By Martin Banks - 22nd July 2010
This will encourage others to see Taiwan and Asia in a different light
David Lin
Taiwanese efforts to forge a trade deal with the EU have been endorsed by an influential EU think tank.
The Brussels-based European Centre for International Political Economy said a recently-signed landmark trade agreement between China and Taiwan could pave the way for a similar deal with the EU.
A new report by the centre said, “The recent cross-straits rapprochement, recently crowned by a trade agreement, could provide a window for Taiwan to sign trade deals with other partners.”
Entitled “Beyond geopolitics—The case for a free trade accord between Europe and Taiwan,” the paper discusses “the economics and geopolitics of EU-Taiwan commercial relations and weighs the case for an FTA” between the two sides.
The report said given Taiwan’s leading position in the world’s information and communication technology supply chains, along with its vibrant democracy in east Asia, it deserves closer attention from the EU.
“An FTA with Taiwan would boost some of Europe’s most competitive sectors in ICT, automotives, pharmaceutical products, and telecommunications, financial, business, transport and environmental services,” the report said.
For the EU, an FTA with Taiwan would potentially deliver much larger gains in the context of greater Taiwan-mainland China economic integration, it says.
“That would free up ‘triangular’ (EU-Taiwan-China) trade and associated foreign direct investment, with European firms—particularly in ICT—using Taiwan as a high-value hub in Greater China and wider East Asian supply chains.”
But to seek an FTA with Taiwan, the report said the EU would need to let mainland China know that such a trade pact would not involve recognition of Taiwan’s formal statehood.
“The EU will want to reassure China that any negotiations with Taiwan will be purely ‘economic,’ involving the EU with Taiwan as a separate customs territory, member of the World Trade Organisation, and without ‘political’ connotations, that is, relating to Taiwan’s political status.”
The report's conclusions are echoed by David Lin, Taipei's new representative to the EU and Belgium, who told this website he hopes an FTA can be signed with the EU "sooner than later."
Lin, a former deputy foreign minister, said the trade deal with China "sends a clear signal of more liberalised" trade relations in Asia.
He said, "It clearly creates more opportunities for the 700 or so European companies operating in Taiwan. It is important both symbolically and in substance.
"Hopefully, all this will encourage others to see Taiwan in a different light."
He added, "In all my future discussions with parliament and the commission I will try to make clear how the trade agreement with China can also be of direct benefit to the EU and European companies."
