Summary:
- China and Mauritius signed a free trade agreement in 2019, the Mauritius–China Free Trade Agreement (MCFTA), China’s first FTA with an African country.
- In the face of various structural constraints, the scope for the free trade agreement to drive expanded trade between Mauritius and China is limited.
- It is also unlikely that foreign direct investment will increase significantly in either direction under the free trade agreement.
- The free trade agreement increases the risk that Mauritius’ already-significant trade deficit with China will widen.
- Given the apparently limited direct economic advantages of the MCFTA, it may be that the key drivers behind the agreement are strategic and geopolitical in nature.
- The implementation of the MCFTA coincides with that of the African Continental Free Trade Area agreement. However, there is little risk of Mauritian trade being diverted away from Africa towards China because Mauritius’ export and import activity under the two agreements is very different.
