Delegation of the European Union to ASEAN

Taiwan and the EU

17/05/2016 - 15:43
EU relations with Country

For the EU, Taiwan is a reliable and valued like-minded partner in Asia.

The EU and Taiwan share common values, such as democracy, the rule of law and human rights. We are both committed to upholding multilateralism and the rules-based international order. The EU and Taiwan share common objectives, such as tackling the challenges posed by the COVID pandemic as well as promoting stability, security and sustainable growth.

While the EU pursues its “One China” policy and recognises the government of the People’s Republic of China as the sole legal government of China, the EU and Taiwan have developed solid relations and close cooperation in a wide range of areas.

Regular consultations between the EU and Taiwan deal with issues of mutual interest, such as human rights, trade and economic issues, connectivity, innovation, digital issues, green energy, circular economy, labour issues, and disaster management. The European Economic and Trade Office (EETO) was established in 2003 as the EU Office in Taiwan, and is now comprised of three sections: the Political, Press and Information Section; the Trade Section; and the Administration Section. 15 Member States of the European Union also have offices in Taipei.

The EU has a strong stake in peace, security and stability in Asia. The EU supports the status quo and peaceful resolution of differences across the Taiwan Strait, rejecting the use or threat of force. It continues to encourage dialogue and constructive engagement.

Taiwan, under the name of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, has been a member of the World Trade Organisation (WTO) since January 2002. Taiwan is party to the WTO Agreement on Government Procurement, the Trade Facilitation Agreement and the Information Technology Agreement. It is also an active participant in plurilateral initiatives in the framework of WTO, where it has a number of shared interests with the EU.

The EU and Taiwan enjoy a close trade and economic partnership. In 2019, Taiwan became the EU's 15th trading partner in the world. Bilateral trade in goods increased by 9.1% and reached a historical record of €50.5bn. The EU is Taiwan's largest foreign investor. Taiwan is an important trading partner and a key player in the global value-added chains. Innovations in the Information Communication Technology, artificial intelligence, smart mobility and green energy sectors offer numerous new business opportunities for European and Taiwanese companies.

The EU-Taiwan framework of cooperation reflects the dynamic trade and economic relationship between two like-minded WTO members. The EU and Taiwan hold annually bilateral trade consultations, a mid-term review, the industrial policy dialogue, the dialogue on digital economy and various sectoral working groups. The broader EU-Taiwan framework includes the presence of 15 Member States offices in Taipei. In addition, the very active European Chamber of Commerce Taiwan (ECCT) represents European businesses in Taiwan.

The EU-financed European Business and Regulatory Cooperation (EBRC) program entered its second phase in October 2019. The EBRC has been designed specifically for Taiwan, with the objective of improving regulatory cooperation between the EU and Taiwan and enhancing visibility and projection in Taiwan of European excellence. Based on its previous four-year success, EBRC continues to fund local events and projects aiming to facilitate regulatory coherence and business collaboration with Taiwan and the region.

 

Trade in Goods

Following the general trend of growing trade between the EU and the world (2.5% from 2018 to 2019), trade in goods between the EU and Taiwan increased by 9.1% in 2019 reaching a new record of €50.5bn, according to Eurostat figures.

EU exports to Taiwan expanded for the eighth year in a row, increasing 17.3% to reach €23.6bn. It was the highest and the first two-digit growth since 2011. In comparison, overall exports from the EU to the world increased by 3.5% over the same period. 

In 2019 the EU imported 2.8% more goods from Taiwan than during the previous year, with a total value of €27.0bn. Meanwhile the EU's overall imports from the world grew by 1.4%.

The EU's trade deficit with Taiwan decreased from €6.1bn in 2018 to €3.4bn in 2019. Among the 27 EU Member States, four shared trade surplus with Taiwan, i.e., Austria, Denmark, Finland and Ireland.

Table 1: Trade in goods between the EU and Taiwan in € bn

Source: Eurostat

 

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

EU exports to Taiwan

13.6

14.7

14.5

15.1

15.7

16.8

17.6

19.4

20.1

23.6

Annual growth rate (%)

47.6

8.6

-1.5

4.2

3.4

7.6

4.7

9.8

3.8

17.3

EU imports from Taiwan

20.8

20.4

18.7

18.1

19.3

21.2

23.0

25.3

26.2

27.0

Annual growth rate (%)

35.3

-1.5

-8.5

-3.2

6.6

9.9

8.3

10.3

3.5

2.8

Total trade value

34.3

35.2

33.2

33.2

34.9

38.0

40.6

44.7

46.3

50.5

Annual growth rate (%)

39.9

2.5

-5.6

0.1

5.1

8.9

6.7

10.1

3.7

9.1

Balance for the EU

-7.2

-5.7

-4.2

-3.0

-3.6

-4.4

-5.3

-6.0

-6.1

-3.4

 

Taiwan's Position as EU Trade Partner

In 2019, Taiwan remained the EU's 15th most important trading partner in trade in goods. Taiwan ranked 20th amongst the EU's export partners, moving up one place from 2018. With respect to imports, Taiwan advanced by two places and became the 12th largest EU partner. In Asia, Taiwan was the 5th largest trading partner of the EU, after China, Japan, South Korea and India. The EU remained Taiwan's 4th trading partner, after China, the US and Japan.

