On January 27, the European Union filed a complaint with the World Trade Organization (WTO) against China, the Communist Party, over discriminatory trade practices on behalf of its member states, Lithuania, regarding its relationship with Taiwan.
This move comes after China launched literal economic sanctions and restrictions on services to the Baltic States last month.
The EU has collected what it considers to be sufficient evidence from interviews with affected Lithuanian companies in the past month and requested that it meet with a Chinese representative in Geneva.
This request is the first formal step towards a WTO case that is likely to be postponed for years before the final decision is reached.
“These actions appear to be discriminatory and illegal under WTO regulations, but they also cover products containing Lithuanian content exported from other EU countries, so Lithuania and elsewhere in the EU. Both are harming exporters, “the EU said in a statement.
“Because of the unsuccessful bilateral attempt to resolve this, the EU has relied on initiating a dispute resolution procedure against China.”
China demanded that the EU not be involved in what it considers to be just a bilateral dispute with Lithuania.
Last August, Beijing recalled the Lithuanian ambassador and demanded that it be recalled from Beijing in response to Lithuania’s decision to deepen relations with Taiwan, which the Chinese government claims to be a fraudulent state.
Lithuania allows Taiwan’s diplomatic presence in the capital Vilnius and agrees that Taiwan’s office will name Taiwan in place of Chinese Taipei, which is used in most countries associated with Beijing. did.
In December, China began imposing an import / export ban on Lithuania, putting international pressure on EU companies to suspend supply and logistics operations in the Baltic states.
The Chinese Communist Party government then blocked goods from France, Germany and Sweden. Included components Made in Lithuania.
Lithuanian exports to China 90% or more In December compared to the same month of the previous year.
The Chinese government continued to declare that any political movement in favor of Taiwan violated the “communiqué spirit of establishing diplomatic relations between China and Lithuania.”
China’s actions against Lithuania have been viewed by Brussels as an attack on the single market of the block that Lithuania joined in 2004.
The trade bloc sees economic movements against a member country as a trade attack on all.
The EU has officially protested the Beijing administration’s violation of WTO rules. letter It was sent by the EU ambassador to WTO Joan Aguiar Machado to China’s counterpart, Lee Chenggang.
“These measures relate primarily to goods or services from or directed to Lithuania or linked to Lithuania in various ways, but also affect the EU-wide supply chain.” Said Machado.
Zhao Lijian, a communist Chinese diplomatic spokesman, in response to this submission, argued that Brussels should act to counter Lithuanian actions.
“Also, the politics of Lithuania to distinguish between good and bad, to be wary of attempts by Lithuania to take over relations between China and the EU, and to establish diplomatic relations with China, like other EU member states. I advise you to persuade them to fulfill their commitments. ” Zhao.
“We urge Lithuania to correct the mistake immediately,” he added.
Valdis Dombrovskis of the European Trade Commission takes the position of the EU statement..
“Launching the WTO case is not a light step for us, but other than requesting WTO dispute resolution talks with China after many failed bilateral attempts to resolve the issue. There is no way, “Dombrovskis said.
“The EU is determined to act together and act swiftly against measures that violate WTO rules that threaten the integrity of the Single Market.”
“China is pressing international companies to abandon their use in the production of Lithuanian parts,” said Dombrovsky.
“We are pursuing diplomatic efforts in parallel to make the situation worse,” he added, “our relationship requires mutual respect.”
“To be clear, these measures are a threat to the integrity of the EU single market, which impacts EU trade as a whole and the EU supply chain, negatively impacting EU industry.”
The Lithuanian government said it was grateful for the support from its allies.
Lithuania’s Foreign Minister Gabrielius Landsbergis said, “This measure is a clear message to China that the EU does not tolerate politically motivated economic coercion.”
Beijing denies being involved in directly pressured international companies to abandon Lithuania and other related markets.
The EU said the measure was “caused by China” and most likely “cooperating with the government,” and accused the denial of being false, Machado said.
Brussels states that there is ample evidence that China is actively blocking Lithuania and other European exporters from the market in violation of WTO rules.
The EU said it would first formally request Beijing to consult to clarify its actions against Lithuania in order to resolve the trade dispute.
The Chinese government has the right to accept or reject consultations designed to speed up arbitration of disputes without resorting to the process drawn out before heading to the WTO for a decision.