1. Could you give us a briefing on the China-Mauritius FTA?
Mauritius is an island nation in the southeast of the African continent in the Indian Ocean. Since the establishment of diplomatic relations between China and Mauritius in 1972, bilateral trade and economic relations have moved forward steadily.
In December 2017, China and Mauritius launched negotiations on the free trade agreement. After four rounds of negotiations, China and Mauritius signed 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 FTA") in Beijing on October 17, 2019. Thanks to our joint efforts, the two sides have completed respective domestic ratification procedures and, in accordance with the provisions of the FTA, it was agreed that the FTA would enter into force and be implemented on January 1, 2021.
Generally speaking, the China-Mauritius FTA is a comprehensive, high-level and mutually beneficial deal. It consists of a preamble, 17 chapters and three annexes, including chapters on initial provisions and definitions, trade in goods, rules of origin and implementation procedures, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, trade in services, investment, competition, intellectual property, e-commerce, economic cooperation, transparency, administrative and institutional provisions, dispute settlement, exceptions, and final provisions, and annexes on schedule of tariff concessions for trade in goods, schedule of specific commitments for trade in services, and product-specific rules of origin.
The FTA contributes to the building of a stronger China-Africa community with a shared future. The China-Mauritius FTA is the first signed by China with an African country, which fills in the gap of Africa region in China’s existing FTA network. The FTA not only provides a stronger institutional guarantee for deepening commercial relations between China and Mauritius, but also raises the level of China-Africa economic and trade cooperation to a new height.
The FTA is a concrete manifestation of the traditional friendship, solidarity and cooperation between China and Africa. China has always stayed committed to the principle of sincerity, real results, affinity and good faith and of upholding justice while pursuing shared interests throughout the negotiations, consulted with Mauritius on an equal footing, fully accommodated each other's concerns, and maximized the win-win results. The two sides eventually achieved a high level of liberalization in the area of trade in goods, made high-quality mutual commitments to market opening in numerous service sectors, and agreed to carry out economic and technical cooperation in various fields such as agriculture, finance, medical care and tourism.
The FTA provides a guidance and model for China-Africa trade and economic cooperation. The proportion of final zero tariff lines for trade in goods on both sides exceeds 94%, both accounting for nearly 93% of imports from the other side. In the area of trade in services, both sides have committed to open up more than 100 sub-sectors, which is the highest level of liberalization of service sector in FTAs Mauritius has signed to date. The investment chapter of the FTA has upgraded the agreement on mutual promotion and protection of investment China and Mauritius signed in 1996. It is the first upgrade of the investment protection agreement signed between China and African countries, thus of positive demonstration significance for China to negotiate and upgrade investment agreements with other African countries and enhance the level of rule of law for China-Africa trade and economic cooperation.
2. What is the importance of China-Mauritius FTA to China?
The FTA is an important progress in the implementation of China's FTA strategy under the guidance of Xi Jinping Thought on Socialism with Chinese characteristics for a New Era. As the first FTA signed between China and African countries, it will play a positive role in promoting China-Africa cooperation, and will also help China to build a new system of open economy in the new era, and form a new development paradigm with the domestic circulation as the mainstay and the domestic and international circulations reinforcing each other.
The FTA will inject new impetus into China-Africa practical cooperation. At present, the covid-19 pandemic is still spreading around the world. Both China and Africa are facing the arduous task of fighting the virus, stabilizing the economy and protecting people's livelihood. The entry into force of the FTA as scheduled reflects the position of both sides of firmly promoting China-Africa cooperation and friendship, and will inject new momentum into China-Africa practical cooperation. The FTA will give a strong boost the confidence of both sides in economic growth, help economic recovery in the post-pandemic era, and play a positive role in deepening China-Africa cooperation.c
The FTA will become a new platform for China's cooperation with Africa. Since the establishment of diplomatic relations between China and Mauritius in 1972, bilateral trade and economic relations have developed steadily. Mauritius promotes free economic and trade policy, attaches importance to the development of trade and the use of international investment, fully embraces the world trading system, and commits itself to becoming an important investment platform to bridge Africa and Asia. It will facilitate Chinese enterprises to enter the African market through Mauritius.
The FTA will help China to build a new development paradigm. After the Agreement comes into effect, domestic industries will have a new platform to participate in international competition, which will enhance their ability to allocate resources in both international and domestic markets, further strengthen the supply and industrial chains, and provide strong support for the creation of a new development paradigm with the domestic circulation as the mainstay and the domestic and international circulations reinforcing each other.
