SINGAPORE -- Singapore and China's Taiwan signed a key free trade agreement here Thursday.

The Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, on Economic Partnership covers areas such as trade in goods, trade in services, investment, dispute settlement, e-commerce, government procurement and customs procedures.

It is one of the first such agreements for Taiwan.

Calvin Eu, Singapore's trade representative in Taiwan, said he was looking forward to the early ratification of the agreement by the authorities of Taiwan.

The agreement will eliminate tariffs for 97 percent of Singapore's exports to Taiwan when it enters into force, and eventually allow all exports to enter tariff-free.

Meanwhile, the tariffs will be eliminated on all goods originating from Taiwan and exported to Singapore once the agreement is in place.

"With the resources we mobilize in concluding ASTEP, it will enable us to rebuild our capability to expedite our economic integration with the region," said Hsieh Fa-dah, representative of Taiwan in Singapore who signed the agreement with Singapore's trade representative Calvin Eu.

It has taken the two sides around two years to negotiate the terms of the agreement.

Singapore is Taiwan's fifth largest trading partner, while Taiwan is Singapore's eighth largest trading partner. Singapore's Ministry of Trade and Industry said total trade between Singapore and Taiwan stood at S$49.7 billion($40.1 billion) in 2012.