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Taiwan: The EU’s ideal supply chain partner in Asia

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Much ink has been spilled on the topic of the relationship between the European Union and the People's Republic of China over recent weeks; from imbalanced trade to values and principles. As the EU recalibrates its policy towards China, it is worth remembering the position of strength the EU finds itself in and the power it can wield, both in values and economics, writes Ming-Yen Tsai, Ph.D,  representative, Taipei Representative Office in the EU and Belgium. 

As the President of the European Commission, von der Leyen mentioned in her first State of the Union address, “[the EU] will continue to believe in open and fair trade across the world. Not as an end in itself – but as a way to deliver prosperity at home and promote our values and standards”. We too in Taiwan have long upheld this notion of free and fair trade and it is why we believe the time is right to begin negotiations on a Bilateral Investment Agreement (BIA) between the EU and Taiwan.

Indeed, the EU and Taiwan are like-minded partners in many respects, both are committed to freedom, democracy, open society, free markets and human rights. The relationship between Europe and Taiwan is stronger than it has ever been. Support for Taiwan has been growing over the past several years among lawmakers across the continent. In May of this year, over 100 MEPs and members of various European national parliaments came together to sign a joint letter supporting Taiwan's bid to attend the World Health Assembly, in part due to Taiwan’s effective efforts to contain the spread of the COVID-19 pandemic.

Just in the past week, we have seen a joint op-ed, written and signed by a number of influential experts and Members of the European Parliament, calling on the EU to “revise” its out-dated One-China policy and to “realign its policy towards Taiwan”.

This support is widely welcomed and hugely important. Nevertheless, what is now needed more than ever is concrete action to deepen the ties between the EU and Taiwan. By commencing negotiations with Taiwan on a BIA, the EU can, not only further deepen trade relations and show its strong support for a likeminded partner, but also enhance EU-Asia connectivity and the EU’s geopolitical and economic interest.
The EU has in recent years demonstrated this strong will to enhance EU-Asia trade links by signing FTAs with Japan, Korea, Singapore and Vietnam. Taiwan simply represents a logical next step in this process.
European investment in Taiwan already stands at record levels, having reached an accumulated value of €48.6 billion to date and accounting for 31% of Taiwan’s total inward FDI.

Taiwan’s cumulative FDI in the EU has reached €7.9bn, of which over 60% was made during the past 5 years, and has created more than 60,000 European jobs. The EU is Taiwan’s 5th largest trading partner, and likewise, Taiwan is the EU’s 5th largest partner in Asia. As it stands, the economic relationship is clearly built on a strong foundation. Furthermore, Taiwan has already signed BIAs with Japan, the Philippines, India and Vietnam, and Economic Cooperation Agreements with Singapore (ASTEP) and New Zealand (ANZTEC) respectively.

What's more, this number looks only set to rise as investors concerned about the worsening situation in Hong Kong, look for safer, more stable destinations for their investments. There is currently €80bn worth of EU investment and 300,000 EU citizens present in the city. For all those Europeans in Hong Kong considering the precariousness of their situation, Taiwan clearly presents an obvious alternative.
Taiwan also offers fantastic opportunities for the EU’s world-leading green energy sector.

The Taiwanese government have put in place a range of ambitious green energy production goals, including the target of 20% renewable energy generation by 2025. In particular, offshore wind capacity is set to increase vastly, with plans to make Taiwan the largest offshore wind energy producer in Asia. This represents a great opportunity for European companies, who have already won the largest proportion of the development projects from now until 2025.

From a broad perspective, the U.S.-China trade friction and the COVID-19 pandemic have exposed the risk of over-reliance on single country or supplier. It has also highlighted the importance of establishing resilient and diverse global supply chains among like-minded partners. Taiwan has long played a key role in the global supply chain.

An EU-Taiwan BIA will bring mutual benefits to both the EU and Taiwan and will provide a stable, reliable and predictable investment environment for European companies in Taiwan and Taiwanese companies in Europe respectively. EU member states have also actively signed various arrangements with Taiwan to enhance co-operation. The European Parliament has in recent years adopted three resolutions, all of which, inter alia, expressed consistent support for a bilateral investment agreement between the EU and Taiwan. Simply put, an EU-Taiwan BIA is supported by all stakeholders.

