China has dropped trade measures targeting Lithuania that the Baltic nation deemed illegal as the two governments discuss how to gradually move toward normalizing diplomatic relations.
A regime of “economic coercion” that was challenged at the WTO, including Lithuania being “deleted from the customs systems so no business are able to export to China,” has ended, Lithuanian Minister of Foreign Affairs Gabrielius Landsbergis told reporters in an interview on Monday.
Lithuania became embroiled in a dispute with China in 2021 after allowing Taiwan to set up a representative office under the nation’s name.
Photo: Reuters
China responded by withdrawing its ambassador to Lithuania and imposing an effective trade ban on the EU member state.
Landsbergis said that while the block on goods had now been lifted, businesses were still wary about conducting trade with China.
“There’s a huge trust issue, not just from the government, but from the business as well,” he said. “Since it has been done in the past, nobody can be sure that it cannot be repeated because it’s a non-rules-based approach.”
Chinese official customs data show little recovery in direct bilateral trade.
Imports from Lithuania were down more than 70 percent in the first 10 months of this year compared with the same period in 2021, before the row broke out.
Trade between Beijing and Lithuania collapsed in the months after the spat, with China only importing US$60,000 of goods from Lithuania in January last year, a 99.8 percent drop from a year earlier.
The EU responded on behalf of Lithuania, taking China to the WTO.
That case is still pending.
The Chinese Ministry of Foreign Affairs reiterated that Lithuania’s action on Taiwan was “wrong” and that its response was “legitimate” in protecting its interests.
“The problem is fundamentally with the Lithuanian side,” it said in a written response. “China has always acted in accordance with WTO rules and will handle relevant issues in accordance with relevant rules.”
Landsbergis said his government had been talking to China for almost two years about normalizing diplomatic relations.
“We’re having a conversation, which, I am saying, with patience, I think could provide some opportunities,” he said.
Neither side has officially reinstated its diplomats in the other country.
Leaders from the EU are expected to travel to China next week for an annual summit.
Any reduction of tensions with Lithuania might help in removing one point of conflict between the two sides.
There has also been no change to the name of Taiwan’s representative office in Vilnius, the deputy head of the Department of European Affairs at the Ministry of Foreign Affairs in Taipei said.
“This is a non-issue,” he said at a regular briefing on Tuesday.
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