Home Business Why the EU is taking the WTO to defend Lithuania against China

Why the EU is taking the WTO to defend Lithuania against China

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It is a case which is perceived in Europe as a test of the unity of the Twenty-Seven by the Chinese authorities. The European Commission began a standoff with Beijing on Thursday January 27 by seizing the World Trade Organization (WTO) against China, accused of blocking Lithuanian imports, against a backdrop of tensions over Taiwan. “Attempts at bilateral resolution having failed, the European Union has decided to initiate a dispute settlement procedure against China. Today’s WTO consultations are the first step in this process.”she announced in a press release.

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Brussels claims to have “accumulated evidence of different types of Chinese restrictions” in recent weeks and quotes in particular the “refusal to clear Lithuanian goods, rejection of import applications from Lithuania and pressure on European companies operating in other EU member states to remove Lithuanian components from their supply chains sourcing when exporting to China”.

A diplomatic quarrel involving Taiwan

This trade standoff comes against the backdrop of tensions between Lithuania, a small country of less than 3 million inhabitants, and China over Taiwan, which Lithuania allowed to open a diplomatic representation in Vilnius in November. This decision aroused the ire of China, which does not recognize the state status of the island, which it considers to be one of its provinces.

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In retaliation, Beijing has limited its diplomatic and commercial ties with the European country. Lithuanian business leaders and officials say China is blocking imports from the tiny Baltic state. Lithuania saw the first restrictions on its goods in December. Beijing would have acted without informing either the EU or the Lithuanian authorities. The European Commission had indicated on several occasions that it was in discussion with Beijing on this issue.

A long procedure

“These actions, which appear to be discriminatory and illegal under WTO rules, harm exporters both in Lithuania and elsewhere in the EU, as they also target products with Lithuanian content exported by other EU countries. ‘EU’underlined the Commission.

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Reacting to the opening of this procedure, Beijing immediately denounced accusations without “no basis”. “To claim that China is exercising so-called coercion against Lithuania has no basis”reacted to the press Zhao Lijian, a spokesperson for the Chinese Ministry of Foreign Affairs. “The problem between China and Lithuania is political, not economic”he said.

“Launching a case at the WTO is not something we take lightly. However, after the failure of several attempts to solve the problem bilaterally, we see no other solution”said EU Trade Commissioner Valdis Dombrovskis.

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“The EU is determined to act with one voice and swiftly against WTO-infringing measures that threaten the integrity of our single market. At the same time, we are continuing our diplomatic efforts to defuse the situation.”he added.

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