5 August 2010 Last updated at 03:18 ET

Taiwan and Singapore to hold trade deal talks

China and Taiwan signed their landmark trade deal in June

Taiwan and Singapore have agreed to hold talks on a free trade deal, with negotiations to begin later this year.

The announcement comes weeks after Taiwan signed a major trade deal with China - the first since the two split at the end of the civil war in 1949.

In the past, Taiwan has been unable to sign trade agreements with its other major trading partners because of Chinese opposition.

But officials believe the deal with China signals a shift.

The two sides signed an economic cooperation framework agreement (ECFA) in June after lengthy negotiations.

Correspondents say that, economically, the deal favours Taiwan but that Beijing hopes for political gains in its long-standing unification campaign.

Taiwanese and Singaporean officials said that their trade deal would be negotiated under the World Trade Organisation framework.

Taiwan said it could pave the way for agreements with other regional neighbours.

"Everyone knows Taiwan is an export-led country dependent on its foreign trade," said Foreign Minister Timothy Yang.

"We believe via Singapore we can strengthen our economic and trade ties with the 10 Association of South East Asian Nation members, not to mention a continued focus on South Asia."

In the past Singaporean leaders have said a trade deal with Taiwan depended on the island improving its relationship with China.

Singapore is Taiwan's fifth-largest export market, Taiwan's CNA news agency said.