Taiwan wants an investment deal with EU

Taiwan and the European Union should sign a long-stalled investment agreement if Europe wants long-term investment from the island, Taiwan’s top trade negotiator said on Friday as the bloc courts tech firms like TSMC to build factories there.

Taiwan has repeatedly called for progress on a Bilateral Investment Agreement (BIA) with the European Union. The EU included Taiwan on its list of trade partners for a potential bilateral investment agreement in 2015, but it has not held talks with Taiwan on the issue since. The EU has been courting Taiwan, a major chip producer, as one of the “like-minded” partners it would like to work with 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 to Reuters at his office in Taipei, Trade Representative John Deng said Europe was “definitely envious” of TSMC’s $40 billion investment in the U.S. state of Arizona, where it will make advanced 3-nanometre chips, because TSMC was bringing a whole supply chain over with it. “For Europe this is not the same scale – it’s individual cases, not on the same level as TSMC” in the United States, he said.

The European Commission did not immediately respond to a request for comment. Taiwan Semiconductor Manufacturing Corp, the world’s largest contract chipmaker, is in talks over a factory in Germany, which would be its first in Europe, though it will focus on the auto industry and make far less advanced chips.

Deng said that Taiwan had engaged in lots of dialogue with the EU but that the bloc was resisting establishing a legal framework for investment that would provide “a sense of security” for Taiwanese businesses. “Our argument is that if you want long-term development for the future, a legal framework is very important,” he said. “For example, you want a very large investment for 100 years, 50 years, you don’t want it gone after three years. … I think the European Commission needs to be clear on that point.”

A BIA would be politically significant for Taiwan given its diplomatic isolation and general exclusion from most global bodies and agreements, though it is a World Trade Organisation member. Taiwan has also been in talks with Canada for a deal to encourage two-way investment – the Foreign Investment Promotion and Protection Arrangement – and Deng said he expected something to be signed this year.

He added he hoped Canadian Trade Minister Mary Ng might come to Taiwan to sign it, in what would be a rare high-level ministerial visit given the lack of formal diplomatic ties. “Taiwan is very hospitable,” Deng said. “If she comes, Taiwan will look after her well.” Reuters