Britain joins China trade block battle

An EU case to curb China’s “coercive trading practices” will see Britain, Australia and the US come together to fight Lithuania’s corner after the Baltic country was “erased” from Chinese customs lists.

Britain will join the US and Australia in backing a trade case against China at the World Trade Organisation over Beijing’s alleged trade curbs on Lithuania.

“We will request to join the EU’s WTO consultation into these measures as a third party to ensure we combat economic coercion in trade together,” Anne-Marie Trevelyan, UK secretary of state for international trade, announced on twitter.

The case, launched last month by the European Union, accuses China of discriminatory trade practices against Lithuania after it effectively banned all trading with the country as punishment for Lithuania appearing to support Taiwanese independence.

Included in the recent trade block was a shipment of more than 20,000 bottles of Lithuanian-made Propeller dark rum, produced by Stumbras, part of MV Group.

While the rum was on route to China, Taiwan government officials discovered that Chinese customs planned to reject the delivery and turn it around at the border. Taiwan swooped in to buy the shipment from underneath China’s nose and had the rum redirected to Taiwanese shores, where it was sold to consumers in time for Lunar New Year celebrations.

Alcoholic beverages are just one area hit by China’s trade block. Beijing has blocked all imports and exports to and from Lithuania, as well as targeting products with Lithuanian content exported from other EU countries.

For this reason, the EU claims that the block against Lithuania threatens the integrity of the EU’s single market.

Valdis Dombrovskis, executive vice-president and European commissioner for trade said: “Launching a WTO case is not a step we take lightly. However, after repeated failed attempts to resolve the issue bilaterally, we see no other way forward than to request WTO dispute settlement consultations with China. The EU is determined to act as one and act fast against measures in breach of WTO rules, which threaten the integrity of our Single Market. We are in parallel pursuing our diplomatic efforts to deescalate the situation.”

Chinese restrictions are said to include pressuring EU companies operating out of other EU member states to remove Lithuanian inputs from their supply chains when exporting to China.

US trade representative spokesman Adam Hodge has said that the Biden administration is “deeply concerned” by China’s discriminatory trade practices against Lithuanian goods and EU goods with Lithuanian content.

The challenge allows 60 days for the parties to reach a settlement. If none is reached, the EU may launch a formal dispute and establish a WTO panel to investigate its claims against China.