The European Commission is to challenge China’s anti-subsidy investigation into EU dairy produce at the World Trade Organization (WTO).
Brussels said by taking the issue to the arbitrator of world trade disputes, it is acting on its “commitment to firmly defend the interests of the EU dairy industry and the Common Agricultural Policy against abusive proceedings”.
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China announced last month it had launched an investigation into subsidies linked to dairy imports from the EU in what was widely interpreted as the latest tit-for-tat move in an ongoing trade spat.
The announcement of the probe came just a day after the EU published a series of additional levies on Chinese electric vehicle imports.
The row has already seen China launch an anti-dumping investigation into certain pork and pig by-products originating from the EU from 1 January 2023 to 31 December 2023.
But it is the dairy announcement that has prompted the EU to ask the WTO to intervene. It is the first time Brussels has decided to challenge an investigation at its initiation stage.
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By GlobalDataThe European Commission said its 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”.
Valdis Dombrovskis, the EC’s executive vice-president and commissioner for trade, said: “The Commission is doing everything it takes to defend EU dairy producers and the Common Agricultural Policy from the abuse of trade defence instruments.
“The Chinese investigation on EU dairy is based on questionable allegations and insufficient evidence, therefore we will continue to challenge it vigorously in all available venues, while calling on China to bring it immediately to an end.”
The consultation requested by the EU today (23 September) represents the first step in WTO dispute settlement proceedings. If they do not lead to a satisfactory solution, the EU could request a panel to be set by the WTO to decide on this investigation.
China’s dairy investigation targets liquid milk and cream with a fat content higher than 10% and various types of cheese from the EU.
The investigation involves subsidies under the EU’s Common Agricultural Policy as well as certain national and regional programmes.
Announcing its probe into EU dairy imports last month, Xinhua, the Chinese state news agency, said the investigation has been launched in response to an application submitted by the Dairy Association of China and the China Dairy Industry Association on behalf of the domestic industry in July.
“The investigation will look into certain dairy products originating from the EU, including fresh cheese, curd and blue cheese and the period to be probed is set between April 1, 2023 and March 31, 2024,” Xinhua’s report said.
It said it would also examine any damage done to related Chinese industries from 1 January 2020 to 31 March 2024.
China accounted for about 9.5% of total European dairy exports last year.
