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DERMOT MURNAGHAN: Now then, as if the eurozone didn’t have enough problems, it’s facing a trade war with the fastest growing economy, or one of them, on the planet and that of course is China. The European Union’s trade chief, Karel de Gucht, says he will not shy away from what he needs to do and he joins me now, a very good morning to you, Commissioner. Let’s look at this, it is a huge issue given the economic state of the European nations, we need to trade and we need to trade big with China, yet looming there is a trade war, talks of trade barriers and protectionism. How do you see it, do you think this can be sorted out?

KAREL DE GUCHT: Well as you just said, we are not going to shy away from our responsibilities but I am not interested at all in a trade war which would be devastating I believe for both parties, for Europe but certainly also for China. There are a number of very important cases that have come up recently, like for example the one on solar panels where we got a complaint by the industry. Don’t forget that the sales of solar panels, Chinese solar panels, in 2011 in Europe was about €21 billion and this is massive, it is the biggest case we ever got and then we have to investigate this if we get such a complaint and while China will have to do something about it. They have now nine months to reflect upon it because that is the time that the investigation will take but I expect them to make a major move, yes.

DM: Have you gone a bit too far because the German Chancellor, Angela Merkel, went to China the other week and was seen as calming things down, she wants to solve all this by discussion. I know you want to do that as well but when you say we will do what we have to do, that has the implication of going further.

KDG: It is the responsibility of the European Commission. Trade is an exclusive competence of the European Union and I am in charge of the negotiations and also the trade instruments like dumping practices, subsidies and so on, so member states can have an opinion about that and I quite agree that if we can come to a negotiated solution so much the better but that will mean that the Chinese are forthcoming and that they make a major move.

DM: Okay, so you have the ability to impose tariffs, is that something that you are getting closer to?

KDG: It is not only about having the ability. When there is a complaint, an investigation is started. Of course if it is a serious complaint then it is and then within nine months we have to take a decision and if it is demonstrated that there is dumping and there is subsidising we have to take measures, we have to impose duties, that’s what we have to do. So if China wants to avoid this they will have to come forward with solutions within this period.

DM: And this isn’t just some irrelevant conversation about things way off in the future, this is – as I said in my introduction – about the economic future of Europe, trade is all-important to the economies of Europe, trade with China especially so.

KDG: Trade is very important because we have a very big trade surplus for services and good and people don’t realise that we have a big trade surplus but of course that is fading away because we have to import most of energy and raw materials so we cannot survive, let’s say, without trade. On the other hand, it is about the same for China, they have to export a lot and Europe is their most important market which means we are very interdependent. We cannot live without trade but the Chinese can certainly not live without Europe.

DM: It’s an argument on a smaller scale that’s been made in this country. Can I ask you how you view the discussions about relationships within the European Union that are being had in the UK and some voices, some senior voices actually within the government saying that perhaps Britain and the UK could survive outside the European Union as long as it had those trade agreements. Is that something that you think could happen, is something that is really feasible?

KDG: I don’t doubt that Great Britain can survive without Europe, I think that goes for a lot of member states. The real question is whether that would be the right choice. What I am quite convinced of and am sure of is that if Great Britain wants to play a major role on the world scene in the next generation it will be as part of Europe and not independently, that I am quite sure of. Now on trade they are a very big trading nation but their biggest client of British industry and services sector is continental Europe, more than 50%, and on top of that you are pretty sure they are going to pay you when you are selling products to – I am not going to name a number of countries where you still have to wait for the payment and this is a legally certain environment and the biggest clients, so I really don’t understand that they would make such a move, you know.

DM: Okay and how do you view the discussions within the UK about potentially renegotiating the relationship with the European Union at this time when the EU is grappling with such huge economic problems within the single currency, within its banks? Is that something that the EU really has time for at this moment?

KDG: The first exciting moment will be whether or not they are choosing for the so-called block option on the justice and home affairs, they had that possibility under the Lisbon Treaty. I think it would be a mistake but of course it is up to the member state concerned, to Great Britain, whether or not they do this. What I think Great Britain should take care of is that they do not endlessly continue this opting out system because in the end you are opting out of everything so you know where you start with opting out but where do you stop, you know?

DM: Mr De Gucht, thank you very much indeed, the EU Trade Commissioner there.