China’s dairy inquiry focuses on liquid milk and cream with more than 10% fat content, as well as several types of EU cheese.
The European Commission launched a challenge at the World Trade Organisation (WTO) against an anti-subsidy investigation into European Union dairy produce.
The EU challenged China in its investigation into the imports of European dairy products after the Union levied tariffs on imported Chinese electric vehicles. The matter took place in an escalating trade row between Beijing and Brussels.
The European Union has taken for the first time taken an action of this kind at the beginning of the investigation. The union has not opted to wait for these to result in trade measures against the bloc.
The commission said that the emerging pattern of China initiating trade defense measures prompted the EU‘s action. The patterns were based on the unreliable allegations and sufficient evidence in a short span.
The parties get a mandatory period of 60 days to consult each other at the start of the proceedings of the WTO. If the discussions did not yield a satisfactory result, the Commission stated that it would request that the WTO convene an adjudicating panel.
Brussels stated that by referring the matter to a global trade dispute arbiter, it is fulfilling its pledge to vigorously protect the interests of the EU dairy industry and the Common Agricultural Policy against abusive procedures.
Announced last month by China about the investigation it launched into subsidies related to the dairy import products from the EU. This action was perceived as a ‘tit-for-tat’ move in the already existing trade dispute. While making this more clear, China announced the probe just after the EU imposed tariffs on Chinese EV imports.
China has already launched an anti-dumping inquiry against some pork and pig by-products originating in the EU from January 1 to December 31, 2023.
The executive Vice President and commissioner for trade of the European Commission, Valdis Dombrovskis stated that the commission has been doing everything in their capacity in order to defend EU dairy producers and the policy of the Common Agriculture from the abuse due to trade defense instruments.
He added, “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 (September 23) marks the first stage in WTO dispute settlement processes. If they do not result in a satisfactory settlement, the EU may request that the WTO convene a panel to conduct this examination.
China’s dairy inquiry focuses on liquid milk and cream with more than 10% fat content, as well as several types of EU cheese.
The examination focuses on subsidies under the EU’s Common Agricultural Policy, as well as specific national and regional initiatives.
The Chinese state news agency, Xinhua said that the investigation was launched as a response after announcing its probe into EU dairy imports last month. The comeback was a response of the nation 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 news reporter from Xinhua said the dairy products that originated from the EU will be investigated which includes fresh cheese, blue cheese and curd and is probed between the set period of April 1, 2023 and March 31, 2024.
The investigation would also examine any damage related to Chinese industries from 1 January 2020 to 31 March 2024.
About 9.5% of all dairy exports from Europe were made to China in the previous year.
The EU’s trade head, Valdis Dombrovskis, said on Thursday that he had “constructive” talks with China’s commerce minister, Wang Wentao, as Beijing seeks a compromise with Brussels to avoid high tariffs on imported EVs.
The commission stated that its WTO action against the dairy probe was the “first time the EU has decided to challenge an investigation at its initiation stage,” and that it marked 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 by the WTO to decide on this investigation,” according to the statement.