The European Commission is set to contest China’s anti-subsidy investigation into EU dairy products at the World Trade Organization (WTO). This decision signifies Brussels’ commitment to protect the interests of the EU dairy sector and the Common Agricultural Policy against what it deems as abusive proceedings.
Recently, China declared that it initiated an investigation into subsidies associated with dairy imports from the EU, a move that has been interpreted as part of an escalating trade dispute between the two regions. This announcement closely followed the EU’s imposition of additional tariffs on Chinese electric vehicle imports, highlighting a response to ongoing trade tensions.
The situation has already led China to launch an anti-dumping investigation into selected pork and pig by-products from the EU, covering the period from January 1, 2023, to December 31, 2023. However, it is the dairy investigation that has prompted the EU to seek WTO intervention, marking the first occasion that Brussels has contested an investigation in its early stages.
The European Commission noted that its complaint stems from an “emerging pattern of China initiating trade defense measures, based on questionable allegations and insufficient evidence, within a brief timeframe.” Valdis Dombrovskis, the EC’s executive vice-president and commissioner for trade, asserted, “The Commission is doing everything it takes to defend EU dairy producers and the Common Agricultural Policy from the abuse of trade defense instruments. 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 sought by the EU on September 23 represents the first step in the WTO dispute settlement process. If these discussions do not yield a suitable resolution, the EU may call for a WTO panel to adjudicate on the matter. The investigation by China specifically targets liquid milk and cream with fat content exceeding 10%, alongside various types of cheese imported from the EU. It examines subsidies from the EU’s Common Agricultural Policy, in addition to certain national and regional aid programs.
According to a report from Xinhua, the Chinese state news agency, this investigation was prompted by an application from the Dairy Association of China and the China Dairy Industry Association, submitted on behalf of the domestic sector in July. The scope of the investigation includes various dairy products from the EU, such as fresh cheese, curd, and blue cheese, with the examination period set from April 1, 2023, to March 31, 2024. Additionally, it will assess any potential damage inflicted on related Chinese industries from January 1, 2020, to March 31, 2024. Notably, China accounted for approximately 9.5% of total European dairy exports in the previous year.
