France, which holds the EU’s rotating presidency, on Sunday said that the EU would firmly back its member state Lithuania in its brewing trade dispute with China.
French Minister Delegate for Foreign Trade and Economic Attractiveness Franck Riester said 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’s Xinjiang.
Photo: AFP
“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 due to discuss the matter.
Lithuania’s dispute with China began when the name of a newly opened Taiwanese representative office in Vilnius explicitly referred to “Taiwan” instead of “Taipei,” as is common practice to placate Beijing.
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 to cut all ties with the nation.
“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 said.
The European Commission, the EU executive that handles trade policy for the 27 member states, has already filed a case at the WTO, 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 is well on track.
The tool could include freezing access to public contracts, holding up health and safety authorizations 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 is 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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