Following a request from the European Commission, the World Trade Organization (WTO) has suspended the case over China’s alleged trade restrictions on Lithuania for the second time.
The WTO said in a statement on Thursday that the case was suspended as of January 27.
The news was first reported by Bloomberg.
The case was previously suspended for a year and the WTO resumed it last week, just one day before it was set to be dropped.
LRT has reported that the case was re-suspended because the Commission’s lawyers continue to find it difficult to prove that China imposed restrictions on Lithuanian goods.
As with the first suspension, the case may be halted for a year, and if not renewed, the proceedings would be terminated.
Following the opening of the Taiwanese Representative Office in the Lithuanian capital as part of Vilnius’ efforts to deepen ties with Taiwan, China in 2021 downgraded diplomatic relations with Lithuania and, according to Vilnius, imposed trade restrictions.
Beijing denies imposing restrictions and claims that companies stopped trading with Lithuania out of hurt patriotic feelings.
Brussels brought the matter to the WTO in early 2022 but requested a temporary suspension of the case in late January 2023, describing it as a procedural step taken for technical reasons.
The EU’s executive body decided to resume the case on January 24, just one day before the deadline before the case would have been dropped automatically.
EC to monitor if sanctions still in effect
The European Commission said on Friday that it requested the WTO suspend the case in order to monitor whether the sanctions remain in effect.
“[T]he EU’s request for resumption was followed by a request for a new suspension of the dispute settlement proceedings in order to continue monitoring whether any restrictions on exports from Lithuania to China remain in effect,” the Commission told BNS in writing on Friday.
As with the first suspension, the case can be paused for a year.
If it is not renewed after this period, the dispute will be closed.
The Commission said that “the EU remains determined to challenge any coercive measures from third countries” against its member states.
“That is also why we continue to challenge China’s measures against Lithuania,” it said in the comment.
However, the Commission noted that “after the original Chinese blockade of goods from Lithuania in late 2021–early 2022, trade between Lithuania and China has improved”.
“Nevertheless, at the present time it seems appropriate to further assess and monitor trade developments with respect to the issues raised in the WTO dispute. The EU will decide on next steps based on its monitoring of the situation, together with Lithuania,” it told BNS.
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