FILE PHOTO: A container area is seen at the Yangshan Deep Water Port, part of the newly announced Shanghai Free Trade Zone, south of Shanghai September 26, 2013. REUTERS/Carlos Barria/File Photo

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

The new law, which was passed 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 labor 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, 15 years after it joined the World Trade Organization (WTO).

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.