China's Free Trade Agreement will not present any benefits to Maldives: Fayyaz

Opposition Maldivian Democratic Party (MDP) Chairperson Fayyaz Ibrahim has stated that the Free Trade Agreement (FTA) entered into with China will not pose any benefits to the Maldives, and rather may prove detrimental.

President Dr Mohamed Muizzu announced at the Independence Day reception that the Maldives-China FTA will be implemented before the end of September.

The President said that this agreement would result in duty exemption from 298 varieties of fisheries products. 7,897 types of value added products will also become duty exempt. This would prove to be an advantage to private companies, as well as the general public, he had said then.

However, speaking at a panel discussion held last night by MDP's leadership, Fayyaz said that it is China, and not Maldives, that will reap the benefits from this agreement.

Fayyaz said that if products brought in from China are charged 0 percent duty, but duty is charged from goods brought from Dubai, Singapore and elsewhere, then Maldivian businesses will become forced to be dependent on bringing in goods from China alone. This is due to the higher expense of bringing in goods from elsewhere, and the lack of a competitive field when the FTA results in no duty being charged on goods from China.

"So what happens is, gradually all the trade links we have formed over the years end up breaking," Fayyaz said.

Fayyaz is of the belief that while Maldives is not a country that exports goods, the benefits of the FTA will be received by the country that does engage in exportation.

"When we enter an FTA saying we want to import fish to China from Maldives, what happens is, China exports a large variety of goods, which they can now do without any duty charges. So we lose the duty, we break up the trade links I just mentioned, all this with the hopes that we can export fish to China," Fayyaz said.

"If we consider the fisheries market, China is one of our main competitors."

MDP has always stood against entering a free trade agreement with China.

Fayaz said last night that MDP had earlier entered into a memorandum of understanding to form a free trade agreement with the United Kingdom. He said that as UK is one of the destinations where most fish products are exported to by the Maldives, entering an FTA with them would be beneficial to the country.

At the Independence Day reception, President Muizzu highlighted that discussions are being held to enter an FTA with UK, and that there are hopes that such an agreement can be reached with India as well.