China-Maldives Free Trade Agreement: 95% of Goods to Enjoy Zero Tariffs

The China-Maldives Free Trade Agreement (FTA) will officially take effect on January 1, 2025, enabling over 95% of traded goods between the two countries to eventually benefit from zero tariffs.

China's Ministry of Commerce recently announced that on December 30, 2024, Chinese Minister of Commerce Wang Wentao and Maldives Minister of Economic Development and Trade, Fayyaz Ismail, held a virtual meeting to jointly declare the official implementation of the China-Maldives FTA.

Negotiations for the FTA began in December 2015, with five rounds of formal discussions and one ministerial consultation. Both sides reached a comprehensive agreement and officially signed the FTA on December 7, 2017. Following domestic ratification processes in both countries, the agreement is now set to come into effect on January 1, 2025.

According to the Chinese Ministry of Commerce, the agreement will grant tariff-free access for most Chinese industrial products—such as ships, electrical equipment, and furniture—as well as agricultural products like vegetables and fruits, exported to the Maldives. Conversely, the majority of Maldivian-origin seafood and other goods exported to China will also enjoy zero tariffs.

The agreement is expected to bolster trade and investment facilitation, providing a solid institutional foundation for the development of bilateral economic relations. It aims to deliver significant benefits to businesses and citizens in both countries by enhancing trade liberalization.

At the launch ceremony of the agreement's implementation, Minister Fayyaz Ismail remarked that this FTA is the first bilateral free trade agreement signed by the Maldives. He described its enactment as a landmark event for the country, one that promises transformative benefits for both nations.

Expected Export Growth of 20%

Shandong Province is one of China's leading regions in trade with the Maldives. Following the agreement's implementation, Chinese exports to the Maldives—such as ships, steel, furniture, ceramics, vegetables, and fruits—will see significant advantages. Meanwhile, Maldivian exports to China, including seafood, nuts, and wooden handicrafts, will also benefit from the FTA's preferential terms.

According to Bi Haijun, Director of the Customs Tariff Division at Qingdao Customs, more than 70% of Maldivian tariff lines will immediately be reduced to zero. Key industries in Shandong, including plastics, steel products, and auto parts, are expected to be among the major beneficiaries.

Preliminary estimates suggest that in the first year of the agreement's implementation, Shandong-based enterprises will save approximately 8 million yuan in reduced tariffs on products exported to the Maldives.