In March 2019, the European Commission published its “EU-China – A strategic outlook,” through which the EU recalibrated its policy position toward China. In parallel, the announcement of its Europe-Asia Connectivity strategy in September 2018 demonstrated the EU’s strong will to deepen EU-Asia links, including inking FTAs with Japan, South Korea, Singapore, and Vietnam in the past two years. As one of the EU member states’ major trading partners in East Asia, Taiwan simply represents a logical next step in their future roadmap.
The EU and Taiwan are like-minded partners, both committed to freedom, democracy, an open society, a market-driven economy, human rights, and the rule of law. If, as the EU-China strategic outlook described last year, China has emerged as a “systemic rival” to the EU, then Taiwan can be seen as a natural partner. That is why the time is ripe for the EU and Taiwan to further strengthen bilateral trade ties, and the first step to achieve this is to commence negotiations on a Bilateral Investment Agreement (BIA).
The EU is Taiwan’s fifth largest trading partner, while Taiwan is the EU’s fifth largest partner in Asia, with the two-way trade amounting to 50.5 billion euros in 2019. More importantly, the EU remains the largest source of Foreign Direct Investment (FDI) in Taiwan, having accumulated up to 48.6 billion euros to date and accounting for 31 percent of Taiwan’s total inward FDI. On the other hand, Taiwan’s cumulative FDI in the EU has reached 8 billion euros, of which over 60 percent was made during the past five years. Taiwanese investment has created more than 60,000 European jobs. Despite this solid EU-Taiwan economic partnership, there is still huge potential for advancement.
These statistics look only set to rise as investors, understandably concerned about the deteriorating situation in Hong Kong, search for safer, more stable destinations for their investments. There are currently 80 billion euros worth of EU investment and 300,000 EU citizens present in Hong Kong, in which the rule of law and its status of high autonomy have been severely undermined in the wake of the imposition of a new national security law by Beijing. For all those Europeans in Hong Kong worrying about their business prospects, Taiwan presents an ideal alternative.
What’s more, Taiwan offers fresh business opportunities for the EU’s world-leading green energy sector. The Taiwanese government has put in place a range of ambitious green energy production goals, including the target of 20 percent renewable energy generation by 2025. In particular, offshore wind capacity is set to increase vastly, with projects planned to make Taiwan the largest offshore wind energy producer in Asia. This represents a great opportunity for European companies, who have already won the largest proportion of the development projects from now until 2025.
A BIA can give European investors peace of mind and greater protections when investing in Taiwan. It can also contribute to the diversification and resilience of European supply chains, and even the EU’s own pursuit of its “EU-Asia Connectivity Strategy” and “Open Strategic Autonomy.” On top of that, however, it would demonstrate the EU’s commitment to its founding principles and to the global alliance of liberal democracies.
Today, the substantial relationship between the EU and Taiwan is getting stronger than ever before. Support for Taiwan has been growing over the past several years among lawmakers across the continent. On the same day as the latest EU-China virtual summit, held on September 14, a joint op-ed signed by a number of influential experts and members of the European Parliament was published by mainstream newspapers in France and Germany respectively, calling on the EU to “revise” its outdated One-China policy and “realign its policy towards Taiwan.”
Last week, 644 parliamentarians from the European Parliaments and national parliaments of 25 European countries signed a joint letter to the World Health Organization’s Director-General Dr. Tedros A. Ghebreyesus, supporting Taiwan’s bid to attend the resumed 73rd World Health Assembly from November 9-14. This unprecedented supportive move is in part due to Taiwan’s outstanding achievement in effectively containing the spread of the COVID-19 pandemic as well as selflessly lending a helping hand to countries in need during the global public health crisis.
Against this backdrop, what is now needed more than ever is to explore more cooperation between the EU and Taiwan. By commencing negotiations with Taiwan on a BIA, the EU can not only deepen EU-Asia connectivity, which is in line with the EU’s economic and geopolitical interest, but also show its solidarity with like-minded trade partners.
As the world’s largest single market, the EU can and should chart its own course of trade relations as a key global player. The EU has the leverage, and I believe the desire, to project its norms and values as a force for good in the world and to safeguard the rules-based international order that it has long upheld.
What we need to do as like-minded trade partners is turn our words into actions and use them to support one another in real, concrete ways. After all, as the world economy has been severely disrupted by the pandemic, only by working closely together can we weather the difficult times and emerge stronger. Deeper economic ties will keep the EU-Taiwan relationship moving forward from strength to strength for the benefit of all in years to come.
Ming-Yen Tsai, Ph.D., is Taiwan’s representative to the EU and Belgium.