Maldives-China FTA to be in effect in 2025, 91 percent goods to be duty-free

Minister of Economic Development and Trade Mohamed Saeed has said that the Free Trade Agreement signed between Maldives and China will be in effect from January, 2025.

In a press conference held at the President's Office, Saeed said that the discussions with the government of China are nearing completion, with the FTA set to be in effect from January 1.

The Minister said that the FTA, along with the agreement with China's Central Bank to conduct current account transactions in local currency, would present benefits to Maldivian businesses and the economy.

One of these benefits, the Minister said, is that 91 percent of goods brought in from China would be exempt from duty charges. He said that it will benefit local businesses when goods can be bought duty-free, and with Maldivian Rufiya.

"At present, we import goods worth between USD 700 million and 1 billion. With the currency settlement agreement, this USD 700 million will not have to be used to bring in these goods," Saeed said, adding that this would also assist in addressing the dollar shortage in the country.

In addition to the goods brought in from China, Saeed said that fish, which is a large part of exports from Maldives, can be exported at zero percent duty. This includes 296 fish products.

Saeed said that when duty does not have to be paid on fish exports, prawns and such seafood varieties can be brought to Maldives from other countries, and be re-exported to China at zero percent duty in the form of value added products.

In response to a question posed by a journalist about the threats for local business that cannot compete with major businesses in China, Saeed assured that this protection would be presented to Maldivian businesses as per the discussions held.

He maintains that although Maldivian travel agents can work within a free sone in China's Shanghai, Beijing and Tianjin, Chinese agents will not be offered the same opportunity in the Maldives.

The Free Trade Agreement between China and Maldives was signed during former President Abdulla Yameen's visit to China on December 18, 2014. The agreement was passed in parliament on November 29, 2017, at which time the majority was held by the coalition between Progressive Party of Maldives and Maldives Development Alliance. Following this, the previous government parked the agreement, stating that the terms are being reviewed.

In July, President Dr Mohamed Muizzu announced that the agreement would be in effect by the end of September.