The European Parliament's Foreign Affairs Committee has called for a bilateral investment agreement between the EU and Taiwan, although the prospects for concluding such an agreement any time soon may be limited.
In a press release issued yesterday, the Foreign Affairs Committee said, "[i]n a new report ... , MEPs on the Foreign Affairs Committee advocate closer relations and a stronger partnership between the EU and Taiwan guided by the EU’s One China Policy." As part of the report, they called for "prepar[ing] the ground for a new Bilateral Investment Agreement," stating: "To step up cooperation, the text [of the report] stresses the need to urgently begin an 'impact assessment, public consultation and scoping exercise' on an EU-Taiwan Bilateral Investment Agreement (BIA)." In an email exchange, a spokesperson for the Committee clarified that "[t]he report is yet to be assembled fully," but said "[i]t will be available online in due time."
The press release also noted that "MEPs highlight the importance of trade and economic relations between the two sides, including on matters relating to multilateralism and the World Trade Organization, technology such as 5G, public health, as well as essential cooperation on critical supplies such as semiconductors."
Bilateral investment agreements have been controversial as a general matter in recent years. The European Commission is in the midst of trying to reform the existing system of international investment arbitration by creating international investment courts, and a group of countries is discussing the issue in an UNCITRAL working group, but this process will likely not be completed soon. The recent Comprehensive Agreement on Investment (CAI) negotiated by China and the EU does not contain either mechanism, but has run into political difficulties anyway.
What this all might mean for a potential EU-Taiwan investment agreement is unclear. Controversies over the scope of the content of such an agreement, as well as China's likely reaction to the initiative, make the prospects for conclusion seem daunting.
UPDATE on September 10, 2021:
The full report is now completed (although not available online yet). Its language relating to an EU-Taiwan bilateral investment agreement is as follows:
DRAFT EUROPEAN PARLIAMENT RECOMMENDATION to the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy on EU-Taiwan political relations and cooperation (2021/2041(INI))
The European Parliament,...
1. Recommends that the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy and the Commission: ...
(b) urgently begin an impact assessment, public consultation and scoping exercise on a Bilateral Investment Agreement (BIA) with the Taiwanese authorities in preparation for negotiations to deepen bilateral economic ties, as such a BIA would lead to an easing of ‘own content’ requirements by European investors and producers in Taiwan; recall, in the context of regional dynamics, the importance of trade and economic relations between the EU and Taiwan, including on matters relating to multilateralism and the WTO, technology and public health, as well as of essential cooperation on critical supplies such as semiconductors; encourages Taiwan to increase investments in the EU, and notes that Taiwan is a full member of the WTO;