, although some governments also take action if the price is deemed to be below production cost or unfair in some other way.

China revealed the lodging of the wine industry complaint in the same announcement in which it expressed its "resolute opposition" to the EU move, leading most observers to view it as a retaliatory measure.

China imports about $1 billion of wine from EU countries annually.

In Brussels, EU trade spokesman John Clancy said the European Commission was "disappointed to learn of this action by China."

"The commission will examine in detail whether the Chinese case is consistent with the WTO framework," Clancy said.

The sharply higher European duties on solar power products could devastate financially strapped Chinese manufacturers struggling with excess production capacity and a price-cutting war.

European imports of Chinese-made solar panels totalled 21 billion euros in 2011 and the EU claims Chinese dumping threatens 20,000 jobs in Europe.

Last year, the United States imposed anti-dumping tariffs of up to 250 per cent on Chinese solar panels following similar complaints.

Questioned in Beijing about the status of talks, EU Ambassador Markus Ederer said he did not consider the wine probe to be a "tit for tat" move by China.

"These talks are ongoing. I cannot predict the result but I see two sides who have a lot of goodwill to find a negotiated settlement," Ederer said.

http://www.globalpost.com/dispatch/news/the-canadian-press/130701/china-launches-eu-wine-dumping-investigation-dispute-over-so