EU-TAIWAN POLITICAL RELATIONS AND COOPERATION

Source: European Parliament Committee on Foreign Affairs 9/9/2021

1. The EU and Taiwan are like-minded partners that share common values of freedom, democracy, human rights and the rule of law.
2. China’s continued military belligerence and grey-zone activities, as well as other  forms of provocation, such as spying, cyberattacks and talent-poaching, against Taiwan pose a grave threat to the status quo between Taiwan and China, as well as to the peace and stability of the Indo-Pacific region and may lead to dangerous escalation.
3. This region is of great importance to the EU both because of its many close partners there, and because one of its Member States, France, has overseas territories there.
4. In 2016 the EU committed to using every available channel to encourage initiatives aimed at promoting dialogue, cooperation and confidence-building between both sides of the Taiwan Strait; these aspirations have so far not been fulfilled.
5. The EU remains the largest source of foreign direct investment (FDI) in Taiwan, with an accumulated value of EUR 48 billion up to 2019, accounting for 31 % of Taiwan’s inward FDI and there is considerable potential for increasing Taiwan’s FDI in the EU. Taiwan dominates the semiconductor manufacturing markets, as its producers manufacture around 50 % of world semiconductor output.
6. Taiwan’s location, its critical role in global high-tech supply chains, and its democratic way of life makes it strategically important for European democracies.
7. The total amount of bilateral trade between the EU and Taiwan reached EUR 51 billion in 2019, with Taiwan being the EU’s fifth largest trading partner in Asia and its 15th largest trading partner in the world.

Recommendations

1. The EU should work closely with the Member States to intensify EU-Taiwan political relations and to pursue a comprehensive and enhanced partnership under the guidance of the EU’s One China Policy. It should consider Taiwan a key partner and democratic ally in the Indo-Pacific on its own merit as a robust democracy and technologically advanced economy that could contribute to maintaining a rules-based order in the middle of an intensifying great power rivalry.
2. An impact assessment, public consultation and scoping exercise on a Bilateral Investment Agreement (BIA) should be undertaken with the Taiwanese authorities in preparation for negotiations to deepen bilateral economic ties, as such a BIA would lead to an easing of ‘own content’ requirements by European investors and producers in Taiwan. In the context of regional dynamics, trade and economic relations between the EU and Taiwan are important, including on matters relating to multilateralism and the WTO, technology and public health, as well as essential cooperation on critical supplies such as semiconductors. Taiwanese investments in the EU should be increased since Taiwan is a full member of the WTO.
3. China’s continued military belligerence against Taiwan and pressure on it, notably through China’s considerable investment in military capabilities, its assault exercises and frequent violations of Taiwan’s airspace is of grave concern. There is a seemingly contradictory intention on the part of China of wanting to incorporate Taiwan under the totalitarian rule of the Chinese Communist Party (CCP), while at the same time claiming to pursue a peaceful development of relations with Taiwan. Any change to cross-strait relations must not be made unilaterally nor against the will of Taiwanese citizens. The EU and Member States should take a proactive role in working with like-minded international partners to pursue peace and stability across the Taiwan Strait, and to establish partnerships with the democratic government of Taiwan.
4. There are serious concerns about the situation in the East and South China Seas, and the EU should strongly oppose any unilateral attempts to change the status quo and increase tensions; and it is important for China to respect international law, in particular the UN Convention on the Law of the Sea (UNCLOS) with its provisions on the obligation to settle disputes by peaceful means, and on maintaining freedom of navigation and overflight.
5. Maintaining peace and stability in the Indo-Pacific is a core interest for the EU and its Member States. A  military conflict in the Taiwan Strait would not only create significant economic disruptions affecting European interests, but would also seriously undermine the rules-based order in the region, as well as democratic governance with human rights, democracy and rule of law at its core.
6. The EU greatly values security in the Taiwan Strait and there is a direct connection between European prosperity and Asian security and, therefore, consequences for Europe if a conflict spread well beyond the economic realm. China’s actions against Taiwan and in the South China Sea will have consequences for EU-China relations.
7. The imposition of the National Security Law on Hong Kong has made the 2005 anti-secession law’s claim to grant Taiwan a high level of autonomy in case of unification completely untrustworthy.
