'We are concerned that there were political concessions made by the government to get China to talk about this issue and that Taiwan could fall into the 'one-China' trap,' said Tsai Ing-wen, head of the pro-independence Democratic Progressive Party (DPP).

'Taiwan is allowed to sign an agreement of this kind with China but not with other major trade partners. China's strategy will leave Taiwan with no options, it's part of their political agenda,' she told a press conference.

Ms Tsai added the timing of the pact - similar in scope to a free trade agreement - was not right because it could put pressure on Taiwanese jobs.

The government of President Ma Ying-jeou is eyeing the trade agreement with Beijing to encourage freer flow of goods and personnel across the Strait and to help the island tackle recession.

Taiwan's economy, Asia's sixth largest, showed a record 8.36 per cent contraction in the fourth quarter of 2008, while this year's gross domestic product is expected to shrink 2.97 per cent.

Economic woes have stepped up pressure on Mr Ma, who won a landslide victory last March on a platform of boosting the flagging economy, vowing to achieve six percent annual growth, and bolstering ties with China.

His government has already unveiled an economic stimulus package worth US$15 billion (S$22.6 billion) in business incentives, infrastructure projects and shopping vouchers.

Relations between Taiwan and Beijing - which still considers the island a part of its territory, 60 years after the two sides split - have improved dramatically since Ma took office, with the recent launch of direct daily flights and shipping services. -- AFP