The Maldives government has started technical discussions with China regarding the feasibility of a free trade agreement between the two nations.
At a meeting held at the Ministry of Economic Development today (February 4), a technical committee consisting of experts from both countries engaged in discussions over what would be the Maldives’ first free trade agreement with a single country.
Haveeru reported economic development minister Mohamed Saeed as saying that the committee is tasked with determining the feasibility of such an agreement and identifying any potential difficulties.
“The truth is we want to set up the free trade agreement as soon as possible,” he told the paper.
He said the two main reasons in pursuing a free trade agreement with China were duty-free exports of fisheries products, and an increase in air travel between the countries which will bring more Chinese tourists to the Maldives.
Fish accounts for 98 percent of the Maldives’ exports, while Chinese tourists make up 30 percent of all visitors to the Indian Ocean nation.
Speaking with Minivan News today, former Economic Development Minister Mahmoud Razee said that free-trade is most advantageous when taken up by nations at the same level of development, with a demand for goods exported by both countries.
“Maldivian fisheries products are mainly imported by European countries, Japan, and America. The question is whether China imports enough fisheries products from the Maldives,” he said.
Razee also said noted that there was a potential risk of China ‘dumping’ low quality and undesirable goods into the Maldivian economy.
Minister at the President’s Office Mohamed Shareef has previously said that free trade talks were initiated by the Maldives, and that China has taken a flexible approach with regards to the final agreement.
Last year, President Abdulla Yameen declared a foreign policy shift to the East, slamming the European Union after regulations resulted in the non-renewal of the Maldives’ preferential trade partner status.
The government’s decision to engage in free-trade with China was revealed in December 2014 after the cabinet’s economic council visited China to hold discussions on Chinese-assisted projects in the Maldives.
“The biggest advantage of the free trade will go towards fishermen. With free trade, the 12 percent export duty will be gone, thus the 12 percent becomes profit for fishermen,” said fisheries minister Dr Mohamed Shainee at the time.
The cabinet members’ visit to Beijing in December also saw the Maldives officially sign up to the Maritime Silk Road project, which will provide a trade route between China and east coast of Africa and the Mediterranean.
China currently has free trade agreements with eight countries – including Pakistan, Costa Rica, Peru, and New Zealand – as well as a regional agreement with the Association of South-East Asian Nations.
The Maldives is currently a member of the South Asian Free Trade Area, along with its fellow SAARC nations.
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