The European Commission launched a challenge at the World Trade Organisation (WTO) on Monday against China’s investigation into European Union (EU) dairy products, initiated after the EU placed import tariffs on Chinese electric vehicles.

This is the first time the European Union has taken such action at the start of an investigation, rather than wait for it to result in trade measures against the bloc.

"The EU's action was prompted by an emerging pattern of China initiating trade defence measures, based on questionable allegations and insufficient evidence, within a short period of time," the commission said.

Proceedings at the WTO start with a mandatory period of 60 days for the parties to consult each other. The commission said it would ask the WTO to set up an adjudicating panel if the consultations did not lead to a satisfactory solution.

WTO panels usually take more than a year to reach conclusions.

Later on Monday, China's commerce ministry said it had received an EU request for consultations and expressed regret over the bloc's WTO challenge.

Beijing's investigation had been initiated "based on Chinese law and at the request of domestic industry," the ministry said in a statement.

"China has a responsibility to protect the legitimate rights and interests of its domestic industries," it added.

China initiated its anti-subsidy investigation on August 21st, targeting EU liquid milk, cream with a fat content above 10 per cent and various types of cheeses.

The commission said it was confident that EU dairy subsidy schemes are fully in line with international rules and not causing injury to China’s dairy sector.

The EU imposed provisional duties in July on electric vehicles built in China and EU members are expected to vote soon on final tariffs, which would apply for five years. China also has ongoing anti-dumping investigations into EU brandy and pork. - Reuters

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