INTERVIEW/Trade office in Taipei making major advances: Lithuanian vice minister

By Chung Yu-chen, CNA staff reporter

Economic relations between Lithuania and Taiwan have taken significant strides and picked up momentum in the year since Lithuania opened a trade office in Taiwan as part of its economic diversification strategy, a Lithuanian official said recently.

With the office set to mark its one-year anniversary, CNA spoke with Karolis Žemaitis, Lithuania's vice minister of economy and innovation, to see what contributions the office has made so far and what its priorities are as 2024 approaches.

According to Žemaitis, major progress has been made on collaboration on semiconductors and lasers.

"When it comes to semiconductor cooperation, I would highlight the Taiwanese capital investment announcement to Lithuanian companies," Žemaitis said, referring to an agreement between Taiwan's Industrial Technology Research Institute (ITRI) and Lithuanian semiconductor company Teltonika in January 2023.

Under the agreement, Taiwan will help the Lithuanian technology company build an experimental 8-inch semiconductor wafer production line, according to Taiwan's government, thereby laying the foundation for semiconductor development in Lithuania.

"This is the first time that Taiwan and Lithuania had this kind of agreement. I imagine this is a big step forward also for Lithuanian semiconductor development, and we are very excited about it," the 30-year-old official said.

Another step forward, he said, was the Ultrafast Laser Technology Research and Innovation Center in southern Taiwan, which was established jointly in September by Taiwan and Lithuania, a global leader in laser technology.

Despite these advances, however, "I would always want to do more," Žemaitis said, in part because of the expectations of Lithuanian society.

With a population of about 2.8 million, Lithuania has experienced rapid development over the last 30 years, creating high expectations within society for quick results, in contrast with Asian cultures that are more "long term," Žemaitis said.

One possible source of momentum is a US$200 million investment fund set up by Taiwan in January 2021 specifically for ventures in Central and Eastern Europe. A partial focus of the fund is to prioritize applications that bring mutual benefits to Taiwan and Lithuania.

According to the National Development Fund (NDF), which is responsible for the project, five investment projects (two in Lithuania, two in Slovakia, and one in Slovenia) worth approximately NT$653 million (US$20.1 million) have been approved under the fund to date.

The projects in Lithuania involve companies specializing in computational precision and laser technology.

Also in January 2021, Taiwan further initiated a US$1 billion credit program to support collaborative projects between Taiwanese companies and firms in Lithuania and neighboring countries.

According to the Cabinet-level National Development Council, Solitek, a Lithuanian solar photovoltaic manufacturer, has received 8 million euros (US$8.46 million) in funding through this program, and three Taiwanese companies have benefited as well.

How the investment fund came about goes to the heart of why Lithuania has pushed for closer economic ties with Taiwan and many other countries in Asia.

It came into being after China launched a series of punitive measures against the Baltic country for allowing Taiwan to open a representative office in Vilnius in 2021 that used the word "Taiwanese" in its name.

China strongly opposes any actions or optics that imply that Taiwan is a sovereign country, and its retaliatory moves, including blocking Lithuanian exports to China, derailed what appeared to be flourishing bilateral trade ties in certain areas.

Nonetheless, Lithuania stood firm on its stance, and the Lithuanian trade office in Taipei opened its doors on Nov. 7, 2022, with Paulius Lukauskas, formerly an adviser to Prime Minister Ingrida Šimonytė, appointed as its head.

When asked if Beijing's intense reaction caught Lithuania off guard, Žemaitis said, "any sort of economic pressure from any country is not something we are very excited about."

But the economic pressure was not new for Lithuania, he said, as the Baltic country is used to being pressured economically by other countries, including Russia.

"Can Russia pressure Lithuania energy-wise? No, it cannot. Why? Because Lithuania is completely energy independent from Russia.

"Nevertheless, I think Lithuania can decide what kind of economic relationships it is developing with whom. And it's not up to other countries to decide for Lithuania," Žemaitis said, a similar line to that of many Lithuanian politicians who have addressed the issue.

"It's not up to China to decide for Lithuania, just like it's not for Lithuania to decide for China. I think that's how the international rule of order is based," he said.

Earlier this year, the Dispute Settlement Body of the World Trade Organization (WTO) decided to establish a panel examining the measures Beijing took that affected trade in goods and services with Lithuania.

"We will see how this process [goes]," the vice minister said, adding that the best way to mitigate the pressure is through diversification, especially in Asia, where Žemaitis has been busy since taking office last year.

Lithuania has opened embassies in South Korea, Singapore, and Australia where it did not have embassies before, he said. It has also sought to bolster trade with Asia, especially with like-minded partners such as Japan, Korea, Singapore and Taiwan.

"This is something that we've been much more proactively working on," he said.

When questioned about whether like-minded partners must be democratic countries, Žemaitis said that democracy, along with values such as freedom of speech and human rights, is a crucial consideration for Lithuania in its interactions with diverse economies.

When it comes to Lithuania's strategy in Asia, "we are focusing more on the, as we call them, like-minded democracies with whom we agree in most cases in the international arena, be it the European Union countries, be it NATO, be it OECD and other formats where fundamental rights are respected," Žemaitis said.

He also mentioned he had no plans to visit China, saying it was not among the priority countries for Lithuania's economic development.

"We have limited time, we have limited resources, and we have to focus these resources on countries that are among our priorities," he said.

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