China’s Ministry of Commerce has begun an investigation into imports of dairy products originating from the EU.
Ireland’s €420m annual dairy exports to China are under threat in what is seen as an escalating ‘tit-for-tat’ trade conflict between China and the EU.
China’s Ministry of Commerce has begun an investigation into imports of dairy products originating from the EU, examining 20 subsidy schemes operating in a number of countries including Ireland, Italy, Croatia, Austria, Belgium, and Finland.
China’s action is being viewed as a response to tariffs imposed by the EU on Chinese-made electric cars imported into Europe.
As part of its anti-subsidy investigation, the European Commission this week revealed the draft decision to impose duties on a range of EV imports including an additional 9% tariff on Tesla vehicles.
Farm representatives have said there is now fear that Irish food exports are being “held hostage” in a dispute that is “not even tangentially related to our sector or process”.
Last year, Ireland exported €420m of dairy products to China, including specialised nutritional powders and casein.
Irish Creamery Milk Suppliers Association (ICMSA) president Denis Drennan said any negative impact on dairy exports would be a “savage blow” at a time when primary dairy producers are “reeling from low prices, adverse weather, and years of high inputs”.
The ICMSA president, who represents 16,000 Irish dairy farmers, said that if the EU is “going to embark on a trade dispute that wipes out” dairy product trade with China, then the association “will be demanding that the EU compensate the farmers”.
Last year, Ireland exported €420m of dairy products to China, including specialised nutritional powders and casein.
Mr Drennan warned that farmers “will be the ones who end up paying the cost of a trade dispute that we had nothing to do with and resolution of which is completely outside our control”.
The launch of the investigation comes ahead of Bord Bia hosting a Government-led trade mission to China in September, to be attended by Agriculture Minister Charlie McConalogue, promoting Irish products such as dairy and beef.
China’s commerce ministry said the dairy products covered in this investigation are cheeses, milk, and cream products intended for human consumption.
Conor Mulvihill, director of Dairy Industry Ireland, the Ibec association representing primary and secondary dairy manufacturers, said that most of Ireland’s cheese exports are directed to the British and EU markets.
Mr Mulvihill said that while “any threat of trade disruption is unwelcome, and China is an important market for both EU and Irish dairy, Irish dairy is well diversified in its product mix and destination countries”.
Conor Mulvihill, director of Dairy Industry Ireland, said most of Ireland’s cheese exports are directed to the British and EU markets.
Expressing his disappointment at the announcement by Chinese authorities to open the subsidy investigation, Mr Mulvihill said: “We are calling on the EU Commission and the Irish Government to work quickly to resolve the investigation and ensure that farm families and the industry are not negatively impacted.
“The Irish dairy industry produces and exports in full compliance with EU and World Trade Organization rules.” China’s decision to launch this anti-subsidy probe follows its previous move in June when it launched an anti-dumping investigation into imported pork products from the EU.”
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