US inks modest trade deal with Taiwan in show of support in the face of pressure from China

The United States has reached a modest trade agreement with Taiwan, signaling Washington’s support for the island democracy as it comes under increasing pressure from China.

The first agreement under the U.S.-Taiwan Initiative on 21st Century Trade is expected to set the stage for a bigger deal later — “a robust and high-standard trade agreement,’’ U.S. Trade Representative Katherine Tai said.

The initiative announced Thursday will, among other things, cut red tape at customs and reduce waiting times for U.S. businesses bringing products to Taiwan. It also commits the U.S. and Taiwan to adopting measures to combat bribery and other forms of corruption and to encouraging more trade involving small- and medium-sized businesses.

The agreement does not require approval from the U.S. Congress. But there is broad bipartisan support in Washington for Taiwan, an island of 23 million that split from China when the communists took over the mainland in 1949 and has since developed into a prosperous democracy. Beijing considers Taiwan a renegade Chinese province and has long demanded that it reunify.

Relations between the United States and China – the world’s two biggest economies – have deteriorated in recent years. The United States accuses China of predatory economic practices and has criticized Beijing’s crackdown on dissent in Hong Kong and Muslim region of Xinjiang and its bullying of neighbors, including Taiwan, over territorial claims.

"Beijing is likely to complain about this announcement, but its words will fall on deaf ears in Washington as negotiations continue'' with Taiwan, said Wendy Cutler, vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.

Taiwan is the world's leading producer of computer chips. The United States last year bought $105 billion worth of goods and services from Taiwan, making it the 10th-biggest source of U.S. imports. American exports to Taiwan came to nearly $55 billion, making it America's 15th-biggest foreign market.