Options and Opportunities for European and U.S. Cooperation with Taiwan

Taiwan’s star continues to rise among democracies. Its ranking in The Economist’s democracy index improved in 2020, as most of the world experienced a democratic slump made worse by coronavirus restrictions. And never before in Europe and the United States has the focus been higher on Taiwan as a democracy. In May, a G7 foreign ministers’ statement mentioned Taiwan for the first time while Germany’s Free Democratic Party removed a reference to the One China policy in its program and instead mentioned support for Taiwan’s democracy. The Biden administration has been clear about its support for Taiwan and the latter’s representative to the United States received an official invitation to attend the presidential inauguration for the first time since 1979.

At the same, the People’s Republic of China’s pressure on and over Taiwan has never been higher, from military trespassing to disinformation and coercion of Western governments, businesses, and individuals that dare to speak up about this. And, with the crackdown in Hong Kong in 2020, Beijing has showed its willingness to break international rules with scant regard for international condemnation, with potentially dire implications for Taiwan.

Taiwan’s Need for Vaccines

For nearly 18 months, Taiwan contained the spread of the coronavirus while maintaining individual liberties and tackling disinformation. The sudden outbreak there last month has led to a spike in cases due to a population with virtually no antibodies and limited access to vaccines. Taiwan has received approximately 2 million doses so far and less than 2 percent of its population has been vaccinated with one dose. It is urgently reaching out to the international community for more vaccines.

The urgent need to expand Taiwan’s access to vaccines was underscored in a recent dialogue convened by the German Marshall Fund among experts and officials from Taiwan, the EU, the United Kingdom, and the United States to discuss cooperation. Taiwan is making progress toward developing a vaccine, which will probably be available in July. In the meantime, Beijing is offering it Chinese vaccines while trying to block other countries from providing it with Western vaccines. The United States and the EU and its member states should step up quickly so that Taiwan can nip the current outbreak in the bud.

Taiwan’s health care system has ranked as the best in the world for three years in a row, according to one survey. Yet, it is unable to share best practices with the rest of the world because it is excluded from the World Health Organization (WHO). In May, its health officials were barred from attending the annual World Health Assembly (WHA) for the fifth straight year. The EU and the United States have backed Taiwan’s inclusion in the WHA, but so far with no success since Beijing continues to block it.   

Including Taiwan Internationally 

There are several areas where democratic Taiwan could play a greater role internationally. Faced with intense interference in its domestic politics and society, it has a solid track record of curbing foreign-directed and domestic disinformation and authoritarian coercion. Digital Minister Audrey Tang’s approach of fighting disinformation with facts and radical openness has proved to be effective and serves as a model for other governments. That approach should continue to be shared with other democracies. Also notable is Taiwan’s position at the forefront of diversity and inclusion in Asia. Its policies on LGBTQI rights, religious freedom, and women’s rights are among the most progressive in the region.

Several participants in the GMF dialogue highlighted the Global Cooperation Training Framework, which since 2015 has served as platform for Taiwan to share its expertise with representatives from countries around the world. Japan has joined the United States and Taiwan as full partners, while the EU has participated on an ad hoc basis in workshops on supply chains and on vaccines (along with Australia, Israel, and the United Kingdom). It would be a welcome next step for the EU and member states to join the framework officially as partners.

Part of the Family of Democracies

Reflecting Taiwan’s position in the family of democracies, the EU and the United States could hold a joint workshop with it on democracy promotion in the Asia-Pacific. This would draw on its experience of having successfully transitioned from authoritarianism to democracy. Taiwan is fast becoming a regional hub for democracy organizations, think tanks, and foundations, including several that relocated from Hong Kong due to the deteriorating environment there. The United States’ National Democratic Institute and International Republican Institute have opened offices in Taipei, as has European Values Centre from the Czech Republic. Germany’s Friedrich Naumann Foundation relocated its Global Innovation Hub from Hong Kong to Taipei earlier this year. Other organizations are contemplating similar moves and Taiwan could be a regional hub for democracy promotion.

There is strong and growing support in Europe and the United States for Taiwan as a like-minded partner and democracy. The Biden administration’s planned Summit for Democracy might represent an opportunity for democracies around the world to engage with it on this front, though no decisions have yet been made on its timing or participants. It has been suggested to hold civil society summits regionally leading up to or during the summit in Washington to illustrate the global commitment to democracy. With its active civil society, Taiwan would be a natural fit to host one such meeting.

The world’s democracies should also actively counter such moves as the People’s Republic of China reported offering vaccines to Paraguay in exchange for a decision to shift diplomatic recognition from Taipei to Beijing. One suggestion is that Washington should inform Beijing that the next time it poaches one of Taiwan’s diplomatic allies, the United States will invite Taiwan’s president to make a visit rather than just a transit stop as before.

