The Maldives government announced late Sunday that the island nation will sign the free trade agreement with China within the first three months of 2017, which will exempt all taxes from fish and seafood products exported from the Maldives to the Asian giant.
Prior to his departure to Hong Kong for the final round of free trade negotiations with the Chinese government, economic minister Mohamed Saeed stated that both nations have put forward their conditions and are nearly at a deal. He said the fourth round of talks which begins Tuesday will finalise their conditions and proceedings to an official agreement.
According to the minister, the Maldives submitted two main points for the deal. The first is exemption of tax from all food and seafood products exported from the archipelago to China, while the second calls for tax exemption for fish and seafood containing products that are prepared using 30 – 40 percent resources from the Maldives. As an example of the latter, Minister Saeed cited the shrimp brought in from India and Sri Lanka and prepared in the Maldives to be exported to China.
“The reason for all this work is that with the change of the Maldives’ development status to a middle income nation, we don’t receive the allowances we used to get before for the GSP (Gross State Product). And so, the president gave special priority to looking into ways to sell fish caught by local fishermen to foreign markets with more ease,” explained the minister.
Saeed also asserted the benefits to Maldives Customs Service’s procedures for importation and exportation via the free trade agreement. Noting that China exports electronics and materials for construction and resorts to the Maldives, the minister stated that this agreement will boost those fields in the Maldives’ economy.
“The Maldives is most definitely the smallest consumer market. China is the largest. We’re connecting the largest and smallest markets in the world, which will also set a major standard for other countries,” said Minister Saeed at the press conference held at Ibrahim Nasir International Airport (INIA) prior to his flight.
The Maldives and China entered into free trade talks last year September 8 and have currently held three rounds of discussions. China had also conducted research earlier this year into the potential advantages of entering such a deal with the island nation.
This also marks the first time for the Maldives to enter into a free trade agreement with a specific country. Previously the island nation entered into a regional agreement with South Asian Free Trade Area (SAFTA) which includes all South Asian Association for Regional Cooperation (SAARC) countries.
The Maldives has been recently strengthening its relations with China. Currently, a number of major infrastructural development projects, especially the ongoing China-Maldives Friendship Bridge linking capital Male with airport island Hulhule, are being constructed by Chinese firms or under Chinese grants.