China calls for US-led trade pact with Taiwan

China’s foreign ministry on Friday called for a US-backed trade pact between Taiwan and the mainland, a day after President Donald Trump announced he would lift economic sanctions against the communist-ruled island.

The Chinese foreign ministry statement came as Taiwan, which has been the subject of a diplomatic dispute with Beijing for decades, said it would be willing to talk about the deal.

Beijing has consistently said it will never accept Taiwan as a state.

Taiwanese President Tsai Ing-wen has also warned of “tough consequences” if Washington follows through with a trade deal with Beijing.

Taiwan’s foreign minister said the Taiwan Economic Relations Commission (TEOC) had agreed to form a new body that would be responsible for the negotiation of a bilateral trade deal between Taiwan, the US and other nations.

It was to be headed by a senior member from China.

Taipei and Washington have a long history of trade disputes over Taiwan, and a 1979 peace treaty that ended decades of Chinese-backed occupation of the island is the basis for the current bilateral trade pact.

The US says it wants a deal that would protect Taiwanese interests while also opening up Taiwan to greater economic and trade links with the mainland.

The Trump administration announced the trade deal, which would bring jobs and other benefits to the US, in a series of tweets Friday.

Trump has said he has been considering the Taiwan trade deal since January.

But his administration has repeatedly rejected calls for it to be part of a broader agreement that would have China, a country that regards Taiwan as part of its territory, and other countries in the region, including the Philippines and Vietnam, as members.

The announcement of the trade agreement comes as Beijing has been pressuring the US to reverse its decision to lift sanctions on Taiwan, saying it was seeking to use the economic crisis to strengthen its grip on Taiwan.