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: