Mr. Izzo, Chairman of ECCT,
Mr. Frederic Laplanche, Head of EETO,
ECCT members,
Honorable Representatives of European countries,
Distinguished guests,
Members of the ROC Cabinet,
Ladies and Gentlemen:
Good Evening!
I am very delighted to join tonight's Europe Day Dinner hosted by the European Chamber of Commerce Taiwan (ECCT). It has always been a pleasure to me to do so, and particularly on this day of the 57th anniversary of the European Common Market's establishment, I think I ought to say, "Happy birthday, European Union!" I've attended this event each year since I took office as president. On behalf of the government and people of the Republic of China, I congratulate the EU and its 28 member states on this auspicious occasion, and I certainly hope we'll see more prosperity and cooperation in the future.
First of all, my compliments go to the ECCT for its indispensable role in bridging differences, generating positive energy, and strengthening the partnership between Europe and Taiwan. The ECCT has also supported a Taiwan-EU economic cooperation agreement (ECA), as Mr. Laplanche just mentioned. I would like to extend my deep gratitude to the ECCT for this support.
During my tenure as president, this government has striven to relax trade restrictions, improve market access for foreign investors, and enhance Taiwan's competitiveness in the international arena. At the same time, we have made a great effort to conclude FTA-type trade agreements with our major trading partners, and have achieved substantial progress. For instance, we concluded the Cross-Straits Economic Cooperation Framework Agreement (ECFA) with mainland China in 2010. And then, the following year, we concluded an investment agreement with Japan. As you know, the Japanese started investing in Taiwan 60 years ago, and they never thought about having a bilateral investment agreement with Taiwan until then. Obviously, this is the result of our conclusion of the Economic Cooperation Framework Agreement with mainland China. Last year we concluded an economic cooperation agreement with New Zealand in July, and an economic partnership agreement with Singapore in November. Last year we also saw the resumption in March of our talks under the 1994 Trade and Investment Framework Agreement (TIFA) with the United States. As for multilateral trade negotiations, we have put top priority on participating in regional economic integration, such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).
On the first day of this year, new year's day, I designated this year as the "year of the big push" for Taiwan's economic development. And in August of last year the government launched the free economic pilot zones that feature reduced restrictions on the cross-border flow of goods, services, personnel, capital, and information. This model for enhanced trade liberalization is a first for Taiwan. We are very pleased that the ECCT commented positively on the pilot zones in its 2014 Position Papers, stating that the initiative "demonstrates a commitment to greater liberalization." I appreciate that very, very much.
Taiwan boasts a highly developed market economy, and shares Pacific borders with the world's three largest economies: the United States, mainland China, and Japan. The industries that we intend to develop in our pilot zones—such as smart logistics, international healthcare services, value-added agriculture, high-tech industry, green energy, financial services, and educational innovation—are complementary to Europe's economic strengths. These pilot zones can create abundant business opportunities for both Taiwan and Europe.
Now I want to touch upon the issue of forging an even closer partnership through an economic cooperation agreement and a bilateral investment agreement with Europe.
Mr. Laplanche just mentioned that we need these two trade agreements because the EU is Taiwan's fourth-largest trading partner, and in 2013 our two-way trade reached 49.1 billion US dollars, a slight increase over 2012. Europe as a whole continues to be the largest source of foreign direct investment (FDI) to Taiwan. Between 1952 and 2013, European investments in Taiwan exceeded US$32 billion in total. I am confident that Taiwan-EU economic and trade ties will continue to grow even stronger in the years to come.
Although this record is already very impressive, I think that more can be done, so I would like to offer important reasons why we need an economic cooperation agreement and a bilateral investment agreement with the EU.
As you know, an FTA-type agreement would benefit both sides. As mentioned before, our government has concluded quite a few agreements with our neighbors. Take New Zealand, for instance. Our agreement with them came into effect in December last year, and in the last four months our exports to New Zealand grew 35%, while their exports to Taiwan grew 33%. So this is a perfect arrangement, because its trade creation effect is very apparent, very prominent. So we want to see the same thing with our economic partnership agreement with Singapore. A bilateral ECA would certainly benefit both Europe and Taiwan.
And now for the second reason why we need an ECA and a BIA. As you know, the European Parliament has consistently called for such an agreement for quite a few years. Just last year, European Parliament passed a resolution on EU-Taiwan trade relations in October, expressing strong support for talks on an agreement with Taiwan. So this is not only needed by us, but also by Europe, as well.
And, number three, companies in Taiwan also hope that this agreement could be concluded as soon as possible. In 2012, the ECCT published a follow-up to its original study on the potential impact of a free trade deal between the EU and Taiwan. The report concludes that "the potential benefits from EU-Taiwan trade enhancement measures are much stronger now than they were in 2008, when the benefits were first assessed." In other words, as time passes by, the benefits of having such an agreement will grow. We hope we could conclude an agreement as soon as possible. Actually, former Vice President Vincent Siew (蕭萬長) went to Europe last year to promote the idea, and received a very positive response.
And there's another reason, not entirely economic, why I believe we should have closer ties with Europe. As you know, right after World War II, France and Germany started a massive student exchange program. Hundreds of thousands of students from each country went to the other country to take part in homestays. The idea was primarily to promote friendship at the early stage among their citizens. This was an excellent idea, so when I took office six years ago, I thought it would be a good idea to let mainland students come to Taiwan, again for the same reason: to build friendship at an early stage of their lives. The year before I took office, there were only 823 students from the mainland, but last year it was over 24,000. So, it was a 30-fold jump. It was interesting to note that two years ago, after my re-election victory, a local Taiwanese student talked to a mainland counterpart and said, "Look, we had a very efficient election. We cast our votes in the morning, and we got the results in the evening." The mainland student said, "That's nothing. In mainland China, we know the result the day before." I didn't invent that joke. It was reported by the New York Times.
Another thing I admire about Europe was the intra-German relationship back in the 1970s. As you know, West and East Germany signed a Basis of Relations Agreement in 1972. In that agreement, each side recognized the territory of the other side, but when it came to the issue of sovereignty, they did not recognize each other's sovereignty, which would have been against the German constitution—the Basic Law, but they said they recognized each other's authority to govern—the word they used in German was Hoheitsgewalt. That was a fascinating idea because, in a normal country, sovereignty and the authority to govern are the same, but in a divided nation, you have to distinguish between the two in order to make co-existence possible.
This is exactly the situation in our relations with the Chinese mainland, and I call for the idea of "mutual non-recognition of sovereignty but mutual non-denial of authority to govern." Only by doing that can we conduct the relationship. This is very unusual and very unorthodox in the world. But after six years of experiment, it worked. In February of this year, the chairman of our Mainland Affairs Council went to mainland China and had a meeting with his counterpart in Nanjing, and they called each other by their official titles. This is the first time for such a thing to happen in the 65 years since the two sides were separated. This also shows that something that we thought impossible six years ago has now become reality. We borrowed that from the Germans, so, are there any friends from Germany here? Thank you!
Another source of inspiration was regional peace. As you know, Taiwan and Japan signed a fisheries agreement almost exactly a year ago, and we were able to solve a 40-year-old fisheries dispute between Japan and Taiwan. As a result, the fishermen on both sides are able to fish in a maritime area about twice the size of Taiwan. And because of that, fishermen from the northern part of Taiwan were able to catch more blackfin tuna than at any other time in history. The catch grew by 3.6%, and the value by 2.9%. How were we able to do that? Well, the Japanese did not originally recognize the existence of the dispute, so before, there was no way we could address it. Former President Lee Teng-hui (李登輝) tried five times, but in vain, and former President Chen Shui-bian (陳水扁) tried ten times, but also in vain. I tried once, and found out that the previous approach was not going to work, so we tried something else. And fortunately, when I proposed the East China Sea Peace Initiative two years ago, we were able to get a positive response from the Japanese. So we concluded an agreement that kept our respective maritime claims intact, so each party could still insist on its maritime territorial claims, but we were able to have a fisheries agreement. The idea is quite simple: while national sovereignty cannot be compromised, natural resources can be shared. Well, I didn't invent that; I borrowed from the Europeans.
Ladies and gentlemen, you guys did a very good job in the 60s and 70s in the North Sea. There were maritime disputes among Germany, Belgium, Britain, and Norway. But you were able, first of all, to submit the case to the International Court of Justice, and when that was settled, you divided the maritime areas and started sharing the exploration and exploitation of hydrocarbon deposits. Now you have a very famous crude oil brand called Brent Crude. This was really admirable, and we've started to learn from you. So Europe has been an important source of inspiration for us, and that is why we think we should grow closer to each other, and try to learn from each other.
Ladies and gentlemen, in closing, I invite everyone here to join me in a toast—to our gracious host for the wonderful dinner tonight, to a very happy birthday of the European Union, and to an everlasting friendship between Taiwan and the EU! Thank you.