3. What are the important consensuses reached on market opening under the China-Mauritius FTA?
Trade in goods. Mauritius will gradually reduce tariffs to zero for 94.2% of tariff lines, accounting for 92.8% of Mauritius's imports from China through a maximum 5-year tariff reduction period, which will benefit Chinese exports to Mauritius, such as steel products, textiles and other light industrial products. China will gradually reduce the tariff to zero for 96.3% of the tariff lines, accounting for 92.8% of our imports from Mauritius, through a maximum of 7 years of tariff reduction. Mauritius' garments, seafood and other exports to China will also see growth. At the same time, the two sides have reached a consensus on rules of origin and implementation procedures, sanitary and phytosanitary measures and technical barriers to trade.
Trade in services. China and Mauritius adopted the positive list approach to make liberalization commitments with comparable overall levels and balanced benefits. The Mauritius side made commitments in 11 service areas such as finance, education, construction, tourism, and health, with more than 130 subsectors. The Chinese side, on the other hand, significantly eased restrictions on Mauritius’s market access in commercial services, finance, transportation and other areas, with the overall level of liberalization far exceeding China’s WTO accession commitments. In addition, the Mauritian side completely opened up the market for Chinese medicine services for the first time and agreed to comprehensively strengthen exchanges and cooperation in traditional Chinese medicine, setting an example for traditional Chinese medicine going global.
Investment. The investment chapter of the FTA has upgraded the investment protection agreement signed in 1996, with significant improvements in the scope of protection, level of protection and dispute settlement mechanism. This will not only provide stronger legal protection for Chinese enterprises to invest in Mauritius, but also help enterprises to use the country as a platform to further expand their investment cooperation in Africa. In the industries of finance, tourism, communication and information, construction, processing and manufacturing, China and Mauritius have a high degree of complementarity and cooperation potential, and the FTA can greatly expand the mutual benefit and win-win results for the two countries in these investment areas.
4. In the FTA, what kind of agreement has been reached in terms of rules of origin?
China-Mauritius FTA recognizes three categories of goods as originating goods: wholly obtained goods; goods produced exclusively from originating raw materials; goods produced from non-originating materials in a Party, provided that the goods conform to a regional value content of no less than 40%, except for the goods listed in Annex II (Product Specific Rules of Origin). Flexible rules of origin are tailor-made for confectionaries, food, beverage, leather, textile, and jewelries from Mauritius. It also contains the Approved Exporter System and Electronic Origin Data Exchange System to benefit businesses.
5. What are the provisions in trade facilitation?
The trade facilitation measures mainly include cooperation between the Customs of the two Parties, sanitary and phytosanitary measures, and technical trade barriers. In terms of customs cooperation, the FTA provides that the Parties shall streamline clearance procedures to promote bilateral trade, and seek corresponding arrangement for customs cooperation and administrative mutual assistance within the limits of each other’s domestic law. In addition, the Parties will step up cooperation in trade facilitation, including in implementing the WTO Trade Facilitation Agreement. In terms of sanitary and phytosanitary measures, the FTA has set out provisions on transparency, measures at the border, and consultation mechanism. Competent authorities of the Parties will reinforce cooperation on equivalence of SPS measures in accordance with the WTO SPS Agreement, to protect the life and health of human beings, animals and plants in each other’s territories while facilitating trade. In terms of technical barriers, the FTA draws on the WTO TBT Agreement to ensure the Parties implement WTO rules properly. It also sets disciplines on standards, conformity assessment procedures, and measures at the border to improve transparency of technical trade barriers, address realistic problems through technical consultations, and encourage technical cooperation.
6. How will the FTA benefit Chinese businesses as they go global?
Chinese businesses can receive the following benefits when they set up regional headquarters in Mauritius and use Mauritius as a gateway to make investments to other African countries: first, the investment will be more secure. The network of bilateral treaties between Mauritius and other African countries reduces the risk of property expropriation, as relevant treaties contain provisions on investment refund and loss compensation in case of political turmoil, war, and state emergencies. Second, businesses can gain cost advantage and enjoy convenience, by utilizing the existing retail network, and manufacturing and logistics platforms between Mauritius and other African countries.
7. After the FTA takes effect, what kind of services can Chinese companies operate in Mauritius?
Mauritius has made commitment on service sector openness in the form of a positive list. Sectors that are open to China include telecommunications, education, finance, tourism, culture, transport, and traditional Chinese medicine. One of the highlights in the services liberalization is the movement of natural persons, which allows Chinese nationals to engage in services in the opened-up sectors. Chinese visitors to Mauritius mainly include business visitors, contracted service providers, trainees, and business detached workers.
