by Dr Ming-Yen Tsai*
20 May, with an overwhelming majority, the European Parliament froze the ratification process of the controversial Comprehensive Agreement on Investment (CAI) with China. With the vote, the parliament sent a clear and important message in response to China’s irresponsible sanctions imposed on several European parliamentarians earlier this year. However, many may have overlooked one other very significant clause included in the resolution, namely that: “The European Parliament, considers that other trade and investment agreements with regional partners, including Taiwan, should not be held hostage to the suspension of the CAI ratification”.
Of course, this may not come as a surprise to some, the European Parliament has long been a vocal supporter of the prospect of an EU-Taiwan Bilateral Investment Agreement (BIA). As recently as November 2020, in its resolution on the EU Trade Policy Review, the parliament called on the Commission to “start the scoping exercise and impact assessment in order to formally commence the negotiations with Taiwan as soon as possible”.
What is most significant about the parliament’s recent resolution, however, is the emphatic instruction to decouple the prospect of an EU-Taiwan BIA from any protracted negotiations regarding the CAI. This is only correct as the parliament has made it abundantly clear that they will not accede to any CAI deal as long as Chinese sanctions remain in place. Fundamentally, the future of the EU’s economic relations with Taiwan, and any investment agreement, should not be jeopardised by the reckless actions of Beijing.
It is also important to note that the parliament’s stance is firmly in line with the Commission’s own stated position. Twice, in 2015 and 2017, the Commission has referenced negotiations on an investment agreement with Taiwan; stating its intention to explore and subsequently prepare to launch negotiations. Furthermore, under its desire to strengthen ties with Asia as per the EU-Asia Connectivity Strategy, it is self-evident that Taiwan could, and should, be an important regional partner for the EU.
Taiwan and the EU have long been democratic partners, ones that share the core values of freedom, democracy, and human rights. Never has it been more apparent, however, than in recent years, that these values are under siege. Threatened by forces that seek division among the democracies of the world, it is of the utmost importance that we stand together in defence of our values.
Likewise, the economic case for strengthening the bilateral relationship between the EU and Taiwan has never been stronger. Investment between both sides is at an all-time high but there is still tremendous room for growth.
Fundamentally, there is an increasing convergence in the direction of the European and Taiwanese economies. While the EU pursues the “European Green Deal” and the “Digital Transformation”, Taiwan is promoting the “Six Core Strategic Industries” and the goal of a “nuclear-free homeland”. It is clear that Taiwan and the EU are both shaping up to be outward-facing, dynamic, green economies that thrive in the most important industries of the 21st century. This gives both sides ample opportunity and incentive to work together and boost cooperation.
To name just a few key potential sectors: from semiconductors; to biotechnology and medical care; innovative electronics; precision machinery; and green energy. All of these industries hold massive opportunities for collaboration and cooperation between European and Taiwanese firms.
Indeed, across these sectors, the EU and Taiwan boast some of the world’s leading and most innovative firms. Increased cooperation, utilising each other’s comparative strengths, will only benefit both sides. Taking the example of semiconductors, which is currently an area of great focus for the EU, we can match Europe’s advanced equipment and materials with Taiwan’s manufacturing prowess and comprehensive industrial chain.
Likewise, to take precision machinery as another example of a strategically important industry with tremendous scope for bilateral cooperation: by combining high-end European technology, Taiwan’s optimization capabilities, and Asia’s huge market, there is a fantastic opportunity to effectively reduce costs and increase efficiency for all sides.
Of course, such bilateral cooperation is already strong in a number of areas, none more so than in the green energy sector. Over the past few years, Taiwan and the EU have collaborated closely in the sector, particularly with regards to wind power construction. In fact, EU-Taiwan cooperation in this area has been so successful, that Japan and South Korea have already expressed their interest in expanding on this sort of cooperation model.
If we are to realise these ambitions of greater economic collaboration, however, it is of vital importance to agree a BIA. An investment agreement would provide investors with greater protection for their investments and shore up the resilience of supply chains under the framework of the EU-Asia Connectivity Strategy.
As we enter the post-pandemic era, we have the chance to rethink old axioms and reassess bilateral relations. It is up to both sides to seize this moment; the time has never been better to begin negotiations on a BIA.
*Ambassador of the Taipei Representative Office in the EU and Belgium
By: N. Peter Kramer
