Flags of Taiwan and U.S. are placed for a meeting in Taipei
Flags of Taiwan and U.S. are placed for a meeting in Taipei, Taiwan March 27, 2018. Reuters

The U.S. and Taiwan reached agreement on the first part of their "21st Century" trade initiative covering customs and trade facilitation, regulatory practices, and small business, the U.S. Trade Representative's office said on Thursday.

After the initial agreement of the U.S.-Taiwan Initiative on 21st Century Trade is signed, negotiations will commence on other trade areas including agriculture, digital trade, labor and environmental standards, state-owned enterprises and non-market policies and practices, USTR said.

U.S. Trade Representative Katherine Tai said in a statement the deal strengthens U.S.-Taiwan relations and demonstrates that they can work together to advance trade priorities for their populations.

"We look forward to continuing these negotiations and finalizing a robust and high-standard trade agreement that tackles 21st Century economic challenges," Tai said.