The EU’s new hype around Taiwan: Prospects for a more granular approach

23 September 2021

In recent months, Taiwan has become discernible on the EU’s agenda, mostly in the form of a Taiwan-friendly discourse appearing in the bloc’s key policy documents, official remarks, and joint statements. There are two main driving forces of this new hype around Taiwan in Europe: increasing concerns about China, and Taiwan’s own activities, such as its domestic and foreign policies and economic performance. These two factors — Chinese and Taiwanese — are overlapping and may not be bifurcated one from another.

There are several specific, mostly security-oriented, reasons for the EU’s recent interest in Taiwan. The island is facing threats from China that are becoming apparent in the EU, such as disinformation and crippling cyber attacks. Therefore, there is a rising awareness that Taiwan is China’s testing ground or laboratory for influence tactics such as public opinion and psychological warfare that could be used abroad. Hence, cooperation with Taiwan is in the EU’s interest to learn from the island about China’s coercive tactics. Furthermore, the pandemic shows that economic overdependence on China poses a threat not only for Europe’s future development but also for its security. Taiwan’s role in semiconductors value-chains, particularly the fabrication of cutting-edge chips on the island, is an argument for closer cooperation with Taipei. Taiwan’s New Southbound Policy that is focused on Southeast Asia to lessen economic dependence on China also seems to dovetail with the newly published EU Indo-Pacific Strategy.

The European Parliament’s role in popularising the Taiwan issue cannot be overestimated. The EU should promptly move towards popularising existing platforms for cooperation with Taiwan, such as those on industrial, digital and high-tech topics.

There is no doubt that the EU’s references to Taiwan in various documents, often for the first time, is worth appreciation. Generally, the EU’s discourse about Taiwan focuses on four elements: the island is a like-minded country; a crucial economic partner and a potential source of future investment; a global high-tech leader; and that the EU supports a pragmatic solution for the Taiwan problem, especially when it comes to the island’s participation in international organisations. Recently, in the EU’s narrative, increasing attention is also paid to stability in the Taiwan Strait and the importance of peaceful development of cross-strait relations. But will this Taiwan-friendly narrative be translated into concrete policies that would significantly revamp the quality of Europe-Taiwan relations?

Limitations at the EU level

In its first-ever report about Taiwan, unveiled in April and adopted by the Foreign Affairs Committee of the European Parliament (EP) in September, the EP called upon the European Commission to upgrade relations “to a comprehensive and enhanced partnership with the official signing of a respective agreement, increase official exchanges between the EU and Taiwan, including at the highest levels, change the name of the European Economic and Trade Office in Taiwan to ‘European Union Office in Taipei’ and prepare an impact assessment on a Bilateral Investment Agreement (BIA) with Taiwan before the end of 2021”. These steps are not only granular but also very political. For example, since the EP has frozen the EU-China Comprehensive Agreement on Investment (CAI) concluded in December 2020 and is unlikely to ratify it in the foreseeable future, the possible start of BIA talks with Taiwan would be seen in China as a highly political signal of modification or even violation of the One-China policy.

Yet other EP documents, such as two resolutions adopted in January 2021, speak about ties with Taiwan in more vague terms, expressing concerns about the situation in the Taiwan Strait, calling for peace and stability, and supporting the island’s democracy. Similarly, modest remarks are presented by the Council, the Commission (EC), and the European External Action Service (EEAS). The latest examples are the State of the Union (SOTEU) address by EC President Ursula von der Layen and the EU Indo-Pacific Strategy. Taiwan was not explicitly mentioned in the SOTEU; although it was named three times in the Strategy, these references are in the section that discusses areas of cooperation such as value chains, digital governance and trade, and not in a chapter that lists partners. There is also no hint that the EU plans to launch talks on BIA.

