Mr. James, Chairman of the European Chamber of Commerce Taipei, Mr. Maczak, Acting Head of the European Economic and Trade Office, Your Excellencies Ambassadors and Representatives, Cabinet members of the Republic of China government, Distinguished Guests, Ladies and Gentlemen: Good evening!
I know you are hungry, so I will be brief. No more than an hour.
It's a great honor for me to be invited to attend this wonderful dinner party by the European Chamber of Commerce Taipei to celebrate the European Union's 54th birthday. On behalf of the government and the people of the Republic of China, I would like to give my warm congratulations and best wishes to the European Union and its 27 member states. May the people of Europe continue to enjoy lasting peace, progress and prosperity.
Taiwan enjoys very close trade and economic relations with the EU, which is not only our fourth largest trade partner, but also our largest source of foreign direct investment. At the end of April this year, European businesses invested around US$30 billion in Taiwan, accounting for roughly 30 percent of total direct foreign investment in Taiwan. Trade between Taiwan and Europe was 37 billion last year, but 48.6 billion this year, up 31%. On top of this, our bilateral trade in the first four months of this year reached US$17.7 billion, a 19% increase over the same period last year. So you can see that our relationship is really very close.
I want to take advantage of this opportunity to thank the European Union for granting our citizens visa-free treatment. That took effect on January 11th this year, and this is a very important step for our relations. As you know, Great Britain actually took the lead two years ago to grant us visa-free treatment, and last year the number of visitors from Taiwan to Great Britain, compared to the year before, had growth of 150%, and trade between Taiwan and Great Britain also rose 25%. So, I can imagine the number of visitors to Europe will increase. Actually, in the month of March, the increase rate was 23% – a 23% percent increase in the rate of visitors to Europe – and I want to remind you that all visitors from Taiwan to Europe are very serious shoppers. They don't just enjoy the Taiwan bubble tea, but also many European products.
On the other hand, there are 20,000 students from Taiwan currently studying in Europe, which accounts for roughly 20% of our total number of students going abroad. And this has been a very effective way to achieve cultural exchange. Beginning last year we started a working holiday program with Germany, and Germany so far is the only country that has done this. And that has been very, very popular. Originally, the number of people allowed was only 200, but it was filled in about a day or two. They increased the number to 700. Still, they were all taken. So I hope our friends from Germany could give us more vacancies so that our young people will have the opportunity to spend one year in your country, working and spending holidays over there. I also encourage other countries to do the same.
I'm sure you are very interested in what has happened between Taiwan and the Chinese mainland in the last year. When I came here last year for the dinner, we had not concluded the ECFA with the Chinese mainland. Now ECFA has been in effect for almost half a year, and the tariff concessions began at the beginning of the year. It's quite clear that our trade with the mainland will increase. But at the same time, our trade with the United States, with the European Union, with ASEAN countries, also went up as a result. Actually, the percentage of increase in places outside mainland China grew more. This is exactly what we would like to see. In other words, our trade relations with the mainland will only serve as a stimulant for our effort to diversify our export markets. And so far, we have done a pretty good job. And, actually, the institutionalization of trade and investment relations with the mainland is a very important step to promote peace and prosperity in this part of the world. So we will continue to negotiate an investment protection agreement with the mainland, which is in the last stages of negotiation.
And we also want to negotiate a dispute settlement agreement with the mainland. When the Japanese earthquake, tsunami, and nuclear incident took place, that reminded us that in the next decade or so we will see the construction of more than six nuclear reactors just across the Taiwan Strait, at a distance of 200 to 600 kilometers from Taiwan. So, no matter how safe our nuclear reactors are, if theirs are not so safe, we will still be in trouble. That is why we have to negotiate with the mainland to have a nuclear safety agreement, which is now also included in our agenda of negotiation with the Chinese mainland.
Just about a week ago, the European Parliament adopted a resolution to support Taiwan's policy to seek observer status with the International Civil Aviation Organization, and for other Taiwanese efforts to participate in the international community. This is something that we appreciate really very, very much. From the very beginning three years ago, when I started to think about improving relations with the mainland, the idea in my mind was a virtuous cycle which may be created as a result of improvement of relations with the Chinese mainland. By "virtuous cycle" (良性循環), I mean, when we improve relations with the mainland, the mainland will be less restrictive as far as our international participation is concerned. And when we are able to participate in international organizations, and to expand our participation, I think people will have more interest and confidence in expanding relations with the Chinese mainland. This is exactly what happened in the last three years. On the one hand, we signed 15 agreements with the mainland — actually institutionalized our relations with the mainland. On the other hand, we were able to attend the World Health Assembly two years ago after a departure of 38 years. And then we did it again last year, and this year we were also in Geneva attending the conference.
