The European Union (EU) initiated the procedure to establish a panel against China in the World Trade Organization (WTO) linked to Taiwan.
In a press release, the European Commission reported that China engages in «discriminatory trade practices» against Lithuania, which are also affecting other exports from the EU single market.
According to the Commission, these actions, which appear to be discriminatory and illegal under WTO rules, are harming exporters not only from Lithuania, but also from other EU countries, as they equally affect products with components from Lithuania that are exported from other countries of the Union.
Since attempts to resolve this issue bilaterally have failed, the European Union has decided to initiate dispute settlement proceedings against China. The WTO consultations that have started today are the first step in this process.
The trigger for the controversy was the decision of the Chinese government to restrict imports from Lithuania after this European country authorized a Taiwanese Representative Office.
Panel against China
In recent weeks, the European Commission has gathered evidence of the various types of restrictions that China has applied.
Among them, indicated the European Commission, it is worth mentioning the refusal to clear Lithuanian goods through its customs, the denial of import requests from Lithuania and the pressure it has exerted on European Union companies operating from other Member States of the European Union. Union to remove Lithuanian components from their supply chains when exporting products to China.
To deal with these cases in the future, the European Commission is reinforcing its set of autonomous measures.
Last month, the European Commission adopted a proposal for an anti-coercive instrument, which would give the EU more possibilities to react in the event of economic coercion. The European Parliament and the Council are currently discussing this proposal.
Starting in December 2021, and without informing the Lithuanian authorities or the EU, China began to severely restrict, or effectively block, imports and exports originating from or destined for Lithuania, as well as those linked to Lithuania.
The Commission has raised this issue on multiple occasions with the Chinese authorities.
The first phase of the WTO dispute settlement procedures is the «request for consultations», in which the EU formally asks China for more information on its measures with a view to reaching a satisfactory solution.
In the event that these consultations do not produce results within sixty days, the EU can request the creation of a panel against China to rule on the matter.
