EU challenges China’s anti-subsidy probe into dairy imports at WTO

CHINA – The European Commission has announced its decision to challenge China’s anti-subsidy investigation into EU dairy imports at the World Trade Organization (WTO). 

This marks the first time the European Union has taken such action at the start of an investigation rather than waiting for it to result in trade measures against the bloc.

“The EU’s action was prompted by an emerging pattern of China initiating trade defense measures, based on questionable allegations and insufficient evidence, within a short period of time,” the commission said.

China’s investigation was announced last month, coinciding with escalating trade tensions between the EU and China. 

The anti-subsidy probe initiated on Aug. 21, targets liquid milk and cream with a fat content higher than 10%, as well as various types of cheese originating from the EU. 

This investigation stems from an application made by the Dairy Association of China and the China Dairy Industry Association in July, seeking to address concerns over perceived unfair competition.

Valdis Dombrovskis, the European Commission’s executive vice-president and commissioner for trade, criticized the basis of China’s investigation, stating it is founded on “questionable allegations and insufficient evidence.” 

He emphasized the EU’s determination to challenge the investigation through all available channels, urging China to halt the proceedings immediately.

This decision reflects an emerging pattern in which China has launched multiple trade defense measures against EU products.

The request for consultations filed by the EU represents the first step in the WTO dispute settlement process. 

Should these consultations fail to yield a satisfactory resolution, the EU may seek the establishment of a WTO panel to adjudicate the matter.

China accounted for approximately 9.5% of total European dairy exports last year, making the outcome of this investigation critical for the EU dairy sector. 

The investigation will examine subsidies provided under the EU’s Common Agricultural Policy and various national and regional programs, examining any damage inflicted on related Chinese industries from January 1, 2020, to March 31, 2024.

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