Plans to negotiate a free trade agreement with Taiwan were put on the backburner several years ago so as not to offend mainland China, sources have revealed.

And while such a plan remains government policy, it is still on hold as the government has its hands full doing deals with Hong Kong, Indonesia, the European Union, the Pacific Alliance and trying to revive the Trans-Pacific Partnership.

The issue resurfaced last week when Liberal Democratic Party senator David Leyonhjelm asked the government what had happened to the Taiwan FTA after then-trade minster Andrew Robb "advised me that such an agreement was on the agenda".

Senator Leyonhjelm said he was concerned at Australia again kowtowing to Beijing. "Taiwan is a free and democratic country, subject to the rule of law. China is none of these." Jessica Hromas

"During the period that Andrew Robb was trade minister, I travelled to Taiwan and was informed by their government representatives that a FTA was on the Australian government's agenda," Senator Leyonhjelm said.

"A month or two after I returned, I confirmed this with Robb's staff. The delay, I was informed, was attributable to the fact that the Department [of Foreign Affairs and Trade] had limited resources and other FTAs had higher priority. Nonetheless, I was assured there would be an agreement in due course."