At the beginning of the New Year in 2021, the Free Trade Agreement between the Government of the People's Republic of China and the Government of the Republic of Mauritius (hereinafter referred to as the Agreement) officially took effect. This is the first free trade agreement signed between China and an African country. This will further raise the level of mutually beneficial cooperation and opening-up between China and Mauritius. In particular, it will make it more convenient for Chinese companies to "go global" and help China-Africa economic and trade cooperation to a new level.
Economic and trade relations developed steadily
Mauritius is an island nation located in the Indian Ocean southeast of the African continent. Since the establishment of diplomatic ties between China and Mao in 1972, bilateral economic and trade relations have been developing steadily. In December 2017, China and Mauritius launched negotiations on a free trade agreement. After four rounds of negotiations, the two sides signed the Agreement in Beijing in October 2019, and it will come into force on January 1, 2021.
According to a person in charge of the World Trade Department of the Ministry of Commerce of China, the China-Mauria FTA is the first FTA signed between China and an African country, filling the gap in Africa region in China's existing FTA network. During the negotiation of the Agreement, China has always followed the principle of sincerity, real results, affinity and good faith as well as the principle of upholding justice and pursuing shared interests. We have consulted with the Mauritius on an equal footing, fully accommodated each other's concerns and tried our best to seek win-win results. The two sides will finally realize a high-level liberalization arrangement in the area of trade in goods, make high-quality market opening commitments to each other in a wide range of service sectors, and agree to carry out economic and technological cooperation in agriculture, finance, medical care, tourism and other areas. The Agreement not only provides a stronger institutional guarantee for deepening economic and trade relations between China and Mao, but also elevates the level of China-Africa economic and trade cooperation to a new height.
At present, both China and Africa are faced with the arduous task of fighting the epidemic, stabilizing the economy and ensuring people's livelihood. The Agreement has come into force as scheduled, demonstrating the two sides' unswerving commitment to promoting China-Africa cooperation and friendship, setting a good example for China-Africa economic and trade cooperation, and injecting new impetus into practical cooperation between China and Africa. The Agreement will boost both sides' confidence in economic growth, boost economic recovery after the epidemic, and give a good boost to China-Africa cooperation.
Our markets will be more open
It is said that the China-Mauritius FTA is comprehensive, high-level and mutually beneficial in general, and the two sides have reached a lot of consensus on market opening in the Agreement.
In terms of trade in goods, Mauritius will gradually reduce duty to zero on 94.2% of the tariff items and 92.8% of gross imports from China through a maximum 5-year tariff reduction period. Major Chinese exports to Mao, such as steel products, textiles and other light industrial products, would benefit. China will gradually reduce duty to zero on 96.3 percent of the items subject to duty and 92.8 percent of China's gross imports through a period of up to seven years. Mauritius's exports of clothing and seafood to China will also increase. At the same time, the two sides also reached consensus on rules of origin and implementation procedures, sanitary and phytosanitary measures and technical barriers to trade.
In the area of trade in services, China and Mauritius have adopted a positive list approach and made an opening commitment of equal level and balanced interests on the whole. The country has made commitments in 11 service areas, including finance, construction, tourism and health, involving more than 130 sub-sectors. This is the highest level of free trade agreement in the service sector that the country has ever reached. China, on the other hand, has significantly eased its restrictions on market access in areas such as business services, finance and transportation, and the overall level of opening-up has far exceeded China's WTO accession commitments. In addition, for the first time, Mao fully opened its TCM service market to China and agreed to strengthen TCM exchanges and cooperation in an all-round way, setting a benchmark for TCM "going global".
In terms of investment, the investment chapter of the Agreement upgrades the investment protection agreement signed in 1996 between China and MaurMauria, and makes significant improvements in the scope of protection, level of protection and dispute settlement mechanism. This will not only provide a stronger legal guarantee for Chinese enterprises to invest in Mauritius, but also help them further expand investment and cooperation in Africa. China and Mauritius enjoy a high degree of complementarity and potential for cooperation in finance, tourism, information and communication, construction, processing and manufacturing, and the Agreement strongly promotes mutual benefit and win-win cooperation between the two countries in these areas of investment. It is worth noting that the Agreement is an upgrade of the investment protection agreements signed between China and African countries. It is of positive exemplary significance for China to conclude and upgrade investment agreements with other African countries and enhance the legal guarantee level of China-Africa economic and trade cooperation.
Chinese companies have benefited from going overseas
Mauritius attaches importance to the development of trade and the utilization of international investment, fully integrates into the world trade system, and strives to become an important investment platform connecting Africa and Asia. With the continuous expansion of cooperation between China and Mauritius in recent years, more and more Chinese enterprises have taken advantage of Mauritius' unique geographical advantages and offshore financial center to set up regional headquarters in Mauritius to support their business in Africa.
According to the Agreement, Chinese enterprises will gain more advantages and convenience to enter the African market through Mauritius. The risk of expropriation is mitigated by a network of bilateral treaties between Mauritius and African countries, which provide for the return of investment and compensation in the event of political unrest, war and national emergencies. Second, it can obtain cost advantage and convenience. The existing retail network, manufacturing and logistics platform between Mauritius and other African countries can help enterprises reduce costs and obtain convenience.
For Chinese citizens and enterprises who want to invest and start businesses in Mauritius, the service sector is a good choice after the Agreement comes into force. Mauritius has adopted a positive list model in its commitment to the service sector, opening up to China such important service sectors as communications, education, finance, tourism, culture, transportation and traditional Chinese medicine. One of the highlights of the opening is the movement of natural persons. Chinese citizens can go to the open service sector of Mauritius to conduct business.
Financial services are one of the key areas of cooperation between China and Mao. In terms of rules, the Agreement has a separate annex on financial services. The two sides agree to strengthen cooperation on domestic regulation and regulatory transparency. In terms of market access, Mauritius has made a high-level opening commitment to China in the insurance, banking, securities and other service sectors, allowing Chinese enterprises to set up commercial presence in Mauritius and granting them national treatment. The Agreement has created a favorable business environment and development opportunities for Chinese and Mauritius financial institutions to enter the markets of the two countries, as well as an opportunity to promote deeper cooperation between the financial sectors of the two countries.
Tourism is one of the pillars of the Mauritius economy. Rich in tourism resources, Mauritius is one of the island tourism destinations favored by Chinese tourists. China and Mauritius have great potential to expand trade in tourism and tourism-related services. According to the Agreement, in addition to opening the tourism service market to each other, the two sides will also strengthen cooperation through cooperation in the development of tourism-related infrastructure, the establishment of tourism exchange and cooperation mechanisms and the joint promotion of tourism products, so as to further facilitate the expansion of tourist flows and the strengthening of cultural and people-to-people exchanges.
It is fair to say that the China-Mauritius FTA is an important progress in China's implementation of the FTA strategy. After the entry into force of the Agreement, China's domestic industries will have a new platform for cooperation with Africa, which will enhance China's ability to allocate resources in both the international and domestic markets, help further strengthen the integration of industrial chains and supply chains, create a more open, transparent and convenient business environment for enterprises, and help build a new pattern of development.
