Monday 26 September 2016

Emerging from China's shadow: Taiwan's tricky quest for a trade deal with Europe

Published 22/06/2015 | 02:30

Visitors look at tablets during the Computex exhibition in Taipei last year - Taiwan is a massive exporter of computer technology
Visitors look at tablets during the Computex exhibition in Taipei last year - Taiwan is a massive exporter of computer technology

Taiwan wants a free-trade deal with the EU, but there's just one, rather large, problem: China.

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The pitch for a deal is based on Taiwan's status as a massive exporter of computer tech, and its proximity to the Chinese mainland - now the EU's second largest trading partner. China and Taiwan signed a historic "economic cooperation framework" agreement in 2010 and relations are improving - though still tense.

Last year, protesters stormed Taiwan's legislature after a services trade agreement with the mainland was signed. The trigger? A perceived lack of Governmental transparency, and a fear that the deal would make Taiwan, which is effectively an independent country, vulnerable to the mainland's economic might.

Irish readers will be familiar with the idea of a small country struggling to emerge from a larger rival's shadow - but there aren't many parallels with the British-Irish relationship.

Taiwan, to which Chiang Kai-Shek's Government fled after the Communists took over, and China are both signed up to what's known as the "1992 consensus" - a peace agreement which states that the island an the mainland are "one China", with different interpretations of what "China" means. In effect that means each side of the dispute claims to be the rightful government of the whole of China.

The peace agreement was the platform for the economic agreement, which Taiwan is now leveraging to persuade Europe to do a deal.

"Taiwan, by virtue of sharing a common culture and language with China, has achieved a large degree of business success in the mainland, so it is well-positioned to serve as the perfect business partner," a document prepared by the Taiwanese foreign trade bureau reads.

"The continuous improvement of trade relations across the Taiwan Strait will further enhance Taiwan's competitiveness in the Chinese market and establish Taiwan as a strategic springboard for its trading partners to use in entering the Chinese market."

Taiwan is small but it punches above its weight. As a whole, the country's exports last year were worth $314bn, 21st in the world, almost three times higher than Ireland and $30bn shy of India.

Analysts at the Brussels-based European Centre for International Political Economy think the case for a deal is strong. "Taiwan offers real opportunities for European firms to increase market access and raise their profile in Asia. In particular, it could boost the competitiveness of the European ICT sector. Overall, EU-Taiwan trade and foreign direct investment (FDI) perform well below potential: there is much room for improvement," a 2010 paper reads.

But behind the scenes Taiwanese officials are pessimistic about the prospect of Europe getting on board. Next to nothing is happening, several senior officials told this reporter.

As negotiations over an investment agreement between Brussels and mainland China continue, the officials think the Europeans' priority is not to do anything that would upset the mainland.

And so the Taiwanese will have to wait.

Irish Independent

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