The European Union lodged a complaint at the World Trade Organisation on Thursday against China's imposition of anti-dumping duties on imports of stainless steel tubes, six months after Japan filed a similar case, the WTO said.
Reuters reported that the complaint centres on high-quality steel products that China needs to build new power plants, crucial for its plans to upgrade and clean up its electricity infrastructure.
China's steel industry, by far the biggest in the world, found it could not produce the same products as cheaply as its Japanese and European rivals. Beijing suspected the imports were being priced unfairly and imposed anti-dumping tariffs.
"The EU believes the anti-dumping duties are incompatible with WTO law, both on procedural and on substantive grounds," the EU said in a statement. "The duties of 9.7 per cent to 11.1 per cent imposed on European products are significantly hampering access to the Chinese market."
The legal move confirmed a plan that EU sources had disclosed to Reuters on Tuesday and it followed a series of tit-for-tat trade actions fuelled by a dispute over China's huge exports of cheap solar power components.
"The steel tariff isn't something new and China is doing it in accordance with the law. The EU wants to send out the message that it is watching measures taken by China very closely," said a Chinese diplomat.
"What's imperative is the two sides need to seize the moment and begin talks on solar panels."
An EU diplomat said the European Commission – the EU executive – would hold talks on solar panels with China next week.
The EU complaint sets the clock ticking on the WTO's legal process, which gives China up to 60 days to hold talks with the European Union to try to settle the complaint.
The European Union said Japan's discussions with China, which the EU attended, had failed.
Japan has already asked the WTO to adjudicate, and the global trade body is poised to appoint three experts to judge the case. But the EU suit may be amalgamated with the Japanese complaint, effectively holding up Japan's case for months.
Details of the EU complaint were not immediately available but the WTO said it cited several articles of the WTO's anti-dumping agreement and article 6 of the General Agreement on Tariffs and Trade, the same rules cited by Japan.
A previous US complaint also targeted Chinese anti-dumping duties on high quality steel products for power plants in a separate case. China lost that case last year and has been told it has until July 31 to bring its rules into line with the WTO's ruling.
