CHINA - MEASURES CONCERNING TRADE IN GOODS AND SERVICES REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE EUROPEAN UNION
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 9 December 2022
Document codes: WT/DS610/8
Complainant: EU
Respondent: China
Third parties: Australia, Brazil, Canada, Colombia, India, Indonesia, Japan, South Korea, New Zealand, Norway, Russia, Switzerland, Taiwan, Thailand, Türkiye, United Kingdom, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. I:1, III:4, V:6, X:3(a), XI:1  GATT 1994Art. 2.2, 2.3, 3.1, 3.2, 5.1, 5.2, 5.6, 5.8, 8, Annex C, Annex C para. 1(a),   Sanitary and Phytosanitary Measures (SPS)Art. 7, 10  Trade Facilitation (TFA)

CHINA - MEASURES CONCERNING TRADE IN GOODS AND SERVICES
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE EUROPEAN UNION
The following communication, dated 7 December 2022, from the delegation of the European Union
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 27 January 2022 the European Union requested consultations with the Government of the
People's Republic of China ("China") pursuant to Articles 1 and 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU"), in conjunction with Article XXII:1 of the
General Agreement on Tariffs and Trade 1994 ("GATT 1994"), Article 24.8 of the Trade Facilitation
Agreement ("TFA"), Article 11 of the Agreement on the Application of Sanitary and Phytosanitary
Measures ("SPS Agreement") and Article XXII of the General Agreement on Trade in Services
("GATS") in relation to measures adopted by, and attributable to, China, affecting the importation
of goods from, and the exportation of goods to, the European Union ("EU") and affecting trade in
services between the EU and China.
The European Union held consultations with China on 14 and 15 March 2022 with a view to reaching
a mutually satisfactory settlement of the matter. Unfortunately, the consultations failed to settle the
dispute.
Therefore, the European Union respectfully requests, pursuant to Articles 4 and 6 of the DSU,
Article XXII:1 of GATT 1994, Article 24.8 of the TFA, and Article 11 of the SPS Agreement, that the
Dispute Settlement Body establish a panel to examine this matter, based on the standard terms of
reference as set out in Article 7.1 of the DSU.
1. Background to the dispute
This Request relates to a complex of inter -related measures attributable to China restricting the
trade in goods from or to Lithuania or linked to Lithuania. As regards the temporal aspects, in light
of the fact that the adoption and maintenance of the Chi nese measures has been wholly or partly
hidden or disguised, and experienced by the European Union with varying intensities at different
times, the European Union seeks findings regarding the existence and content of each of the
measures at issue by reference to each of the following times (1) at the end of the first quarter of
2021 (2) at the end of August 2021 (3) at the end of the final quarter of 2021 and (4) the date on
which the panel is established.
Beginning in or around the final quarter of 2021, importers of products originating in Lithuania and/or
transiting through Lithuanian ports and/or with some other link to Lithuania began encountering
restrictions on securing customs clearance for their goods to enter Chinese territory. Those
restrictions include in particular: (i) error messages on the IT systems used to input data necessary
to secure customs clearance from the Chinese customs authorities; (ii) containers being blocked in
Chinese ports pending customs clearance; (iii) failures on the part of the Chinese customs authorities
to process requests for customs clearance in due time or at all. Those restrictions are novel,
numerous, recurrent, and strongly correlated in temporal and substantive terms, as well as in terms
of the provenance of the goods and have persisting effects.