A BIA can not only give European investors peace of mind and greater protections when investing in Taiwan, but also contribute to the diversification of European supply chains, and even the EU's own pursuit of its “EU-Asia Connectivity Strategy” and “Open Strategic Autonomy”. More than this, however, it would demonstrate the EU’s commitment to its founding principles and to the global alliance of liberal democracies.
What we need to do as like-minded partners in this increasingly interconnected world is turn our words into actions and use these actions to support one another in real, concrete ways.

After all, as players on the international stage, we are certainly playing on the same team. And as President von der Leyen recently pointed out, “[the EU] must deepen and refine its partnerships with its friends and allies”, and pledged to “use [its] diplomatic strength and economic clout to broker agreements that make a difference”. I am convinced that a BIA with Taiwan would be one such way that the EU could make a difference, and that with joint effort, EU-Taiwan relations will go from strength to strength for the benefit of all in years to come.

Brexit

EU tells Brexit negotiator: Don't let deadline force bad trade deal

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The European Union’s chief Brexit negotiator told member states’ envoys on Wednesday (2 December) that negotiations on a trade deal with Britain were reaching “a make-or-break moment”, and they urged him not to be rushed into an unsatisfactory agreement, write .

Four diplomats told Reuters after a briefing by Michel Barnier that the talks remained snagged - as they have been for months - on fishing rights in British waters, ensuring fair competition guarantees and ways to solve future disputes.

“He said the coming days will be decisive,” said a senior EU diplomat who took part in the briefing, just over four weeks before the end-of-year deadline for a deal to avoid what could be an economically damaging divorce.

Speaking under condition of anonymity, the diplomat said Barnier did not specify a date by which an agreement must be clinched, but time will be needed for all 27 member states and the European Parliament to approve it before 31 December.

“Swift progress is of the essence,” David McAllister, who chairs a Brexit group in the European Parliament, said on Twitter. “An agreement needs to be reached within very few days if (the European) Council and Parliament are to complete their respective procedures before the end of the transition period.”

Britain formally left the EU on 31 January after 47 years of membership but then entered a transition period under which EU laws apply until the end of this year to give citizens and businesses time to adapt.

EU rules for the internal market and the EU Customs Union will not apply to Britain from Jan. 1.

Failure to secure a trade deal would snarl borders, spook financial markets and disrupt delicate supply chains that stretch across Europe and beyond, just as countries grapple with the COVID-19 pandemic.

Another senior EU diplomat said several member states would rather see negotiations continue past the end of the transition phase even if that means a brief “no deal” period.

“We need to continue negotiating as long as needed. We cannot sacrifice long-term interests because of short-term timetable issues,” the envoy said after Barnier’s briefing.

“There is a worry that because of this pressure of time there is a temptation to rush. We told him: don’t do that.”

The first diplomat said there was no discussion at the meeting of ambassadors of negotiating past 31 December.

A British government official said London would not agree to extending the transition period with the EU, and Britain has repeatedly ruled out any extension to the talks into next year. London blames the EU for the impasse at talks.

A third EU diplomat said it was still unclear whether negotiators could bridge the gaps on the three main sticking points but some member states were becoming “a bit jittery”.

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Brexit

EU's Barnier says upcoming UK legislation could push Brexit talks into crisis - RTE

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European Union Chief Negotiator Michel Barnier told ambassadors that Brexit talks would be thrust into crisis if UK legislation expected next week includes clauses that would breach the existing withdrawal agreement, RTE reported on Wednesday (2 December), writes William James.

“The EU’s chief negotiator Michel Barnier has told EU ambassadors that if the UK Finance Bill, expected next week, contains clauses that breach international law [ie, that breach the NI Protocol] then the Brexit talks will be ‘in crisis’ and there will be a breakdown in trust,” RTE’s Europe Editor Tony Connelly said on Twitter, citing two unnamed sources.

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coronavirus

Brexit Britain just approved a European vaccine, German health minister says

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Celebrating Britain’s swift approval of BioNtech and Pfizer’s coronavirus vaccine as a benefit of Brexit is misplaced since the vaccine was itself a product of the European Union that Britain has left, German Health Minister Jens Spahn (pictured) said, writes Thomas Escritt.

Spahn told journalists that while Britain had been the first to approve the vaccine, he was optimistic that the European Medicines Agency would soon follow. The time difference was due to Britain and the US having conducted an emergency approval process, while the EU was using a regular process.

“But a few remarks on Brexit to my British friends: Biontech is a European development, from the EU. The fact that this EU product is so good that Britain approved it so quickly shows that in this crisis European and international cooperation are best,” he said.

Some have suggested that Britain having its own medicines approval meant it could move more nimbly than the EU’s bloc-wide agency.

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