The European Union (EU) took China to the World Trade Organisation (WTO) on Thursday over its coercive practices against Lithuania and some exporters from other member states.

"These measures are a threat to the integrity of the single market because they affect intra-EU trade and EU supply chains and have a negative impact on EU industry," European Commission Vice-President Valdis Dombrovskis said as quoted by Bloomberg.

Dombrovskis said the EU worked hard to gather evidence to document China's restrictive measures against European products, because the actions were conducted informally and many European companies were reluctant to cooperate because they fear retaliation from Beijing.

According to European Union’s press release, it has evidence of pressure on European companies operating in other members states to remove Lithuanian inputs from their supply chains when exporting to China.

According to the Lithuanian Confederation Industrialists, some 130 companies are unable to send products to China or to clear shipments through customs. The economic value of the containers blocked is around 26.5 million euros ($29.9 million), EU officials said.

The most affected sectors have been pharmaceuticals, lasers, electronics and food and beverages. China’s coercive measures included restrictions on exports to the Baltic nation, and Chinese companies are canceling orders from Lithuanian firms.

“China in a sense is also putting pressure on multinational companies to abandon the use of Lithuanian components in their production, otherwise they also may face import restrictions,” Dombrovskis said in an interview to Bloomberg.

He said, “It’s clear that these kind of practices applied by China are in breach of the WTO rules.”

“We urge EU member states and the European Parliament to fast-track the work on the anti-coercion mechanism, because that would give us the possibility to react swiftly and effectively when faced with economic coercion,” Dombrovskis said.

The EU's move Thursday is largely symbolic because it will take several years for the case to work its way through the WTO's backlogged dispute-settlement system. Even if the EU wins an initial ruling, China could essentially veto it by appealing to the WTO's inoperable appellate body.

Image credit: AP