The European Commission (EC) has launched a consultation request at the World Trade Organization (WTO), challenging China’s initiation of an anti-subsidy investigation against imports of some EU dairy products. This marks the first time the EU has challenged an investigation at its initiation stage and aims to defend the interests of the EU dairy industry and the Common Agricultural Policy (CAP) against “abusive proceedings” from China.

The EU has been hit with a series of trade measures from China throughout this year. Last month, the Chinese government launched a probe into certain imported European dairy products a day after the EC released its final revised duties on Chinese electric vehicles, increasing trade tensions.

This followed similar allegations from China in June when authorities in the country launched an anti-dumping probe into the EU’s pork exports, which the European meat industry said caught “EU pork producers in the crossfire.”

But now, the EC is hitting back, with the full backing of the EU dairy industry.

The EC is now firmly defending the interests of the EU dairy industry and the CAP.

The Commission has followed the investigations very closely from the beginning, in full cooperation with exporting EU producers and member state authorities.

“The Commission is determined to make full use of all available legal means to defend EU industry against the abuse of trade defense instruments,” says an EC statement.

Valdis Dombrovskis, executive VP and commissioner for trade, emphasizes that the Commission is doing everything it takes to defend EU dairy producers and the CAP 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.”

Trade body supports EC

European dairy organization Eucolait has welcomed the EC’s move to launch WTO consultations concerning the Chinese anti-subsidy investigation into EU cheese and cream exports, saying it “constitutes the first step in WTO dispute settlement proceedings.”

The body, considered the voice of the European dairy industry and representing EU dairy producers and other stakeholders, says this is the first time an anti-subsidy case has been challenged at this very early initiation stage. 

China launched the investigation on August 21, 2024. The probe targets liquid milk and cream with a fat content higher than 10% and various types of cheese from the EU.

“We appreciate this strong signal of support from the Commission to the European dairy sector,” says a Eucolait statement.

Unfounded investigation?

Eucolait stresses that China is one of the most important markets for EU dairy products and that EU dairy producers fully comply with international trade rules.

“It is therefore vital that this unfounded investigation is challenged in a timely manner. The payments received by European producers are largely decoupled and have no established link with exports. There is no indication that any of the support farmers receive under the CAP would benefit processors or exporters of cheese or cream.”

“There is also insufficient evidence of any material damage to the Chinese domestic industry resulting from imports of these products from Europe.”

“Eucolait stands ready to co-operate with the Commission both in the context of the WTO proceedings and the ongoing anti-subsidy investigation,” the statement continues.