TAIPEI (CNN) — The United States and Taiwan agreed the first stage of a bilateral trade initiative on Thursday, less than a year after negotiations began, in a move that demonstrated the increasingly close relationship between Washington and Taipei.
The new initiative, titled the U.S.-Taiwan Initiative of 21st Century Trade and unveiled in June last year, will be the first official trade agreement between Taiwan and the United States since U.S. President Joe Biden assumed office in 2021.
It covers areas including trade facilitation, regulatory practices, services domestic regulation, anti-corruption and supporting small and medium sized enterprises, a statement from the US Trade Representative (USTR) Office said.
“This accomplishment represents an important step forward in strengthening the U.S.-Taiwan economic relationship,” U.S. Trade Representative Katherine Tai said in the statement.
“It demonstrates how we can work together and advance mutual trade priorities on behalf of our people. We look forward to continuing these negotiations and finalizing a robust and high-standard trade agreement that tackles pressing 21st century economic challenges,” she added.
The IPEF, made up of 14 member states including Japan, Singapore and the Philippines, is not a trade agreement in the traditional sense. It includes one “pillar” related to trade, but has other aims too, including making supply chains more resilient, promoting clean energy and combating corruption.
Kristy Hsu, a director of the Taiwan ASEAN Studies Center at the Chung-Hua Institution of Economic Research, said the U.S.-Taiwan agreement would “create a more efficient and transparent business environment for companies from the two sides.
Taiwan, population around 24 million, is currently the world’s 21st largest economy. It plays a crucial role in global supply chains due to its leading role in producing semiconductor chips, vital components in everything from smartphones to computers.