The United States and Taiwan have announced the start of trade talks amid heightened tensions with China over the status of the self-ruled island.

Washington and Taipei said on Thursday they agreed to move forward with the US-Taiwan Initiative on 21st-Century Trade, which seeks to boost trade and advance common standards in areas such as anti-corruption policy and environmental regulations.

The US Trade Representative said the two sides had reached a consensus on a mandate for negotiations, with the first round of talks expected to take place within two to three months.

“We plan to pursue an ambitious schedule for achieving high-standard commitments and meaningful outcomes covering the eleven trade areas in the negotiating mandate that will help build a fairer, more prosperous and resilient 21st century economy,” Deputy United States Trade Representative Sarah Bianchi said in a statement.

The announcement comes after US President Joe Biden opted to exclude the democratic island from the Indo-Pacific Economic Framework for Prosperity (IPEF). The Asia-focused economic initiative is widely seen as aimed at countering China’s growing influence as a rising military power and the world’s second-largest economy. China is the biggest trading partner of most of the region’s major economies, including Taiwan.

The trade talks are likely to draw an angry response from China, which responded to US House of Representatives Speaker Nancy Pelosi’s recent visit to Taiwan with unprecedented military exercises and trade sanctions against the island.

Beijing considers Taiwan a province that must be “reunified” with the mainland, by force if necessary, and has accused the US of trying to overturn decades of diplomatic policy concerning the island’s status.

The Biden administration has said that its adherence to the “One China” policy has not changed, but it opposes any attempt to change the status quo by force.

Under the Nixon-era policy, Washington does not recognise Taiwan as an independent country or China’s territory, and only acknowledges – without endorsing – Beijing’s claim to the island. The US is also obliged to help Taiwan defend itself under its Taiwan Relations Act of 1979.

•PHOTO: The United States and Taiwan have announced the start of trade talks amid tensions with China over the status of the island [File: Hwa Cheng/Bloomberg]

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