The WTO's Dispute Settlement Body decided to examine the countervailing and anti-dumping measures Brussels has imposed on imports of stainless-steel cold-rolled flat products from Indonesia, a Geneva-based trade official said.
Indonesia claims the measures are inconsistent with a long line of international trade rules and filed a complaint in January.
The two sides failed to reach an agreement during consultations set up to resolve the spat and Indonesia last month made an initial request for the Dispute Settlement Body to create an expert panel to rule on the matter.
The European Union blocked the first request, but under WTO rules, a second panel request is, in practice, automatically accepted.
The WTO's panels of independent trade and legal experts usually take several months to announce their decisions.
They can authorise retaliatory trade measures if they rule in the plaintiff's favour.
Previously, parties unhappy with a panel decision could appeal.
But the appeals tribunal -- also known as the supreme court of world trade -- has been frozen since late 2019, after the United States under president Donald Trump blocked the appointment of new judges and demanded a dramatic overhaul.
Brussels and Jakarta have several trade disputes before the WTO, including over EU restrictions on the use of palm oil-based biofuels, of which Indonesia is the world's largest producer.
They are also at loggerheads over a European law aimed at banning imports to the EU that contribute to deforestation.
Despite the various disputes, the EU and Indonesia are hoping to strike a free-trade agreement in 2023, the bloc's ambassador in Jakarta said at the start of the year.
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