Chnge Partnership with WWF International, Natuur & Milieu and E3G issued a communique to the European Commission requesting immediate withdrawal of plans to impose punitive import duties on solar photovoltaic (PV) equipment entering the EU on Thursday 30 May 2013.

From 6 June the Commission will impose duties averaging 47% for a ‘trial’ period. This is the largest duty ever imposed by the Commission and threatens the €21bn on Chinese panels market in the EU. Already governments are lining up against the Commission’s heavy-handedness.

There are three things that stand out from this debacle. Firstly, it doesn’t make geopolitical sense. The EU has yet to grasp that an healthy trade relationship with China is of critical strategic importance with trade amounting to over €1 billion daily. China is the EU’s second largest export market and China is the biggest importer into the EU. A healthy trading relationship is an importance basis for addressing common issues such as low-carbon energy transformation and decarbonisation. China will shortly launch regional carbon markets modeled on the EU’s scheme. This is part of a comprehensive way to shifting production towards low-carbon which makes this trade dispute all the more woeful. It also puts about 242,000 net jobs at risk. A calamity considering chronic levels of unemployment in almost all countries. That the EU is bending over backwards to establish a fossil fuel rich trade deal with Canada, the only country to abandon the Kyoto Protocol on climate change, challenges sanity.

green jobsSecondly, this dispute highlights incompetence and a lack of clarity. The EU’s flagship climate and energy package has done to move international action on combating climate change than anything else. The 20% renewable energy target allows governments to diversify their energy systems in order to reduce exposure of high cost fossil fuel imports. At the European Summit the EU raised concerns about energy costs and their potential impact on overall competitiveness. Affordable PV panels have allowed many households and communities to gain energy independence. Supply chains have been built up all over Europe granting jobs to people. Penalising affordable PV puts additional costs on government support schemes rendering them overly burdensome.

Finally, it flirts dangerously with  growing populist protectionist temptations and above all a worrying anti-Chinese sentiment. Putting Trade Commissioner Karel de Gucht back into a managable box before he does more harm is vital. This is not the time to launch a crusade against China. Trade war could make Europe considerable weaker especially if the Chinese retaliate on EU exports. China is the second biggest market for EU exports worth €144 million in 2010. There is a chance for diplomacy to solve the day. The Chinese are urging the Commission to come to the table. Chancellor Merkel and over governments are pressing them too. Will the Commission listen to these calls? We will find out shortly….