Commencing in or around the final quarter of 2021, entities established in Lithuania began
encountering difficulties relating to goods due to be exported from China to Lithuania. Those
difficulties include failures on the part of the Chinese customs authorities to process requests for
customs clearance for export in due time, or at all. Entities established in Lithuania, or showing a
link to Lithuania, also reported the supply of services from or to Lithuania, encountered restrictions.
Those restrictions have similar characteristics.
In the same time period, entities established in Lithuania began reporting that beginning in 2021,
Chinese customs authorities began refusing customs clearance for shipments of various products
covered by SPS certificates issued by Lithuanian authorities.1 These entities also reported that these
refusals appeared to lack proper justification and occurred at an increased frequency.
As of 8 February 2022, China formalised the import bans for products that had already been blocked,
by suspending the acceptance of import declarations from Lithuania.2
The measures at issue
The measures, including the SPS measures at issue, include the adoption, maintenance and
application through its actions or omissions, in law and in fact, as such and as applied, by China, of
import bans or import restrictions on the products at issue, from the EU or parts thereof.
The means through which China imposes and administers these measures operate collectively but
also separately, and affect the importation or exportation of goods from or to Lithuania, or showing
a link to Lithuania for example through the presence of Lithuanian components. These measures
predominantly concern goods from or destined for Lithuania or lin ked in various ways to Lithuania,
but also have an effect on supply chains throughout the EU.
The above -described complex of measures are inter -linked and show a targeted prohibition or
restriction relating to the trade in goods from or to Lithuania or linked to Lithuania which is intended
to be generally applicable.
These measures are attributable to China which, through actions of the Government, and/or through
measures designed, promulgated, or applied by entities (including local government bodies, no n-
governmental bodies and state-owned enterprises) in Chinese territory acting as, under the authority
of, or in concert with the Government, has encouraged, incentivised or otherwise instigated a
coordinated policy designed to restrict trade from and with the EU, and more specifically, Lithuania,
in a manner that is inconsistent with the terms of the covered agreements.
In particular, the acts or omissions of the General Administration of Customs China resulting in the
failure to take administrative action s or decisions necessary for customs clearance, as well as the
unjustified refusal to grant customs clearance, has the effect of prohibiting or restricting importation.
China also grants less favourable treatment for transit for products with a link to Li thuania as
described above.
China arbitrarily or unjustifiably discriminates between the EU and other Members where identical
or similar conditions prevail, including between China's own territory and that of the EU, in applying
sanitary and phytosanitary measures, and further applies sanitary and phytosanitary measures in a
manner which constitutes a disguised restriction on international trade, when goods with a link to
Lithuania are involved.

1 Including wheat, logs (wood), peat and food and beverage products.
2 Including alcohol, beef, dairy products, logs (wood) and peat.

2. Brief summary of the legal basis for the complaint in respect of China's measures
The European Union considers that in light of the matters set out above in sections 1 and 2, the
measure or series of measures described are inconsistent with China’s obligations under the
following provisions of the covered agreements3:
- Article I:1 of GATT 1994, because, by its acts or omission as regards the operation of its
custom clearance procedures to goods originating in Lithuania and/or transiting through
Lithuanian ports and/or with some other link to Lithuania, China has not and is not according
immediately and unconditionally to the like product originating in or destined for the territory
of the EU with respect to all rules and formalities in connection with importation and
exportation, the advantage s, favours, privileges or immunities granted by China to any
product originating in or destined for any other country.
- Article V:6 of GATT 1994, because, by its acts or omission as regards the operation of its
custom clearance procedures to goods transiting through Lithuania, China has accorded and
accords to products which have been in transit through the territory of another Member
treatment less favourable than that which it accords to such products that have been
transported from their place of origin to their destination without going through the territory
of that other Member.
- Article X:3(a) of GATT 1994, because China has administered and administers its laws,
regulations, decisions and rulings of the kind described in Article X:1 of GATT in a man ner
that is not uniform, impartial and reasonable.
- Article XI:1 of GATT 1994, because China has instituted and is maintaining prohibitions or
restrictions other than duties, taxes or other charges on the importation of products from
the territory of the EU.
- Article 7 of the TFA, because for products originating from the territory of the EU, China has
not maintained and is not maintaining procedures allowing for the submission of import
documentation and other required information, including manifests, in order to begin
processing prior to the arrival of goods with a view to expediting the release of goods upon
arrival.
- Article 10 of the TFA, because China has not adopted and/or applied import, export, and
transit formalities and documentation requirements with a view to a rapid release and
clearance of goods, particularly perishable goods. Furthermore, China has not adopted
and/or applied import, export, and transit formalities and documentation requirements in a
manner that aims at reducing the time and cost of compliance for traders and operators.
- Article 2.2 of the SPS Agreement, because China has not ensured, and does not ensure, that
the measures at issue are not applied beyond the extent necessary to protect human or
animal life or health. Further, China has not ensured, and does not ensure, that the measures
at issue are based on scientific principles. It appears that there is no scientific basis, whether
specific or general, for restricting imports from within Lithuania; or with respect to all the
products at issue. China failed and fails to ens ure that the measures at issue are not
maintained without sufficient scientific evidence.
- Article 2.3 of the SPS Agreement, because China has not ensured and is not ensuring that
the sanitary and phytosanitary measures which it applies do not arbitraril y or unjustifiably
discriminate between Members where identical or similar conditions prevail, including
between their own territory and that of the EU and has applied sanitary and phytosanitary
measures in a manner which constitutes a disguised restriction on international trade.
- Articles 3.1 and 3.2 of the SPS Agreement, because the measures are neither "based on"
nor "conform to" the relevant international standards, guidelines or recommendations as
laid down by the Codex Alimentarius, World Organizati on for Animal Health (“OIE”), or

