The US and Taiwan reached an agreement on the first part of their “21st Century” trade initiative, covering customs and border procedures, regulatory practices, and small business, the US Trade Representative’s office said on Thursday (May 18).
After the initial agreement of the US-Taiwan Initiative on 21st Century Trade is signed, negotiations will commence on other, more complicated trade areas including agriculture, digital trade, labor and environmental standards, state-owned enterprises, and non-market policies and practices, USTR said.
US Trade Representative Katherine Tai said in a statement that the deal strengthens US-Taiwan relations and demonstrates they can work together to advance trade priorities for their populations.
“We look forward to continuing these negotiations and finalising a robust and high-standard trade agreement that tackles 21st Century economic challenges,” Tai said.
Taiwan’s Office of Trade Negotiations in a statement called the agreement “historically significant” and said Taiwan aimed to finalise negotiations on all remaining issues by the end of the year.
The pact is not expected to alter goods tariffs, but proponents say it will strengthen economic bonds between the US and Taiwan, open the Chinese-claimed island to more US exports and increase Taiwan’s ability to resist economic coercion from China. Democratically governed Taiwan strongly rejects China’s sovereignty claims.
China has reacted furiously to Taiwan President Tsai Ing-wen’s recent engagements with high-ranking US politicians, including an April meeting with US House of Representatives Speaker Kevin McCarthy. Announcement of the trade pact comes just ahead of planned meetings between China’s commerce minister, Wang Wenta, and USTR Tai and US Commerce Secretary Gina Raimondo.