- Trade between Taiwan and the EU
Taiwan and the EU are important economic partners. In terms of bilateral trade in goods, Taiwan was the EU’s 31th largest trading partner overall and 5th largest trading partner in Asia in 2023; on the other hand, the EU is the 4th largest trading partner overall of Taiwan, after mainland China, the United States and Japan. Trade between Taiwan and the EU mounted to US$ 73.8 billion in 2023, a decrease of 2.01 % in comparison to 2022.
Important exporting items from Taiwan to the EU include integrated circuits, bolts and nuts, bicycles and parts thereof, computers and accessories/parts thereof, accessories/parts for telecommunication equipment and accessories/parts for automobile. Important exporting items from the EU to Taiwan include semiconductor processing equipment, vehicles, pharmaceuticals, chemicals, precious metal and other parts and accessories.
- Investment between Taiwan and the EU
Historically, the bilateral investment tie between Taiwan and the EU has always has been strong. From 1952 to 2023, Foreign Direct Investment (FDI) from the EU has accumulated to US$ 58.1 billion, making the EU the largest FDI source in Taiwan. In 2023, EU companies made considerable investments in Taiwan for a total amount of US$ 3.21 billion.
Taiwan’s outward FDI to the EU from 1952 to 2023 has accumulated to US$ 13.5 billion. Taiwan businesses have greatly increased investments to the EU in recent years. In the past five years (2019-2023), investments from Taiwan have totaled US$ 8.45 billion, accounting for 62.4% of all investments made by Taiwan businesses in the EU.
Over the past 8 years (2016-2023) of President Tsai's administration, Taiwan's two-way investment in the EU has continued to grow, with Taiwan's investment in the EU totalling US$10.85 billion, a 10.6-fold increase compared to the previous 8 years (2008-2015, total investment of US$1.02 billion).
On the other hand, the EU's investment in Taiwan reached US$31.71 billion over the past eight years, a 3.98-fold increase over the previous eight years (2008-2015, US$7.96 billion).
Moreover, Taiwan and the EU have become complementary partners in the digital and green transformation. In recent years, TSMC, a semiconductor manufacturer, has annonced setting up a 12-inch wafer fab in Germany, GlobalWafers has invested in Italy to build a 12-inch production line, and ProLogium Technology, a solid-state battery manufacturer, has invested in France to set up a battery factory for electric vehicles. That way, the two-way investment relationship is expected to continue to develop in a positive direction.
- The need for a Taiwan-EU Bilateral Investment Agreement (BIA)
Considering the strong trade and investment ties between Taiwan and the EU, it is only logical for both sides to continue to pursuit a better business environment that can further enhance the economic interaction and commercial cooperation between Taiwan and the EU with bilateral legal instruments. A Bilateral Investment Agreement (BIA) could be one of the options.
An investment agreement will increase FDI through improvement of market access conditions, enhancement of the predictability of investment environment and effective resolution of investment disputes. Those are crucial factors that enterprises take into account when making overseas investment decisions. In its 2015 “Trade for All” strategy, the EU indicates that it will explore launching negotiations on investment with Taiwan, which is also in line with its 2018 “Connecting Europe and Asia” strategy. Since the announcement of “Trade for All” strategy, the European Parliament has passed over 10 resolutions supporting the EU-Taiwan BIA, and working level dialogues have been regularly held between Taiwan and the EU.
FDI is one of the most important driving forces of job creation and economic growth, and an investment agreement is one of the best ways to realize the benefits. A BIA will be mutually beneficial for both Taiwan and the EU, and Taiwan will continue to work together with the EU to pursuit the early realization of the Taiwan-EU BIA.
