The Lithuania-Taiwan Saga: Reshaping EU-China Relations and European Unity
In the shadow of Soviet-era watchtowers, a small Baltic nation dared to challenge a rising superpower. The diplomatic equivalent of David versus Goliath unfolded as Lithuania, a country of barely 2.8 million people, stood its ground against the economic might of China's 1.4 billion. What began as a seemingly insignificant decision in Vilnius soon escalated into a geopolitical showdown that would send shockwaves across Europe, testing alliances and reshaping trade policies. As the dust settles years later, the repercussions of this audacious move continue to reverberate, leaving diplomats, economists, and political theorists grappling with its far-reaching implications.
Lithuania allowing Taiwan to open a representative office in Vilnius under its own name at the end of 2021 marked the beginning of a far-reaching diplomatic standoff. This position was solidified further through Lithuania’s withdrawal from the "17+1" cooperation format with China. Such a move, considered reckless by many, has lately been viewed from a different perspective as global attitudes toward China continue to change.
The reaction from China was immediate and ruthless: from trade restrictions and diplomatic downgrades to pressuring multinational companies. However, the highly expected economic disaster for Lithuania did not occur to the extent many had anticipated. The EU's support, coupled with increased economic ties with Taiwan and other partners, helped mitigate the impact of Chinese sanctions.
It is only now, that in retrospect, Lithuania's actions look more justified than reckless. The nation's stand against economic coercion and in support of democratic values has resonated with many Western allies. Lithuania has become a case study in resisting authoritarian pressure, inspiring other small nations to reconsider their relations with China.
Subsequently, Lithuania's experience has triggered a broader reassessment of Europe's economic reliance on China. This process was already underway due to the COVID-19 pandemic and related supply chain disruptions but was then accelerated by the Lithuania-Taiwan controversy. Many EU countries have since taken measures to diversify their trade relations and reduce strategic vulnerabilities.
EU support for Lithuania has strengthened over time from initial hesitation to more concrete acts, such as the implementation of the anti-coercion instrument in 2023. This is not aimed at China, per se, but it gives the EU the mechanism it needed to deal with economic bullying.
Furthermore, the Lithuanian experience has also been used by the EU to incorporate lessons into its broader China strategy, where the bloc has become more assertive on issues related to human rights, technology transfer, and market access vis-à-vis Beijing. While maintaining dialogue with China, the EU has also strengthened its partnerships with other Indo-Pacific nations, including Taiwan.
The solidarity shown to Lithuania has also extended to other areas. For instance, when China attempted to pressure other EU member states over their ties with Taiwan, the bloc presented a more united front, demonstrating that it had learned from the Lithuanian experience.
The Lithuania-Taiwan controversy has contributed to a significant recalibration of EU-China relations. While the economic relationship is still important, the EU has taken up a more measured and cautious tone, better described as "de-risking" than "decoupling."
The EU has fortified its screening mechanisms for foreign direct investment, particularly in strategic sectors, and taken a tougher line on reciprocity in market access and fair competition. These measures, though not entirely due to the situation in Lithuania, were certainly accelerated by it.
The incident, if anything, led to increased coordination between the EU and like-minded partners such as the US, Japan, and Australia in their relations with China. Policies on technology exports, human rights, and regional security have actually started to become more aligned.
The Lithuania-Taiwan saga has been a learning curve for the EU in foreign policy coordination, with the initial responses fragmented. Since then, however, the bloc has found more effective ways to create a united front.
The creation of the anti-coercion instrument is one example of how the EU has adapted its tools to address new challenges. Additionally, there has been an increased emphasis on consultation and coordination among member states before taking actions that could have bloc-wide implications.
Nevertheless, difficulties persist. It remains a test for the EU to balance the diverse interests of its member states with the need for a coordinated and coherent foreign policy. Debates within the bloc on stances toward issues like the Israeli-Palestinian conflict and relations with Russia have shown that achieving consensus on sensitive foreign policy issues is still a complicated problem.
What first seemed like a Lithuanian diplomatic misstep in regard to Taiwan has, in fact, become a pivotal moment for both the reshaping of EU-China relations and unity within Europe. It has prompted reconsiderations of economic dependencies, hardened EU resolve against coercion, and contributed to a more assertive and coordinated European foreign policy.
The experience has shown that even the smaller EU states can leave their mark on the bloc's direction on global issues. It also underlined the significance of the member states' solidarity in the face of external pressures.
As the global order continues to evolve, with increasing competition between democratic and authoritarian systems, the EU's ability to present a united front while respecting member state sovereignty remains crucial. The Lithuania-Taiwan saga has indeed been very challenging, but it has contributed in the end to a more robust and strategically minded European Union.
The longer-term consequences of this shift are still playing out, but one thing is as clear as daylight: this episode has helped set the tone for how the EU will now approach both China and world affairs. As the bloc continues to navigate an increasingly complex international landscape, the lessons learned from the Lithuania experience will undoubtedly shape its foreign policy for years to come.
Image courtesy of Petras Malukas via Getty images, ©2021. Some rights reserved.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of the wider St. Andrews Foreign Affairs Review team.
