‘Third parties’ should not interfere in Taiwan’s dealings with the EU, Taiwan minister says

China should not interfere with commercial dealings between Taiwan and the European Union especially when increased economic resilience between the two sides contribute to the benefit of the global economy, a senior Taiwan minister told CNBC.

Taiwan would pursue a new free trade agreement with the EU should high-level talks with the bloc over the tightening of semiconductor supply chains yield a wider deal, Taiwan’s deputy minister for economic affairs, Chen Chern-Chyi, said Friday.

Semiconductor-powerhouse Taiwan is holding rare ministerial-level discussions with the EU to boost its chip industry and supply chain with Europe, while also engaging with the U.S. on new trade talks. The discussions have drawn the ire of Beijing which has called for all parties to observe the one-China policy. 

Taiwan is democratically self-ruled but Beijing claims the island as part of its own territory and has never renounced the use of force to bring the two together. 

“Beijing always expresses their opposition to our economic cooperation with our partners but this is for the global benefit, for the welfare of humankind,” Chen said during an exclusive interview on CNBC’s “Street Signs Asia.”

“I think third parties should not intervene or obstruct this kind of positive cooperation between parties.” 

Chen said Taiwan’s discussions with the EU and the U.S. were imperative to the resilience of the global supply chains.

To that end, Taiwan regularly looks to shore up its trade dealings with its global partners and the EU is no different, particularly given that the bloc is Taiwan’s fifth largest trading partner with 50 billion euros ($53.8 billion) in bilateral trade. Taiwan is a key supplier of semiconductor chips to many European manufacturers, Chen added. 

The Taiwanese official also said he is not expecting a backlash from Beijing but Taiwan’s 40-year history of “managing mainland China” will hold them in good stead in handling any fallout. 

High-level talks like the one with the EU help to advance Taiwan toward its goals of cutting as many trade deals as possible including one with the EU.

Taiwan has also expressly asked to join the new U.S.-led Indo-Pacific Economic Framework even though it was left out of the initial 13-country membership, Chen said. 

“For the U.S., allowing Taiwan to join the IPEF framework under the same name runs the risk of providing legitimacy to arrangements that degrade or belittle Taiwan’s sovereignty,” political scholars Yao-Yuan Yeh, Charles K. S. Wu, Fang-Yu Chen, and Austin Horng-En Wang said in a recent analysis in the Diplomat.

“The name of ‘Taiwan’ is a non-starter, too, as it would challenge the current U.S. One China policy.”

Additionally, excluding Taiwan would have allowed other Asian countries — not willing to offend China —to join the IPEF, other analysts have said.

Separately, Taiwan has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), alongside mainland China. 

The CPTPP — the second largest trade bloc in Asia-Pacific — is conditional on approval by all 11 members of the bloc. It has its genesis in the original U.S.-led Trans-Pacific Partnership, which Donald Trump formally withdrew from in 2017.

When asked if Taiwan would influence Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, to increase its tie-up with Europe, Chen said it was up to TSMC to make its own commercial decisions. He added that Taiwanese officials regularly encourage Taiwanese companies to deploy their businesses globally.