Mauritius first African Country to sign Free Trade Agreement with China
Mauritius is busy shaping future Economic Perspectives by re-engineering its market presence, expanding into two new large markets in early 2021. The China FTA (Free Trade Agreement), signed in October 2019 is operational as from January 2021. The Economy Partnership Agreement with India is launched in April 2021.
The FTA comprises four main components pertaining to trade in goods, trade in services, investment, and economic cooperation.
Mauritius will benefit from Duty Free Export on more that 8,000 tariff items representing 96% of the Chinese national tariff lines. The FTA eliminates custom duties on a list of products of export interest in Mauritius, which includes seafood products, fruits, rum, animal feed, soaps and detergents, garments, and medical devices.
There are also ten areas of cooperation including industrial cooperation, pharmaceuticals, medical services and cosmetics, agro-industry and food security, business cooperation that is part of the FTA.
At a time when China is growing its investments into Africa, the extensive network of Double Taxation Avoidance Treaties and Investment Promotion and Protection Agreements of Mauritius will undoubtedly encourage investors to structure and route their cross-border flows through Mauritius.
With the ratification of the Mauritius China FTA, Chinese companies can choose the Mauritius IFC (International Financial Center) to set up their regional headquarters in Mauritius and even relocate their regional treasury management due to its conducive business climate, political stability, and a string of other unique selling points.
The government of Mauritius is also busy with the setup of an RMB clearing hub in Mauritius, which would facilitate payments and settlements as well as support stability in terms of exchange rate management locally.
The timing is right, as reported by BBC, where Beijing is now the city with highest number of billionaires in the world, adding 33 new billionaires last year. The richest person in China is now the bottled water tycoon, Zhong Shanshan, knocking Alibaba founder Jack Ma from his mantle. China's food and grocery sector is now vying with its tech industry in producing the country's richest business people.
The attached China FTA Brochure details various elements of interest, such as:
Products that China imports from the World
Product Categories with Import Value Trends over the last 5 years
Products where Mauritius will benefit with Custom Duties dropped to Zero on Entry.
How to Calculate Regional Value Content
Product Specific Rules of Origin
We will be covering the India Economic Partnership Agreement in our next Blog.