EU Takes Complaints About China, Egypt Trade Practices to WTO

The European Union launched a case at the World Trade Organization over China's allegedly discriminatory practices against Lithuania, which the EU claims are also affecting other exporters from the European trading bloc, the European Commission said. China's restrictions on Lithuania stem from the country's support for Taiwan. In November 2020, Lithuania's ruling coalition agreed to support "those fighting for freedom" in Taiwan. China's response included a refusal to clear goods from Lithuania through customs, rejection of Lithuanian import applications and a campaign to get non-Lithuanian EU companies to remove Lithuanian inputs from their supply chains when sending goods to China (see 2112090012). While the commission also implemented a proposal for an anti-coercion instrument to help respond to China's restrictive measures, it has now also requested consultations with China at the WTO over the restrictions.

"Launching a WTO case is not a step we take lightly," said EU Trade Commissioner Valdis Dombrovskis. "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."

The EU also requested dispute settlement consultations at the WTO with Egypt over that nation's compulsory import registration requirements, the EC said. The Egyptian regulations require foreign companies in 29 different industries, including food, cosmetic and textiles, looking to export goods to Egypt to register with the requisite authorities. The commission said the process is "arbitrary and can take years." Following the imposition of the registration requirements in 2016, EU exports subject to the regulation fell by 40%, the commission said. The requirements violate the WTO agreements on tariffs and trade, agriculture, and import licensing procedures, the EU told the WTO. If the dispute settlement consultations fall through, the EU can request a WTO panel to decide the matter.