The U.S. and Lithuania agreed to cooperate on ways to counter what they called China's economic coercion in a move that is likely to draw a strong rebuke from Beijing.
U.S. Trade Representative Katherine Tai told Lithuanian Foreign Minister Gabrielius Landsbergis on Wednesday that the Baltic nation had Washington's support during a call that was held amid a diplomatic dispute over Taiwan opening a representative office in Vilnius under its own name.
The two officials pointed out that the U.S. and the European Union, as democratic market economies, share a number of core values and principles that we need to defend internationally. The way to confront bullying is not to give up, it is to work together, according to Kolas Yotaka, the spokesman for the Presidential Office in Taipei.
After allowing the office to open in its capital, Lithuania faces unofficial trade hurdles and a downgrade of diplomatic relations with China, a move Beijing deems to be a violation of its one-China principle. China recalled its ambassador, but it denies it is blocking the nation's exports. The World Trade Organization has been involved with the dispute between the EU and the World Trade Organization.
In response to the economic pressures from China, Taiwan pledged to establish a $200 million fund to invest in Lithuania and open its markets to the country.
Eric Huang, head of the representative office in Vilnius, said at a news conference that Taiwan would invest in the areas of semiconductors, lasers, biotechnologies and research. He added that it will send a team to assess Lithuania's aspirations to develop a semiconductor industry.
It's time for us to help with your difficulties, said Harry Ho-jen Tseng, Taiwanese Deputy Foreign Minister.
Lithuania has been aiming to build closer economic ties with Taiwan and has been expecting to gain a foothold in Taiwan's semiconductor sector since last year when it left the Chinese-led 17 1 format, a group of EU states that China is using to engage and influence the bloc.
Taiwan's National Development Council and Lithuania's Economy Ministry have yet to discuss the details of the investment fund, which will be financed by Taiwan's National Development Fund. An even bigger fund for investments backed by Taiwan's central bank is in the works, Huang said.
On the trade front, Taiwan is working to redirect 120 containers of Lithuanian products that have been halted at Chinese ports and open up the island s market for Lithuanian dairy and grain, Huang said. A Taiwanese company also purchased 20,400 bottles of Lithuanian rum that China refused to let into the country, according to the South China Morning PostChina Morning Post.
Taiwan is committed to speed up the process for Lithuania as Lithuania faces such unprecedented economic coercion in international trade history, Huang said.
The dispute has triggered political tensions in Lithuania, where President Gitanas Nauseda criticized the government for opening the office with Taiwan and said using the name of the democratically ruled island was a mistake.
Nauseda later walked back and said that his position on the opening of the office was positive and unchanged, adding that he never called it a mistake.