WTO TRADE POLICY REVIEW OF MALDIVES
Statement of the United States delivered by the Permanent Representative to the World Trade Organisation, Ambassador Michael W. Punke.
For the Record
March 21, 2016
Thank you, Chair. The United States warmly welcomes the delegation from Malé, led by Executive Director Ibrahim Yoosuf Fulhu to this, the third Trade Policy Review of Maldives. Much has transpired since Maldives’ 2009 TPR, both globally and domestically. The United States appreciates the Secretariat’s and the government’s work in documenting the changes that have taken place since Maldives’ second TPR. We compliment you for providing WTO Members with a more complete picture of Maldivian policies affecting trade, and we look forward to learning more about them during the next several days. We would also like to thank the Ambassador of Pakistan for acting as discussant and for providing his insights to ensure a meaningful context for this review.
Since the 2009 TPR, the Maldives has continued to chart a course towards economic liberalization. Maldives has a small, yet growing market that is statutorily receptive to foreign investment and trade in goods and services, and despite political challenges, the Maldives have experience a sustained, albeit irregular and relatively slower, growth rate. Economic turbulence over the past five years has negatively affected most of the world economy, and Maldives is no exception. Nonetheless, many of the economic liberalization programs the government has worked on – or plans to undertake – will have a lasting impact on Maldives’ future economic growth.
However, real and growing concerns about the status of democracy and rule of law in Maldives may act as a deterrent towards additional investment in the market. In addition, this beautiful island nation also faces challenges with high degrees of youth unemployment and religious extremism. A path that allows everyone – including vulnerable populations of migrant workers — to exercise their human rights and that protects labor rights and fundamental freedoms will facilitate our cooperation on important mutual interests, including countering violent extremism, addressing environmental concerns, and ensuring security in the Indian Ocean.
Maldives’ continued commitment to diversification is key to the nation’s economic growth and development. We recognize the challenges that Maldives will continue to face as it makes the transition along the road to economic prosperity. The Maldives remains eligible for our Generalized System of Preferences (GSP) program and we stand ready to assist in providing additional information to Maldivian businesses about how to take advantage of our GSP program.
In 2014 the United States and Maldives held our first Trade and Investment Framework Agreement Council, or TIFA, meeting in Malé. This inaugural TIFA identified several areas for cooperation to increase external trade and investment; we look forward to future meetings to advance cooperation under the appropriate circumstances.
The United States remains mindful of Maldives’ efforts to upgrade its trade policy regime as characterized in the government’s report for this meeting. Specifically, we commend the government’s efforts to reduce its dependence on import duties as the primary revenue generator. A broad-base taxation system in conjunction with plans to develop a financial market will establish a diverse portfolio of revenue-generating schemes that will boost government earnings and help achieve poverty-alleviation.
Services remain by far the largest sector of the economy (accounting for more than 80 percent of GDP and over 90 percent of total goods and services exports) with tourism being the largest activity and the largest generator of government revenue. We hope that Maldives can contribute to efforts to reduce barriers to global services trade.
We are also aware of the government’s ongoing efforts to improve transparency in government procurement, to introduce quality control mechanisms on exports, and to develop laws to protect intellectual property rights. The United States stands ready to work with Maldives as your government develops IP laws to ensure that they are TRIPs-consistent. As part of the TPR process, the United States has submitted questions to the Maldives regarding actions such as these in an effort to help the Maldives pursue economic advancement, and we look forward to considering your responses. We also join others in urging the Maldives to ratify the Trade Facilitation Agreement as soon as possible, an attribute that our companies increasingly consider as they contemplate investment decisions.
The United States acknowledges the tests facing the Maldives because of its island-nation topography. Because of its low elevation, the Maldives is among the most vulnerable countries in the world to rising sea levels which have the potential to disrupt significantly the Maldivian economy and way of life, and we applaud your government’s efforts to address these concerns.
Thank you for your attention, and we look forward to learning more about Maldives trade policy regime. The United States offers best wishes to the Maldives for a successful Trade Policy Review.