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Finance

Chip powerhouse Taiwan calls for economic partnership deal with EU

Published by Uma Rajagopal

Posted on November 18, 2024

Featured image for article about Finance

TAIPEI (Reuters) – Taiwan President Lai Ching-te called on Monday for the signing of an economic partnership agreement with the European Union, saying it would boost cooperation in semiconductors and that as democracies the two sides should be working together.

Taiwan has pushed for the signing of investment and trade deals with the EU, in what would be politically significant for Taiwan given its diplomatic isolation and general exclusion from most global bodies and agreements.

For its part, the EU has been courting Taiwan as a “like-minded” partner under the European Chips Act to encourage more semiconductor production in Europe and lessen dependence on Asia, despite the lack of formal ties with the Chinese-claimed island.

Speaking at a Taiwan-EU investment forum in Taipei, Lai said that facing the threat of expanding authoritarianism, Taiwan and the EU must form a “strong democratic umbrella” and build secure supply chains for global democracies.

“Looking to the future, Taiwan hopes to take an innovative approach towards the signing of an economic partnership agreement with the EU,” he said.

Such an agreement would set a sound institutional basis for further cooperation in fields such as semiconductors and AI, Lai added.

“This would not only make both our economies more resilient and secure, but also ensure the stable operation of global supply chains.”

Taiwanese investment in EU has been anchored by Taiwan Semiconductor Manufacturing Co (TSMC), which in August launched a major new chip plant in Dresden, Germany, expected to be a key supplier to European industry and automakers.

Maria Martin-Prat, deputy head of the European Commission’s directorate general for trade, made no mention of signing such a deal with Taiwan in a video message to the investment event, though she did praise bilateral relations.

“Taiwan, a vibrant democracy with an open economy, is a trusted partner for us to promote our economic security,” she said.

Taiwan has few free trade agreements, though last year it signed an Enhanced Trade Partnership with Britain and has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

($1 = 0.9483 euros)

(Reporting by Ben Blanchard; Editing by Muralikumar Anantharaman)