THE European Union has taken China to the World Trade Organization last week over its coercive practices against Lithuania and some exporters from other member states.
'These measures are a threat to the integrity of the single market because they affect intra-EU trade and eu supply chains and have a negative impact on EU industry,' European Commission Vice President Valdis Dombrovskis, told Bloomberg in an interview.
Mr Dombrovskis said the EU worked hard to gather evidence to document China's restrictive measures against European products, because the actions were conducted informally, and many European companies were reluctant to cooperate because they fear retaliation from Beijing.
China, the EU's main trade partner, started blocking Lithuanian products - and some other European goods that contained Lithuanian components - at customs last December, after Taiwan opened a representative office in Vilnius under the country's name instead of the capital, Taipei. Beijing considered the move a challenge to its sovereignty.
The diplomatic standoff escalated after China recalled its ambassador and downgraded ties with Lithuania. Meanwhile, the Lithuanian government has rejected any change to the name of the representative office.
China, which has denied that it's blocking Lithuanian exports, called the EU's move groundless. 'We also hope the EU side will tell right from wrong and stay vigilant from Lithuania's attempt to hold China-EU relations hostage,' Chinese Foreign Ministry spokesman Zhao Lijian said recently at a regular press briefing in Beijing. He added that China and the EU are continuing to discuss a planned summit in March between the EU and China.
The EU said in a press release that it has evidence of pressure on European companies operating in other members states to remove Lithuanian inputs from their supply chains when exporting to China.
The EU's move is somewhat symbolic because it could take several years for the case to work its way through the WTO's backlogged dispute-settlement system. That dispute mechanism is hobbled by an inoperable appellate branch, but both the EU and China have agreed to mediate cases using an EU-crafted mechanism known as the multi-party interim appeals arrangement.
'As WTO members, China and EU have maintained communication under the dispute settlement mechanism,' Chinese Ministry of Commerce spokesman Gao Feng said in Beijing. 'I want to stress that China has always managed trade according to WTO rules and will handle the issue based on the WTO's relevant rules.'
Once the EU launches the case, China has 60 days to enter into consultations with the bloc. If that doesn't resolve the issue, Brussels can request the establishment of a WTO panel. Those proceedings normally last more than the maximum stipulated period of nine months.
The Lithuanian Confederation Industrialists, the country's largest business association, said some 130 companies are unable to send products to China or to clear shipments through customs. The economic value of the containers blocked is around EUR26.5 million ($29.9 million), EU officials said.
The most affected sectors have been pharmaceuticals, lasers, electronics and food and beverages.
China's coercive measures included restrictions on exports to the Baltic nation, and Chinese companies are cancelling orders from Lithuanian firms.
SeaNews Turkey
'These measures are a threat to the integrity of the single market because they affect intra-EU trade and eu supply chains and have a negative impact on EU industry,' European Commission Vice President Valdis Dombrovskis, told Bloomberg in an interview.
Mr Dombrovskis said the EU worked hard to gather evidence to document China's restrictive measures against European products, because the actions were conducted informally, and many European companies were reluctant to cooperate because they fear retaliation from Beijing.
China, the EU's main trade partner, started blocking Lithuanian products - and some other European goods that contained Lithuanian components - at customs last December, after Taiwan opened a representative office in Vilnius under the country's name instead of the capital, Taipei. Beijing considered the move a challenge to its sovereignty.
The diplomatic standoff escalated after China recalled its ambassador and downgraded ties with Lithuania. Meanwhile, the Lithuanian government has rejected any change to the name of the representative office.
China, which has denied that it's blocking Lithuanian exports, called the EU's move groundless. 'We also hope the EU side will tell right from wrong and stay vigilant from Lithuania's attempt to hold China-EU relations hostage,' Chinese Foreign Ministry spokesman Zhao Lijian said recently at a regular press briefing in Beijing. He added that China and the EU are continuing to discuss a planned summit in March between the EU and China.
The EU said in a press release that it has evidence of pressure on European companies operating in other members states to remove Lithuanian inputs from their supply chains when exporting to China.
The EU's move is somewhat symbolic because it could take several years for the case to work its way through the WTO's backlogged dispute-settlement system. That dispute mechanism is hobbled by an inoperable appellate branch, but both the EU and China have agreed to mediate cases using an EU-crafted mechanism known as the multi-party interim appeals arrangement.
'As WTO members, China and EU have maintained communication under the dispute settlement mechanism,' Chinese Ministry of Commerce spokesman Gao Feng said in Beijing. 'I want to stress that China has always managed trade according to WTO rules and will handle the issue based on the WTO's relevant rules.'
Once the EU launches the case, China has 60 days to enter into consultations with the bloc. If that doesn't resolve the issue, Brussels can request the establishment of a WTO panel. Those proceedings normally last more than the maximum stipulated period of nine months.
The Lithuanian Confederation Industrialists, the country's largest business association, said some 130 companies are unable to send products to China or to clear shipments through customs. The economic value of the containers blocked is around EUR26.5 million ($29.9 million), EU officials said.
The most affected sectors have been pharmaceuticals, lasers, electronics and food and beverages.
China's coercive measures included restrictions on exports to the Baltic nation, and Chinese companies are cancelling orders from Lithuanian firms.
SeaNews Turkey