Lithuania-Taiwan and the EU’s hesitation in supporting its Member States

Marius Buga

On July 20th, 2021, the Representative of the Taipei Mission in Latvia, Eric Huang, together with Lithuanian MP and Chairman of the Lithuanian Parliamentary Group for Relations with Taiwan, Matas Maldeikis, announced that a new representative office will open in Lithuania. Crucially, the office in Vilnius would be named ‘Taiwanese Representative Office’, a sharp departure from the traditionally used ‘Taipei Mission’. This deepening of ties between Lithuania and Taiwan was met with widespread support in Washington, but Brussels’ reaction has been more timid. Foreign analysts were reasonably concerned that the People’s Republic of China would retaliate, yet Lithuanian officials were cautiously optimistic. According to an analysis by the Bank of Lithuania, as Lithuania has not developed significant economic ties with China, cutting off trade with China would not be particularly harmful and only reduce GDP by 0.3% over three years. Hence, the government of Lithuania has continued to deepen its ties with Taiwan, despite warnings from Beijing.

Half a year later, as political and economic pressure from Beijing has escalated, the situation has changed. According to Lithuanian and international sources, Lithuanian goods have been stopped at the border, German companies were pressured to avoid buying components made in Lithuania or risk of being cut off from China, while Lithuanian diplomats in China had their diplomatic status downgraded and the Lithuanian embassy was closed down. This pressure has caused concern within Lithuania and in the West, as significant portions of the Lithuanian political elite have voiced doubts about the representative office’s name, including the Lithunian President, Gitanas Nausėda. However, not all of the consequences have been negative, as Taipei has responded by rerouting blocked Lithuanian exports from China to Taiwan, aided by a surge in Taiwanese consumption of Lithuanian goods as a signal of support. Further assistance has already been announced, with President Tsai’s administration creating a $200 million investment fund to invest into Lithuanian industries and to boost bilateral trade opportunities. Finally and perhaps most importantly, Taiwan has been signalling a willingness to help Lithuania break into the microchip manufacturing industry. Such a deal would be a great opportunity for Lithuania and all of Europe, as it currently faces a microchip shortage. Of course, it is wise to remain cautious because despite a recent $1 billion fund increase, current plans and investments do not even come close to the scale necessary for a microchip manufacturing plant. All together, however, increased cooperation with Taiwan offers some hope for a bountiful partnership, albeit China’s mounting pressure.

During this diplomatic clash, the EU has had little impact. While the European Commission expressed diplomatic support for Lithuania, other measures seem lacking. Only recently, in January 2022, did the EU even take the case of China blocking Lithuanian goods to the WTO, and even now, this process will take months if not years. During this time, Brussels has not offered significant economic support to ease the pressure on one of its Member States. Instead, Washington has offered a $600 million export-credit agreement to Lithuania. The rapid reaction by the US compared to Brussels may serve to confirm the suspicions of Eastern European states that the EU is willing to sacrifice smaller Member State interests for economic gain, while Washington remains a competent ally. Critical voices in Lithuania have noted that the EU seems to be paralyzed by Beijing’s threats, once again raising the issue that the EU is sluggish to act in support of the values it espouses when they clash with economic interests. 

Concerns over Lithuania starting a diplomatic feud with the second most powerful nation in the world and fears of economic repercussions at home and in the EU are valid. However, the Lithuanian government has a right to determine its own foreign policy, especially since this move is in line with EU values, stressing the importance of building ties with and supporting democracies globally. Perhaps the EU could be forced to act as more nations follow Lithuania’s lead. Slovenia is already considering opening up its own representative office, while shrugging off possible Chinese opposition. Even if the office is named differently, it may not change China’s response, as analysts have argued that Beijing cares less about the name than the perceived expansion of Taiwan’s diplomatic ties and legitimacy. Additionally, Beijing’s behaviour seems disproportional and out of line with official WTO agreements, but China continues to deny that it is boycotting Lithuanian goods despite evidence. Failing to rebuke such behaviour sets a precedent that China is able to use unofficial embargos to bully smaller states into changing their foreign policy and that the EU is unwilling to defend its Member States on the global stage. 

The EU still has time to remedy its response. While public opinion in Lithuania is sceptical of the government’s position, the country has garnered significant public goodwill internationally and government elites retain confidence in what they refer to as a “value-based foreign policy”. This style of foreign policy is deemed vital because, as Prime Minister Ingrida Šimonytė noted, “states like Lithuania can only survive in world where international law and basic values are respected”. Such statements are attracting more support, as conservative news reports in Japan, India, Australia and others champion the small country for being brave enough to stand up to Beijing. The myth of ‘David versus Goliath’ fits Lithuania: a small democratic state standing stalwartly against an authoritarian communist empire. It also echoes the story of Lithuanian independence from the Soviet Union. Beyond that, it appeals to Taiwan’s current struggle to maintain its freedom. For global audiences, such a story invokes a strong sentiment of rooting for the underdog. Yet, the power Lithuania would expect support from most, the EU, has remained unresponsive. Brussels must take stronger action to support its Member States against unlawful coercion from China for promoting what are ostensibly EU values. Failing to do so casts doubt on the EU’s coherence and integrity, as it may be seen to value economic contracts above both human rights and the international standing of its members.

