Total trade volume between the EU and Taiwan contracted 9 percent last year and European exports to Taiwan fell for the first time since 2001 because of the global economic downturn, the Taipei-based European Economic and Trade Office (EETO) said in a report.
Based on general trade barometers, the 9 percent decline was significant, said Guy Ledoux, head of the EETO.
The World Bank said the volume of global trade rose 3 percent in last year and EU trade with Japan decreased by 4 percent and remained unchanged with South Korea.
“While the economic downturn is the main explanation for this downturn, it is more difficult to understand why EU-Taiwan trade has been more affected than EU trade with other partners,” Ledoux said.
He said the steeper decline could be related to the type of products traded between the EU and Taiwan, which may have been more sensitive to the economic downturn.
The 2009 EU-Taiwan trade and investment fact file on 2008 EU-Taiwan trade also showed that Taiwan fell from No. 13 to No. 21 among the EU’s trading partners, while the EU remained Taiwan’s fourth largest trading partner.
“The drop in ranking mainly results from the jump by oil and gas exporting countries — Algeria, Ukraine and Libya — on the back of high oil prices in the first part of 2008,” the report said.
“This will come back to normal next year, ” Ledoux said.
The structure of trade showed the EU remained a key industrial partner for Taiwan, with the most imported products being office and telecommunications equipment and the biggest exports being power and non-electrical machinery and chemicals.
Germany remained Taiwan’s largest trading partner in the EU because of its leading position in machine tools and other mechanical equipment.
The report said, however, that the EU had not exploited the full potential of the Taiwanese market.
“Although Taiwan in 2008 took steps on the way to joining the World Trade Organization Government Procurement Agreement, there are still a number of market access issues. European businesses, for their part, do not sufficiently explore the potential of the Taiwanese market,” the report said.
As to investment flows, the EU was no longer the biggest holder of FDI in Taiwan. With its 26.35 percent share of total FDI in Taiwan at the end of last year, the EU trailed behind the US’ 35.23 percent share of FDI holdings.
“This is mainly due to the lack of fresh foreign capital and general caution of investors and does not signify shifting importance in the bilateral trade relationship,” the report said.
Noting that the EU was only the 10th leading destination for Taiwan’s outward investment, the report said that Taiwan was not fully using its opportunities to invest in the large European market, which deserves more attention from the country.
In terms of people-to-people exchanges, the report said the number of students, businesses and tourists from Europe had increased, but the number of visas requested from Taiwan to the EU fell sharply last year by 23 percent year on year, with only 218,411 issued.
The report attributed the sharp drop to a strong euro and the economic crisis that hit the world in the second half of last year.
On the other hand, the report said a significant increase was expected in the number of Taiwanese nationals visiting the UK, which lifted the visa requirement for Taiwanese tourists on March 3.
The number of Taiwanese students in the UK and Spain dropped by 18 percent compared with 2007.
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