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International relations

EU-Taiwan investment forum signals warmer ties amid China chill

Tsai calls for bilateral agreement to strengthen economic ties

European countries held an investment forum in Taipei to promote investment on Sept. 22. (Photo by Lauly Li)

TAIPEI -- More than a dozen key European countries, including Germany, France, the Netherlands, Italy and Spain, on Tuesday launched their first joint campaign to promote investment between the EU and Taiwan in a signal of their warming ties with the democratic island amid escalating U.S.-China tensions.

The landmark investment forum, which involves 15 European countries and is organized by the European Economic and Trade Office, the de facto European Union embassy in Taiwan, comes as the continent also grows more skeptical of China.

At a recent EU-China summit, European officials urged Beijing to open its markets and respect human rights as basic requirements for their relationship. China is the European bloc's biggest source of imports and second-biggest export market; it also views Taiwan as its territory.

Taiwanese President Tsai Ing-wen said on Tuesday that the EU is Taiwan's biggest foreign investor and that her administration has created a robust investment environment not just to serve domestic needs but to build stronger international ties. "Like the EU, we encourage mutually beneficial global partnerships by providing a fair and predictable business," she said.

Tsai also proposed that the EU and Taiwan begin negotiations for a bilateral investment agreement, saying, "Taiwan is ready to become one of the EU's top partners in the information, communication technology, biotech, health and mobility sectors."

Filip Grzegorzewski, head of the European Economic and Trade Office, said the pandemic has revealed the vulnerabilities of international supply chains. "We better change, before we have to."

"The European Union and Taiwan have unique possibilities to work together and embrace new opportunities in this changing world ... and this is very important: that we both share the same values of an open, transparent and fair international trading system," Grzegorzewski said in his opening remarks at the forum.

Filip Grzegorzewski, second from left, head of the European Economic and Trade Office, poses with Taiwanese President Tsai Ing-wen, center, at a forum in Taipei on Sept. 22. (Photo courtesy of the European Economic & Trade Office)

The meeting fits with Taiwan's efforts to broaden its horizons.

Before the forum, Taiwanese Foreign Minister Joseph Wu said at a news conference on Thursday that Taiwan had long concentrated on investing in a single country, China. But as the investment environment there is changing, many companies based on the island are considering moving elsewhere.

"We are glad to see the EU is welcoming Taiwanese companies to invest there," Wu said. "The EU shares the same values of democracy, freedom and human rights with Taiwan. We call on Taiwanese companies to go to the EU and invest."

On the flip side, Wu said Taiwan is an ideal place for European and other foreign countries to invest, despite China's near-constant threats to force a reunification.

"Although the threats showed signs of escalation in the past two years, there have been no economic activities between Taiwan and the others that have been affected by China's threats and political intervention," Wu said. In fact, the EU was already the largest investor in Taiwan in 2019, he added.

The warming of EU-Taipei relations follows U.S. moves to deepen ties with Taiwan, as Donald Trump's administration looks to pull more allies to its side in its geopolitical conflict with China.

Keith Krach, the U.S. undersecretary for economic growth, energy and the environment, last week became the second senior U.S. official to visit Taiwan in a month. U.S. Health and Human Services Secretary Alex Azar came to the island in early August, paving the way for high-level economic and trade talks.

After Azar's visit, Taiwan soon eased restrictions on U.S. pork and beef imports, and signaled the move would be a significant step toward a possible free trade agreement between Taipei and Washington.

The American Institute in Taiwan, Washington's de facto embassy, recently organized a forum on restructuring the world's supply chains, co-hosted by top representatives from the EETC and the Japan-Taiwan Exchange Association, Japan's representation on the island.

Milos Vystrcil, president of the Czech Republic's Senate, who led a high-profile 90-member delegation that included Taiwan-friendly Prague Mayor Zdenek Hrib, also joined the event.

Taiwan is renowned for its technology and semiconductor industries. Key Apple, HP, Dell and Google suppliers, including Foxconn, Pegatron, Quanta Computer, Compal Electronics, Inventec and Delta Electronics, all have manufacturing plants across Europe -- in the Czech Republic, Poland, Germany, Slovakia and Hungary.

Taiwan Semiconductor Manufacturing Co. and United Microelectronics are both key buyers of chip production equipment from European suppliers such as ASML, and have been key manufacturing partners for European chipmakers NXP, Infineon and STMicroelectronics.

Taiwan was the EU's 15th-largest trade partner in 2019. Meanwhile, the EU was the fourth-largest trading partner for Taiwan, after China, the U.S. and Japan.

The island's trade with the EU amounted to $23.7 billion in the first six months of this year, or 8.1% of Taiwan's total, according to the Bureau of Foreign Trade.

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