The European Commission has taken a further step in two World Trade Organization (WTO) disputes with Beijing. It calls for the establishment of two adjudicating panels to resolve the two disputes concerning the ban on imports of Lithuanian products into China and Chinese measures affecting European advanced technology patent holders.
Import ban on Lithuanian products
China has imposed import restrictions on products from Lithuania and those with Lithuanian components in December 2021, following the opening of a Taiwanese representative office in Vilnius. In January 2022, the EU called for WTO consultations (see EUROPE 12878/4).
The Chinese measures were difficult to prove until Beijing imposed a clear ban on imports of Lithuanian alcohol, beef, dairy products, wood products and peat due to sanitary and phytosanitary standards. According to the Commission, “China failed to prove that these bans were justified”.
Lithuanian exports to China fell by 80% between January and October 2022, compared to the same period last year, according to Chinese customs statistics.
Ten months of consultations have not led to a resolution of the issue between the two parties and the Commission has therefore decided to take the next step, which is to request the formation of a panel.
Chinese measures affecting European patent holders
The EU requested WTO consultations with Beijing in February 2022 regarding China’s practice of preventing critical technology rights holders from enforcing them in courts outside China.
In practice, Beijing has imposed “anti-suit injunctions” on some patent holders involved in disputes since 2020, preventing them from bringing Chinese manufacturers to court in non-Chinese jurisdictions. However, the Commission believes that European courts should be able to hear cases involving European patents. It is also concerned that this measure acts as a forced transfer of technology.
Again, the consultations did not lead to a mutually acceptable solution and the EU wishes to move to the next stage of the procedure.
The EU’s request on these two cases will be on the agenda of the next WTO Dispute Settlement Body (DSB) meeting on 20 December. At that point, Beijing will be able to refuse the establishment of a panel. However, if the EU repeats its request at the next meeting in January - and it intends to do so, according to a European source - the panel will be established, regardless of China’s wishes.
The procedure can then take up to one and a half years before the court issues its report. (Original version in French by Léa Marchal)