EU launches WTO case against China over Lithuanian export ban

The EU has taken action today (27 January), against the People’s Republic of China, launching a case at the World Trade Organization relating to its discriminatory trade practices against Lithuania, which is also hitting other companies in the EU’s Single Market.

In retaliation for Lithuania permitting Taiwan to open an investment office in Vilnius, which China considers to be a de facto embassy, China has slashed imports from Lithuania by 91% according to its own figure and has also sharply reduced imports. China believes that Lithuania’s actions breach the ‘One China’ policy, which most EU countries respect, where only the People’s Republic of China is recognised as a sovereign state. 

European Commission Vice President Valdis Dombrovskis emphasized that he would like to find a diplomatic solution and reaffirmed the EU’s engagement with China over issues like climate change. 

Dombrovskis made it clear that the EU considers this issue as a European one, especially since China is also encouraging multinational companies to abandon the use of Lithuanian components in their production, otherwise they too may face import restrictions: “Let me be clear: These measures are a threat to the integrity of the EU Single Market. They affect intra-EU trade and EU supply chains. And they have a negative impact on EU industry.”

China recently celebrated its 20th anniversary of joining the WTO. Dombrovskis says that membership means being bound by multilateral rules and respecting those rules.

The executive vice president also used today’s announcement to urge EU member states and the European Parliament to fast track the work on the anti-coercion instrument, which he presented at the end of 2021. He said: “It will give the EU the possibility to react swiftly and effectively when faced with economic coercion. 

"The EU should invest every effort to have this instrument in place as soon as possible – and the Commission will support efforts by the French Presidency to make quick progress.”

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