EU to take China to the WTO over dairy subsidies investigation

Millions in farm products on the line in latest phase of a dispute tied to tariffs on Chinese-made electric cars

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Brussels’ WTO case relates to a Chinese anti-subsidy inquiry into various dairy products under the EU’s giant common agricultural policy. Photo: AFP

Published: 6:30pm, 23 Sep 2024

The European Commission has launched a World Trade Organization case against a Chinese government inquiry into EU dairy subsidies.

It is the first time the commission has challenged an investigation-stage action by a WTO member in Geneva, indicating a desire in Brussels to head off the inquiry before punitive tariffs are imposed on a politically sensitive sector.

The move is the latest ploy in a brewing trade war between the two powers, sparked by the European Union’s push to contain what it sees as market-distorting subsidies and overcapacity in various industrial sectors in China.

The WTO case concerns an anti-subsidy inquiry launched by China’s Ministry of Commerce in August, into certain milk, cream and cheese products under the EU’s giant common agricultural policy.

The inquiry also targets national-level support programmes in multiple EU member states, and is broadly seen to be in retaliation for the commission’s own anti-subsidy probe into Chinese-made electric vehicles.

The dairy lobby is among Europe’s most powerful, and reacted angrily to news that its exports were being dragged into a trade dispute that centres on EVs.