China investigates EU wines in latest trade spat

Mon Jul 1, 2013 12:41pm EDT
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BEIJING (Reuters) - China formally began an investigation on Monday into whether Europe is selling wine in China below cost, a response to escalating trade tensions with the European Union.

The Chinese government said it would seek to determine if EU producers benefited from unfair subsidies following a complaint from its own wine producers.

EU officials have said China is only targeting the EU wine industry in retaliation for a dispute with the European Union over cheap Chinese solar panels.

A European Commission spokesman said he was disappointed to learn of China's latest action and that the Commission, the EU executive, would examine whether it was consistent with World Trade Organization (WTO) rules.

WTO rules prevent members from leveling tit-for-tat sanctions, instead requiring proof assembled via thorough investigation that a country's industry has suffered damage before any duties can be imposed.

In its announcement on Monday, China's Commerce Ministry said its inquiry, expected to last at least a year, would meet the relevant WTO rules.

"The Ministry of Commerce will follow the principles of openness, fairness and transparency, fully respect all parties' legal rights, and make a fair ruling based on objective fact and the relevant laws and regulations," it said.

The European Union accuses Chinese manufacturers of dumping billions of euros' worth of solar panels in Europe at below-production cost.

It levied punitive tariffs on Chinese solar panels in June and has warned the duties will rise further unless a negotiated solution is reached by early August.   Continued...

A participant looks at a bottle of German HenKell Trocken sparkling wine at a wine expo in Beijing, June 4, 2013. REUTERS/Stringer