China's Ministry of Commerce (MOFCOM) announced the decision to launch a countervailing investigation into certain dairy products originating in the EU, with immediate effect. Imports of fresh and processed cheese, as well as uncondensed milk and cream without added sugar or other sweeteners, will be investigated. In the first seven months of the year, China imported over USD315 million of affected dairy products from the EU. France was the top source, shipping products worth USD115 million in the period, with Italy second with USD43 million. The investigation would cover 20 subsidies benefiting the EU dairy industry and companies. Seven fall under the EU’s common agricultural policy, while the remainder come from individual members, including Belgium, Italy, Ireland, Austria, Croatia, Finland, Romania and the Czech Republic.
This investigation started on August 21 and should be completed before August 21, 2025, said MOFCOM, noting that it can be extended for six months under special circumstances. The investigation was initiated in response to the domestic industry's application. On July 29, MOFCOM received a formal application from the Dairy Association of China and the China Dairy Industry Association on behalf of the domestic dairy industry to launch a countervailing probe. On August 7, MOFCOM issued, in accordance with corresponding laws and regulations, an invitation for consultations to the EU on relevant countervailing investigation matters, and it held consultations with the EU on August 14.
According to the evidence provided by the applicants and the preliminary review of MOFCOM, the total output of the relevant dairy products accounted for the main part of China's total output of similar products in the same period from 2020 to 2023 and the first quarter of 2024. Such a result was in compliance with Articles 11 and 13 of the “Countervailing Regulations of China.” The investigation period for certain dairy products was from April 1, 2023 to March 31, 2024, and the industrial damage investigation period was from January 1, 2020 to March 31, 2024. Parties and governments of interested countries should register with the Trade Remedy and Investigation Bureau of MOFCOM to participate in this countervailing investigation within 20 days from the date of this announcement, according to the MOFCOM.
China's probe into certain dairy products from the EU is based on WTO rules, which is in stark contrast with the EU's unilateral move on Chinese electric vehicles, Yang Chengyu, Associate Research Fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times. Additional reporting was provided by the South China Morning Post.