 

Trade in Services

In 2018, Taiwan was the EU's 27th trading partner in the world in trade in services. Total trade in services between the EU and Taiwan reached €8.1bn, a substantial growth by 8.3%. There is abundant room for growth in the service sector as the bilateral service trade only accounted for 0.5% of the EU's total trade in services. In 2018, the EU was the world's largest exporter and importer of services. The EU's services exports to and imports from the world amounted to €968.6bn and €824.0bn, respectively. The top 5 service trade partners of the EU were the United States (21.0%), United Kingdom (20.7%), Switzerland (9.5%), China (4.3%), and Singapore (3.1%).

In 2018, Taiwan was the EU's 23rd exporting destination and the 28th source of import for trade in services worldwide. The EU's exports of services to Taiwan reached a high record of €4.6bn, a growth by 7.2% from 2017. The EU's import of services from Taiwan showed a growth of 9.8% compared to the year 2017, amounting to €3.5bn in 2018. The EU had a surplus of €1.0bn for trade in services with Taiwan in 2018, the highest in the past decade. This represented a 13.7% growth from the previous year in trade surplus. Compare the 2018 data with that of 2011, the overall trade in services between the EU and Taiwan increased by 46.2%, and the exports and imports increased by 64.7% and 34.5% respectively.

Table 2: Trade in services between the EU and Taiwan in € bn

Source: Eurostat

 

 Year

Total trade amount in services (€ billion)

Growth rate

EU's Imports

EU's Exports

Balance for the EU

Total

EU's Imports

EU's Exports

Balance for the EU

Total

2011

2.1

3.4

1.3

5.5

-13.4%

-25.2%

-39.3%

-21.0%

2012

2.4

3.7

1.3

6.1

12.1%

9.3%

4.4%

10.3%

2013

2.8

3.5

0.6

6.3

17.4%

-6.7%

-50.9%

2.7%

2014

2.8

3.8

1.0

6.6

-1.2%

9.1%

54.1%

4.5%

2015

3.0

4.0

1.0

7.0

7.4%

6.0%

2.2%

6.6%

2016

3.0

4.1

1.0

7.1

0.9%

1.4%

3.1%

1.2%

2017

3.2

4.3

4.0

7.5

6.6%

5.0%

0.4%

5.7%

2018

3.5

4.6

1.0

8.1

9.8%

7.2%

-0.6%

8.3%

 

Investment

The EU is Taiwan’s biggest foreign investor. According to Taiwan's statistics, in 2019 the worldwide Foreign Direct Investment (FDI) flows to Taiwan amounted to $11.3bn, of which $3.6bn or 31.4% came from the EU. Compared with 2018, the total amount of EU investments decreased by 42%, after a surge by 101.4% from 2017 to 2018. Most EU investments went into manufacturing sectors, amounting to 57.3% of the total FDI, in which electronic parts and components manufacturing took the most, 56.6%. Professional, science and technology services accounted for another 16.2%, followed by electricity and gas supply, 12.6%. The EU remained Taiwan's biggest investor in 2019.

Among all FDI flows to Taiwan in 2019, FDI from the Caribbean Islands (UK) ranked first, with an amount of $3.1bn or 27.6% of the total inward FDI. The Netherlands ranked second, amounting to $2.3bn, or 20.3%. Japan ranked the third place with an amount of $1.3bn or 11.3%, followed by Australia $0.7bn or 6.3% and Denmark $0.7bn or 6.1%. The top five together accounted for nearly 70% of total inbound investment to Taiwan. Note that the US/China trade and technology rivalry has accelerated the trend of diversification. During 2019, the approved investments from China to Taiwan fell by 58% to $97.2mn. In addition to foreign investments flows to Taiwan, Taiwanese enterprises have also returned investments to Taiwan. The approved returning investments reached €27.2bn, covering textile, rubber, electronic components and auto parts manufacturers, among others.

In 2019, a total outbound investment amount of $11.0bn was approved. This was a decrease of 52.1% in investment amount compared to 2018.

Regarding the EU, $0.7bn outbound FDI from Taiwan to the EU was approved. This only accounted for 6.1% of the total outbound investment of Taiwan. Financial and insurance industry attracted 89.1% of the EU-bound investment. Manufacturing amounted to another 9.4%, followed by wholesale and retail sector 1.2%.

 

For further information on EU-Taiwan trade and investment relations:

Human dignity, freedom, democracy, equality, the rule of law and respect for human rights are the values on which the European Union is founded. Embedded in the Treaty on European Union, they have been reinforced by the Charter of Fundamental Rights.

