Korea and Taiwan have begun talks to sign their first economic cooperation pact since Seoul severed ties with Taipei in 1992 after forging diplomatic ties with mainland China.

Trade officials from Korea and Taiwan met in Taipei at the end of June, according to trade ministry sources here. The talks began at the request of Taiwan.

Mindful of Beijing's wariness of warming ties between Korea and Taiwan, Seoul kept the talks under wraps. The second round will be held in Seoul in October of this year.

The agreement will will grant investors from both sides guarantees of their assets and equal treatment as local investors.

Taiwan is seeking to boost its exports after Korea forged free trade agreements with the EU and U.S. If Taiwanese companies build factories in Korea, the products manufactured here could enjoy the benefits of Korea's FTAs. Seoul for its part feels that increased Taiwanese investments would create jobs.