The Free Trade Agreement (FTA) between the Maldives and China will take effect on 1 January, both countries announced on Monday during an online ceremony attended by their trade ministers.
The agreement, originally signed during former President Abdulla Yameen Abdul Gayoom’s visit to China in December 2014, was approved by the Maldives parliament in November 2017. However, the subsequent government expressed reservations and placed the agreement under review.
The agreement marks the first Free Trade Agreement between the Maldives and a foreign nation.
The FTA covers trade in goods, services, and investment. It offers zero-tariff access for nearly 96% of products traded between the two countries. The Maldives’ key export—seafood products—will enjoy duty-free access to the Chinese market under the agreement, while China’s industrial and agricultural exports, including flowers, plants, and vegetables, will benefit from it.
Speaking at the online ceremony to announce the implementation of the FTA, Chinese Commerce Minister Wang Wentao highlighted the longstanding close ties between China and the Maldives, emphasising that the economic relations between the two countries have strengthened significantly in recent years. He noted that both nations have completed the necessary preparations for the agreement’s implementation. The agreement would bring numerous benefits, including the exemption of duties on fish exports from the Maldives to China, as well as easier imports of Chinese electronics and furniture into the Maldives, the minister said.
Minister Wang expressed hope that the agreement would elevate China-Maldives relations to new heights.
In his remarks at the ceremony, Minister of Economic Development and Trade Mohamed Saeed said that the FTA would bring significant benefits to the private sector, local businesses, and the national economy. It would also provide opportunities for Maldivian products to enter the Chinese market and help create employment opportunities, he added.
The government has previously said that the agreement is expected to increase trade between the two countries to US$1 billion, up from the current US$700 million in annual trade.
The Maldives has agreed to sign a free trade agreement with India and is in talks with the UK regarding a similar agreement. In addition, a preferential trade agreement has been signed with Turkey, which is set to take effect in the first quarter of next year.