8. Taiwan should enjoy meaningful participation as an observer in meetings, mechanisms and activities of international bodies, including the World Health Organization (WHO), the International Civil Aviation Organization (ICAO), the International Criminal Police Organization (Interpol) and the UN Framework Convention on Climate Change (UNFCCC). Member States and the EU institutions should support international initiatives calling for Taiwan’s participation in international organizations.
9.  Economic, scientific, cultural, political and people-to-people exchanges, meetings and cooperation between the EU and Taiwan should be increased, as well as exchanges with the participation of Member State representatives, including at the most senior levels, so as to fully reflect the dynamic, multi-faceted and close cooperation between the EU and Taiwan as like-minded partners. The Czech Republic and all other sovereign countries have the right to develop economic and cultural cooperation with Taiwan.
10. The tensions across the Taiwan Strait calls for protecting Taiwan’s democracy given the importance of Taiwan as an EU partner and regional economic power in the context of the EU’s future Indo-Pacific Strategy currently being prepared by the EEAS and the Commission. The EU  should work closely with other like-minded partners through its Indo-Pacific Strategy to address China’s assertive posture in the region, and to strengthen the rules-based order, given the EU’s own interests in the region.
11. The EU should continue to adopt initiatives to enhance bilateral economic relations and people-to-people contacts, especially among youth, and including academia, civil society, sports, culture and education, as well as city-to-city and region-to-region partnerships as well as commend current sister city partnerships between European and Taiwanese cities and encourage city diplomacy as a tool to help Taiwan’s participation in international initiatives, which would enable Taiwan to bypass Chinese attempts to further increase its diplomatic isolation.
12. European and Taiwanese cooperation in the media sector should be encouraged so as to diversify the Chinese language media environment in the EU and provide an alternative to PRC-controlled media outlets.
13. The EU and Member States should help raise awareness in Europe about the situation in the Taiwan Strait, as well as the complexity of Taiwan-China relations through the establishment and funding of dedicated programs and research targeting society at large; as well as investing in an inclusive debate across Member States, explaining to the European public the risks of an authoritarian advance in the Indo-Pacific through China’s assertive posture and its efforts to undermine democracy, in particular in Taiwan, and the implications of leaving such threats unaddressed for democracies across the globe.
14. The EU should encourage dialogue and cooperation with Taiwan in all industrial sectors and supply chains, in particular emerging industries and industries of strategic importance such as electronic vehicles, robotics and smart manufacturing, as well as semiconductor technologies.
15. The EU should engage in partnerships with Taiwan in the fields of ICT, biotech, health and security, and work on concrete cooperation and initiatives between the EU Connectivity Strategy and Taiwan’s New Southbound Policy; as well as strongly support intensifying both sides’ partnership in semiconductors.
16. The EU should acknowledge Taiwan’s central role in strategic industries such as the fifth generation of communication infrastructure (5G), as it is home to the world’s largest foundry and the leading producer of semiconductors. In the future microchips will play a central role in shaping the global order and whoever is in control of the design and manufacturing of microchips will set the course in the 21st century. The disruption to global supply chains caused by the pandemic has put Taiwan at the center stage of the technological drive, and has also made the EU realize its own vulnerabilities, highlighting the urgency of reflecting on how to reduce its dependencies on external actors. It is therefore important to increase cooperation with Taiwan to support the EU’s agenda for its green and digital transition, as well as the EU’s efforts toward diversification of value and supply chains, as the pandemic has accelerated demands for both, highlighting the need for increased investment and political support, in particular in value chains of strategic importance, such as microelectronics, autonomous driving and artificial intelligence (AI), which are areas where Taiwan plays a central role.
17. The first ever European Investment Forum in Taiwan took place in September 2020, and encourages more bilateral investment in both directions. Investments in particular in industries where Taiwan is a leader, namely critical technologies including semiconductors should be increased, which would support the EU’s efforts to strengthen its own microelectronic capacity. Following the 2020 Taiwan-EU Dialogue on Digital Economy, the EU and Taiwan should further build on their discussions on research and technology cooperation, blockchain, AI, cybersecurity certification, the data economy and digital connectivity, in order to identify further synergies, expand policy exchange on the development of the digital economy, and establish more extensive partnerships.
18. Taiwan has made voluntary commitments to help combat global warming, thereby contributing to the implementation of the objectives of the Paris Climate Agreement.
