Cooperation in the semiconductor sector Taiwan's president calls for economic alliance with the EU

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Taiwanese President Lai Ching-te has called for the signing of an economic partnership agreement with the European Union. In his opening speech at the 2024 EU Investment Forum in Taipei, Taiwan's head of state emphasized the importance of cooperation in the semiconductor industry and the necessity of collaboration as democracies.

In light of a globally tense economic and political situation, Taiwan's President Lai Ching-te has emphatically pointed out Taiwan's desire for the signing of investment and trade agreements with the EU. Due to its diplomatic isolation and general exclusion from most global bodies and agreements, Taiwan has long sought access to global economic forums, while also striving for international recognition and security, especially considering the tense political situation with the People's Republic of China. China continues to lay political claim to the island state in the Pacific. This has, among other things, led to most leading economic nations currently not officially recognizing Taiwan as an independent state.

In recent years, Taiwan has taken a leading position in the global semiconductor market in many areas - particularly in semiconductor contract manufacturing, as well as memory, wireless, and SoC technologies. The EU, for its part, has courted Taiwan as a "like-minded" partner within the framework of the European Chips Act, to promote semiconductor production in Europe and reduce dependency on Asia, despite having no formal relations with the China-claimed island.

"A joint protective umbrella against the spreading autocratism"

In a speech at the 2024 EU Investment Forum in Taipei, Taiwan's President Lai on Monday, November 18, 2024, once again called for an economic alliance between Taiwan and the EU. He particularly referred to the current geopolitical and economic situation, emphasizing that Taiwan and the EU must form a "strong democratic shield" in the face of the threat of spreading authoritarianism and establish secure supply chains for global democracies.

"Looking to the future, Taiwan hopes to pursue an innovative approach to signing an economic partnership agreement with the EU," he said. In his view, such an agreement would create a solid institutional foundation for further cooperation in areas such as semiconductors and AI. "This would not only make our two economies more resilient and secure but also ensure the stable functioning of global supply chains."

Previous approaches between the EU and Taiwan have, among other things, led to the opening of a TSMC manufacturing site in Dresden, which was inaugurated last August. Both the German government and the EU Economic Council have high hopes for the site to strengthen the local semiconductor supply chain for the European industry, particularly the automotive market.

EU remains cautious

Maria Martin-Prat, Deputy Director-General of the Directorate-General for Trade of the European Commission, did not address the possibility of such an economic alliance in a video message also sent on the occasion of the investment forum. However, she praised the existing bilateral relations. "Taiwan, a vibrant democracy with an open economy, is a reliable partner for us to promote our economic security," her video message stated.

Although Taiwan holds an important position in the semiconductor industry, the country has so far been able to conclude only a few free trade agreements due to the precarious political situation with China. However, some significant steps have been initiated in recent years: Last year, the Taiwanese government signed an expanded trade partnership with the United Kingdom. The island state has also applied for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This trans-Pacific free trade zone, also known as TPP11 due to its current number of members, currently includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.(sg)