German ex-chancellor urges solution to EU-China trade dispute

European Union (EU) members should understand that protectionism does not help make their businesses competitive, says former German Chancellor Gerhard Schroeder.

In a recent interview with Xinhua, he called for a negotiations-based approach to settling the EU-China trade dispute involving solar products.

"I share the position of the German government that the trade dispute must be resolved through negotiations," said Schroeder, who served as German chancellor from 1998 to 2005.

He called on the German government to put more pressure on the EU on this issue, saying that "it makes no sense for both sides to act with increasingly more punitive tariffs."

Earlier this month, the EU introduced punitive tariffs on China's solar panels. The current 11.8-percent punitive duty lasts until Aug. 6, after which it would rise to 47.6 percent should negotiations fail.

The German government has been concerned about Brussels' move, with Vice Chancellor and Economy Minister Philipp Roesler saying to levy punitive duties on Chinese solar panels is a "grave mistake."

In the interview with Xinhua, Schroeder said that partnership between China and Europe leads to win-win results while trade protectionism brings harm.

German businesses have expressed concerns over the EU's decision to impose provisional anti-dumping duties on Chinese solar products.

In a statement issued earlier this month, the Federation of German Industry (BDI) said it regrets the EU's decision and urgently appeals to both sides to find a mutually acceptable solution.

"Punitive tariffs on Chinese products will not make the German solar industry competitive," Schroeder said. "Only the companies that have specialized and internationalized at the same time are able to survive."

The former chancellor said the Chinese economy has developed enormously and become technologically more competitive, which will not only lead to rising wage levels in China and more expensive products, but also create new opportunities for German companies to cooperate with Chinese partners.

It does not matter whether the competitors come from the United States, China or Europe, he said, adding that it is only important that there is a level playing field that is fair for everyone.

Commenting on some EU countries' moves to protect their own economy in face of losses in the eurozone debt crisis, Schroeder said EU countries must understand that protectionism does not help make their own businesses competitive.

"Ten years ago we were considered the 'sick man of Europe.' Today we are the engine of growth," Schroeder said, recalling the social welfare and labor reforms he championed that saw tax cuts and freed up the job market.

He added that other European countries must also reform likewise.

On the still unfolding regional debt crisis, Schroeder said the EU needs to make further steps to overcome the crisis, including stronger coordination of financial and economic policies among the EU member states and more pro-growth measures.

"Growth in Europe is important for China and vice versa," the former chancellor said. "We are interdependent."