3 With respect to all of the matters, GATT, TFA and SPS, China systematically precludes or restricts
trade through an inappropriate and/or unjustified application of the relevant provisions.

International Plant Protection Convention (“IPPC”), as provided for in Articles 3.1 and 3.2 of
the SPS Agreement.
- Articles 5.1 and 5.2 of the SPS Agreement, because China does not ensure that the measures
at issue are ba sed on an assessment, as appropriate to the circumstances, of the risks to
human, animal or plant life or health, taking into account risk assessment techniques
developed by the relevant international organizations, as required by Article 5.1 of the SPS
Agreement. China has neither provided, nor referred to, any such risk assessment or
completed any risk assessment.
Further, in adopting, maintaining and/or applying the measures at issue, China did not take
into account available scientific evidence; relevan t processes and production methods;
relevant inspection, sampling and testing methods; the prevalence of specific diseases or
pests; the existence of pest - or disease -free areas; the relevant ecological and
environmental conditions; and quarantine or other treatment. Had China properly taken
these matters into account, it would have concluded that the measures at issue are
unnecessary and unjustified.
- Article 5.6 of the SPS Agreement, because when establishing and maintaining the measures
at issue, China has failed and fails to ensure that they are not more trade -restrictive than
required to achieve their appropriate level of sanitary protection, taking into account
technical and economic feasibility, as required by Article 5.6 of the SPS Agreement. China
has failed and fails to take into account that there are other measures, which are reasonably
available taking into account technical and economic feasibility, that achieve China’s
appropriate level of sanitary protection and that are significantly less restrictive to trade. In
particular, as regards wheat, the alternative measures would take into account the standards
for establishing pest free areas as determined by the IPPC. China should recognise
Lithuanian territory as a non-affected area.
- Article 5.8 of the SPS Agreement because, when the EU requested China to provide the
reasons for the sanitary or phytosanitary measures constraining exports of logs, peat and
wheat, for which the EU has reason to believe that they are not based on the relevant
international standards, guidelines and recommendations, China did not provide the
reasons.
- Article 8 of the SPS Agreement, because in the operation of control, inspection and approval
procedures, China has not ensured and is not ensuring that the procedures are not
inconsistent with the provisions of this Agreement.
- Article 8 and Annex C.1(a), (b) and (c) of the SPS Agreement, because China has failed, and
fails to ensure, with respect to its procedures for checking and ensuring the fulfilment of
sanitary measures, that such procedures have been undertaken and completed without
undue delay and in no less favourable manner for imported products than for like domestic
products, as required by Annex C.1(a) to the SPS Agreement.
Furthermore, with respect to Annex C.1(b) to the SPS Agreement, China has failed, and fails
to ensure, that the competent body transmits, as soon as possible, the results of the
procedure in a precise and complete manner to the applicant, so that corrective action may
be taken if necessary; that even when the application has deficiencies, the competent body
proceeds, as far as practicable, with the procedure if the applicant so requests.
- Article III:4 of GATT 1994 for the reasons stated above, the measures at issue are
inconsistent with China’s obligations under GATT 1994, and specifically Article III:4 (national
treatment with respect to internal regulations) because China accords to imported products
treatment less favourable than that accorded to like products of national origin.
The measures by China appear to nullify or impair the benefits accruing to the European Union
directly or indirectly under GATT 1994, the SPS Agreement, and the TFA.

This panel request relates to the measures at issue and to any amendments, supplements,
extensions, replacement measures, renewal measures, implementing measures, or other related
measures.
The European Union asks that this request for the establishment of a panel be placed on the agenda
for the meeting of the Dispute Settlement Body to be held on 20 December 2022.