The European Commission said it will launch the first ever litigation against China at the World Trade Organisation by seeking a settlement panel for an car parts dispute.
The EU's executive Commission said it also expected the US and Canada to request the establishment of a panel on the same issue.
The three, which have increasingly shown signs of impatience with China's trade policies, in March called on Beijing to enter into talks on how to lower barriers to China's $19 billion car parts market. Today they said that the time for consultations had run out.
'We have tried again and again to find an acceptable, negotiated solution to this issue and without Chinese engagement we have no alternative but to take this course of action,' EU Trade Commissioner Peter Mandelson said.
The EU, the US and Canada want China - which joined the WTO in 2001 - to change its rules on import tariffs that they say hinder foreign car makers and car parts suppliers in China, now one of the world's biggest car markets.
China considers car parts as a whole vehicle if they account for 60% or more of the value of the final vehicle and it charges a higher tariff on them, the Commission has said.
The rule appears designed to help Chinese car parts makers by forcing car companies to buy from them and is a contravention of WTO rules, EU and US officials say.
