"We recommend that the dispute settlement body request the European Union to bring its measure into conformity with its obligations," it said.

China brought the case to the WTO in July 2009 after the European Union imposed hefty tariffs on imports of some Chinese steel and iron fasteners, ranging from 26.5 percent to as high as 85 percent.

The WTO's decision marked China's first win against the EU.

In a statement on the Chinese Commerce Ministry's website, Beijing welcomed the decision, pointing out that the WTO found that the EU's measures were "discriminatory and violated relevant WTO regulations."

It called on the EU to respect the WTO's decision and to end "measures that violated WTO rules and that are discriminatory, to give fair treatment to Chinese exports and to protect regular Sino-European trade."

Parties to the case have 60 days to file appeals.

China is the world's biggest producer of screws, nuts, bolts and washers, while the European Union is its biggest market.

The EU imported 575 million euros (762 million dollars) worth of Chinese fasteners in 2007, according to the Jiaxing Association of Chinese Fastener Producers.

EU-China trade has exploded in recent years, making the EU the top destination for Chinese exports while China is Europe's biggest trade partner after the United States.

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