The European Union (EU) and China resolved their biggest trade standoff by far on Saturday, following an agreement to regulate solar panel imports from China and avoid similar disputes in other sectors such as steel and wine. The EU trade chief and the Chinese trade representative finalized the deal over a telephone conversation, arranging a minimum price for Chinese panels near spot market rates. 

Europe had initially planned to impose expensive tariffs from August 6 but the plan was rejected in the emd by majority of EU countries. The opposition, which was mostly due to wariness of offending Chinese leaders and being unable to conduct business in the world's second-largest market, resulted to a compromise deal.

"We found an amicable solution," remarked Karel De Gucht, EU Trade Commissioner. "I am satisfied with the offer of a price undertaking submitted by China's solar panel exporters," he said, referring to the minimum price for China's imports.

The solar deal stipulated that the trading price would be no less than EUR 0.56 cents per watt, which according to solar exchange pvXchange was an amount close to the European spot price for Chinese solar panels in July. 

Under the agreement, China will be also be given leeway to supply about half of Europe's solar panel demand, if calculated according to last year's levels. China will provide 7 gigawatts without being subjected to tariffs as the Europe's total consumption amounted to 15 gigawatts for 2012, according to an EU source.