BRUSSELS—The European Union sued China in the World Trade Organization over punitive trade restrictions that Beijing imposed on Lithuania last year, harming the small Baltic state and the 27-country bloc.
China’s near-total curtailment of exports from Lithuania last December followed moves by leaders in Vilnius to support Taiwan, which Beijing considers a breakaway province.
The EU said Wednesday that as a result of China’s restrictions, trade between it and Lithuania fell 80% this year through October. China’s restrictions cover exports directly from Lithuania and Lithuanian elements of goods exported from other EU countries, the bloc said.
Lithuania’s annual exports to China are worth more than 220 million euros—the equivalent of $230 million—but a broader concern is “a chilling effect” on trade in the EU, said a bloc official.
“China has applied discriminatory and coercive measures” with its policies, the EU said in a statement.
China’s Ministry of Commerce said it regretted the EU’s decision. In a statement, it said China would handle the matter in line with the WTO’s dispute-settlement procedures and would “resolutely safeguard its legitimate rights and interests.”
The EU’s trade office said it filed a separate complaint against limits China placed on the ability of EU high-tech patent holders to file lawsuits outside China to protect their intellectual property. The restrictions, known as anti-suit injunctions, forbid EU patent-holders from enforcing their patent rights, even in EU courts, the trade office said.
Violations of China’s rules, which affect companies such as makers of mobile-communication technology, can lead to fines of more than 130,000 euros a day, the EU said.
“Through these anti-suit injunctions China unilaterally imposes rules for the benefit of its own enterprises, to the detriment of the WTO multilateral system for the protection of intellectual property rights,” the EU said.
Brussels earlier this year filed less formal complaints on both issues, but didn’t achieve satisfactory results. Both issues “are highly damaging to European businesses,” the bloc’s trade office said.
“Our preference was to solve these two significant and systemic cases in a consultation process and we have invested a considerable amount of time in doing so,” said EU Executive Vice President and Trade Commissioner Valdis Dombrovskis. He said those talks were “to no avail.”
The outcome of filings in the WTO is far from certain because the 164-member organization is partially paralyzed by disputes among the U.S., China and other members. The EU’s decision to file its cases suggests it still sees utility in the organization—which Brussels is striving to rejuvenate—at least as a forum to publicize its trade grievances.
“It’s another sign that we will use all of the means available to us to enforce our rights and stand up where we feel our companies are being mistreated by our partners,” said the EU official.
He added that China has a good record of implementing rulings from the WTO that go against it.
“We see China take their WTO compliance seriously,” the official said.
Bringing the cases to the WTO demonstrates that the EU is taking a good-faith approach to resolving its trade disputes, said Fredrik Erixon, director of the European Centre for International Political Economy in Brussels. He said it also gives the bloc more opportunities to act unilaterally through new tools it is setting up, such as legislation aimed at preventing economic coercion.
“It’s a signal of strength,” Mr. Erixon said. “It basically means that, hey, we actually have a very good case against you.”
Proceedings can last up to 18 months, the EU said, though at least one case—a fight between the U.S. and the EU over subsidies to plane makers
Airbus SE
and
Boeing Co.
—dragged on for more than 15 years as it moved through WTO appeals.
—Kim Mackrael contributed to this article.
Write to Daniel Michaels at daniel.michaels@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
BRUSSELS—The European Union sued China in the World Trade Organization over punitive trade restrictions that Beijing imposed on Lithuania last year, harming the small Baltic state and the 27-country bloc.
China’s near-total curtailment of exports from Lithuania last December followed moves by leaders in Vilnius to support Taiwan, which Beijing considers a breakaway province.
The EU said Wednesday that as a result of China’s restrictions, trade between it and Lithuania fell 80% this year through October. China’s restrictions cover exports directly from Lithuania and Lithuanian elements of goods exported from other EU countries, the bloc said.
Lithuania’s annual exports to China are worth more than 220 million euros—the equivalent of $230 million—but a broader concern is “a chilling effect” on trade in the EU, said a bloc official.
“China has applied discriminatory and coercive measures” with its policies, the EU said in a statement.
China’s Ministry of Commerce said it regretted the EU’s decision. In a statement, it said China would handle the matter in line with the WTO’s dispute-settlement procedures and would “resolutely safeguard its legitimate rights and interests.”
The EU’s trade office said it filed a separate complaint against limits China placed on the ability of EU high-tech patent holders to file lawsuits outside China to protect their intellectual property. The restrictions, known as anti-suit injunctions, forbid EU patent-holders from enforcing their patent rights, even in EU courts, the trade office said.
Violations of China’s rules, which affect companies such as makers of mobile-communication technology, can lead to fines of more than 130,000 euros a day, the EU said.
“Through these anti-suit injunctions China unilaterally imposes rules for the benefit of its own enterprises, to the detriment of the WTO multilateral system for the protection of intellectual property rights,” the EU said.
Brussels earlier this year filed less formal complaints on both issues, but didn’t achieve satisfactory results. Both issues “are highly damaging to European businesses,” the bloc’s trade office said.
“Our preference was to solve these two significant and systemic cases in a consultation process and we have invested a considerable amount of time in doing so,” said EU Executive Vice President and Trade Commissioner Valdis Dombrovskis. He said those talks were “to no avail.”
The outcome of filings in the WTO is far from certain because the 164-member organization is partially paralyzed by disputes among the U.S., China and other members. The EU’s decision to file its cases suggests it still sees utility in the organization—which Brussels is striving to rejuvenate—at least as a forum to publicize its trade grievances.
“It’s another sign that we will use all of the means available to us to enforce our rights and stand up where we feel our companies are being mistreated by our partners,” said the EU official.
He added that China has a good record of implementing rulings from the WTO that go against it.
“We see China take their WTO compliance seriously,” the official said.
Bringing the cases to the WTO demonstrates that the EU is taking a good-faith approach to resolving its trade disputes, said Fredrik Erixon, director of the European Centre for International Political Economy in Brussels. He said it also gives the bloc more opportunities to act unilaterally through new tools it is setting up, such as legislation aimed at preventing economic coercion.
“It’s a signal of strength,” Mr. Erixon said. “It basically means that, hey, we actually have a very good case against you.”
Proceedings can last up to 18 months, the EU said, though at least one case—a fight between the U.S. and the EU over subsidies to plane makers
Airbus SE
and
Boeing Co.
—dragged on for more than 15 years as it moved through WTO appeals.
—Kim Mackrael contributed to this article.
Write to Daniel Michaels at daniel.michaels@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8