11 - 17 April 2001

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Boosting trade with Tunisia

Prime Minister Eddie Fenech Adami highlights the development of further economic ties with Tunisia, addressing the launch of Partnership Day, which took place during the Tunisian Prime Minister's visit to Malta.

He speaks on strengthing business with foreign companies wanting to operate in Malta and on the Euro-Mediterranean Agreement, which is boosting trade integration between Tunisia and the EU.

By Eddie Fenech Adami

The Mediterranean dimension is an important pillar in the foreign policy of both Malta and Tunisia. Our countries have been active participants in the Euro-Mediterranean Partnership, since its inception in Barcelona in 1995.

One of the essential objectives of this process is the consolidation and expansion of trade within the Mediterranean region. This involves expanding trade flows between the EU and the Mediterranean countries but the Euro-Mediterranean Process envisages also the establishment of partnerships and systems of co-operation between the Mediterranean partners themselves. Further progress needs to be registered as regards this "horizontal" or "south-south" integration. Increased trade co-operation between Malta and Tunisia is a step in this direction.

Today there is a worldwide recognition that trade liberalisation policies are important policies which determine the success of economies. Removing the barriers to trade enables countries to specialise in those sectors where they have a comparative advantage, thus concentrating their assets on what they can produce best. Furthermore, the stimulus of an open economy promotes competitiveness and efficiency and facilitates the adaptation of companies to changes in their environment. Besides the economic advantages, trade also plays an important role in establishing contacts throughout all strata of society. Together with the freedom in trade comes the freedom of exchange of ideas and experiences. Trade helps to bring about an understanding of each other's cultural milieu and thus, an improvement in dialogue among states and peoples. In this manner, the engagement of states into mutual trade establishes strong links between them and hence, facilitates the development of stable relations among states.

The volume of trade between Malta and Tunisia has increased by Lm1.1 million since 1995, to reach around Lm2.5 million in 2000. Maltese domestic exports to Tunisia reached Lm0.3 million in 2000 compared to Lm0.1 million in 1995. Re-exports have also increased from Lm0.04 million in 1995 to reach Lm0.4 million last year. At the same time, imports from Tunisia reached Lm1.8 million in 2000, from Lm1.3 million five years earlier.

Trade is definitely one aspect of our bilateral relations that could be developed further. There is significant scope for increasing trade between the two countries, both as regards Maltese exports to Tunisia as well as Tunisian exports to Malta.

Improving trade relations was among the topics which were covered last year, in May, during the long series of discussions held between Malta and Tunisia within the framework of the Third Mixed Commission Meeting. Important developments took place and indeed, the results of these discussions were a landmark of our history of bilateral relations. Closer links were forged as a number of agreements were signed providing for further cooperation in the areas of tourism, agriculture, fisheries, culture, employment and training, civil protection, mutual assistance in Customs related matters and local councils. A double taxation agreement was also signed, which has a far-reaching effect on the business communities in the two countries.

Furthermore, negotiations were initiated to establish a free trade zone between the two countries. The creation of a free trade area would provide a very important opportunity to develop further trade and cooperation between Malta and Tunisia. It would increase and facilitate trade between the two countries.

Over the last few years, Tunisia has made impressive progress in the economic field reflecting the whole programme of restructuring and reforms which has been implemented over recent years. This represents significant opportunities for Maltese business. Likewise, I am convinced that Malta presents various trade and economic opportunities for the Tunisian business sector.

A free trade agreement would remove the barriers to trade between our countries, enabling businessmen to find profitable trade opportunities. Market access would improve both for Maltese as well as Tunisian exporters. This would enable businesses in both countries to search for and explore the potential of a relatively untapped market. There are opportunities not only for trading in finished products but also as regards the sourcing of industry's requirements of raw materials or semi-finished goods. New trade opportunities would thus emerge for both Maltese and Tunisian enterprises, leading to economic and commercial benefits for both parties. Improved market access would also provide the potential for investment opportunities, resulting in increased interlinkages between the two economies and hence continuing to strengthen the bilateral relations between Malta and Tunisia.

Efforts to develop further the economic ties between our two countries are not being undertaken only at the government level. Indeed, an agreement was signed last year between the Malta Federation of Industry and the Union Tunisienne de l'Industrie, Commerce et de l'Artisan (UTICA). This cooperation agreement aims to strengthen economic and trade relations between Malta and Tunisia and to support Euro-Mediterranean partnerships. A cooperation agreement is also in place between the Malta Development Corporation (MDC) and the Tunisian Foreign Investment Promotion Agency (FIPA). This agreement reflects the aim of the two agencies to work closer together to promote industrial cooperation between companies in the two countries. It is one of the efforts which are being undertaken to promote investment opportunities between the two countries.

Furthermore, one of Malta's major banks, the Bank of Valletta, has also opened representative offices in Tunisia to strengthen business with foreign companies who wish to operate in Malta. Governments have an important role to play to reduce, and if possible remove, any barriers to trade and other obstacles to economic cooperation. However, the extent of the development of trade and economic relations depends on initiatives by the private sector. Without a pro-active approach by the business people themselves, who are the real drivers of the economy, intents for increased economic cooperation agreed upon by our governments would remain untapped opportunities.

Malta's external relations must be seen in the context of its vocation to become a member of the European Union (EU). Significant progress has been registered in the path towards accession to the Union. We are convinced that Malta's EU membership would be beneficial to North African countries, including Tunisia, as Malta would act as an added voice for the Mediterranean region in the European Union. As an EU Member State, Malta would also be able to act as a catalyst for trade between the EU and the Mediterranean partners.

On its part, Tunisia has had a long-standing co-operation relationship with the EU. The Euro-Mediterranean Agreement between the EU and Tunisia, which entered in force in 1998, was the first one ratified amongst Mediterranean countries. This agreement is boosting the trade integration between Tunisia and the EU.

The future presents Malta and Tunisia with various opportunities for improved trade and economic relations. I am confident that your visit will not only serve to develop further the already excellent relationship between the two countries but will also provide opportunities for good business contacts that will result in fruitful linkages in the years to come for the benefit of the two countries.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt