EU Files WTO Complaint Against China for Alleged Unfair Dairy Investigation

September 23, 2024 TruthUSA

Brussels said the move was prompted by China’s increasing use of trade defense measures “based on questionable allegations and insufficient evidence.”

The European Union (EU) has formally filed a complaint with the World Trade Organization (WTO) over the Chinese regime’s decision to initiate an anti-subsidy probe into dairy products shipped from the bloc.

The EU’s executive arm, the European Commission, made the announcement on Monday, marking the first time the bloc has challenged an investigation at its initiation stage.

“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,” the commission said in a statement.

On Aug. 21, China’s commerce ministry announced it would investigate the subsidies European milk and cheese producers have received from the bloc.

Products under China’s investigation are milk and cream with a fat content of more than 10 percent and various types of cheese from the EU. The subsidy programs the Chinese ministry is reviewing include seven under the EU’s Common Agricultural Policy, as well as 13 provided by national authorities in Austria, Belgium, Croatia, the Czech Republic, Finland, Italy, Ireland, and Romania.

The probe came just a day after Brussels unveiled its revised draft decision, preparing to impose final tariffs of up to 36.6 percent on electric vehicles (EVs) made in China. This will be added to the current 10 percent duty the EU levied on all imports.

The dairy probe, which could lead to tariffs on exports to China, was widely seen as a retaliation against the EU’s EV tariff hike, fueling concerns about a full-blown trade war between Beijing and Brussels.

China has already taken the EU’s proposed duties to the WTO and launched similar anti-subsidies probes into the bloc’s pork and brandy after the European Commission launched an investigation into Beijing’s state subsidies to the EV industries last October.

In a further sign of possible retaliation against the bloc’s tariff proposal, China’s state-run media Global Times, in a June report, hinted at the possibility of targeting high-powered gasoline cars imported from the bloc. On Aug. 23, Chinese officials discussed “raising the import tariffs on fuel-powered cars with large displacement engines” during a meeting with automakers and industry associations, the commerce ministry said in a statement published on its website.

EU’s trade commissioner, Valdis Dombrovskis, has called for the investigation into EU’s pork, dairy, and brandy to be “terminated” during a Sept. 19 meeting with his Chinese counterpart, Wang Wentao.

“EU will do its utmost to defend the interests of its industries,” Dombrovskis told Wang in Brussels.

Dombrovskis reiterated the call on Monday, urging China to bring the review of EU’s diary products “immediately to an end.”

The EU sent the consultation request on Monday, the first step in the WTO dispute settlement proceedings. EU officials said they would ask the WTO to set up a panel if the consultations do not yield a satisfactory solution.

In a statement issued later on Monday, China’s commerce ministry said Beijing received the EU’s request for consultation and defended its decision to open the review.

The investigation of EU dairy products was opened “in accordance with Chinese law and at the request of domestic industries,” the ministry said, adding that “China has a responsibility to safeguard the legitimate demands of domestic industries and their rights and interests.”

Monday’s announcement comes as China’s commerce minister wrapped up his Europe trip and returned to Beijing.

The visit, which includes stops in Rome and Berlin, comes as the EU’s 27 member states are about to vote on whether to impose five-year EV duties.

The introduction of EV duties would be defeated only if a qualified majority of 15 EU members, representing 65 percent of the EU population, voted against the proposals.

After meeting with Chinese Communist Party leader Xi Jinping in Beijing, Spanish Prime Minister Pedro Sanchez publically called on the bloc to reconsider the duty hikes on China-made EVs.

Italian Foreign Minister Antonio Tajani said that Rome backs the duties proposed by the EU before hosting Wang on Sept. 16.

Wang has vowed to persist in the negotiation efforts “until the last minute” of the EV case during the meeting with representatives from Chinese and European EV makers on Sept. 18.

Experts have called on the EU to hold firm on the position, highlighting the bloc’s leverage over Beijing due to China’s dependence on the European market, the challenges it faces in the U.S. market, and its slowing economy.

“Duties or no duties, Chinese leaders desperately need Europe to remain open to their exports,” Noah Barkin, an expert on Europe and China at the German Marshall Fund, wrote in a Sept. 16 report.

“The EU should hold firm, not because a new US administration will want it to, but because its own geopolitical credibility and industrial future are on the line.”

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