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Lithuania miscalculated responses to its escalation with China.
Written by Paul Antonopoulos, independent geopolitical analyst
The Anglo Alliance (US, UK and Australia, or AUKUS) and Taiwan have enthusiastically expressed their support for the European Union’s complaint on Chinese economic policies against Lithuania. Anne-Marie Trevelyan, the UK’s secretary of state for international trade, said on Twitter on February 7 that London “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.” In effect, the Anglo Alliance are latching onto the EU’s complaint to the World Trade Organization in an attempt to portray a united Western front against China, but this far from the actual reality.
Relations between Lithuania and China deteriorated after the opening of a Taiwanese representative office – a de facto embassy – in Vilnius. In response, Beijing significantly downgraded its diplomatic relations with the Baltic country and Lithuanian exporters are finding it difficult to do business with China.
Western media also reported that China began putting pressure on transnational corporations, such as German tire maker Continental. China, as European companies complain, insist that any product made or sourced in Lithuania, even partly, cannot be imported into the country.
Vilnius now attempts to frame itself as a victim of an “economic bully” rather than the instigator of a political and diplomatic crisis. According to Lithuanian Foreign Minister Gabrielius Landsbergis, Vilnius cannot take retaliatory measures as it must comply with the European Union’s customs system. Because of this limitation, Landsbergis had no choice but to call on Brussels to assist in Lithuania’s unprovoked escalation with China.
However, it was Taipei and not Brussels that quickly offered Lithuania assistance by buying 20,400 bottles of alcohol originally intended for mainland China. The government of the “rebel province,” as Beijing terms Taiwan’s ruling authorities, then promised to open a $200 million investment fund for Lithuania’s strategic industries, in addition to a $1 billion line of credit for Lithuania to finance commercial projects.
Unlike Taiwan, Brussels for its part is in no hurry to take concrete measures against China for the sake of Lithuania. In Europe, there is currently no common approach in relations with the East Asian country. For many EU members, especially Germany, China remains the most important consumer market for products. For Mediterranean EU countries, especially Greece, China has been a lifeline for desperately needed investment, especially during the previous decade’s recession.
Effectively, the majority of the EU are not ready to give up China for the sake of a minnow country like Lithuania. This harsh realisation is summed up by Lithuanian President Gitanas Nausėda begrudgingly admitting that the decision to rename Taipei’s representative office to “Taiwan” was a mistake.
None-the-less, now the EU has finally responded to Vilnius’ call for help by submitting an application to the World Trade Organization (WTO) about China’s retaliatory actions. However, it is not clear what role the WTO can play in making China change its policies when Lithuania instigated the crisis to begin with and refuses to end its provocation.
In addition, the complaint was made when the WTO is in the midst of an internal institutional crisis caused by the US. Currently, the WTO Appellate Body does not have a new arbitrator as the US is blocking new appointments. Although the WTO’s main dispute settlement body continues to operate, the enforcement of its decisions has become completely non-binding.
Brussels perhaps recognizes the ineffectiveness of the WTO in the current situation and is only making a symbolic gesture to maintain the façade of a united Western front against so-called common adversaries, i.e. China’s economic and trade policy.
In fact, even the Anglo Alliance itself is shaky in their common cause of opposing and challenging China. It is recalled that when Canberra launched an initiative to pin the blame of COVID-19 onto China through an “independent investigation,” Washington just simply expressed verbal solidarity. Following Canberra’s audacious request, Australia is now experiencing real economic problems related to restrictions China currently imposes on Australian beef, wine, barley and other agricultural products.
Although the verbal solidarity comes as Australia is now facing real economic problems, it was said before the announcement of the AUKUS Alliance. That does not negate the fact though that the US has an extensive and continued track record of betraying allies, despite assurances given. The latest casualties of Washington’s backstabbing are Greece, Cyprus and Israel as the US only last month backed out of supporting the EastMed pipeline.
In this way, Vilnius has undoubtedly miscalculated. Lithuania, which has major economic and social issues, has decided it can sacrifice trade with China for the sake of its political relationship with Washington. This is in addition to Vilnius miscalculating European reactions to any of China’s retaliatory measures. The majority of Europe evidently is unwilling to sacrifice their economies for the sake of serving American interests, with cheerleading from the UK and Australia, like Vilnius has done.
