Mr Deputy Speaker, Sir, before replying to the substance of the question, allow me to provide a brief background for the benefit of the House. In June 2025, China announced the introduction of a new trade framework called the Framework Agreement on Economic Partnership for Shared Development with African countries. The new trade framework proposed to extend a zero-tariff treatment on 100% of tariff lines to 53 African countries for their exports to China, following bilateral negotiations with each of them. On 28 April 2026, China issued an announcement that it will unilaterally grant the zero- tariff treatment to 20 African countries having diplomatic relations with it, but which are not classified as least developed countries, without the need for bilateral negotiations. The 20 African countries include Mauritius, and the zero-tariff treatment is applicable for a two-year period as from 01 May 2026 to 30 April 2028. Thus, Mauritian exporters can already take advantage of the zero-tariff treatment on all their exports to China as from 01 May 2026, subject to applicable rules of origin. Within the two-year implementation period of the zero-tariff treatment, that is, from 01 May 2026, Mauritius will have to negotiate and upgrade its current FTA with China. As the House is aware, Mauritius signed a free trade agreement with China in October 2019, which entered into force on 01 January 2021. The purpose of the upgrade is to ensure that we continue to benefit from the zero-tariff treatment for our exports to China and to ensure long- term predictability and consistency with the World Trade Organization rules. One of our main exports to China is sugar. For this product, we are informed by the Chinese side that the tariff rate quota (TRQ) of 50,000 tonnes, currently granted to Mauritian sugar under the FTA, will be maintained as granted under the FTA with 15% duty in quota instead of the normal tariff of 50%. We are also informed that Mauritian exporters will have the option to choose between the preferential tariff treatment under the existing FTA or the new zero tariff treatment. The choice will depend on the most commercially advantageous option for our exporters, but will remain subject to compliance with the applicable rules of origins under each arrangement. Mr Deputy Speaker, Sir, a key feature of the zero-tariff measure is cumulation. This means that producers can source inputs from eligible African countries having an agreement with China for manufacturing in Mauritius and exporting duty-free to China as an originating product. This extensively enlarges our source of inputs for manufacturing locally. It is to be noted that since the zero-tariff measure is new, Mauritius is in constant communication with the Chinese authorities to seek additional information pertaining to the modalities and operational procedures and details. Mr Deputy Speaker, Sir, having provided the background, let me now respond to part (a) of the question by saying that the zero-tariff treatment granted by the People's Republic of China, as from 01 May 2026, is unilateral, and therefore, Mauritius is not required to reciprocate the zero-tariff treatment. As regards part (b) (i) of the question, the current FTA between Mauritius and China is the first of its kind that China has concluded with an African country. The FTA is indeed beneficial to Mauritius. Under the FTA, China has committed to eliminate tariffs on 8,547 tariff lines on goods over a period of seven years. The concession covers a wide range of products, including garments, frozen fish, paints, wines and spirits, dairy products and chemicals. In addition, China has granted Mauritius an export quota of 50,000 tonnes of sugar at a preferential tariff rate of 15% instead of the normal rate of 50%. Mauritius, for its part, has provided China with duty-free access on 192 tariff lines and reduced tariffs on a further 51 tariff lines. The House may wish to note that, at the time the FTA was signed, approximately 93% of our tariff lines were already duty-free to all countries. It is also worth noting that China was already the main import market of Mauritius, even prior to the FTA coming into force. It is the hope that this new measure and the eventual upgraded FTA can contribute meaningfully in reducing the trade deficit that we currently have with China. With regard to the impact of the FTA on local businesses, I wish to inform the House that since the entry into force of the FTA in 2021 until 06 May 2026, total exports to China under the FTA amounted to Rs1.75 billion. While trade flows have fluctuated over the years, exports to China under the FTA have recently shown an increase from some Rs126 million in 2024 to Rs449 million in 2025. The main export products include textile products and sugar. The significant increase in the export data from 2024 to 2025 is mainly due to export of sugar to China under the TRQ. The House may note that 14 local businesses are currently exporting their products to China under the FTA. Mr Deputy Speaker, Sir, in terms of impact on local producers, the FTA has created new export opportunities, especially for sugar and textile products. There remain further export potentials for products such as fresh agricultural produce, seafood, and special sugar. Discussions are ongoing with stakeholders to identify additional products for export to China and to address implementation challenges with a view to help them take full advantage of the FTA. Another concrete outcome of the FTA has been the establishment of the China- Mauritius Renminbi Clearing Centre in June 2025. This centre, which is based in Mauritius, greatly facilitates payment systems for business operators dealing with China, thereby reducing transaction cost. Concerning part (b) (ii) of the question, I wish to inform the House that as per information provided by the Ministry of Finance, the duty concessions relating to trade in goods under the FTA cover only import duties, that is, tariffs, and are not applicable to excise duties. Consequently, there is no revenue foregone in terms of excise duties arising from the implementation of the FTA. However, regarding import duties, the total amount foregone as at date is around Rs330 million. However, I need also to state that import duties paid under MFN, that is, goods that are not eligible under the FTA, for the period 01 January 2020 to May 2026, we have collected approximately Rs3 billion. Mr Deputy Speaker, Sir, to conclude, I wish to add that trade is not only about revenue generation or revenue loss. It is much more than that. It is conventional wisdom that free trade contributes to the welfare of consumers in terms of wider choice and more competitive pricing. Thank you.

Yes, hon. Jhummun.

Thank you. Can the hon. Minister inform the House whether, following this agreement, are we importing more and more from China or is it more or less the same?

As I have said, we are currently negotiating the new FTA Framework. There are currently two officers who are in China and they are having a training session, and they are being trained on the implementation of the new FTA. Once they are back, negotiations will follow and then we will decide whether we will go ahead with the new FTA or not.

The hon. Second Member for Rodrigues! STATE TRADING CORPORATION – RATION RICE – PRICE & STOCK