EU turns to WTO over Chinese trade restrictions

Imports and Exports | | MIC Customs Solutions |

The EU has asked the WTO to rule on disputes with China involving exports from Lithuania and high-tech patents.

The EU has asked the World Trade Organization (WTO) to intervene as it steps up its dispute with China over trade restrictions imposed by Beijing on Lithuanian exports and high-tech patents.

Brussels' claims cover two issues, including import bans on alcohol, beef, dairy, logs and peat shipped from Lithuania, which were described by the European Commission (EC) as discriminatory and unjustified.

While China claims the restrictions are for phytosanitary reasons, the EU noted Beijing has failed to provide evidence for this. Many observers have suggested the restrictions are in fact a retaliation for Lithuania allowing Taiwan to open a de facto embassy in the capital Vilnius.   

The measures include not only goods produced in Lithuania itself, but those from the rest of the EU that use components from the Baltic nation. Brussels has claimed the restrictions have led to an 80 percent reduction in trade between China and Lithuania, as well as hampering intra-EU trade by discouraging other European companies that export to China from doing business with Lithuanian suppliers.    

The other dispute relates to a series of injunctions issued by Chinese courts since 2020 that prevent companies with high-tech patents from effectively protecting their technologies in non-Chinese courts, including those in the EU.

According to the Commission, these "anti-suit injunctions" unduly limit the ability of high-tech patent holders from going to an EU court to settle a dispute with a possible licensee.

Valdis Dombrovskis, EC executive vice-president and commissioner for trade, said: "Good partners treat each other with respect and should adhere to fair play. It is therefore our duty to stand up for our rights when China violates global trade rules or subjects an EU member state to economic coercion, also affecting our single market."

He added that while the EU would have preferred to solve the dispute through a consultation process, this has proved fruitless. Therefore, the Commission has no choice but to turn to the WTO for a ruling.

The next step will be for the WTO's Dispute Settlement Body to discuss the EU's request at its next meeting on 20th December. China can oppose the establishment of a panel once. If it does so, the EU will renew its request and the panel will be established at the 30th January 2023 meeting of the body.