Financial cooperation will be a priority in our cooperation. In terms of rule-making, the FTA has a separate Annex on financial services that reflects the bilateral agreement to step up cooperation in domestic rules, regulation transparency, and recognition. In terms of market access, Mauritius has made high-level commitment on the openness of insurance, banking, and securities sectors, and allows Chinese businesses to establish commercial presence in Mauritius receiving national treatment. China has offered in the FTA the latest financial opening-up policies on the basis of our WTO commitments. The FTA will create a sound business environment and development opportunities for the financial institutions to enter into each other’s market, and will promote closer and deeper cooperation between the two financial authorities.
Tourism is a pillar industry and the largest sector for service trade in Mauritius. With its rich tourism resources, Mauritius is a favorite island destination for Chinese tourists. The two countries have enormous unlocked potential in trade in services when it comes to tourism and related industries. According to the FTA, in addition to opening up the tourism service markets to each other, the Parties will also strengthen cooperation in tourism infrastructure construction, tourism exchange and cooperation mechanisms, and promotion of tourism products. This will help to increase the number of tourists to each other and enhance people-to-people exchanges.
8. What are the measures taken in the China-Mauritius FTA to protect intellectual property rights？
The IP Chapter comprises of 5 Articles, including General Provisions, International Conventions, Intellectual Property and Public Health, Cooperation and Final Provisions. In general, these provisions take full into account the difference and state of play of the IP systems of the two countries, reflecting the broad inclusiveness of this Chapter. The two sides commit to protect intellectual property rights through closer cooperation.
9. What are provided for in the e-commerce sector in the China-Mauritius FTA?
E-commerce is an issue of shared concern of the two sides. The two countries will exchange and share information on laws and regulations, policies and practical experience, step up research and training, support the mutual recognition of digital certificates and electronic signatures, improve the acceptance of e-documents of trade management, work together to create an enabling environment for businesses to improve efficiency and expand market. The two sides will intensify e-commerce cooperation to boost bilateral trade.
10. Could you expound on the Trade Remedy Chapter of the China-Mauritius FTA?
The Trade Remedy Chapter consists of 2 parts with all together 9 provisions, covering detailed rules on anti-dumping and countervailing measures, global safeguard measures and bilateral transitional safeguards. The two sides reaffirm the rights and obligations under the WTO Agreement regarding anti-dumping, countervailing and safeguard measures. China’s domestic industries may apply for the usage of afore-mentioned trade remedies to safeguard their own interests when relevant legal conditions are met. In addition, this Chapter sets out bilateral transitional safeguards which serve as a safety valve to provide remedies for the Parties suffering from domestic industrial damage caused by increased imports as a result of the implementation of the FTA. This mechanism of transitional safeguards is designed with reference to agreements on global safeguard measures, while maintaining certain flexibility on the conditions, time periods, numbers of implementation and compensation, reflecting the consensus of prudential use of trade remedies and upholding free trade.
11. What does the China-Mauritius FTA provide for competition policies?
Maintaining a level playing field is of great significance to FTAs to improve economic efficiency and consumer’s benefits. Hence, the China-Mauritius FTA includes the Competition Chapter provide that competition law enforcement by all parties shall follow the principle of transparency, non-discrimination and procedural justice, enhance the transparency of competition legislation and enforcement, step up the two countries’ cooperation and coordination on competition, and improve their capability of implementing competition polices and laws through technological cooperation.
12. What measures are adopted in the China-Mauritius FTA to promote bilateral economic and technological cooperation?
The Economic Cooperation Chapter of the FTA provides for the goals, means and scope of bilateral economic cooperation, and sets out general plans for cooperation in such areas as agriculture, innovation, commerce, finance, healthcare, education, cinema, maritime economy, tourism, culture, arts and sports. For instance, on medicine and medical services, the two sides agree to encourage cooperation between the private sectors through people-to-people exchanges, joint research and commercial application; encourage training and capacity building on pharmaceuticals and clinical pharmacy practice and improve the quality control system and testing of pharmaceutical products; agree to sign a cooperation agreement on Traditional Chinese Medicine (TCM) between the National Administration of Traditional Chinese Medicine of China and the Ministry of Health and Wellness of Mauritius, and set up TCM centers in Mauritius, etc.
