The Maldives and China signed a memorandum of understanding (MoU) yesterday to launch negotiations to establish a free trade agreement between the countries.
In a brief statement after the signing ceremony at the Kurumba Resort, economic development minister Mohamed Saeed described the Sino-Maldives relationship as “central to the quick realisation of the broad economic vision of President Abdulla Yameen.”
Saeed announced that official negotiations to determine the terms of the free trade agreement will begin in October.
If the negotiations succeed, the agreement would become the first of its kind for the Maldives with any bilateral partner. The regional South Asian Free Trade Agreement (SAFTA) is the only free trade agreement the Maldives has signed.
The MoU was signed at a meeting of the Joint Committee on Trade and Economic Cooperation (JCTEC) established between the Maldives and China following Chinese President Xi Jinping’s historic state visit in September 2014.
Under the envisioned free trade agreement, China is expected to exempt tariffs or import duties for Maldivian exports.
Saeed signed the MoU on behalf of the Maldivian government while Chinese vice minister of commerce Gao Yan, who led the Chinese delegation, signed for China.
Gao Yan described the delegation’s ongoing visit as “rich in substance, practical and productive,” and assured that China will remain a “trustworthy and reliable friend of Maldives”.
Both officials noted that the 21st Century Maritime Silk Route, the development of the Ibrahim Nasir International Airport (INIA) and the ‘China-Maldives Friendship Bridge’ are highlights of the “strong friendship” between Maldives and China.
In December, 2014 a high level delegation of cabinet ministers visited Beijing in an official trip and signed an agreement with the Chinese government to join the silk route initiative.
The Silk Route will link the east coast of Africa and the Mediterranean and pass through the Maldives’ northernmost atoll – the proposed site of the Ihavandhippolhu Integrated Development Project.
The ‘iHavan’ transshipment port – one of five mega-projects envisioned by the government – is designed to take advantage of the US$18 trillion worth of goods transported across the seven degree channel annually.