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China opens EU wine probe as trade dispute spreads

Update: June, 05/2013 - 12:01

BEIJING – Beijing has begun an anti-dumping probe into European wine, the commerce ministry said on Wednesday after the EU imposed tariffs on solar panel imports from China, in a dramatic broadening of the trade dispute.

"The Chinese government has initiated an anti-dumping and anti-subsidy investigation procedure into wines from the European Union," commerce ministry spokesman Shen Danyang said in a statement.

China is the EU's second-largest trading partner, but the move is a major widening of a row that has already involved solar equipment and telecoms, chemicals and seamless pipes.

No figures were immediately available for total EU wine exports to China, but the largest individual wine supplier nation in 2012 was France, with 140 million litres sold, worth $788 million.

On Tuesday the European Commission imposed anti-dumping duties on imports of Chinese solar panels, defying German-led opposition and warnings from Beijing.

EU Trade Commissioner Karel De Gucht said they were being sold at up to 88 per cent below cost in the European market and the "dumping" was harming the European solar panel industry.

The Commission would levy an initial average tariff of 11.8 per cent from Thursday, rising to 47.6 per cent on August 6 in the absence of negotiations based on a Chinese commitment to address the problem.

China "firmly opposes" the EU move, Shen said in the ministry statement, describing the tariffs as "unfair taxes against China's photovoltaic products exports to Europe."

"The Chinese government and industry have shown great sincerity and made enormous efforts in resolving the issue via dialogues and consultations," he said.

"We hope the European side will show further sincerity and flexibility and find a solution that is acceptable to both sides via consultations."

The statement came after China's official news agency Xinhua said the Commission's imposition of duties showed the "bizarreness" of EU decision-making.

"As the EU's second-largest trade partner, China could have joined in efforts to help pull the bloc out of recession with the power of its massive demand," it said.

"But the EU has continued to test China's patience and limitations, a situation that is unrealistic for China to accept. Protectionism on one side is bound to trigger protectionism on the other."

Germany had led growing opposition to the tariffs in recent weeks while hundreds of companies belonging to the Alliance for Affordable Solar Energy had warned they could "very significantly" harm business.

Xinhua said the approval of the duties regardless "points to the bizarreness of the EU's decision-making mechanism, or simply the obstinacy of the European Commission."

German Economy Minister Philipp Roesler said it was "a serious mistake," with Berlin firmly opposed. -- AFP

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