These values also apply to the EU's foreign policy: Europe helps as much as possible to protect universal values across the world, through agreements, dialogues, cooperation projects, and also thanks to funding from the European Instrument for Democracy and Human Rights.

The EU and Taiwan hold annual consultation on human rights to exchange  views on their respective human rights situations and policies and discuss issues of mutual concern such as the death penalty, business and human rights, migrant workers’ rights, gender equality and LGBTI rights, etc..  

An overview of the EU's Human rights policy and more in-depth information can be found at:

http://europa.eu/pol/rights/index_en.htm

http://ec.europa.eu/justice/fundamental-rights/index_en.htm

The EU's Human Rights policy across the world is summarized here:

http://eeas.europa.eu/human_rights/index_en.htm

The EU also, in particular, promotes the abolition of the death penalty worldwide. On this specific issue, you can refer to:

http://eeas.europa.eu/human_rights/adp/index_en.htm

The EU and Taiwan have a successful track record of cooperation in R&I based on the fact that both share many research priorities and face similar societal challenges – ageing societies, sustainable food security, climate change, energy - and both see cooperation as necessary to promote the excellence in science and to increase the competitiveness of their industries and the access to international markets. In addition, Taiwan holds a significant position in the global Information and Communication Technology (ICT) field - a cross-cutting and enabling technology. The government of Taiwan has heavily invested in projects in R&I building a large technological capability. Taiwan is a world leader in the semiconductor industry, which has a major strategic importance. There is hardly an industry nowadays that can succeed without the use of microchips.

Taiwan research institutions have been active participants in the EU's research framework programmes with a good history of collaboration in FP5, FP6 and FP7. Taiwan is regarded by the Commission as a high-income partner. Since 2003 the Taiwanese government co-funds Taiwanese researchers participating in EU framework programmes. The areas of robotics, micro and nano-electronics, and ICT in general, digital security, personalized healthcare and medicine, smart cities and communities, competitive low-carbon energy, energy efficiency, blue growth with special emphasis on unlocking the potential of seas and oceans, offer good potential for future cooperation.

Protecting, preserving and improving the world around us

The EU has some of the highest environmental standards in the world, developed over decades to address a wide range of issues. Today the main priorities are combating climate change, preserving biodiversity, reducing health problems from pollution and using natural resources more responsibly. While aimed at protecting the environment, these goals can contribute to economic growth by fostering innovation and enterprise. We also hope that the experiences gained over the decade can be shared with friends in Taiwan.

Climate change

The European Economic and Trade office regularly liaises with the Environmental Protection Administration Taiwan, NGOs, think tanks and academic institutions in the field of climate change, in order to clearly convey the EU's position on climate change and to promote domestic action in these areas through organising events, seminars and visits. The EU has been at the forefront of international efforts towards a global climate deal. The EU has played a key role in brokering the historic agreement in Paris on 14 December 2015, where 195 countries adopted the first-ever universal, legally binding global climate deal. The ambitious and balanced agreement, the first major multilateral deal of the 21st century, sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C.

Europe Festival

Europe Festival is the largest outreach annual event to celebrate Europe Day (9th May) with the Taiwanese public. The objective of the fair is to promote the EU and its Member States to the Taiwanese public with booths showcasing European culture, cuisine, foods and drinks, as well as interactive games, and on-site live performances. The event is an excellent example of EU-Taiwan collaboration, as it is a joint effort by the Member States’ offices in Taiwan, as well as the Ministry of Foreign Affairs, the Ministry of Culture, and the Taipei City Government. Find out more on the Europe Festival Facebook Page.

European Film Festival Taiwan (TEFF)

The European Film Festival Taiwan has been organised by the European Economic and Trade Office (EETO) annually since 2005. It started from a classical film festival profile: 35 mm film format, public advertising, and tickets sales, and evolved into today's format of using free of charge DVD screenings at universities, local governments and cultural centres. The TEFF not only showcases the rich, diverse cultures of the European countries, but also offers Taiwanese movie goers an excellent opportunity to enjoy free European movies from different countries. For more information, please visit http://www.teff.tw/ or the TEFF Facebook Page.

Book Exhibition

The European Economic and Trade Office started to take part in the Taipei International Book Exhibition (TIBE), one of the largest book fairs both in Asia and in the Chinese speaking world, by hosting an EU pavilion since 2013. The objectives of the EU pavilion are to introduce the richness of EU cultures to the Taiwanese public through literature and books.

European Education Fair in Taiwan (EEFT)

The European Education Fair in Taiwan is an initiative devoted to promoting high quality education opportunities in Europe. It has been organised since 2002, giving European countries a chance to introduce their higher education institutions and to provide Taiwanese students with information regarding visa regulations, travelling and scholarships. For more information, please visit http://www.eef-taiwan.org.tw/ or the EEFT Facebook Page.

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