By The China-Maldives Free Trade Agreement (FTA), set to come into effect on January 1, 2025, will provide exclusive trade opportunities to the Maldives, not available to other countries, Minister of Economic Development and Trade Mohamed Saeed announced at a special ceremony.
Signed in 2014, the FTA was approved by the Maldives Parliament in 2017 but faced delays in implementation due to a change in government in 2018. President Dr. Mohamed Muizzu revived efforts to operationalize the agreement after taking office in November 2023, paving the way for its imminent enforcement.
Speaking at the event, Minister Saeed emphasized the transformative potential of the FTA for the Maldives’ economy. He assured that while concerns about reduced border revenue had been raised, the agreement would create significant trade opportunities and alternative revenue streams.
Key Benefits for Local Industries
Minister Saeed outlined specific advantages for key sectors, particularly tourism and fisheries. Highlighting cost reductions in the tourism industry, he provided an example of how building a guesthouse would become more affordable under the FTA.
“If a 12-room guesthouse costs USD 325,000 to build, 10 percent of that is for construction items. When considering additional room items, this accounts for 20 to 25 percent. Overall, the government can offer a discount of USD 32,500 to 39,000,” the Minister explained. He noted that these savings would bolster the guesthouse industry and stimulate growth in related businesses.
In the fisheries sector, Minister Saeed announced that the FTA allows the unrestricted export of all types of fish caught in the Maldives, a privilege not previously available. He clarified that China’s investment in restricted sectors would still adhere to Maldives’ regulations, ensuring balanced growth.
Unique Opportunities Through the FTA
The Minister highlighted the exclusivity of the agreement, which offers the Maldives unique benefits compared to other FTA partners with China. For instance, local Maldivian companies will be able to operate in designated Chinese free trade areas with the same rights as domestic Chinese firms, including internal travel distribution.
“This is a benefit not extended by China to any other FTA partner until now,” he stated, underscoring the agreement’s strategic importance.