by Angelo Di Mambrο
In an unprecedented move on Monday (23 September), the European Commission has launched consultations at the World Trade Organisation (WTO) against an ongoing investigation by the Beijing authorities into the compatibility of EU subsidies with global trade rules.
The opening of a consultation is the first step in a dispute at the WTO. It is the first time the EU has challenged a trade investigation at the initial stage and comes after months of trade tensions over the EU’s investigation into imports of battery electric vehicles (BEVs) from China, launched last October. A final decision in that case is expected within days.
In retaliation, Chinese authorities have launched investigations into EU imports of brandy, pork, and, last August, dairy.
Authorities in Beijing are investigating imports of all types of EU cheese – including fresh, blue and processed – as well as cream and milk with more than 10% fat, alleging that subsidies provided by the EU’s Common Agricultural Policy (CAP) and individual member states are harming Chinese producers.
The investigation “is based on questionable allegations and insufficient evidence, and we will continue to challenge it vigorously in all available venues,” EU Trade Commissioner Valdis Dombrovskis said on Monday in a press release, calling on “China to bring it immediately to an end”.
On 29 August, China announced that it would not impose tariffs on EU brandy despite finding evidence of dumping on European imports.
After the meeting
The EU moves on dairy come after a meeting between Dombrovskis and his Chinese counterpart, Minister of Commerce Wang Wentao, last Thursday (19 September) in Brussels.
After eight hours of talks, the meeting was considered a step towards an easing in trade tensions between Brussels and Beijing.
In a statement on X after the meeting with Wang, Dombrovskis described talks as “constructive”, saying that China and the EU would “intensify efforts to find an effective, enforceable and WTO-compatible solution to the dispute.”
But on Monday, the tone was different. “The Commission is determined to make full use of all available legal means to defend EU industry against the abuse of trade defence instruments,” said the bloc’s executive in a press release.
After the exchange between Dombrovskis and Wang, the Chinese ministry of commerce sent a questionnaire to all companies involved in the investigation, the European Dairy Association (EDA) told Euractiv.
Against this backdrop, “the consultation request at WTO level is to show that our Union is ready to step up its trade defense,” the EDA Secretary General Alexander Anton said in an email.
*first published in EURACTIV.com
By: N. Peter Kramer
