Photo : REUTERS/Ints Kalnins
04 February 2022, Friday | NIAS Europe Daily Brief #116
IN FOCUS
By Ashwin Dhanabalan
Lithuania and China: Four reasons, why Vilnius has become Beijing’s Achilles heel
On 21 March 2021, Lithuania withdrew from the China-CEEC 17+1 group. It felt the grouping undermined the EU's role in the region. The withdrawal was partially driven by China's countermeasures over the bloc's accusations against Beijing's Xinjiang policy.
According to China's Ministry of Commerce, China-Lithuania trade was USD 1.35 billion in 2019, placing China in 22 places for the export market and 10 places for sourcing imports. The Global Times reported: "The withdrawal of countries like Lithuania could also be the opportunity to improve China-CEEC cooperation mechanism, according to Chinese experts." Back then, Beijing felt a small country like Lithuania withdrawing from the cooperation would have little to no impact on China's influence in the region. Yet, one sees a wave of anti-China positions across Europe in countries like Slovenia, Germany, France. Even across the globe – one could see a similar sentiment in the US, UK and Australia after its diplomatic debacle with Lithuania.
Four reasons, why Lithuania has become China’s Achilles heal
First, the EU launched an official dispute with China on behalf of Lithuania with the World Trade Organisation(WTO). The arbitration would have significant implications that can be seen in terms of economic and diplomatic contentions. China’s Foreign Ministry spokesperson Zhao Lijian said: "We also remind the EU to distinguish right from wrong and be alert of Lithuania's attempt to kidnap China-EU relations." He further denied the allegations on the violations of WTO norms and clearly stated these issues were more political than economic. China warned the EU not to escalate the bilateral dispute with Kyiv because Beijing said it only practiced business preference on Lithuanian supplies.
Second, a revival of EU's anti-coercion instrument. EU's anti-coercion instrument has not been enacted yet and it will not be implemented until an agreement is reached. The Lithuania-China issue is a prime example of how the EU can hold a larger country accountable for clamping down on smaller countries within the EU to safeguard their interests. Furthermore, China's weaponization of European value chains could lead to the EU and regional countries stepping up their Indo-Pacific strategy to secure their economic interests.
Third, a shift in the EU's foreign policy of strategic economy. The recent tensions would affect the EU's push for a strategic economy, as it depended on closer economic ties with China. China was initially seen as a critical player for shifting its traditional dependence from the US. The EU had also hoped to play a crucial role between the US and China to bridge relations between the two countries in the case of diplomatic tensions. Under President Macron's EU Presidency, France had supported the idea of pushing for a strategic economy. Yet, with the recent debacle and the French Parliament's judgment on China's treatment of Uyghurs as genocide, it would make Paris reconsider its stand.
Fourth, Europe versus China has taken a global turn with the EU approaching the WTO. Australia has requested to join the consultations regarding the trade dispute between the EU and China. Australian Trade Minister Dan Tehan said: "Australia has a substantial interest in the issues raised in the dispute brought by the European Union against China ... and will request to join these consultations." As Australia and China had their contentions in 2018 when Canberra banned Huawei, Canberra recently filed two cases with the WTO regarding China's import duties.
On 26 January, the US House of Representatives passed the America Competes Act of 2022, which approved Washington to rename its Taiwan embassy. The bill also authorizes the change from Taipei Economic and Cultural Representative Office to Taiwan Representative Office in the United States. The act cleared the speculations reported by Global Times on 22 January, which suggested that the US diplomats had pressured Lithuania to consider changing the name of the Taiwanese representative office in Vilnius.
References:
"Australia seeks to join WTO talks on China-EU trade row," Reuters, 29 January 2022.
"China urges EU not to be 'kidnapped' by Lithuania after Brussels' lawsuit threat," Global Times, 27 January 2022.
Jacob Fromer and Owen Churchill, "US House finalises bill to confront China, including provisions on semiconductors and Taiwan ties," South China Morning Post, 26 January 2022.
Zhang Tengjun, "Lithuania needs much more than removing 'Taiwan' from office name to mend ties with China," Global Times, 22 January 2022.
Chen Qingqing and Yang Kunyi, "Lithuania's decision to quit China-CEEC 17+1 won't change fundamentals of platform," Global Times, 23 May 2021.
