EU lawmakers clear law to limit cheap Chinese imports

STRASBOURG (Reuters) - The European Parliament approved legislation designed to protect EU industries against excessively cheap imports from China.

The new law, which was passed on Wednesday by 554 votes to 48 against, amends regulations on dumping and subsidies by third countries, such as China. It also allows investigators to take into account environmental and labour standards when setting import duties.

The law, due to enter force before the end of the year, comes after China demanded it should no longer be treated as a special case from December 2016, which was 15 years after it joined the World Trade Organization (WTO).

China's Commerce Ministry criticised the move as causing "serious damage" to the WTO's anti-dumping legal system, adding that the EU should respect international trade rules.

"The new EU anti-dumping investigation method lacks a basis under WTO regulations," the ministry said in a statement on Thursday.

The EU will in future determine that dumping is taking place if prices for export are lower than domestic prices for all members of the WTO.

However, it will make exceptions for cases of "significant market distortions", such as excessive state intervention, an exception expected to cover many Chinese firms.

The European Commission is expected to produce a report on China when the law enters force, outlining instances of market distortion.

(Reporting by Lily Cusack; Additional reporting by Michael Martina in Beijing; Editing by Philip Blenkinsop, Andrew Heavens and Richard Borsuk)