Taipei: The first agreement under a new trade initiative between Taiwan and the United States will take effect on Tuesday, both governments confirmed, with Taipei hoping this marks a step toward a future free trade deal.

Taiwan was initially excluded from the U.S.-led Indo-Pacific Economic Framework, which was launched in 2022 to counter Beijing's growing influence in the region. In response, the U.S. established the U.S.-Taiwan Initiative on 21st Century Trade, complementing existing agreements like the U.S.-Taiwan Economic Prosperity Partnership Dialogue and Technology Trade and Investment Collaboration Framework.

According to U.S. Trade Representative Katherine Tai, the first agreement under the 21st Century Trade Initiative includes measures on anti-corruption, customs administration, trade facilitation, and support for small and medium-sized enterprises. Tai emphasized that this marks a significant step in strengthening economic ties between the U.S. and Taiwan.

Taiwan's Office of Trade Negotiations echoed this sentiment, describing the agreement as a demonstration of the "rock solid partnership" between the two countries. They also highlighted the strategic importance of deepening ties with key trade partners amid global uncertainty.

Discussions for a second agreement, focusing on labor, the environment, and agriculture, are still ongoing. Taiwanese officials have expressed hopes of securing a free trade agreement with the U.S., although such talks have been paused by the U.S. government.

Despite the absence of formal diplomatic ties, the U.S. remains Taiwan's primary international ally and arms supplier, much to China's displeasure, as it opposes any official engagements between Taipei and Washington. Taiwan, however, rejects Beijing’s sovereignty claims.