Mauritius Applies to Join the Eurasian Economic Union

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Op/Ed by Chris Devonshire-Ellis

  • Implications for uniting Africa, EAEU, China and India finance and trade  

The Indian Island nation of Mauritius, sitting just off the East Africa Madagascar coast has made an application to join the Eurasian Economic Union (EAEU). While perhaps better known for its coral beaches and resorts, French creole style atmosphere and vacationing Russians escaping the frigid Russian winter months, the proposal makes a lot more sense than first appears.

Mauritius has also been developing, over several years, a financial services offshore trade platform, with offshore companies being able to park funds in Mauritius at low tax rates. In fact, Dezan Shira & Associates, the advisory firm behind Russia Briefing, was responsible for the translation of Mauritian offshore company law and documentation into Chinese language for that market back in the late 1990’s.

But recent trade developments have expanded the significance of Mauritius in international trade still further. The country is part of the African Continental Free Trade Agreement (AfCFTA) which came into effect on January 1 this year and which in phases, is abolishing tariffs on all products traded between African nations.

Mauritius has also agreed Free Trade Agreements with China and India – two of the world’s largest consumer markets, and thus providing a direct services and trade link between these countries and Africa.

That has specific implications, especially for Russia, as Moscow has been targeting Africa as a growth market for its corporates to use both as an export manufacturing base – the free trade zone at Port Said being an example – but also as a source of materials and commodities and a market for Russian products in its own right. The same, albeit to a lesser extent, also applies to the other EAEU nations of Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Mauritius as a Free Trade partner with the EAEU provides a convenient HQ for tying together Africa, China, India and EAEU trade.

There may be other unforeseen advantages, including for EU and US companies. As the EU and United States seem bent on ‘decoupling’ from China and are poised to make it difficult for some of their business sectors to engage in and invest in China and Russia, establishing a Mauritian entity – and therefore qualifying for the Mauritius FTA positioning may help alleviate some of the negative aspects of an increasingly protectionist West.

Having Mauritius on board to access Africa, as well as China and India, makes a lot of global trade sense for the EAEU – and others.

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