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| President Abdulla Yameen and Chinese President Xi Jinping. Photo by: The Wire Website |
China and Maldives have signed a Free Trade Agreement in a time when China seems to be getting ready to ramp up business ties across South Asia. China already has an Free Trade Agreement with Pakistan & is exploring FTA's with Bangladesh, Sri Lanka and Nepal. With the announcement of a free trade agreement between the two nations, India is known to be watching China’s increasing presence in the region very closely with concern & is yet to comment on the development. The controversial Maldives-China FTA was signed by Minister of Economic Development Mohamed Saeed and Minister of Commerce of China Zhong Shan. President Abdullah Yameen’s government has described the China-Maldives FTA as a favorable development while the Opposition parties has voiced concern over its apparently quick negotiation. Below are some important facts about this deal that we know so far.
1. The China Maldives free trade agreement which commits both nations to reduce tariffs on most imported goods to zero – was passed with only 30 votes from ruling party lawmakers in the 85-member legislature.
2. An emergency sitting was called to send the FTA to the national security committee & the oversight committee of parliament completed its review in a less than 10-minute closed-door meeting and the 1,000-plus page agreement was promptly approved in a less than one hour parliamentary process.
3. China Maldives free-trade agreement waive tariffs on more than 95 per cent of goods imported from both sides, along with a commitment to open service markets in finance, health care and tourism.
4. According to the Chinese ministry of commerce, the two countries would reduce tariffs of over 95 percent of goods to zero under the Free Trade Agreement
5. The decision to pursue a FTA between the two nations was made during Chinese President Xi Jinping’s historic state visit to the Maldives in September 2014.
6. The China Maldives Free Trade agreement would be the Maldives’ first bilateral free trade deal.
7. Maldives is the second country in South Asia, after Pakistan, to enter into a FTA with China. A country which has got the largest manufacturing economy in the world, second largest importer of goods & world’s fastest growing consumer market.
8. Maldives’ opposition parties believes the FTA was signed in haste without sufficient parliamentary scrutiny and it would take the nation into a debt trap and bring instability in the Indian Ocean region.
9. Government of Maldives believes the FTA with China is likely to further boost economic ties and bring tangible benefits to Maldivian importers and exporters.
10. India is concerned about China’s emerging political and security nexus in the region with this FTA & according to the Indian media the biggest worry for India is that the FTA will draw the Maldives more closely into China’s security net.
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