China Signs Free Trade Agreement with Mauritius
China and Mauritius signed a free trade agreement (FTA) on October 17. This is China’s first FTA with an African nation. The agreement will reportedly give Mauritius duty-free access to about 8,547 products, representing 96 percent of Chinese tariff lines.
The FTA also covers more than 40 service sectors, including financial services, telecommunications, ICT, professional services, construction, and health services. Mauritius nationals will also be able to establish businesses in China as wholly-owned entities and through joint partnerships with Chinese operators.
China and Mauritius pledged to eventually reach zero tariffs on 96.3 percent and 94.2 percent of traded items, respectively. These account for 92.8 percent of import volume for both countries to each other.
The agreement was in the works since 2017 and is likely part of Mauritius’ three-year development strategy to 2021, which aims to shift the island’s reliance away from Europe and achieve further economic penetration into ASEAN.
Mauritius’ Prime Minister’s Office noted that the agreement, “would lay the basis for the opening of an Economic and Trade Office by the Economic Development Board in Shanghai and would facilitate promotional activities of the Government of Mauritius in key target cities in line with the ‘Go East Strategy’ to explore avenues to increase FDI and trade between Mauritius and China.”
Chinese presence in Mauritius dates to the 1600’s. While the local Chinese community currently makes up only two to three percent of the population, they have contributed significantly to the country’s economic growth.
Mauritius was ranked as the best place to do business in Africa in 2018 and is touted to achieve the status of being a developed economy by 2020. Stronger trade and business ties with China could accelerate this progress.
Key beneficiaries include trade in iron and steel products, textiles, and light industrial products, which are China’s main exports to Mauritius. China has agreed, in turn, to export sugar produced in Mauritius, among other products.
The China-Mauritius FTA provides clear guidance on rules of origin, trade remedies, and technical barriers to trade and sanitary and phytosanitary issues.