Generally, the EP is more outspoken and radical than Council and Commission. However, although its role has been strengthened since the Lisbon Treaty, the EP plays a consultative role in foreign and security policy, and the Council is not legally obliged to follow its opinion. If the aforementioned report about Taiwan is adopted by the EP (what is likely), the Commission is obliged to accept or reject it within three months. In the case of the latter, the Commission must explain why; but even if it accepts the document, its recommendations will still be non-binding.

At the same time, decision-making bodies like the Council, and executive bodies such as the Commission and the EEAS, are more sceptical when it comes to undertaking steps to noticeably enhance ties with Taiwan. The reasons are apparent. Although the EU is hardening its stance on China by calling it a systemic rival, the PRC remains an important partner due to several member states’ economic dependence on China, especially Germany. The acceleration and subsequent conclusion of CAI talks is a good case study about both the EU’s dependence on China and Germany’s role. For Germany, China accounts for 15 per cent of overall exports outside the EU, and the German car industry heavily invests in the Chinese market. The recent unclear signals about the EU’s China policy — whether to perceive China more as a rival or partner — epitomise the limitations of the EU’s tougher line on China and imply that any attempt to adopt a bold Taiwan approach will be cumbersome.

Furthermore, the EU’s foreign and security policy is based on consensus, which means that the interests of selected member states such as their economic dependence on China or problems with territorial disputes may hamper the EU’s attempts to overhaul its Taiwan policy. There are several examples of initiatives criticising China stymied by those countries that pursue rather China-friendly policies. Divergent interests lead to inefficiency in the EU’s external actions. To put it bluntly, one should not expect any spectacular decisions on Taiwan at the EU level.

The role of the Central and Eastern European states

Under these circumstances, it seems that individual member states have more room to shape their bilateral relations with Taiwan, and the Central and Eastern European countries (CEE) appear predestined to play a crucial role in strengthening Europe’s ties with Taiwan. As former members of the socialist block under Soviet Union influence, the CEE countries know from experience what it is like to be living under the shadow of coercion from a big, influential and authoritarian neighbour. The region also shares with Taiwan the experience of transforming from authoritarianism to democracy during the late 1980s and early 1990s. Consequently, values-based policies, especially when it comes to preserving democracy and the rule of law, are essential for both the CEE and Taiwan.

More importantly, and in contrast to Western Europe, the region is not economically dependent on China. Although trade has been steadily growing, only about 3 per cent of China’s overall exports go to the CEE, and the PRC constitutes less than 2 per cent of the CEE’s exports. The cumulative value of China’s investment in CEE EU members is only around €9.5 billion, and the CEE hosts less than 1 per cent of Chinese global outward investment stock. For comparison, the UK, Germany, Italy, France, Finland, and the Netherlands are the top recipients of Chinese investments with a cumulative value of €10 billion-€55 billion each. The CEE are also not significant recipients of Chinese infrastructure projects based on credits and loans. What is more, the majority of CEE countries are working on, have already adopted a law, and/or signed declarations with the US aimed at excluding Chinese companies from developing countries’ 5G networks.

In recent years, the region has become politically more cautious towards China due to widespread disillusionment with the 17+1 formula established in 2012. There is also a growing general disenchantment with China’s behaviour. Reasons include China’s attempts at hostile takeovers of European high-tech companies such as German industrial robot maker Kuka and investments in critical infrastructure that resulted in adopting or enhancing investment screening mechanisms in CEE countries such as Czechia and Poland. The CEE countries are also concerned about recent trends in China such as the consolidation of power in Xi Jinping’s hands, rising state control over society, violation of human rights, harassment of Uyghurs in Xinjiang, and the crumbling of Hong Kong’s autonomy.

The CEE region highly appreciates transatlantic cooperation and is dependent on the US when it comes to security guarantees because of threats from Russia. Indeed, an important security-related goal for the CEE is enhancing NATO’s deterrence of Russia, for which US involvement is essential. This fact, as well as Biden’s continuation of Trump’s sharp course on China concurrently with pressure on allies to stymie cooperation with China, creates more room for the CEE to cooperate with Taipei. In recent months, CEE countries such as Czechia, Lithuania, Poland, and Slovakia, have been at the vanguard of forming a granular approach towards Taiwan. Each of them has more or less openly criticised cooperation with China and signalled a willingness to enhance ties with Taipei.

