Foreign Affairs
The Rising Trend: Estonia’s Infatuation with Taiwan and its Implications

Estonia has allowed Taiwan to open an unofficial, non-diplomatic economic and cultural representative office in Tallinn, following in the footsteps of countries worldwide with unofficial ties with Taiwan. This move follows Lithuania’s decision to open a representative office in Lithuania, which opened in November 2021, and is called the “Taiwanese Representative Office in Lithuania.” The Lithuanian office, which opened in November 2021, was called the “Taiwanese Representative Office in Lithuania,” which balks the traditional use of “Taipei” over “Taiwan” to avoid Beijing’s complaints and any alleged notions of formal relations.

The opening of the Vilnius office in Lithuania led to a downgraded bilateral relationship with China, the expulsion of the Lithuanian ambassador from Beijing, and the removal of Lithuania as a “country of origin” for Chinese trade. The World Trade Organization complaint against China, supported by the US and EU, was based on Beijing’s complaint that the office provided legitimacy to Taiwan. However, Estonia’s decision to allow Taiwan to choose an office in Estonia is a significant step towards fostering economic relations between the two countries.

Beijing is concerned about the expansion of Taiwan’s international space, particularly with the name of an office in Lithuania. The opening of a new de facto embassy would be seen as offensive to Beijing. As more countries build ties with Taiwan, leaders can assess diplomacy risks and benefits. A possible office in Estonia would allow Taipei to interact with Estonia, expand bilateral trade, and demonstrate international partnership.

PRC Foreign Ministry Spokesperson Wang Wenbin made clear the Lithuania office name issue was fake and called for Estonia to change course, making no mention of the prospective name of a future office. Estonian Foreign Minister Margus Tsahkna hinted that the office would be “representation—economical representation—of Taipei, not Taiwan,” which should appease Beijing’s concerns.

Beijing plans to increase pressure on Estonia, including threatening to leave the country if the office opens. The true test will come once details about the office are released, including Beijing’s intentions to punish Estonia and the European Union and the US’s support for Tallinn. Taiwan President Tsai Ing-wen has opened a $1 billion fund for joint Taiwanese-Lithuanian projects and $200 million for Taiwanese investment in Lithuania’s industrial sector.

The Biden administration announced a $600 million credit line, and the collective West closed ranks, supporting Lithuania for the decision and warning Beijing against further reprisals. If Beijing treats Tallinn similarly to Vilnius, it will be clear that Beijing will ignore international warnings to serve its own goals. Estonia must be decisive in its decision, as divisions within Vilnius have prolonged Beijing’s pressure on politicians. Estonia’s Foreign Minister Tsahkna is leading, but the coalition government must follow the same line.

If Estonia does not back down, the country could benefit from new Taiwanese-Estonian projects. Since the Taiwanese and Lithuanian offices opened, Taipei has agreed to assist in building an 8-inch semiconductor wafer production line in Lithuania and open a joint research center on laser technology in Taiwan. Taiwan’s National Development Fund funded two projects in Lithuania, while Solitek received $8.5 million from the $1 billion fund, accelerating progress between Taipei and Vilnius.

Tallinn is set to open a Taiwan office and participate in the National Defense Fund (NDF), potentially attracting new investments and participating in the cross-Strait competition. However, the benefits will depend on Beijing’s response to complaints and the potential for retaliation. Tallinn’s office opening will likely occur under a new leader in Taipei, and the implementation of these promises will be up to her successor.

The move comes after Lithuania defied China’s pressure to reverse course, and Beijing is now in a situation where another Baltic country has allowed Taiwan to expand its international space, expanding the threat landscape in its push to eliminate Taiwan’s presence abroad. As these seemingly small countries defy China and are backed by large countries, the harder it will be for Beijing to prevent the spread of Taiwan fever.

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