China and the European Union ended an anti-dumping and anti-subsidy investigation into EU wine exports ahead of Chinese President Xi Jinping's visit to Europe, the Ministry of Commerce said on Friday.

A ministry statement said China and the EU reached agreement on the wine probe on Tuesday through negotiation and consultation.

China launched the investigation last year to determine if European product was sold below fair value in China. The case was widely believed to be a counter measure to EU moves to impose punitive duties on solar panels from China. The solar dispute, which took the two economies to the edge of a trade war, was resolved through a price undertaking with Chinese Premier Li Keqiang's mediation during his visit to Europe in May.

Xi will make his first trip to Europe since taking office from March 22 to April 1. He will visit EU headquarters, the Netherlands, France, Germany and Belgium.

Chinese Commerce Minister Gao Hucheng said in a statement he was happy to see both sides resolve the dispute through cooperation.

"Both China and the EU have been on the right track to resolving trade friction since the settlement of the solar panel dispute," Gao said. "The wine case was smoothly settled and the China-EU dispute on the telecommunication equipment is also moving toward the same direction."

The EU threatened in May to open an anti-dumping and anti-subsidy investigation concerning imports of mobile telecommunications networks and their essential parts from China.

"All of this proved, again, that dialogue and consultation under World Trade Organization rules are the best way to settle disputes and that China and the EU have the wit and capability" do so, Gao said.

EU wine exports to China reached 257 million liters in 2012 and were worth nearly $1 billion, more than half coming from France.

Earlier this month, China and the EU resolved a dispute on polysilicon products through consultation and negotiation. European exports of polysilicon will not be sold below a specific minimum price in China, while China agreed to refrain from anti-dumping and anti-subsidy duties on imports.

Cui Hongjian, director of European studies at the China Institute of International Studies, said recent trade settlements between China and the EU were likely to build a harmonious atmosphere for Xi's visit to Europe.

"Both sides value the bilateral economic ties very much," Cui said. "Trade friction, if not properly resolved, will have a much bigger impact on each other's industries than decades ago. As China and the EU industries are now closely connected, industrial coordination should be included into the moves of settling trade disputes, which will enhance the mechanism of settling trade friction."

The EU is China's largest trade partner with bilateral trade of $559.06 billion in 2013, up 2.1 percent year-on-year. The two sides are also negotiating a bilateral investment treaty.

The commerce minister said this year marks a new decade of the China-EU Comprehensive Strategic Partnership and "we have reasons to believe that bilateral economic cooperation will develop faster and better".

lijiabao@chinadaily.com.cn

(China Daily USA 03/24/2014 page16)