Oct 16, 2012

Taiwan: EU Free Trade Agreement In The Making

Taiwan is now the EU’s 19th largest trading partner and is pressing for closer economic ties with the EU, despite pressure from China. 

Below is an article published by The Parliament:

A senior Chinese official in Brussels says Beijing will "fiercely resist" any attempt by the EU to sign a free trade agreement (FTA) with Taiwan.

The pledge comes despite fresh calls by several MEPs, including former ALDE leader Graham Watson, for an FTA between the two sides.

Taiwan itself is pressing for closer economic ties with the EU, pointing out that the EU is the only one of its top six trading partners not to have a bilateral trade arrangement with Taipei.

It is thought that, mindful of the potential economic benefits to an ailing EU economy, many in the commission are also keen to start negotiations on an FTA with Taiwan.

However, an official at the Chinese embassy to the EU has told this website that Beijing will continue to oppose such a deal. The official, who did not wish to be named, said Chinese opposition is based on its continuing sovereignty claim over Taiwan. He said, "We believe the EU should conclude FTAs only with bona fide sovereign states and this does not apply to Taiwan." "We are against an FTA with the EU and this will continue."

The EU's support for the so-called 'One China Policy' could also hinder any attempts to initiate FTA discussions.

China's trenchant position on the issue is sure to incense MEPs such as Watson and Lithuanian member Laima Andrikiene who, speaking last week, called on the EU to "forge ahead" with an 'economic cooperation agreement' (ECA) with Taiwan.

Addressing an event in Brussels to mark Taiwan's "double tenth" anniversary, the EPP deputy said the EU "stands to gain substantially economically" from any such deal.

She said, "Taiwan is a country which shares similar values to ours in Europe and I would urge the EU to press ahead with an FTA at the earliest opportunity. It really does make sense."

A recent study by the Global Trade Analysis Project estimates that an ECA with Taiwan would benefit the EU economy to the tune of 0.04 per cent or a €5bn rise in GDP per year.

Separately, a report in September by 'Copenhagen Economics' said an agreement is "more urgent now than in 2008" before the financial crisis.

It said closer economic integration will "invariably lead to a triple-win scenario" between Taiwan, the EU and China.

Andrikiene's comments were echoed by Watson who, speaking at the same event, also endorsed closer economic and trade ties with this "remarkable country".

The event heard that 2011 had "proved to be another successful year" for EU/Taiwan relations as bilateral trade between the two sides reached €40bn, an increase of eight per cent on the previous year.

Taiwan, it was said, is now the EU's 19th largest trading partner and, following implementation of the Schengen visa waiver for Taiwan citizens in January 2011, the number of tourists travelling to Europe from Taiwan rose by 38 per cent in 2011 to 239,062.

A source at Taiwan's representation to the EU pointed out there had been "improvements in many fields" in relations.

Meanwhile, ALDE member Edward McMillan-Scott praised David Lin, Taiwan's outgoing ambassador to the EU, who has become the country's new foreign minister. He said, "David Lin has been an outstanding ambassador for his country during his time in Brussels. "He has displayed diplomacy of the highest standard and I am sure he will be a credit to his country as foreign minister."