The European Union will resume its World Trade Organization case against China over the alleged economic coercion of Lithuania.
The bloc’s executive arm, the European Commission, said on Friday it had requested a resumption at the Geneva trade courts, ending a week of speculation over whether it would let the suit expire.
The case was launched in 2022, after a fierce dispute between Vilnius and Beijing over a controversially named “Taiwanese Representative Office” in the tiny Baltic state.
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Soon after the office opened, Lithuanian exporters found they could no longer ship products to mainland China. The country’s details had been wiped from the official Chinese customs system.
In November 2021, customs data showed the value of shipments fell by 91.4 per cent compared to a year earlier. The virtual wipeout led the commission, which manages the trade policies of the EU’s 27 member states, to launch a case at the WTO.
The World Trade Organization headquarters in Geneva, Switzerland. Photo: AFP alt=The World Trade Organization headquarters in Geneva, Switzerland. Photo: AFP>
However, the commission chose to pause the case on January 25 last year when it was due to make a second submission of evidence. Lawyers believed the case was unwinnable after failing to find evidence that the trade embargo was orchestrated by the state in retaliation for the Taiwan episode.
In public and in private, Beijing said variously that it was caused by the patriotism of mainland importers, who would not buy from a country that questioned the status of Taiwan, or due to technical errors.
Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.
With the exception of Lithuania, Taiwan’s offices across the EU have traditionally avoided mentioning the island in its name, bearing the name of the city of Taipei instead.
The bloc 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 the mainland.
Reports in late 2021 detailed how the Chinese government had pressured companies such as the German car parts giant Continental to stop using parts made in Lithuania.
But the sense in Brussels is that state-sponsored coercion cases do not fit neatly within WTO rules. However, many also feel that dropping the case in the same week that US President Donald Trump was inaugurated would send the wrong message to Washington.
The EU wants to convince Trump that it has become more assertive towards China and hopes to partner with him on some policy tenets aimed at Beijing. While Trump has little regard for WTO rules, it is feared that failing to pursue what is seen as an egregious case of coercion would not impress him, regardless of the outcome.
But on Friday, it notified Beijing and the WTO that it wanted to resume proceedings. According to WTO rules, the case would have automatically expired had the EU chosen not to reopen it before the end of the day.
It is not immediately clear whether it has sourced fresh evidence, but resuming proceedings does not require it to immediately make a new submission. The decision comes after a pressure campaign from Vilnius not to drop the case.
“In our opinion, there are still some issues, which are related to the fact that not all of the restrictions have been lifted,” Lithuanian President Gitanas Nauseda told public broadcaster LRT last week.
“Yes, I understand that presenting evidence and substantiating it is not simple,” said Nauseda. “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.”
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.
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Publish date : 2025-01-24 01:30:00
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