Maldives considers scrapping Free Trade Agreement (FTA) with China

Maldives, which has been steadily restricting its ties with China, may scrap its Free Trade Agreement (FTA) with Beijing to safeguard trade relations with other countries including India. The FTA established between Maldives and China during the regime of former president Abdulla Yameen will hinder trade relations with other countries, stated Maldives’ economic minister Fayyaz Ismail recently.
The FTA with China was approved by Parliament in 2017 during Yameen’s tenure. The contentious agreement was signed between the then Maldives president and his Chinese counterpart Xi Jinping during the former's first state visit to Beijing in 2017. Speaking on a programme aired by the state radio station, Ismail said the agreement should not have been signed in the first place and said it was detrimental to the country’s economy.
“My personal opinion is that the FTA is unacceptable and should not have been signed,” said Ismail. He recalled that he had heavily criticised the agreement as a Parliament member under the previous administration. Ismail said the deal allows goods from China to be imported with no duty charged on it. But charging a bigger duty on goods imported from other countries while no duty is charged on Chinese goods would likely disrupt the trade relationship with other countries, the minister stated.

“The trade links we have established over time will be destroyed if we go ahead with the FTA. This means we will have nothing to fall back on. Our trade relations with Singapore, Dubai and India will all be in vain. Of course, all businesses will opt for Chinese products if goods are available at lower costs,” he said. Maldives’ finance minister Ibrahim Ameer termed the deal “non-existent”.

Fisheries comprise a big part of export for Maldives but the fishermen are not benefiting from the FTA, alleged the Maldives government. India-Maldives ties have been transformed ever since Ibrahim Mohamed Solih was elected president in 2018. India-backed infrastructure projects are being implemented at a fast pace and Delhi has come forward to assist Male following the outbreak of Covid-19.