In addition to that, we were able to conclude, or to join, the Agreement on Government Procurement (GPA), which after we joined the World Trade Organization we were unable to join at the same time. We are now able to participate in bidding on the government procurement projects of 40 countries around the world as a result of being a party to the GPA. This is what I call a "virtuous cycle." So by doing that, Taiwan has better prospects for its international participation, which is very important for Taiwan's survival. The European Union, in its May 11th resolution, said that they strongly support the signing of an EU-Taiwan economic cooperation agreement—an FTA-type or similar type of economic cooperation, either trade enhancement measures or other forms of economic cooperation. This is very much welcome by the government here because South Korea, which is a major competitor of ours, already has one with the EU. South Korea also has an FTA with the United States. We were actually left behind in the last almost 10 years. So when I initiated the idea to sign the ECFA with the Chinese mainland, I kept telling everybody, "Listen, we were left in the cold. Everybody else in Asia is gaining by signing FTAs. Altogether, they have signed 58. The countries in Asia which had not signed an FTA are only two. One is called North Korea. The other is Taiwan. That is something unbearable to us.
As you know, our trade volume last year was US$526 billion, and North Korea has a trade volume not even exceeding US$5 billion, so Taiwan really doesn’t belong in the same category as North Korea. So we had to try very hard to break the isolation and the potential marginalization of Taiwan, and we made it. Actually, barely two months after we signed the ECFA agreement with the mainland, Singapore said they are willing to negotiate a trade cooperation agreement with us, and we are negotiating that now. In addition to Singapore, other countries in Southeast Asia and South Asia also expressed an interest, because the logic is so simple—when Beijing is willing to improve relations with Taiwan, these countries said, "Why couldn't we?" And actually, this is something that will benefit everybody. It is basic economic common sense that FTAs create trade, and that is very beneficial to all countries involved.
So this is what we will be doing in the future, and according to the research results of some European think tanks, like the European Centre for International Political Economy, it is an excellent idea for the European Union and Taiwan to sign an FTA or similar arrangement so that Europe would benefit and would be better equipped to explore the Asian market in such sectors as ICT, automobiles, pharmaceuticals, telecommunications, finance, green energy, transportation, and environmental services. This is exactly what I had in mind. As a matter of fact, in the year 1992, I had an opportunity to deliver a speech in Munich, Germany. At the time, I was driving at the idea that European companies could enter into strategic alliances with Taiwanese companies and jointly explore the Chinese mainland market. Now that we have ECFA and you can set up your regional headquarters in Taiwan, ECFA will make the effort much easier.
I just talked to the Japanese economist Kenichi Ohmae (大前研一), and he said that in Japan many people understand, if they go to the mainland market alone, their chance of success is 68%, but if they go with a Taiwanese partner, the success rate could go as high as 78% because, after all, we speak the same language. We understand the customs, and we've been there for quite a while. So I think this is a golden opportunity for European companies to increase their investments in Taiwan, and to explore the possibility of further business models, or taking advantage of ECFA. And I want to assure you that in the future, the role of the Republic of China will be five-fold.
First of all, we want to be a peacemaker. Secondly, we want to be a provider of humanitarian assistance. Our donations after the Japanese tsunami and nuclear accident are a good example. As of yesterday, the number has reached US$200 million. And, number three, we want to be a promoter of international cultural exchange. Number four, we want to be a creator of business opportunities and new technologies. And, number five, we want to be a standard-bearer of Chinese culture in the international community. If we do that, we will create a win-win-win situation for Taiwan, the Chinese mainland, and Europe. This is something that we would like to have your support and cooperation on, so that we can really break new ground in this part of the world. I would like to take advantage of today's gathering, not only to say "happy birthday" to the European Union, but also to seize a golden opportunity for Taiwan, the European Union, and mainland China to work together. I think that is probably the best way to consolidate regional peace and stability. Thank you very much.
【Source: Office of the President】