IN BRIEF
By Joeana Cera Matthews and Padmashree Anandhan
POLAND
Warsaw: President Duda to propose bill closing down Supreme Court disciplinary chamber
On 03 February, Polish President Andrzej Duda proposed to submit a bill that would shut down the Supreme Court’s disciplinary chamber. The move was an effort to end the clash with the EU. Duda said: “I propose that this chamber be abolished… I want to give the Polish government an instrument to end the dispute with the European Commission.” Critics condemned the proposal, claiming that it was just “bogus rebranding”. The European Court of Justice (ECJ) had imposed a fine of EUR 1 million per day for the lack of Polish action regarding the chamber. (“Poland: President seeks closure of court body to end EU row,” Deutsche Welle, 03 February 2022)
NORTHERN IRELAND
Northern Ireland First Minister resigns over objection on Brexit protocol
On 03 January, Northern Ireland First Minister, Paul Givan belonging to the Democratic Unionist Party submitted his resignation objecting to the Brexit checks in the Irish Sea. Previously when the Agricultural Minister blocked the inspection of goods that were delivered from the UK. The move angered the EU, as it violates the Brexit agreement. According to the First Minister, “They have been impacted by the agreement made by the United Kingdom government and the European Union, which created the Northern Ireland Protocol.” Due to the complex system of power sharing in Northern Ireland, the Deputy First Minister from the Nationalist Party Sinn Fein by default loses the power. The leader of both parties have called for snap elections to avoid political chaos.(“Northern Ireland first minister resigns over post-Brexit trade rules,” Deutsche Welle, 04 February 2022)
NORWAY
NATO Secretary General to become the next Central Bank Governor of Norway
On 03 January, the Norwegian government announced that Jens Stoltenberg, currently the Secretary General of the NATO , will be positioned as the Central Bank Governor after his tenure ends. Stoltenberg said: “I am grateful for the trust and am looking forward to taking on the job.” The Finance Minister welcomed the decision and praised his knowledge, background and the management experience which would suit the best for the position. (“NATO chief Jens Stoltenberg to lead Norway's central bank,” Deutsche Welle, 04 February 2022)
REGIONAL
Poland: Agreement signed with the Czech Republic over Turow mine
On 03 February, Polish Prime Minister Mateusz Morawiecki and the Czech Republic Prime Minister Petr Fiala met in Prague and signed an agreement regarding the Turow mine. The deal ends the long-drawn dispute over the lignite mine. According to Morawiecki, the agreement allows the smooth functioning of both the Turow open-pit mine and the nearby power plant. During the joint press conference, Fiala said: “This deal undoubtedly brings advantages and benefits and results to communities affected (by Turow).” The agreement also calls for the Czech Republic to withdraw its complaint made to the European Court of Justice (ECJ). However, the daily fines of EUR 500,000 imposed on Poland by the European Commission are expected to continue until the official withdrawal. (“Polish, Czech governments sign deal on contested mine,” Deutsche Welle, 04 February 2022)
MIGRATION
France: Schengen Council created to address migration concerns
On 03 February, the interior ministers of the Schengen zone met at Lille in France to discuss the creation of a Schengen Council. Termed by Deutsche Welle as the “crisis council,” it is expected to deliberate on the “questions of border and migration”. According to French Interior Minister Gerald Darmanin, the Schengen Council’s first meeting has been scheduled for 03 March. The decision comes in the backdrop of France’s EU presidency and its aim to retrieve the Schengen zone’s borderless movement, thus, facilitating reforms to the processing of migrants. (“Europe: Schengen countries establish crisis council,” Deutsche Welle, 03 February 2022)
INTERNATIONAL
Ukraine: US intelligence claims Russia to substantiate invasion by potential “fake attack”
On 03 February, the US revealed intelligence that stated the next Russian move over Ukraine would be the “fabrication of an invasion pretext”. The Pentagon spokesperson said: “As part of this fake attack, we believe that Russia would produce a very graphic propaganda video, which would include corpses and actors that would be depicting mourners and images of destroyed locations.” However, the US Deputy National Security Adviser Jonathan Finer pointed out the uncertainty of the claim. (“US alleges Russian plot to fabricate Ukraine attack,” Deutsche Welle, 03 February 2022)