EU launches action against China over Lithuania row

The European Union said yesterday it has launched action against China at world trade’s governing body for engaging in discriminatory practices against Lithuania, saying that Beijing’s spat with the Baltic country is hitting other EU exports.

Lithuania broke with diplomatic custom by agreeing that the Taiwanese office in Vilnius would bear the name Taiwan instead of Chinese Taipei, a term used by other countries to avoid offending Beijing. China considers Taiwan part of its territory with no right to diplomatic recognition. 

Beijing expelled the Lithuanian ambassador and withdrew its own ambassador. Last month, Lithuania closed its own embassy in the Chinese capital. Tensions have mounted, and Lithuania accuses Beijing of holding up goods at China’s borders. The EU is now turning to the World Trade Organization.

“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,” European Commission Executive Vice-President Valdis Dombrovskis said.

“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,” he said in a statement.

The European Commission manages trade on behalf of the 27 EU member countries. It says it has built up evidence of Chinese restrictions. They include a refusal to clear Lithuanian goods through customs, the rejection of import applications from Lithuania, and pressuring European companies operating out of other EU countries to remove Lithuania from their supply chains when exporting to China.

The first stage of the EU’s action under WTO dispute settlement rules involves a “request for consultations” under which the bloc will formally ask China for more information about its measures with the aim of resolving the dispute amicably.

If no results are achieved within 60 days, the EU can request that a WTO panel rule on the dispute. MDT/AP