Maldives-China free trade agreement comes into effect

The free trade agreement between Maldives and China came into effect on Wednesday – over a decade after the agreement was signed.

The FTA between Maldives and China was signed in December 2014 during former president Abdulla Yameen Abdul Gayoom’s administration after two years of extensive negotiations. The agreement received parliamentary approval three years later, in November 2017. The implementation of the agreement remained tabled during former president Ibrahim Mohamed Solih’s administration.

But incumbent president Dr. Mohamed Muizzu, who replaced Solih in 2023, expressed an immediate keenness to implementing the agreement.

The FTA finally came into force on Wednesday, over a decade after the agreement was signed, with the beginning of the New Year 2025.

It marks the activation of Maldives’ first bilateral free trade agreement.

According to the Economic Ministry, the FTA aims to enhance trade volumes, increase productive capacity, reduce trade barriers, and create new business opportunities for businesses in both Maldives and China.

The ministry said that under the FTA, both nations will benefit from reduced tariffs and improved market access commitments.

In an event held earlier this week to celebrate the FTA’s upcoming activation, Economic Minister Mohamed Saeed said the agreement will create will create unprecedented opportunities for Maldivian traders.

With the FTA now in force, Maldivian exporters, particularly in the fisheries sector, will gain duty-free access to the large Chinese consumer market.

The FTA allow Maldives to export 296 fish products to China at zero tariff.

Meanwhile, service providers in both countries will have new opportunities to provide cross-border services and set up commercial operations in agreed service sector industries.

Additionally, consumers and traders in the Maldives will enjoy access to a broad range of Chinese products at cheaper prices, including construction material and furniture – which is now among products that can be imported at zero tariff – providing a greater choice for Maldivian consumers and businesses.

The Maldivian administration expects the FTA will boost the annual trade volume between Maldives from USD 700 million to USD 1 billion.