EU suspends WTO dispute against China’s trade restrictions on Lithuania

The European Union suspended its dispute against China at the World Trade Organization over a de facto trade embargo against Lithuania.

The Geneva-based trade body circulated a note late Friday to its members saying the EU had requested to "immediately suspend its proceedings" with China.

Brussels formally launched its WTO dispute in early 2022 after Beijing imposed trade restrictions against Lithuania in late 2021 because Vilnius deepened its ties with Taiwan, which China sees as a breakaway province.

The case dealt a blow to the relations between Beijing and Brussels, with the EU accusing China of discrimination and coercion against its eastern member Lithuania.

The high-profile case also motivated Brussels to boost its own trade arsenal, with tools such as the anti-coercion instrument, which effectively allows the European Commission to investigate whether economic coercion has taken place against an EU country and to propose countermeasures.

A year ago, the WTO granted a EU request to escalate the dispute to set up a panel, which effectively put the matter in the hands of judges. Under WTO rules, the EU now has one year to resume the dispute, otherwise the process lapses and the proceedings will stop.