Economic Integration between the EU and Taiwan: Analyzing the Changes in Trade and Investment Relations after the Initiation of EU’s Trade for All Strategy

Abstract

The European Union (EU) has been Taiwan’s largest source of foreign investment, and it is Taiwan’s fourth-largest trading partner in 2024. EU-Taiwan economic relations have grown consistently and significantly after the 2015 “Trade for all” strategy initiated by the European Commission. The average increase rate of Taiwan’s investment in the EU reached 807.62%; bilateral trade improved by 40.35% after 2015. The t-test and regression analysis results show that the increase in EU-Taiwan trade and investment is statistically significant, indicating positive effects of the “Trade for All” strategy on promoting EU-Taiwan economic integration. This research analyzes EU-Taiwan economic integration by conducting an international political economy analysis to identify the political and economic benefits gained by both the EU and Taiwan and pinpoint factors affecting the prospect of EU-Taiwan economic agreements. Variables restraining the institutionalization of EU-Taiwan economic relations include the China factor, the structural constraint of the EU, and the acceptance of EU norms in Taiwan, precisely the death penalty issue.