EU launches WTO challenge against China dairy probe

Brussels – The European Union on Sept 23 launched a World Trade Organisation (WTO) challenge against a Chinese anti-subsidy investigation into imports of European dairy products, in the latest move in a trade spat between Beijing and Brussels.

“Today, the (European) Commission launched a consultation request at the World Trade Organisation, challenging China’s initiation of an anti-subsidy investigation against imports of certain dairy products from the EU,” the EU’s executive arm said.

“The EU’s action was prompted by an emerging pattern of China initiating trade defence measures, based on questionable allegations and insufficient evidence, within a short period of time.”

China announced its probe in August after the EU unveiled a plan to hit Chinese electric vehicles (EVs) with hefty tariffs. The Chinese investigation covers a range of items from fresh cheese and curd to blue cheese, including some milk and cream.

The Chinese probe takes aim at subsidies provided to the EU’s 27 member states under the Common Agricultural Policy, but also national subsidy plans in Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania and the Czech Republic.

The European Commission in July announced plans to levy import duties on EVs imported from China after an anti-subsidy investigation started in 2023 found they were unfairly undermining their European rivals.

The EU wants to protect its auto industry, a jewel in Europe’s industrial crown providing jobs to around 14 million people.

The commission is in charge of trade policy for the 27-country bloc.

The tariffs are currently provisional and will become definitive for five years only after a vote by member states that should take place before the end of October.

China has angrily responded to the EU’s plans, warning it would unleash a trade war. In August, it also filed an appeal with the WTO over the tariffs.

Later on Sept 23, China’s commerce ministry said it had received an EU request for consultations and expressed regret over the bloc’s WTO challenge.

Beijing’s investigation had been initiated “based on Chinese law and at the request of domestic industry”, the ministry said in a statement. “China has a responsibility to protect the legitimate rights and interests of its domestic industries,” it added.

Beijing has also already launched investigations into European brandy and pork products imported into China – besides the dairy probe.

The EU’s trade chief Valdis Dombrovskis said he had held “constructive” talks with Chinese Commerce Minister Wang Wentao on Sept 19, as Beijing seeks a deal with Brussels to avoid steep tariffs on imported EVs.

The commission said its WTO move was the first step in the body’s dispute settlement proceedings.

“If they do not lead to a satisfactory solution, the EU could request a panel to be set up by the WTO to decide on this investigation,” it said. AFP