Taiwan vows talks as EU requests WTO dispute settlement consultations

Taipei, July 27 (CNA) Taiwan has said that it will continue talks with the European Union following the bloc's request for dispute settlement consultations regarding the country's offshore wind policy.

The European Commission's Directorate General for Trade issued a press statement on Friday announcing that the EU has officially requested dispute settlement consultations at the World Trade Organization (WTO) concerning Taiwan's requirement that wind power developers use a certain level of locally manufactured components in their projects.

"In the view of the EU, Taiwan's local content eligibility and award criteria in energy capacity allocation auctions for offshore wind farms are inconsistent with its WTO commitment to not discriminate against imported goods and services," the statement said.

According to the European Commission DG for Trade, dispute settlement consultations are the first step in WTO dispute settlement proceedings.

In response, Taiwan's Ministry of Economic Affairs explained in a press release on the same day that a WTO member can request dispute settlement consultations over the other side's trade policies following bilateral talks.

The ministry said it has 10 days to reply to the request, per WTO rules.

It did not specify whether it would agree to the consultations, only that the ministry would continue working with the Office of Trade Negotiations (OTN) under the Executive Yuan, and continue discussions with the EU.

"Our foreign mission has been tasked with discussing concerns over the policy with the EU," the ministry said.

However, it pointed out that Minister Kuo Jyh-huei (郭智輝) had already revealed earlier that Taiwan would relax its "local content criteria" for wind farm projects.

An economic official told CNA that Taiwan's "local content criteria" was not trade protectionism.

Rather, the official said, it is necessary to consider Taiwan's geopolitical situation because national and energy security needs to be considered and the "red supply chain" has to be avoided.

The "red supply chain" refers to one featuring Chinese companies.

Other countries, including Japan and Canada, had similar regulations when their wind power industry was emerging and adjusted measures as they went along, the official said, adding that Taiwan would likely relax requirements.

The official said imports would be allowed, following reviews, if developers found that the cost of domestically made products exceeded foreign alternatives by "a certain percentage," or if the production capacity of domestic manufacturers was restricted.

"If [the dispute settlement consultations] do not lead to a satisfactory solution within 60 days, the EU can request the WTO to set up a panel to rule on the matter," the European Commission DG for Trade said.

As the EU and Taiwan have a "close and productive relationship," the bloc said it hopes a mutually satisfactory solution can be found during the consultations.