EU launches WTO case against China over Lithuania row

Lithuania infuriated China in July when it allowed Taiwan to open a diplomatic outpost in Vilnius

The European Union angered China on Thursday by launching a case against Beijing at the World Trade Organization for targeting Lithuania over its stance on Taiwan.

The move by Brussels was a further deterioration in ties between China and the bloc, with a long-negotiated investment deal already on the rocks after both sides exchanged tit-for-tat sanctions.

The move outraged Beijing, which does not recognise Taiwan as a state and considers the self-ruled democratic island a rebellious territory of the mainland. 

"However, after repeated failed attempts to resolve the issue bilaterally, we see no other way forward than to request WTO dispute settlement consultations with China," he said.

By going to the WTO, the EU lent support to accusations by Lithuanian business leaders and officials that the row has resulted in China blocking imports from Lithuania and other economic restrictions.

Washington will work with its allies "to push back on the PRC's coercive economic and diplomatic behavior", US Trade Representative spokesperson Adam Hodge said in a statement, using the acronym for the People's Republic of China.

- 'So-called' coercion -

"The issue between China and Lithuania is a political one, not an economic one," said Chinese foreign ministry spokesman Zhao Lijian.

These included "a refusal to clear Lithuanian goods through customs, rejection of import applications from Lithuania, and pressuring EU companies operating out of other EU member states to remove Lithuanian inputs from their supply chains".

Despite the evidence, Dombrovskis said the bloc would continue to pursue diplomatic solutions to the feud and has raised the problem with his Chinese counterparts in recent weeks.

Lithuania welcomed the "very clear message" that the EU "will not tolerate politically motivated economic coercion", said Foreign Minister Gabrielius Landsbergis.

It said China's "improper economic and trade measures" had "troubled and repelled many countries".

The row began in November when China downgraded diplomatic ties with Lithuania and stopped issuing visas there in protest at Vilnius' decision to allow Taiwan to open the representative office under its own name.

Opinions are split in Vilnius. 

But the Lithuanian government on Wednesday said it had no intentions of modifying the name.

The relationship with Beijing grew even more complicated a year ago when an EU-China investment deal wanted by Germany was put on indefinite standby after both sides exchanged tit-for-tat sanctions over the treatment of the Uyghur Muslim minority in China.

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