In the case of Poland, in 2018, the country decided to change the name of its office in Taiwan from the ‘Warsaw Trade Office’ to the ‘Polish Office in Taipei’, while The Polish Investment & Trade Agency opened a Taipei-based office. What is more, information about Poland-Taiwan meetings or agreements (such as economic consultations or scientific cooperation) are publicly available on the Polish ministerial websites, which is a novelty. The June 2019 bilateral agreement on legal cooperation on criminal matters between the two countries was signed into law on 28 January 2021 by President Andrzej Duda. It is Taiwan’s first such agreement with any EU member state and covers mutual legal assistance, extradition, transfer of sentenced persons, and the exchange of information. During the pandemic in 2020, Poland helped Taiwanese students return home by launching the first-ever direct passenger flight between the two countries operated by LOT Polish Airlines. In September this year, Poland handed over 400,000 vaccine doses to Taiwan. While Czechia, Lithuania, and Slovakia have also provided COVID-19 vaccines to Taiwan in recent months, Poland is the third-largest donor of jabs to Taiwan after the US and Japan.

Slovakia signed an arrangement with Taiwan a few weeks ago and Prague signed a sister city agreement with Taipei in early 2020. Last year, an 89-member Czech Senate delegation led by Speaker Milos Vystrcil conducted a high-level and widely publicised visit to Taipei that ended up with China’s Foreign Minister Wang Yi, claiming that “Prague will pay a heavy price” for this step. However, this threat did not amount to much because of the very low level of economic exchange between China and Czechia. Indeed, Czechia is more dependent on Taiwanese than Chinese investments as it is the fourth biggest recipient of Taiwanese FDI among European countries. Lithuania is perhaps the most outspoken among the CEE countries. The country has officially withdrawn from the 17+1 framework, invited Taiwan to set up its representative office in Vilnius, and intends to open its own trade office on the island. The Taiwan issue was a topic of discussion during the last general election held in the country in October 2020, including a proposal by the Freedom Party (that forms the current ruling coalition) to support Taiwan’s independence and recognition as a country. Taiwan has also been added to a coalition agreement (“[Lithuania] will defend those fighting for freedom around the world, from Belarus to Taiwan”) that underpins the new government.

The way forward

Bearing in mind how the EU works and that it must balance the interests of 27 member states, the fact that Taiwan is on its agenda is worth appreciating. The European Parliament’s role in popularising the Taiwan issue cannot be overestimated. The EU should promptly move towards popularising existing platforms for cooperation with Taiwan, such as those on industrial, digital and high-tech topics. Although it remains to be seen whether the EP will adopt the Foreign Affairs Committee’s report and, if so, how the Commission respond, this document should be treated as a toolbox of various granular actions that could be implemented when possible. The EU should also improve its PR skills and publicise its activities related to Taiwan. Perception matters. The CEE, for its part, should leverage the well-publicised steps already taken to build a Taiwan-friendly atmosphere and perception among Europeans, and form a coalition to pressure the EU’s executive institutions to focus on developing more granular steps towards the EU’s new Taiwan policy.

The EU needs an innovative and sophisticated approach towards Taiwan. Focusing on a sectoral approach (e.g., in the case of a BIA) or smaller but concrete actions (e.g., the extension of cooperation to new areas such as the legal dimension, emerging technologies, addressing disinformation) with an explicit reference to Taiwan would be good first steps towards building a consensus among member states. The One-China policy is not a God-given approach with strictly defined and unshakable boundaries. Europe must seize the initiative to be innovative and flexibly manoeuvre within the limits of this notion.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Justyna Szczudlik is the Deputy Head of Research, Head of Asia-Pacific Program and China Analyst with the Polish Institute of International Affairs (PISM). Image credit: Flickr/Uming Photography.