EU launches WTO challenge against China dairy probe

BRUSSELS, Belgium — The EU on Monday launched a WTO challenge against a Chinese anti-subsidy investigation into imports of European dairy product, in an escalating trade row between Beijing and Brussels.

Beijing announced its probe in August after the European Union unveiled a plan to hit Chinese electric vehicles with hefty tariffs.

"Today, the [European] Commission launched a consultation request at the World Trade Organisation [WTO], 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," it said.

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 commission is following through on its commitment to firmly defend the interests of the EU dairy industry and the Common Agricultural Policy against abusive proceedings," Brussels said in a statement.

It said the WTO move against the dairy probe was the "first time the EU has decided to challenge an investigation at its initiation stage", and that it had kicked off the initial steps in the global body's 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," it said.

"China has the responsibility to safeguard the legitimate demands and legitimate rights and interests of domestic industries," the Chinese commerce ministry said.

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

The EU wants to protect its automobile 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 only become definitive for five years after a vote by member states that should take place before the end of October.

Last month China also filed an appeal with the WTO over the tariffs.

The EU's trade chief Valdis Dombrovskis said he had held "constructive" talks with China's commerce minister Wang Wentao on Thursday as Beijing seeks a deal with Brussels to avoid steep tariffs on imported EVs.