TAIPEI (Reuters) – Taiwan is seeking other trade agreements with the European Union given a long-sought investment deal is a “long shot”, a senior government official said on Thursday, as the bloc courts Taiwanese chip firms to build factories on the continent.

Taiwan has repeatedly called for progress on a Bilateral Investment Agreement (BIA) with the EU. The EU included Taiwan on its list of trade partners for a potential bilateral investment agreement in 2015, but has not held talks with Taiwan on the issue since.

The EU has been courting Taiwan, a major chip producer, as a “like-minded” partner it would like to work with under the European Chips Act to encourage more semiconductor production in Europe and lessen dependence on Asia, despite the lack of formal ties with the Chinese-claimed island.

Speaking at a Taiwan-EU chip event on the sidelines of the SEMICON Taiwan exhibition, Taiwan Deputy Economy Minister Chen Chern-chyi said they wanted to work with fellow democracies but there needed to be a “systemic environment” for companies.

“In that regard of course we have long been promoting a bilateral investment agreement between the EU and Taiwan. However, we know that’s a long shot,” said Chen, who visited the European Commission in June.

“In the middle term we look forward to some trade agreement, some trade arrangement that we can show to the companies that there is an established system to protect you and to promote mutual investment and to work together to form a very resilient supply chain.”

Taiwan Semiconductor Manufacturing Corp, the world’s largest contract chipmaker, announced last month a 3.5 billion euro ($3.75 billion) investment in Germany for the company’s first factory in Europe.

A BIA would be politically significant for Taiwan given its diplomatic isolation and general exclusion from most global bodies and agreements, though it is a World Trade Organisation member.

Filip Grzegorzewski, the EU’s de facto ambassador to Taiwan, noted that President Tsai Ing-wen had attended the previous three Taiwan-EU investment forums with senior ministers and encouraged Taiwanese investment in Europe.

“That’s an extremely powerful signal that they are sending to their own companies, their own investors, to take a favourable look at Europe,” he said, sitting next to Chen.

($1 = 0.9326 euros)

(Reporting by Ben Blanchard. Editing by Gerry Doyle)

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