EU ministers to back Lithuania in China trade battle

France, which holds the EU’s rotating presidency, said on Sunday (13 February) that the European Union would firmly back its fellow member Lithuania in its brewing trade war with China.

French Trade Minister Franck Riester told AFP that his counterparts meeting in the French port city of Marseille felt strongly that the small Baltic nation was a victim of coercion from Beijing and would fast-track plans that could give Europe new powers to fight back.

Relations between Brussels and Beijing are at a low point after a failure to ratify a long negotiated investment deal was followed by a round of tit-for-tat sanctions that was sparked by European concern for the plight of the Uighur minority in China.

“What China is doing with Lithuania is clearly coercion. The Chinese are using trade and economic weapons to put political pressure on us,” Riester said before EU trade ministers were to discuss the matter.

Lithuania’s fight with China began when a newly opened mission from Taiwan in Vilnius explicitly referred to the self-ruled democratic island instead of just Taipei, its capital city, as is common practice to placate Beijing.

China downgrades diplomatic ties with Lithuania over Taiwan

China downgraded its diplomatic ties with Lithuania on Sunday (21 November), expressing strong dissatisfaction with the Baltic State after Taiwan opened a de facto embassy there, escalating a row that has sucked in Washington.

In retaliation, Beijing downgraded diplomatic ties and Lithuanian exports have been stopped at China’s border, with widespread reports that European exporters have been cautioned by Beijing clients to cut all ties with the country.

China stops Lithuanian goods at customs, Commission ‘collects information’

China has banned Lithuanian products from entering the Chinese market amid growing tensions, according to Lithuanian media on Thursday (2 December). The European Commission said it is still gathering information and will return to the matter later.

“It doesn’t matter what happened between China and Lithuania. That’s not the point. The point is how China has chosen to address (its grievance),” Riester added.

The European Commission, the EU executive that handles trade policy for the 27 member states, has already filed a case at the World Trade Organization, though that process could take months or years.

The EU said it is also pursuing diplomatic solutions, but Reister said that a proposal for Europe to give itself a so-called anti-coercion capability was well on track.

The tool could include freezing access to public contracts, holding up health and safety authorisations on certain products or bans from EU-funded research projects.

Riester said the tougher strategy on China and other “disloyal” actors was part of a “paradigm shift” in EU trade policy that for too long saw free trade and opening new markets as an end in itself.

Trade was an essential part of the European economy, he said, “but not at any price… not at the price of unfair competition, not at the price of our values.”

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