Europe Seeks United Front in Lithuania’s Trade Feud With China
(Bloomberg) -- The European Union is still struggling to rally behind a unified message over accusations that China is economically targeting Lithuania, a member of the bloc’s single market, over a diplomatic feud between the two governments.
Foreign ministers from the EU’s 27 member states are discussing the situation in Brest, France, on Friday as the Lithuanian government says that restrictive Chinese measures are costing its companies tens of millions of euros.
Lithuania faces unofficial trade hurdles and a downgrade of diplomatic ties with China after it allowed Taiwan to open a representative office in its capital, a move Beijing deems a violation of its one-China principle. China also recalled its ambassador, though it denies it’s blocking the nation’s exports.
“We are in complete solidarity with Lithuania,” Swedish Foreign Minister Ann Linde told reporters in Brest on Friday, adding that Beijing’s actions are unacceptable. Her Austrian counterpart, Alexander Schallenberg, said, “It’s important to stand together and prevent other powers -- whether it’s Russia or China -- from singling out members and treating them differently.”
A European Answer
But not everyone is convinced the EU is presenting a strong enough front, given the threat this poses to the bloc’s single market. At least one member state warned the German government in recent days that it’s being too timid on the issue and needs to show more solidarity with Lithuania, according to an official familiar with the talks who asked not to be identified because the discussions were private.
German companies that source components in Lithuania have also run into problems exporting products to China, and the U.S. said earlier this month that it was concerned that its companies were also at risk of losing access to the Chinese market.
“The EU made clear that we need common European answers to forced measures,” German Foreign Minister Annalena Baerbock said on Friday.
The EU has raised the issue with the World Trade Organization and proposed a new anti-coercion trade tool that would safeguard the bloc’s geopolitical interests. But either avenue could take years to play out.
“It’s a European problem and it requires a European solution as well,” Lithuanian Foreign Minister Gabrielius Landsbergis told reporters in Brest on Thursday, pointing out that European companies have been targeted as well as Lithuanian ones.
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