EU executive confident its Chinese EV measures comply with WTO, says probe continues

BRUSSELS (Reuters) - The European Commission is confident its investigation into, and measures against, state subsidies for Chinese electric vehicles are compatible with World Trade Organization rules and its probe will continue, the EU executive arm said on Friday.

The European Union imposed provisional tariffs of up to 37.6% on imports of electric vehicles (EV) made in China in July, keen to protect its domestic EV production, after an EU investigation found the cars were subsidised by China.

China on Friday requested a WTO consultation, arguing the EU investigation results and the provisional tariffs lacked factual and legal basis and seriously violated the global body's rules.

The Commission, which handles all trade issues for the 27-nation EU, said it was carefully studying all the details of Beijing's request to the WTO and would react to the Chinese authorities in due course according to the WTO procedures.

"The Commission is confident of the WTO-compatibility of its investigation and provisional measures," a Commission spokesperson said.

"This request for WTO consultations does not affect the timeline of the anti-subsidy investigation, which in the meantime continues," the spokesperson said.

WTO cases typically take a very long time to resolve. The effectiveness of the WTO's dispute settlement is now further undermined by the lack of a functioning Appellate Body, which has been blocked by the lack of new appointments since 2019.

However, the EU and China are party to an appropriate Multi-Party Interim Appeal Arbitration Arrangement (MPIA), which allows to adjudicate possible disputes pending the blockade of the appointment of the WTO Appellate Body.

(Reporting by Jan Strupczewski; Editing by Tomasz Janowski)