Brussels. China’s investigations into European cheeses and dairy products have no reason to exist other than revenge, and the EU is taking Beijing to the World Trade Organization (WTO). The European Commission’s decision to initiate the dispute phase represents the latest chapter in the Sino-European tug-of-war over electric cars “made in China”. Faced with the announcement of the imposition of EU duties on battery-powered four-wheelers produced in Asia with anti-competitive public subsidies, the People’s Republic responded by announcing the start of checks on the export of dairy products. A response that has given rise to a trade skirmish and mutual accusations of unfair practices. The EU would like to avoid an open trade war, but it does not intend to be intimidated or sacrifice its own economic interests.
“Questionable” accusations and “insufficient” evidence, collected in a period of time considered short, and therefore insufficient, for a proper formal accusation. These are the beliefs of the European Commission, which has decided to oppose the Chinese investigations and to raise the case before the WTO. In Brussels it is noted that this is the first time that the EU has contested an investigation in its initial phase. This is not a casual emphasis. The aim is to send a message of firmness, as confirmed by Valdis Dombrovskis. “We will continue to vigorously contest this investigation in all appropriate venues,” stresses the Commissioner for Trade, who urges China to “immediately close this investigation against European products through what he defines as an “abuse of trade defense instruments” perpetrated against the Union and some of its agri-food excellence.
The EU decision comes a few days after the meeting between Dombrovskis himself and the Chinese Minister of Commerce, Wang Wentao, who on September 19 in Brussels agreed to find a useful solution to avoid a trade war. The willingness to work together does not translate into concessions, however. On the one hand, the dossier opened in response to the European duties on cars is not closed, on the other hand, the Chinese countermove is contested.
The Chinese government announced the start of investigations into European dairy products on August 21, the day after the Commission announced slightly lowered but still confirmed duties on Chinese producers of battery-electric cars. Beijing is targeting especially milk and cream and creams with a fat content higher than 10%, along with various types of cheese. The Commission is confident that the aid recognized through the Community rules is in line with international regulations and therefore not harmful to competition or, consequently, to the Chinese sector. The WTO has its say.
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