Lithuania complains of trade ‘sanctions’ by China after Taiwan dispute

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Lithuania said on Friday that China had blocked all imports from the Baltic state in an escalation of a diplomatic dispute over relations with Taiwan.

Vilnius said Beijing had delisted it as a country of origin, which meant goods cannot clear customs, and was rejecting all import applications.

Beijing downgraded diplomatic ties with Lithuania and suspended consular services there after the country permitted a Taiwanese Representative Office to open in November.

China considers Taiwan to be part of its territory.

Gabrielius Landsbergis, Lithuanian foreign minister, denounced the “unannounced sanctions” on Friday and said Lithuania would ask the European Commission for help. It was “unprecedented when one EU member state is being partially sanctioned”, he said.

The country exported €300m worth of goods to China in 2020, less than 1 per cent of its total exports.

“We have been informed that Lithuanian shipments are not being cleared through Chinese customs and import applications are being rejected. We are in contact with Vilnius and the EU Delegation in Beijing in order to collect all possible information and clarify the situation,” the commission said.

The move comes days before Brussels proposes a law allowing it to retaliate against such economic sanctions.

The anti-coercion instrument, to be agreed by the commission on Wednesday, would allow the EU to retaliate more swiftly against the measures and US action against companies trading with Cuba and Iran.

However, it faces opposition from several EU members which fear it could breach international rules and damage global trade. The 27 EU members and the European parliament must back the law before it comes into force.

Estonia and Japan have lodged public objections, along with business lobbies in Denmark and Sweden. Their governments were also sceptical, diplomats said.

Tokyo said the instrument could break World Trade Organization rules, a concern shared by some EU capitals.

“Deterring/counteractions themselves may have a potential inconsistency with the WTO Agreement as a prohibited unilateral measure,” Tokyo told the EU in a consultation on the proposal in March.

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Estonia demanded that “the proposed instrument must be fully in line with WTO rules” in its submission. “The cornerstone of EU trade policy is its compatibility with the multilateral rules-based trading system, embodied by the rules of the WTO.”

EU diplomats said Sweden, Denmark, Finland, Italy and the Czech Republic had concerns about the plan.

“It is not clear to us that the problem is large enough to justify the proposal,” said Sweden in a letter to the commission seen by the FT. “If implemented, this instrument would likely have a significant economic impact on trade, businesses, and on the relations between the EU and other countries.”

Global Times, the Chinese state-run media outlet, said in an article on Friday that Lithuania had been “dancing” with the US and making inappropriate remarks on Taiwan. It said Beijing had no choice but to lower Lithuania’s diplomatic status and that Vilnius must “bear all the consequences” arising from this.

Additional reporting by Eleanor Olcott in London



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