Cityscape, Lithuania
Geneva: The European Union has requested World Trade Organization (WTO) dispute consultations with China concerning alleged Chinese restrictions on the import and export of goods, and the supply of services, to and from Lithuania or with a link to Lithuania. The request was circulated to WTO members on January 31, 2022.
The European Union claims the challenged measures are inconsistent with a number of provisions of the General Agreement on Tariffs and Trade (GATT) 1994, the General Agreement on Trade in Services, the Agreement on the Application of Sanitary and Phytosanitary Measures, and the Trade Facilitation Agreement.
The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
On January 27, 2022, when China was specifically asked about the EU’s move to launch a WTO case against Beijing over its “discriminatory trade practices” against Lithuania, the Chinese foreign office had stressed in Beijing that the so-called China’s “coercion” of Lithuania “is groundless and distorts facts”.
Spokesperson Zhao Lijian had then told reporters that China has been following WTO rules and the problem between China and Lithuania was a political not an economic one. “They were caused by Lithuania’s acts in bad faith that hurt China’s interests, not China’s pressure on Lithuania. They are issues between China and Lithuania, not China and the EU,” Lijian had said and had urged the Lithuanian side to immediately “mend its ways, avoid willingly act as a pawn for “Taiwan independence” separatist forces and anti-China forces, and return to the right track of adhering to the one-China principle”.
China had also reminded the EU to “tell right from wrong”, stay wary of Lithuania’s attempts to take China-EU relations hostage and advise Lithuania to follow other EU members in fulfilling the political commitment made upon the establishment of diplomatic ties with Beijing.
It may be mentioned that beginning in or around the final quarter of 2021, importers of products originating in Lithuania and/or transiting through Lithuanian ports and/or with some other link to Lithuania began encountering restrictions on securing customs clearance for their goods to enter Chinese territory. Those restrictions include in particular: (i) error messages on the IT systems used to input data necessary to secure customs clearance from the Chinese customs authorities; (ii) containers being blocked in Chinese ports pending customs clearance; (iii) failures on the part of the Chinese customs authorities to process requests for customs clearance in due time or at all. Those restrictions are novel, numerous, recurrent, persisting and strongly correlated in temporal and substantive terms, as well as in terms of the provenance of the goods.
Commencing in or around the final quarter of 2021, entities established in Lithuania began encountering difficulties relating to goods due to be exported from China to Lithuania. Those difficulties include failures on the part of the Chinese customs authorities to process requests for customs clearance for export in due time, or at all. Those restrictions have similar characteristics.
Since August 2021, there have similarly been reports of entities established in Lithuania encountering difficulties in obtaining financial services from Chinese entities.
Beginning in or around the final quarter of 2021, there have similarly been reports of shipments of products covered by SPS certificates issued by Lithuanian authorities being refused customs clearance by Chinese customs authorities.
Lithuania’s stand on recognition of Taiwan has irked China. As recently as on January 28, 2022, China had stated it had articulated on the nature of the Taiwan-related issue concerning Lithuania on many occasions. “Lithuania is clear about crux of the issue. If the Lithuanian side truly wants to ease tensions with China, then it should demonstrate sincerity, correct mistakes with concrete actions, and return to the right track of adhering to the one-China principle. Muddling through the issue by playing with words simply does not work,” a Chinese foreign ministry spokesperson had said in Beijing on January 28, 2022.
– global bihari bureau
