Male, Jan 2 (PTI) Male has described as “a significant milestone” the China-Maldives Free Trade Agreement (CMFTA) under which both nations will benefit from reduced tariffs and improved market access commitments, media reports said.

The CMFTA, which came into effect starting Wednesday, aims to enhance trade volumes, increase exports, increase productive capacity, reduce trade barriers, and create new opportunities for businesses in both Maldives and China, a release from the Maldives' Ministry of Economic Development and Trade said.

“The FTA marking a significant milestone in the economic relations between the two countries,” state-run Public Service Media (PSM) said here on Wednesday.

Chinese state-run news agency Xinhua said, “A set of legal and policy measures took effect in China on Wednesday as part of the country's efforts to advance high-quality development and high-standard opening up. These measures include a free trade agreement between China and the Maldives, among others.” The CMFTA was signed in 2014, approved by the Maldivian Parliament in 2017, however, its implementation was suspended following a regime change in 2018. President Mohamed Muizzu's official visit to China in January 2024 pushed it further.

Earlier in the year, Trade Minister Mohamed Saeed had indicated that India has initiated efforts to have an FTA between the two countries, a claim that was rejected by New Delhi. India said it was ready to consider if the archipelagic nation expresses interest for such a pact.

Meanwhile, a release from Saeed's ministry said the key provisions of the CMFTA encompass trade in goods, trade in services, investment protection and facilitation, and deeper economic and technical cooperation.

Maldivian exporters, particularly in the fisheries sector, will gain duty-free access for all fisheries and seafood exports to the large Chinese consumer market.

Xinhua said, as per the Agreement, the vast majority of China's industrial exports to the Maldives, including ships, electrical equipment, and furniture, as well as agricultural products such as vegetables and fruits, will benefit.

According to government estimates, China-Maldives trade currently surpasses USD 700 million annually, with expectations that this trade volume could rise to USD 1 billion with the FTA's implementation, the psmnews.mv.en added. PTI NPK NPK NPK

Free trade agreement expands duty-free market access and investment protections, reducing tariffs and facilitating goods and services trade. The China Maldives Free Trade Agreement is now in force, creating a framework of tariff reductions and market access commitments covering trade in goods, trade in services, investment protection and facilitation, and economic and technical cooperation. The Agreement grants duty free access for Maldivian fisheries and seafood exports to China and extends preferential tariff treatment to a broad range of Chinese industrial and agricultural exports to the Maldives, aiming to reduce trade barriers and expand bilateral trade.