The China-Maldives Free Trade Agreement (FTA), which will come into force on 1 January 2025, promises to create new avenues for Maldivian businesses to market and sell their products in China, according to the Ministry of Economic Development and Trade.
The FTA, aimed at promoting trade and investment between China and the Maldives, was signed in 2014 and approved by the Parliament in 2017. However, its implementation was suspended following a change in administration in 2018.
President Dr Mohamed Muizzu, who assumed office in November 2023, and his administration have been working towards implementing the FTA. It will introduce significant changes, such as reducing the cost of imports from China and enabling local businesses to expand their products and services into the Chinese markets, according to the government.
The economic ministry highlighted several expected benefits of the FTA. For Maldivian businesses, the agreement will lower import costs, especially for everyday household items, and increase the variety of product brands available, according to the ministry. The fisheries and construction industries are also set to gain from the FTA, with duty waivers on equipment required for these sectors. Import duties on a wide range of items and resources essential for creative industries will also be waived.
The FTA is also expected to pave the way for Maldives' economic diversification and further expansion of the economy, the ministry said. The Economic and Technical Cooperation chapter of the FTA will support human resources development and capacity-building efforts in the Maldives, assisted by China. This includes increasing skills for Maldivians and job creation, as well as seeking Chinese assistance in further developing and expanding the research sector, according to the ministry.
The FTA also aims to hold investment promotion efforts to increase Chinese investments in various Maldivian economic sectors. Architects, medical professionals, and other service sectors will be able to market and expand their services to Chinese markets through the agreement, further boosting job creation in the country, the ministry added.
According to government estimates, China-Maldives trade currently surpasses USD 700 million annually. The President Dr Muizzu administration anticipates that this trade volume could rise to USD 1 billion with the implementation of the FTA.