The EU finally sent a request to the World Trade Organization (WTO), on Thursday 27 January, to open consultations with China after several weeks of gathering evidence. Since 1 December, Chinese customs have been blocking Lithuanian exports and products containing components from Lithuania. For the Commission, this is a violation of WTO rules.
“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”, said the EU Commissioner for Trade, Valdis Dombrovskis.
Chinese statistics show a 91% drop in Lithuania’s imports in December 2021 compared to December 2020. The pharmaceutical, laser, electronics and food sectors are particularly affected.
The request, which the Commission submitted to the WTO early on 27 January, marks the start of a dispute settlement procedure. China has ten days to respond to this request to open consultations. If it refuses to do so, or if the discussions do not lead to an agreement between the two parties, the EU can request the establishment of a dispute panel at the WTO. At this stage, it will be up to the EU to prove China’s violations.
According to an EU source, the Commission services have already collected substantial evidence against China.
Two other European sources also added that the Commission had the unanimous support of the Member States in this approach.
However, the arbitration process at the WTO can be very lengthy. This is why Valdis Dombrovskis called on the co-legislators to speed up work on the anti-coercion tool (see EUROPE 12849/1): “The Commission will support efforts of the French Presidency (of the EU Council) to make quick progress”.
This tool aims to respond to third countries that attempt to economically harm the EU or one of its Member States. It could allow the Commission to impose countermeasures such as the withdrawal of tariff preferences, exclusion from public procurement or the withdrawal of EU funding in a broad sense.
The Commissioner expressed his confidence that the tool could be finalised and adopted before the end of the year. On the other hand, he also indicated that the EU was, in parallel, seeking a diplomatic solution with China.
Moreover, Beijing reacted to the European initiative: “The so-called Chinese coercion against Lithuania is groundless and inconsistent”, the Chinese Foreign Minister, Zhao Lijian, said on 27 January.
The Lithuanian Foreign Minister, Gabrielius Landsbergis, said his country hoped that the consultations would lead to a resolution of the dispute, but also to long-term sustainable solutions.
See the formal request for WTO consultations: https://bit.ly/3o3kslu (Original version in French by Léa Marchal)