BRUSSELS: The European Union on Monday formally launched a challenge at the World Trade Organization (WTO) in response to a Chinese anti-subsidy investigation targeting imports of European dairy products, in a significant escalation in the trade row between Beijing and Brussels.
The investigation was announced by China in August, shortly after the EU revealed plans to impose substantial tariffs on Chinese electric vehicles (EVs). The EU expressed concerns over what it perceives as an emerging pattern of trade defense measures initiated by China.
In a statement, the EU’s executive arm said that the challenge is aimed at a broad range of dairy products, including fresh cheese, curd, blue cheese, and certain milk and cream products.
The investigation specifically targets subsidies granted to the EU’s 27 member states under the Common Agricultural Policy, as well as national subsidy programs in countries such as Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania, and the Czech Republic.
“The Commission is committed to firmly defending the interests of the EU dairy industry and the Common Agricultural Policy against abusive proceedings,” the statement added.
This is the first time the EU has challenged a trade investigation at its initiation stage. Officials said that if consultations do not yield satisfactory results, they could request the establishment of a WTO panel to resolve the issue.
China expressed regret over the EU’s WTO challenge. China’s Ministry of Commerce said that the investigation was initiated in accordance with Chinese law and at the request of domestic industries. “China has the responsibility to safeguard the legitimate demands and legitimate rights and interests of domestic industries,” the ministry stated.
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The backdrop of this trade tension is further complicated by the EU’s plans to impose import duties on Chinese electric vehicles. This decision came after an anti-subsidy investigation determined that these vehicles were unfairly undercutting European competitors, prompting fears of a trade war. The EU’s tariffs, which are currently provisional, are expected to be finalized following a vote by member states before the end of October.
The trade chief of the EU, Valdis Dombrovskis, held “constructive” discussions with China’s commerce minister Wang Wentao in an attempt to find a resolution that could prevent the imposition of steep tariffs on imported EVs.