19. The EU and the Member States should deepen cooperation with Taiwan in confronting disinformation from malign third countries, including the sharing of best practices, joint approaches to fostering media freedom and journalism, deepening cooperation on cybersecurity and cyber-threats, raising citizens’ awareness and improving overall digital literacy among the population in order to strengthen the resilience of our democratic systems; support intensified cooperation between relevant European and Taiwanese think tanks in this field.
20. The EU should consider learning from Taiwan’s experience of fighting disinformation from the mainland that target Taiwan’s media independence by using social media platforms, infiltrating Taiwanese television and print media in order to influence public opinion, seeking to undermine elections in Taiwan; and commend Taiwan for considering media literacy a useful and vital tool for educating people on identifying disinformation, and for therefore incorporating media literacy into the school curriculum.
21. Taiwan’s efforts to fight disinformation and combat fake news go beyond Taiwan, influencing not only society on the island, but also the Chinese-speaking community in Hong Kong and other South East Asian countries.
22. The threat Taiwan faces from China’s disinformation operations is part of a larger problem facing democracies across the globe in an era where communication technologies are central to the geopolitical competition for global leadership. China, together with other non-democratic countries, also remains a major threat to democracies in Europe through disinformation campaigns, a threat that has significantly increased with the pandemic. Cooperation in the fight against disinformation is therefore in the interest of both the EU and Taiwan.
23. Current EU-Taiwan cooperation on research and innovation in the Horizon Europe Framework Program (2021-2027) should be promoted and more Taiwanese researchers in Horizon Europe in future should participate.
24. Tourism and youth exchanges with Taiwan through initiatives such as the working holiday, the Erasmus programs or the Taiwan-Europe Connectivity Scholarship should be promoted, and opportunities for cooperation in higher education and other areas should be explored with the goal of strengthening Chinese and Taiwanese expertise in Europe and contributing to a better understanding of Europe in Taiwan.
25. The EU and its Member States should enhance cooperation with Taiwan in the Global Cooperation and Training Framework (GCTF), which is a regional cooperation platform for capacity-building and training programs for third countries around the globe.
26. The name of the European Economic and Trade Office in Taiwan should be changed to ‘European Union Office in Taiwan’ in order to reflect the broad scope of our ties.
27. The setting up of a Taiwanese Representative Office in Lithuania is welcome and the Chinese government’s reaction of imposing economic sanctions on Lithuania is condemned.
28. Taiwan is an outstanding partner in promoting human rights and freedom of religion in the Indo-Pacific region. Taiwan’s performance sets an example in the region with its strong record of respect for fundamental freedoms, both economic and social, as well as political and cultural rights, including progress on LGBTQI people’s rights, and the rights of indigenous communities. The EU Special Representative for Human Rights and the EU Special Envoy for the Freedom of Religion or Belief should participate in international human rights conventions in Taiwan and take concrete action to work with Taiwan to advance human rights, social rights, religious freedom, the digital economy and sustainable growth of the developing countries in the Indo-Pacific region.
29. The EU should strengthen cooperation with Taiwan with a view to exchanging best practices in handling the COVID-19 pandemic, launching initiatives to facilitate the procurement of vaccines and continuing to enhance the EU’s cooperation with Taiwan in health and communicable disease control.  The Taiwanese government and its people have displayed a relatively successful containment of the pandemic domestically and their generosity has extended help to other countries. Taiwan’s effective response relied on transparency, openness and the use of technology in collaboration with society, an approach rooted in public trust.
30. Taiwan has demonstrated acts of solidarity with the EU, by the donation of over 7 million surgical masks to several Member States during the dire early months of the pandemic, as well five mask production lines to the Czech Republic; and this solidarity needs to be reciprocated.
31. Intelligence sharing between Member States and Taiwan and the joint fight against cross-border crime should be encouraged.
32. The US and Japan have highlighted for the first time the importance of peace and stability in the Taiwan Strait in the joint statement of a recent bilateral summit, which was then followed by a similar statement by the G7 in early May. The EU should work together with other like-minded partners, such as Australia, New Zealand, India, Japan, South Korea and the United States, and consider inviting Taiwan to participate with its partners in existing platforms and working groups on critical industries.
33. Member States which do not have an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion or a Tax Information Exchange Agreement with Taiwan should initiate negotiations on such agreements as soon as possible.