Maldives News | 18 October 2009
Maldives signs agreement with US on trade
The Maldives signed a framework agreement with the United States on Saturday to open up the discussion on trade between the two countries.
Under the Trade and Investment Framework Agreement (TIFA), a council will be established with high-ranking government officials as well as members of the private sector who will meet on a regular basis to discuss trade and investment issues.
The council will work towards removing all obstacles to trade and investment between the Maldives and the US.
The agreement was signed by Mohamed Rasheed, minister for economic development, and Michael Delaney, the assistant US trade representative for South and Central Asia.
Speaking to Minivan News today, Yousuf Riza, permanent secretary of the ministry of trade and economic development, said, “The understanding is that we will promote trade-related activities between the Maldives and the US and under the framework, there’s no set limit to that.”
Riza said the council would provide a forum to discuss any trade-related issues from trade facilitation to tariffs to technical assistance.
According to the US Census Bureau, in 2008 the US exports to the Maldives totalled US$20 million while imports from the Maldives to the US totalled US$3.6 million, a marginal increase from the previous year.
Riza said the Maldives currently exported fish to the US but hoped to have access to the US General System of Preference (GSP), which would cut duties, making Maldivian exports more competition. He said a seven per cent tax was currently imposed on all Maldivian exports.
Last month, Foreign Minister Dr Ahmed Shaheed wrote to the US Secretary of State Hillary Clinton to ask that the Maldives be reinstated in the GSP.
The objective of the GSP is to promote economic growth in the developing world by providing preferential duty-free entry to certain products from designated countries. At present, 131 countries participate in the scheme.
The Maldives was suspended from eligibility in 1995 because of concerns about the country’s human rights record, above all, the absence of employment rights.
Speaking at the signing ceremony, Delaney said the government’s liberal economic policies would attract investment in the Maldives.
Riza told Minivan News today that while the incumbent government’s privatisation policy and open economy was an attractive package for trade, the TIFA was initiated last year before President Mohamed Nasheed took office.
“It has taken a while because of a change of administration in both countries,” he said.