The United States and Taiwan on Thursday reached an agreement on the first part of a 21st Century trade pact, the US Trade Representative’s office said.

The agreement, which covers customs and trade facilitation, regulatory practices, and small business, is the first step in a broader trade agreement between the two sides.

“This agreement is a significant milestone in our efforts to deepen our economic relationship with Taiwan,” US Trade Representative Katherine Tai said in a statement. 

“It will create new opportunities for American businesses to invest and grow in Taiwan, and it will help to ensure that our economies are more resilient and competitive in the 21st century.”

It is expected to be signed by the two sides in the coming weeks.

Taiwan’s government welcomed the agreement, saying it would “further strengthen economic and trade ties between Taiwan and the United States.”

“This agreement is a testament to the strong and enduring partnership between Taiwan and the United States,” Taiwan’s Ministry of Foreign Affairs said in a statement. 

“We look forward to working with the United States to implement this agreement and to further deepen our economic and trade cooperation.”

The agreement is the latest development of the growing economic and political ties between the United States and Taiwan. The two sides have been working to strengthen their relationship in recent years, as they have become increasingly concerned about China’s growing military and economic power.

The agreement will likely be seen as a rebuke to China, which has long opposed any official ties between the United States and Taiwan. China considers Taiwan a breakaway province, and it has threatened to use force if Taiwan declares independence.

However, it is likely to have a positive impact on the economies of both sides.