The European Union has until Friday to tell the World Trade Organization whether it intends to resume its legal action against Beijing over the alleged coercion of EU member state Lithuania in 2021 after a blazing row over Taiwan.
The case – which will otherwise automatically expire – is seen by some as a test of the EU’s assertiveness towards Beijing in the era of US President Donald Trump’s second term in the White House, which began on Monday.
Lithuania’s exports to China were wiped out virtually overnight in November 2021, according to official customs data, after it permitted the opening of a controversially named “Taiwanese representative office” in its capital, Vilnius.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Offices representing the self-ruled island – which Beijing regards as part of its territory, to be reunited by force, if necessary – are traditionally referred to in Europe as being there on behalf of Taipei.
Most countries, including the US, do not consider Taiwan as an independent state. However, Washington and its allies are opposed to any unilateral change to the status quo.
When Lithuanian exporters found their country had been removed from China’s national customs system – leaving them unable to send their goods – the EU took the case to the WTO.
However, the European Commission chose to pause the case on January 25 last year after struggling to gather evidence that Beijing had taken a political decision to halt the Lithuanian shipments.
Brussels was also unable to convince businesses from third countries to go on the record and give testimony that they had been encouraged not to use Lithuanian components in their exports to China.
A Geneva source said the WTO had received no signal to restart the dispute, which will expire on the one-year anniversary of the moratorium unless the EU actively decides to renew it.
However, according to EU officials, the European Commission is leaning towards reopening proceedings against Beijing, with one describing the decision as a matter of “high politics”.
Pressure is now growing on Brussels, not only from senior politicians in Vilnius but also from Washington, according to a Bloomberg report.
Officials from the Trump administration are suggesting that if the EU hopes to work with the president on matters related to China, it had better show it is serious about countering its alleged economic coercion, according to Bloomberg.
Lithuanian President Gitanas Nauseda urged the commission to prise the case back open. “In our opinion, there are still some issues, which are related to the fact that not all of the restrictions have been lifted,” he told public broadcaster LRT.
“Yes, I understand that presenting evidence and substantiating it is not simple. But it’s certainly within the European Commission’s capacity, so we encourage it not to give up, continue the case and expect a positive outcome.”
Ex-foreign minister Gabrielius Landsbergis, an outspoken critic of China, took to social media to remonstrate with Brussels over its perceived unwillingness to argue a case on the grounds that matters of coercion do not neatly fit in with WTO rules.
“Withdrawing without even waiting for the official ruling means abandoning the defence of the single market, accepting China’s argument and allowing a precedent to be set,” Landsbergis said.
“China could then attack any other country in the same way,” he added in a long thread. “Not only are we risking encouraging China’s bullying, the EU would also be snubbing the US at a very inappropriate time.
“If we wanted to convince Trump to view Europe with even more scepticism, capitulating to China right now would be a good way to do it.”
The Lithuanian embassy in Beijing was closed in 2021 at the height of the row between Vilnius and Beijing over relations with Taiwan. Photo: AP alt=The Lithuanian embassy in Beijing was closed in 2021 at the height of the row between Vilnius and Beijing over relations with Taiwan. Photo: AP>
According to people familiar with the proceedings, the commission’s lawyers advised pulling the case last January because of the lack of direct proof of a state-directed coercive campaign when a second tranche of evidence was due to be submitted.
A senior EU source said that during consultations over the case, the Brussels negotiators would raise examples of individual shipments that had been blocked, only for them to be released soon afterwards.
The result was that the case became extremely difficult to argue in WTO terms and, knowing that the submission would eventually become public, the lawyers advised against proceeding. China was “muddying the waters in real time”, said the source.
Beijing has consistently denied – publicly and privately – any orchestration, saying variously that the disruptions were because of the patriotic nature of Chinese importers, or that a series of technical errors were to blame.
Trade watchers are sceptical as to whether the EU could win the case, given the lack of a smoking gun in terms of a written or spoken directive from Beijing to stop imports from Lithuania.
Restarting the case does not require the commission to immediately submit more evidence, but could buy it some time as it begins negotiating with Trump’s team.
Brussels wants to propose some transatlantic alignment on China policies in exchange for a reprieve from the new president’s threatened trade tariffs, and also hopes to ensure his support for Ukraine.
The Office of the US Trade Representative told Bloomberg: “The case is as strong today as the day it was filed. It is very hard to understand why the commission, one year after suspending this dispute on China’s coercion, has still not resumed it.”
EU trade spokesman Olof Gill said “no decision has been made yet” on whether to resume the case. “We will always stand by Lithuania and address any coercion and its effect on trade,” he said.
“For now, we will continue to monitor developments, looking notably at exports from Lithuania to China, and we will continue to work closely with our allies on matters of economic coercion, in particular in the G7,” Gill added.
Separately, the EU launched a new WTO case against China on Monday, citing “unfair and illegal trade practices in the sphere of intellectual property”.
According to the commission’s case, China’s state courts have been “setting binding worldwide royalty rates for EU standard essential patents, without the consent of the patent owner”.
“This pressures innovative European hi-tech companies into lowering their rates on a worldwide basis, thus giving Chinese manufacturers cheaper access to those European technologies unfairly,” a statement read.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
Author :
Publish date : 2025-01-22 01:30:00
Copyright for syndicated content belongs to the linked Source.
The post Deadline looms for EU’s WTO case against China alleging coercion of Lithuania first appeared on Love Europe.
Author : love-europe
Publish date : 2025-01-22 10:04:39
Copyright for syndicated content belongs to the linked Source.