The European Union said it has launched a case at the World Trade Organization (WTO) against China over what the EU said were discriminatory trade practices against Lithuania.
A row between China and Lithuania erupted after the Baltic state allowed the opening of a Taiwan representative office in Vilnius.
The dispute quickly became an economic issue after Beijing banned Lithuanian imports. China also pressured China EU companies such as German car parts giant Continental to stop using components made in Lithuania.
“These actions, which appear to be discriminatory and illegal under WTO rules, are harming exporters both in Lithuania and elsewhere in the EU, as they also target products with Lithuanian content exported from other EU countries,” the bloc said.
‘Don’t Let Row Hijack Relations’
China’s Foreign Ministry said on Thursday that the European Union should not allow Lithuania to hijack their relations, after being asked about the EU launching a case against Beijing over discriminatory trading practices imposed against the Baltic state.
The China-Lithuania issue is political, not economic, Foreign ministry spokesman Zhao Lijian said at a regular briefing in Beijing.
Lithuania’s Foreign Ministry said later it hoped that China and the EU can dissolve the ‘trade disruptions’ when they discuss the issue.
Lithuania’s deteriorating relations with China are likely to affect businesses, economist Alexander Izgorodin told local media.
He said direct losses were less of a worry than possible indirect consequences.
“If China continues to pressure European customers not to work with Lithuanians, then we must first talk about the need to compensate companies for indirect losses, such as exports to the EU market,” he told the Delfi newspaper in Vilnius.
“We have not yet seen the results of the crisis with China. Companies will need help the most in the first quarter or half of this year,” he said.
Izgorodin, a prominent Lithuanian economist, said although China is not a main export market for goods of Lithuanian origin, the Baltic country’s producers and exporters are at risk because they are part of European production chains.
- Reuters, with additional editing by George Russell and Jim Pollard
This report was updated on January 27, 2022 with additional information.