New Delhi caught by surprise as Maldives seals FTA with China

Note4Students

Mains Paper 2 | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora

The following things are important from UPSC perspective:

Prelims: FTA

Mains level: The news card talks about the China-Maldives FTA


News

Context

Maldives-China FTA

    1. In a sudden move that has sent alarm bells ringing in New Delhi, Maldives rammed through its Free Trade Agreement with China in the Maldivian parliament last night in a session attended by only 30 out of 85 members
  • The haste with which the government, led by President Abdulla Yameen, decided to pass the pact the session took barely half an hour is being perceived here as Male trying to cosy up to China.
  1. This is Maldives’s first FTA with any country, and China’s second FTA with any country in South Asia after Pakistan.
  2. There are concerns that it could lead to increased Chinese military presence in the island nation.

Background

  1. This comes in the backdrop of Yameen planning to visit Beijing in December.
  2. This will be a reciprocal visit after the first-ever visit by Chinese president Xi Jinping to Maldives in September 2014.
  3. Maldives is the only country in the neighbourhood which has not been visited by Prime Minister in the last three-and-half years after he cancelled a proposed trip in March 2015 due to the turbulent political situation.
  4. Maldives and India do not have a Free Trade Agreement.

Views of Maldives Government

  1. According to the Maldives Presidential office’s statement, the FTA will enable exemption of duties on fisheries products exported to the world’s largest consumer market.
  2. Maldives transitioned from Least Developed Country (LDC) to Middle-Income Country status on 1st January 2011.
  3. However, this growth was accompanied with huge duties levied on fish products exported to the international market,” the statement said.
  4. Also, Maldivian government has extended invitations to establish free trade agreements with countries including Japan, the United States of America, the United Kingdom and countries of the European Union.
  5. However, it doesn’t name India.

Views of Maldivian Opposition

  1. Criticizing the FTA with China, Opposition leader emphasized that such an agreement will be detrimental to our economy as balance of trade is greatly in favor of China.
  2. Also, the FTA cannot be implemented until the legislation is passed.
  3. The Opposition demanded that the implementation of the FTA with China should be suspended till a proper feasibility study is conducted.

 

 

Foreign Policy Watch: India-Maldives
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