Mauritius and China have strengthened their bilateral relations with the signature of a Free Trade Agreement (FTA) on October 17 2019 in Beijing. The Agreement is the first FTA which China has signed with a country of the African continent. The FTA which represents a major achievement for Mauritius will give the country access to a huge market of 1.4 billion inhabitants, with a GDP of some $13 trillion.
The FTA will enable Mauritius to benefit from duty free access on the Chinese market on some 8,227 products, representing 96% of the Chinese tariff lines. The duties applicable on 88% of these tariff lines will be eliminated with immediate effect, while the remaining tariffs will be eliminated over a five to seven-year period. These products include key export items such as rum, frozen fish, noodles and pasta, wafers and biscuits, fresh fruits, juices, mineral water, linen, garments, watches and articles of leather.
Mauritius struck a significant deal with China on special sugar, which is expected to generate export revenue of some $ 40 million annually. China agreed to grant Mauritius a Tariff Rate Quota (TRQ) of 50,000 tons market access for special sugar with an in-quota rate of 15%.
As regards trade in services, Mauritius service providers will have access to more than 40 service sectors, including financial services, telecommunications, ICT, professional services, construction and health services. Mauritius will also be able to establish businesses in China as wholly owned entities or in joint partnership with Chinese operators.
Furthermore, the FTA will create new investment opportunities in Mauritius targeting the Chinese market. The FTA provides for the protection of investors and their investments against discriminatory and unfair treatment. Moreover, investors will be compensated if expropriation of their investments is inevitable. Mauritian authorities also expect to have more investment in the services sector from China in view of the predictability and legal security which the agreement will provide to investors.
Regarding the Economic Cooperation chapter of the Agreement, Mauritius and China have agreed to collaborate in 10 areas, including industrial development to increase competitiveness; to develop manufacturing based on innovation and research; to conduct exchange of specialists; to have an exchange of researchers for disseminating know how and for support in technology and innovation; and to cooperate in the financial sector.
The Mauritius-China FTA will become operational after it is ratified by both countries.