Chinese Experts Counter EU Criticism on Dairy Trade Practices

Chinese experts have responded robustly to criticism from the European Union regarding countervailing duties imposed on EU dairy products. They contend that these measures not only comply with international trade laws but also serve to protect the competitiveness of China's domestic dairy industry.

In a recent preliminary determination, China announced a countervailing investigation into certain dairy imports from the EU, a move characterized by industry insiders as both fair and lawful. Experts emphasize that this decision is aligned with World Trade Organization regulations and addresses the mounting pressures on China's dairy sector caused by subsidized imports.

As competition from EU imports escalates, stakeholders in China's dairy industry describe the current climate as precarious. The Ministry of Commerce (MOFCOM) declared that the temporary countervailing measure, which takes effect immediately, imposes ad valorem duties ranging from 21.9% to 42.7% on specific dairy products after confirming that subsidized imports have inflicted significant harm on local manufacturers.

Notably, this move has sparked concern among EU officials and industry representatives, with some labeling the duties as "unjustified." In response, Chinese experts have characterized this perception as a double standard, arguing that it fails to acknowledge the EU's extensive agricultural subsidies.

According to Liu Changquan, head of the Rural Industry Economics Division of the Rural Development Institute, China's investigation is based on objective facts, particularly the substantial agricultural subsidies provided by the EU, especially within the dairy sector.

Analyses conducted within Liu's institute reveal that subsidies comprise a significant portion of farmers' incomes across the EU, particularly in the dairy industry, where support levels can reach up to 80% in some member states. This subsidization distorts production incentives and contributes to oversupply in international markets.

This situation has led to an influx of imported dairy products, inhibiting the growth of China's domestic dairy sector. Experts note that the share of imported cream and cheese significantly undermines local production capabilities and profit margins.

Moreover, as China's agricultural support remains low compared to global standards and the dairy market operates largely on free competition, the experts argue that the countervailing measures are not only justified but necessary to level the playing field.

The countervailing investigation was initiated following applications from domestic industry associations in August 2024, and MOFCOM's transparency throughout the process highlights its commitment to adhering strictly to legal protocols.

The draft measures have garnered support from domestic industry stakeholders, with assurances of compliance with WTO standards and crediting these steps as crucial for combating unfair trade practices while fostering market predictability for local producers.

As the situation evolves, officials maintain that China stands ready to engage with the EU on trade issues to mitigate frictions and enhance the economic relationship through dialogue, demonstrating a cooperative stance despite the ongoing disputes.