References

Official Profiles:

Official Twitter Account of President of the European Commission, Ursula von der Leyen, tweet on the meeting with Lithuanian PM, January 4 2022

https://twitter.com/vonderleyen/status/1478438955439861763?s=20

Taipei Mission in the Republic of Latvia Press Release July 20 2021

https://fb.watch/b0R_NMx0JY/

Lithuanian Member of Parliament, Matas Maldeikis, personal Facebook account, December 26, 2021

https://www.facebook.com/photo.php?fbid=431525905166936&set=a.298121071840754&type=3

Articles:

Andrews, Kevin “Lithuania backs Taiwan despite Beijing bullies” Spectator Australia, Jnauary 15 2022

https://spectator.com.au/2022/01/lithuania-backs-taiwan-despite-beijing-bullies/

Asia Nikkei “Taiwan sets up $200 million Lithuania investment fund amid China dispute” January 5, 2022

https://asia.nikkei.com/Politics/International-relations/Taiwan-sets-up-200m-Lithuania-investment-fund-amid-China-dispute

European Commission Press Release “EU Refers China to the WTO following its trade restrictions on Lithuania” January 27, 2022

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_627

Kapoor, Ravi Shanker “Lithuania can stand up to China but bigger powers can’t” Sunday Guardian Live, January 15 2022

https://www.sundayguardianlive.com/opinion/lithuania-can-stand-china-big-powers-cant

Lau, Jack “Taiwanese firm buys Lithuanian rum destined for mainland China amid diplomatic row” South China Morning Post, January 4 2022

https://www.scmp.com/news/china/diplomacy/article/3161992/taiwanese-firm-buys-lithuanian-rum-destined-mainland-china?utm_content=article&utm_medium=Social&utm_source=Twitter#Echobox=1641251957-1

Lau, Stuart and Cerulus, Laurens “Lithuania wins microchip windfall from Taiwan in China clash” Politico, January 9 2022

https://www.politico.eu/article/lithuania-taiwan-china-microchip-windfall-clash/

Lau, Stuart “Lithuania secures extra $1 billion pledge from Taiwan amid China blockade” Politico, January 11 2022

https://www.politico.eu/article/lithuania-secures-extra-1-b-pledge-from-taiwan-amid-china-blockade/

Lau Stuart “Slovenia to bolster trade ties with Taiwan, wading into row with China” Politico, January 18 2022

https://www.politico.eu/article/jansa-slovenia-to-follow-lithuania-for-new-office-in-taiwan/

Martinez, A and Feng, Emily “Amid Taiwan spat, Lithuania closes embassy in China after diplomats leave” NPR, December 16 2021

https://www.npr.org/2021/12/16/1064751716/amid-taiwan-spat-lithuania-closes-embassy-in-china-after-last-diplomats-leave?t=1644241412478

Nevett, Joshua “Lithuania: The European State that dared to defy China then wobbled” BBC News, January 7, 2022

https://www.bbc.co.uk/news/world-europe-59879762

Parker, Jessica “Lithuania-China row: EU escalates trade dispute with Beijing” BBC News, January 27 2022

https://www.bbc.co.uk/news/world-europe-60140561

Shattuck, Thomas J. “Lithuania Fever in Taiwan: Can China Break It?” Foreign Policy Research Institute, January 26 2022

https://www.fpri.org/article/2022/01/lithuania-fever-in-taiwan-can-china-break-it/

Sytas, Andrius and O’Donnell, John “EXCLUSIVE: China pressures Germany’s Continental to cut out Lithuania – sources” Reuters, December 17, 2021

https://www.reuters.com/world/china/exclusive-china-asks-germanys-continental-cut-out-lithuania-sources-2021-12-17/

Sytas, Andrius “Lithuania to get US trade support as it faces China fury over Taiwan” Reuters, November 19 2021

https://www.reuters.com/business/lithuania-get-us-trade-support-it-faces-china-fury-over-taiwan-2021-11-19/

Sytas, Andrius “Lithuania says China is blocking its customs exports” Reuters, December 3, 2021

https://www.reuters.com/article/china-lithuania-trade/lithuania-says-chinese-customs-is-blocking-its-exports-idUSKBN2II0Y7

The Sankei Shimbun Editorial Board “Editorial | China’s Shameful Intimidation of Lithuania and Taiwan” Japan-Forward, January 17 2022

https://japan-forward.com/editorial-chinas-shameful-intimidation-of-lithuania-and-taiwan/

Lithuanian News:

Lithuanian Verslo Žinios (transl: Bussiness News) “Lithuanian Bank: Cutting commerce with Belarus or China would not be painful” August 20 2021 (Translated by Author)

https://www.vz.lt/finansai-apskaita/2021/08/20/lb-prekybos-su-baltarusija-ar-kinija-nutraukimas-nebutu-skausmingas

Šemelis Augustinas, “Value based foreign policy raises questions: is it too expensive, is it cohesive?” LRT, December 31 2021, (Translated by Author)

https://www.lrt.lt/naujienos/lietuvoje/2/1576147/vertybine-lietuvos-uzsienio-politika-kelia-klausimu-vieniems-ji-per-brangi-kiti-pabrezia-nuoseklumo-trukuma

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s