EU files case against China at WTO over trade restrictions on Lithuania: Report

The European Union on Thursday, 27 January, launched a case at the World Trade Organization against China over "discriminatory trade practices" against Lithuania. The European Union in the statement informed that the actions of Beijing seemed to be "discriminatory" and "illegal" under the rules of the World Trade Organization. The move from the EU comes shortly after China imposed trade restrictions on Lithuania.

In the statement, the EU highlighted that the action of China is affecting exporters both in Lithuania and elsewhere in the 27-nation bloc as they also target products with Lithuanian content exported from other EU countries. The European Union noted that their efforts to resolve the issue bilaterally have not been successful and they have decided to initiate dispute settlement proceedings against China. Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade said that launching a WTO case against China is not a step that they take lightly, however, they have failed to resolve the issue and have no other way to resolve the matter other than requesting WTO dispute settlement consultations with Beijing.

"Launching a WTO case is not a step we take lightly. However, after repeated failed attempts to resolve the issue bilaterally, we see no other way forward than to request WTO dispute settlement consultations with China," Valdis Dombrovskis said in the statement. 

The EU is determined to act as one and act fast against measures in breach of WTO rules, which threaten the integrity of our Single Market. We are in parallel pursuing our diplomatic efforts to deescalate the situation," Valdis Dombrovskis added.

According to the statement, the European Commission has built up evidence of the various types of Chinese restrictions which include a refusal to clear Lithuanian goods through customs, rejection of import applications from Lithuania. The EU also noted that China, without informing the EU or Lithuanian authorities from December 2021, started blocking imports from and exports to Lithuania or linked to Lithuania. The EU stressed that the Commission has repeatedly raised the issue with the Chinese authorities.

Lithuania - China ties 

Tensions between China and Lithuania escalated after Taiwan and Vilnius set up diplomatic offices in each other's countries. As Lithuania started strengthening diplomatic ties with Taiwan, China reportedly started blocking imports of Lithuanian goods in December. Business organizations told Politico that China's decision has started affecting manufactured goods from other EU countries like France and Sweden as they are dependent on Lithuanian supply chains. A China-based business executive told Politico that China is pressurising EU businesses to stop the import of Lithuanian products. The executive revealed that two German companies in the auto industry had parts stopped at Chinese ports as they were manufactured in Lithuania. 

Image: AP/ANI