EU Set to Play for Time in Economic Coercion Case Against China
(Bloomberg) -- The European Union is set to buy time in its case against China at the World Trade Organization over allegations of economic coercion targeting Lithuania, according to people familiar with the matter.
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The EU will likely resume the case this week following a one-year suspension, said the people, who spoke on the condition of anonymity. If the bloc doesn’t resume the complaint by the end of this week then it will lapse, a development that could antagonize the incoming Trump administration and some member states.
The EU is trying to strike a delicate balance between its initial exchanges with Trump and his advisers, who have been vocal about the bloc taking a stronger stance toward China. Bloomberg reported earlier that any move to drop the case would frustrate Trump’s team.
In a procedural move, however, the EU may re-suspend the proceedings as early as next week as it compiles evidence, according to the people. They cautioned that the final decision could still change.
A spokesperson from the European Commission declined to comment.
The EU filed a complaint against China at the WTO in 2022 as a result of trade restrictions Beijing imposed on Lithuania after the Baltic country opened a Taiwanese representative office in its capital. China, which considers Taiwan its territory, has repeatedly voiced opposition to countries engaging in official contact with the government in Taipei.
Officials from the outgoing administration of President Joe Biden had urged the EU to keep pursuing the case. Trump has vowed to take a tough line on China, has threatened the EU with tariffs and his team has criticized the bloc for being, in its view, weak on Beijing. Some politicians in Lithuania have also been calling for the case to be resumed.
“Lithuania is urging the European Commission to continue the case,” Lithuania’s Foreign Minister Kestutis Budrys said in a radio interview with Ziniu Radijas Thursday. “It’s about an authoritarian regime that applies measures as it pleases, and that does not register or announce any of them anywhere publicly.”
The commission, the EU’s executive arm, said at the time that China was using economic coercion against one of its member states — a claim that the US and 17 other countries supported as third parties in the case.
Lithuania said in 2023 that trade with China was “stabilizing” and that the customs restrictions had been lifted. In January 2024, the EU decided to suspend the proceedings, setting off a year-long lobbying frenzy, with other capitals pushing Brussels not to give up for fear that it would set a bad precedent.
The logic back then was that the EU would have likely lost the case because the required evidence was no longer there, according to people familiar with the matter, which would leave the EU looking weak. Suspending the case was tactical, one of the people said.
The EU has numerous other cases at the WTO involving China, including over patent royalties, and it has probed the second-largest economy in several areas including public tenders, the procurement of medical devices and electric vehicles, where the bloc applied tariffs last year despite immense pressure from Beijing.
--With assistance from Milda Seputyte.
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