The trade relations between Mauritius and the EU are strong, multi-layered and have grown over the years. The EU is one Mauritius's strategic partners: it is by far the most important market for the Mauritius’ tourism industry; the EU is Mauritius' main commercial partner in terms of total trade flows as well as the main source of Foreign Direct Investment to the country.
Bilateral trade between the EU and the Republic of Mauritius
The EU and Mauritius share a long history in external trade. To this date, the EU remains the biggest trading partner for Mauritius, with France, United Kingdom, Germany and Italy leading the way.
The main export commodities:
• sugar, clothing/textiles and tuna for Mauritius;
• machinery and transport equipment, food and manufactured goods for the EU.
While the value of EU exports to Mauritius fluctuated between EUR 650 million in 1995 and EUR 1 billion in 2003, it reached EUR 818 million in 2011 and the EU imports from Mauritius stood at EUR 926 million in 2011.
Around 66%of Mauritian exports went into the EU in 2011, on the other hand the bulk of Mauritius' imports originated in Asia (some 54% in 2011, mainly from India, China, Malaysia, Japan and Thailand), the EU following with 24% in 2011, mainly from France, Germany, UK, Spain, Italy and the Netherlands.
The legal framework for the bilateral trade relations between the EU and Mauritius are:
• Cotonou partnership agreement of 2000 (first revision in 2005 and second one in 2010) and
• Interim Economic Partnership Agreement (iEPA) between the EU and four Eastern and Southern African (ESA) countries , namely Madagascar, Mauritius, Seychelles and Zimbabwe, signed in Mauritius in August 2009 and being implemented since 14 May 2012.
Under the iEPA, Mauritius committed to liberalise 95.6% of its total trade with the EU. The following products are at least partially exempt from liberalisation: live animals and meat, edible products of animal origin, fats, edible preparations and beverages, chemicals, plastics and rubber articles of leather and fur skins, iron & steel and consumer electronic goods.
For sugar, which remains of great relevance to EU-Mauritius economic relations, free access for ACP (African, Caribbean and Pacific) sugar under EPAs will be subject to an automatic safeguard mechanism to be applied to non-LDC ACPs only (including Mauritius). Free access is granted unless the two criteria are simultaneously met:
•total imports from ACPs reach 3.5 million t and
•imports from ACP non-LDCs reach 1.38 million t in 2008/9, 1.45 million t in 2009/10 and 1.6 million t per marketing year in 2010/11-2014/15.
ESA region is affected with a regional safeguard threshold for exports from non-LDCs (which is 544 711 t in 2009/10, 572 756 t in 2010/11, 632 851 t from 2011/12 onwards). From 1 October 2015 onwards, the access to EU market will be totally free, and the regular EPA safeguard will apply.
Mauritius has for a long time enjoyed the benefits of the Cotonou trade regime, under which the EU granted unilateral trade preferences to the ACP countries. The EU has granted preferential market access to the ACP States since 1964 under the successive Lomé Conventions and the Cotonou Agreement. Under these trade agreements, the ACP countries have benefited from duty-free access on the EU market on almost all products, except for some agricultural products regulated by specific commodity protocols such as sugar, beef, rum and bananas.
Foreign Direct Investments (FDIs)
Mauritius has seen a steady rise of FDIs flow over the last years, rising from MUR 2.8 billion in 2005 to almost MUR 14 billion (app. EUR 350 million) in 2010. A decline in FDI occurred in 2011 and 2012, as a result of the global economic crisis. However the level of FDI remains well above the 2005 level (MUR 9.5 billion in 2011, MUR 10 billion projected for 2012).
On average around 50% originated from the EU (with France and the UK as the leading investors). Other important sources of FDIs are India and South Africa, but also China, Switzerland and the US.
Construction, real estate, finance and insurance and accommodation and food services are the main sectors attracting FDIs.