The Ministry of Economic Affairs earlier this month issued a statement to urge the EU to conclude ongoing negotiations and sign a bilateral trade and investment agreement with Taiwan. The EU commission launched such talks with Taiwan after a formal resolution adopted by the European Parliament in July.
In a recent policy communication, Trade for All, the EU announced its new Asia-Pacific investment strategy and highlighted the significance of Taiwan for the eurozone’s economic interests.
President Tsai Ing-wen (蔡英文) also recognizes this bilateral economic accord would strengthen investment protections for both sides and inspire Taiwanese entrepreneurs, especially small and medium-sized enterprises, to invest in the EU regions and boost local economies. Both sides acknowledge the potential benefits of creating a better business climate with this investment agreement.
A modern and comprehensive investment agreement should go beyond the limited concept of “economic growth” or “investment protection” and cover a wide range of issues under the umbrella of “sustainable development,” such as labor standards, environmental protection and social cohesion.
Regarding environmental rules, the initial objective of these related clauses is to assess and monitor the environmental impacts of trans-boundary economic activities. In this context, contracting parties should not lower their domestic environmental standards for the purpose of attracting foreign investment.
The trend for synergies between investment and environment can be observed in international policy agendas. The UN’s 2030 Agenda for Sustainable Development and, particularly, the Addis Ababa Action Agenda suggest that foreign direct investment is a crucial component of sustainability efforts.
Such investment can use various policy instruments — such as private-public partnerships, “green” funds and other hybrid market mechanisms — to harness technological and financial resources to promote climate change adaptation, energy efficiency, biodiversity and other pro-environmental projects.
This month, Taiwan and Germany signed a Joint Declaration of Intent on Cooperation in the Field of Energy Transition, which focuses on collaborations on electricity market liberalization and clean energy technologies. Also this year, Taiwan and the European Bank for Reconstruction and Development celebrate 25 years of cooperation. The bank’s Taiwan Technical Cooperation Fund has invested about 42 million euros (US$43.9 million) in more than 270 projects, mainly in the “green” energy, transport and communication sectors and future “smar” cities.
Reviewing all current environmental collaborations is a feasible way to consider what synergistic components could be further integrated in the forthcoming EU-Taiwan economic agreement. Because a bilateral treaty provides an excellent opportunity to legalize the vague climate-friendly rhetoric and reserve policy space for environmental regulations on specific matters — for example, energy trade and investment.
The EU-Taiwan economic deal might become a new and strong catalyst for Taiwan’s green economy transition. A well-tailored framework requires sufficient public consultation and horizontal policy coordination.
The Ministry of Economic Affairs should welcome a broad involvement of the related governmental agencies (ie, Environmental Protection Administration and International Cooperation and Development Fund (財團法人國際合作發展基金會), civic society and industrial stakeholders. Such involvement is essential for the future successful implementation of treaty provisions.
Yang Chung-han is a doctoral candidate at the University of Cambridge and a member of the Taipei Bar Association.
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