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The status of negotiations

Richard Cachia Caruana, Core Negotiating Group Chairman, addressed the 16th meeting of the EU-Malta Joint Parliamentary Committee on Monday. He reviews the current status of Malta’s accession negotiations and discusses the developments expected over the coming months.

Since we last had an exchange of views within this forum, a further seven chapters are now, so to speak, on the table. We have also had the satisfaction of reaching agreement on another five chapters which are now provisionally closed, with the eighteenth closure – the Transport chapter – occurring only ten days ago.
The other chapters to be concluded since we met in Malta last May are those dealing with the Free Movement of Goods, the Free Movement of Persons, the Free Movement of Services and Energy.
This means that we have reached the stage where a number of Malta’s requests for special arrangements have been considered and granted. This is the case with all the five chapters we have closed since May, except that dealing with the Free Movement of Services, where no requests were made by Malta.
At this stage the only chapter remaining to be opened is that dealing with Agriculture. We expect this chapter to be formally opened for negotiations during the Belgian Presidency. Nevertheless, a number of technical discussions have already taken place with Commission officials on various aspects of this chapter. These relate in particular to the veterinary and phytosanitary acquis. Substantive negotiations will take place during the first semester of 2002 under the Spanish Presidency.
The arrangements granted to Malta so far, vary in nature. The two granted in the chapter dealing with the Free Movement of Goods are of a very specific and technical nature. These are:
• a four year transition period for full harmonisation with requirements related to the registration of pharmaceutical products; and
• the possibility of retaining traditional references to evaporated milk, cocoa and chocolate products on the basis of consumer recognition in Malta.
The four-year transition period agreed under the Energy acquis is also of a technical nature and relates to Malta’s need to conform with the requirement of a 90 days’ supply of oil stocks.
In a certain sense, the same can be said of the special arrangements granted in the Transport chapter which relate essentially to Malta’s size and the fact that it is an island. These include:
• a three-year transition period for the retrofitting of certain vehicles with speed limitation devices;
• a transition period of two years for vehicles operating internationally and of three years for vehicles operating nationally in respect of the charging of heavy goods vehicles for the use of certain infrastructures;
• a two-year transition period to finalise the roadworthiness test process.
The special arrangement granted to Malta under the Free Movement of Persons chapter goes well beyond the technical dimension of the other arrangements concluded so far. This deals with the free movement of workers.
The Maltese Government understood that there was a clear perception within Maltese society that EU membership could create an imbalance in the labour market, at least in the initial stages. As you know this is not a phenomenon unique to Malta.
It can be argued, on the basis of previous enlargements, that Malta should not experience a major influx of workers following accession. It can also be contended that the economic growth that will follow EU membership will be sufficient to sustain any possible entry of labour into Malta.
Nevertheless, as was the case within the Union itself, it was politically imperative for the Government to seek ways of addressing what was a clear concern.
In the light of this concern, Malta has been granted an arrangement whereby the acquis on the free movement of workers will be applied as from day one of membership, but, for an initial period of seven years Malta will have the possibility of taking remedial action in the case of any unmanageable influx of workers. Subsequent to this seven-year period, Malta will also have the option of consulting with its partners in case any difficulties should arise.
As Minister Borg has said, it is a credit to the manner in which the accession negotiations are being carried out that the member states readily understood the context of Malta’s request and gave an appropriate and satisfactory response to it.
While this forms an important basis for the final package that will be presented to the Maltese people, there are a number of other important issues that will be discussed in the coming weeks and months.
In the shorter term, we are focusing our attention on the chapters dealing with Social Policy and Employment, the Free Movement of Capital, Fisheries and Justice and Home Affairs.
In the Social Policy chapter we have made four requests for transition periods. Three of these are based on the time required for the new Occupational Health and Safety Authority of Malta to reach full operational status. The other concerns the implementation of the article of the Working Time Directive dealing with the maximum working week. Consultations on this latter request are in their final stages and we hope that agreement can be reached in time for provisional closure at the next meeting of the Accession Conference at Deputies’ level.
The chapter dealing with the Free Movement of Capital has seen considerable progress in the past few weeks and we can say that there is only one outstanding issue to be finalised. This deals with our request to retain restrictions on the purchase of secondary residences in Malta. The Union has acknowledged that Malta’s size calls for special consideration in this context. Both sides are now focusing on what is necessary to reach a satisfactory arrangement on this issue.
While the Maltese fisheries sector may be considered to be rather small in purely economic terms, it clearly has social and cultural relevance. The negotiations on this chapter, where the principal issue for Malta is our request to manage the 25 miles around Malta as a conservation zone, are in hand. We hope that significant progress can be registered over the coming weeks.
We consider that Malta is well advanced in its preparations in the case of Justice and Home Affairs. Indeed, we expected to have been able to close this chapter by now. Unfortunately this has not been the case. The aftermath of the September 11 attacks has had its own inevitable impact on this area of the acquis. Nevertheless, we would still wish to provisionally close this chapter under the current Presidency.
We can also aim at conclusion of three of the remaining chapters in the medium term. The negotiations on Customs Union and Taxation are now each concentrated on one outstanding issue. In the case of Customs Union this concerns duty relief. In the case of the Taxation chapter the issue under discussion is our request to maintain the exempt VAT status of a number of sensitive items. We are hopeful that over the coming weeks ignificant progress can be registered on these key issues, both of which are of high importance for Malta.
The environment negotiations should see major developments now that our new Environment Protection Act is in place. A number of requests for special arrangements have been made in this chapter, the majority of which relate to infrastructural measures that require time and considerable funding to implement.
This leaves us with the final four substantive chapters: Competition, Regional Policy, Financial and Budgetary Provisions and Agriculture. The negotiations on these subjects were always expected to take longer, both because they involve inherently complex issues and also because they have significant financial implications, in particular for the Union itself.
I would, nevertheless, like to briefly touch upon the key issues involved.
The most conspicuous aspect of the Competition chapter concerns state aid, including aid to the ship building and repair industries. I am confident that the Union has understood our need to restructure a sector that relates to an economic activity that is so characteristic of our country.
The chapter on Regional Policy centres on the structures that Malta needs to put in place to allow it to make maximum use of the structural and cohesion funds after accession. On the EU’s side the discussion will naturally focus on the funding that will be made available to new member states.
The chapter on Financial and Budgetary provisions deals primarily with the technical issues connected with the harmonisation of certain budget practices and procedures.
The last chapter is that of agriculture, which I have already referred to. This is undoubtedly one of the most critical chapters. Not only does it have the largest acquis, it also has the largest budget allocated to it by the European Union. It has to be noted that although Malta’s agriculture sector only produces 2.5% of Malta’s GDP, the raw numbers do not paint an accurate picture of either the socio-cultural or the environmental importance of this sector. Considerable effort will go into guaranteeing the financial viability of farming in Malta.
I have run briefly through all the chapters which we are negotiating. It is, however, necessary to place an assessment of this nature within the broader implications that the accession exercise presents for Malta.
Throughout this process, our conviction has been that accession is primarily a political act. It is, however, the essential characteristic of the European process that fundamentally political objectives are normally pursued through the progressive application of pragmatic and very often technical measures.
Accession negotiations constitute a classic example of this approach. Throughout the accession process, Malta - like any other candidate country - needs to ensure that, without minimising the relevance and importance of the technical aspects of the negotiations, it never allows the political objective to become blurred.



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