EU escalates WTO challenges to China over patents, Lithuania By Reuters

BRUSSELS (Reuters) – The European Commission said on Wednesday it had requested the formation of adjudicating panels at the World Trade Organization, the next step in two trade disputes with China.

The disputes, both brought to the WTO at the beginning of the year, concern alleged Chinese restrictions on EU companies’ rights to use a foreign court to protect their high-tech patents and on trade with EU member Lithuania.

“In both cases, the measures are highly damaging to European businesses,” the Commission said in a statement, adding that measures against Lithuania disrupted intra-EU trade and supply chains.

The Commission, which oversees trade policy for the 27-member European Union, formally requested consultations with China at the WTO, the first step in a WTO challenge. Such consultations rarely resolve disputes.

The EU executive said it would request the formation of a WTO panel at the next meeting of the WTO Dispute Settlement Board on Dec. 20, noting that panel proceedings can last up to one and a half years.

One of the disputes concerns China’s downgrading of diplomatic ties with Lithuania from December 2021 and pressure on multinationals to sever links with the Baltic nation of 2.8 million people after it allowed Taiwan to open a de facto embassy in Vilnius.

The Commission said China had also placed import bans on alcohol, beef, dairy, logs and peat shipped from Lithuania on the basis of plant and food safety rules without proving the bans were justified.

In the other case, the Commission said Chinese courts had since August 2020 issued “anti-suit injunctions” that prevent European companies from seeking redress over standard-essential patents in non-Chinese courts, such as EU courts.

The Commission said Chinese manufacturers used the injunctions to pressure patent rights holders to grant them cheaper access to European technology.