There is also a need for the democratic community to prepare for the next battlegrounds in international cooperation about Taiwan. The EU and the United States were taken by surprise in 2018 when the People’s Republic of China demanded that international airlines stop referring to Taiwan as an independent country on their websites. Hotel chains and other companies have also been affected. It is prudent to keep preparing for similar steps in the future, especially as Beijing is looking to expand the extraterritorial reach of its laws and regulations. 

A participant from Taiwan at the GMF dialogue highlighted that its exclusion from the WHO and WHA is replicated in other international organizations. It lacks access to the International Civil Aviation Organization and it cannot participate in the United Nations Framework Convention on Climate Change. In both instances, Taiwan’s marginalization creates “black holes” in the international coverage. 

Economic Cooperation with Taiwan

In the United States, the ambition to negotiate new, bold free-trade and bilateral investment agreements is absent even under the new Biden administration. Classical free traders in Washington are a dying race. In that sense, the best option for economic cooperation between the United States and Taiwan may be through smaller sectoral deals (semiconductors, on which a U.S. strategic review is due soon, would be one option) that gradually can build into a bigger deal. Convening a meeting of the U.S.-Taiwan Trade and Investment Framework Agreement, which has not been done since the Obama administration, would be a small but important next step. 

Some participants in the GMF dialogue called for greater attention to be paid by the EU to Taiwan now that the European Parliament has put the Comprehensive Agreement on Investment with Beijing in the freezer. However, although many members of the European Parliament are advocating for a Bilateral Investment Agreement (BIA) with Taiwan, this is mostly a politically symbolic gesture that is reportedly unlikely to be realized soon. What is more, Europe is not decoupling from the People’s Republic of China: for example, a recent survey showed that 72 percent of German businesses operating there want to expand production. Still, if there was ever a time for promoting a BIA, it is now.

There are new opportunities for cooperation with Taiwan with the increased focus on semiconductors and securing supply chains for democracies. On the other hand, though, the combination of the United States’ focus on supply chains and national security, its continued trade conflict with China, and the EU’s move toward strategic autonomy could end up squeezing the room for Taiwan and its companies to maneuver in. The global leader in chip-manufacturing technology, Taiwan’s TSMC, currently has 90 percent of its production at home but it could be pressured to produce more in the United States, the EU, and China (unless U.S. pressure makes the latter impossible) for each market. If TSMC were to be compelled to reduce production in Taiwan, the result would be fewer jobs and a negative impact to the economy. And, while Taiwan has gradually reduced its over-reliance on the Chinese market since 2017, the latter remains a big neighboring market that cannot be completely shunned.   

Countering Authoritarian Coercion

The People’s Republic of China has amped up its “grey zone” authoritarian coercion against Taiwan in a multitude of areas. These include disinformation in traditional and social media, economic pressure, military aerial incursions into the island’s Air Defense Identification Zone, and naval exercises simulating attacks. A recent cover of The Economist described Taiwan as the most dangerous place on earth. Participants in the GMF dialogue portrayed Beijing’s pressure tactics as aimed at intimidating Taiwan and eroding the will of its people to support their government, yet several insisted that there was no imminent threat of invasion.

The need for democracies to counter the People’s Republic of China’s coercion is becoming increasingly urgent. Options for this include demonstrations of solidarity with Taiwan and collective efforts, such as the ones to offset the impact of Beijing’s boycott of Taiwanese pineapples, where social media campaigns encouraged purchases of “freedom pineapples,” senior officials from friendly countries tweeted pictures taken with Taiwanese pineapples, and Japan increased pineapple imports from Taiwan. In response to military coercion, options beyond unilateral U.S. actions could be explored with the Quad partners Australia, India, and Japan.

Europe can also play a role in this. Where statements on foreign and security matters are concerned, it may be better to rely on EU member states rather than on the EU institutions. While discussions at the union level are helpful to raise awareness, the requirement of unanimity in foreign policy means that EU statements usually represent the lowest common denominator. The member states have more flexibility to express stronger views on their own, in smaller groups, or in other constellations, such as the G7.

One suggestion to counter economic coercion by the People’s Republic of China is for democracies to establish an “economic Article 5,” similar to NATO’s mutual-defense clause. The goal would be to deter Beijing by demonstrating a shared willingness to impose costs on it, including by using sanctions. A credit facility for international companies, which often end up in the forefront of economic or values battles with Beijing, as seen most recently in the case of Western companies sourcing cotton from Xinjiang, could also be established. 

The discussions during the recent GMF trilateral dialogue underscored the need for continued and stronger cooperation by Europe and the United States on and with Taiwan. Taiwan’s democracy is robust, vibrant, and internationally recognized for its achievements but under constant threat at all levels. The priority placed by the Biden administration and the EU on democracy and its renewal should provide ample new opportunities to work with Taiwan in the coming period.