01 MAY 2002

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The state of negotiations

Richard Cachia Caruana, Chairman of Malta’s Core Negotiating Group, on Monday discussed developments in Malta’s EU accession negotiations and the main issues to be tackled over the next few weeks and months. Following are extracts from his address to the Seventeenth Session of the Eu-Malta Joint Parliamentary Committee

This meeting comes during a time of rather intensive interaction with the European Parliament. We have this Joint Parliamentary Committee; the President of the Parliament, Pat Cox, will be in Malta in three weeks’ time. I was also given the opportunity to hold an exchange of views with your colleagues – and indeed some of those among you here today – of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, just two weeks ago.

Earlier, you heard Minister Joe Borg give an overview of Malta’s goals both as a candidate country as well as beyond. I would like to address the more technical issues that have been tackled over the past few months, as well as those we will be dealing with in the remaining period of this negotiating process.

As Minister Borg said, a further three chapters have been provisionally closed since November. These are the ones dealing with Social Policy and Employment, Free Movement of Capital and Justice and Home Affairs.

The discussions on Social Policy centred on two particular aspects. On the one hand there was the need for the new Occupational Health and Safety Authority to reach full operational capacity. The other matter concerned the length of the working week, where Malta wanted to ensure that the required change in the working place dynamic from obligatory to voluntary overtime would be gradual, in order to avoid any disruptions at the workplace, in particular to the manufacturing sector.

All the social partners agreed with this position and the agreement reached includes provisions which will, where necessary, allow conditions in existing collective agreements to remain applicable.

As you are aware, the main issues arising during the negotiations on the Free Movement of Capital were those related to the purchase of secondary property.

As occurred in the case of the Free Movement of Workers – which we had discussed in some detail at the November meeting of the Joint Parliamentary Committee - the Union recognised Malta’s special concerns in this area owing to our very particular demographic and geophysical characteristics.

This led to agreement on the application of non-discriminatory restrictions on the rights of EU citizens to acquire and hold secondary property, unless they have resided in Malta for a minimum of five years. This arrangement will be permanent and provided for in a protocol annexed to the Accession Treaty.

Although no requests for special arrangements were made in the Justice and Home Affairs chapter, the negotiations were detailed and intensive. This is a particularly sensitive area both in Malta and in Member States and the discussions focused on building mutual trust as well as preparing the infrastructure – legal and physical – required to fulfil the responsibilities covered by this chapter.

Another eight substantive chapters remain open for negotiations. We have set ourselves the target of completing negotiations on five of them during the remaining two months of the Spanish Presidency. These are Fisheries, Customs Union, Taxation, Environment and Competition.

In the Fisheries chapter we are close to reaching agreement on our request for the 25 nautical miles around Malta to continue to be managed as a Conservation Zone.

In the Customs Union chapter the remaining substantive issue that can be discussed at this stage concerns duty relief on certain textile items. The negotiations on the Taxation chapter are focused on Malta’s request to retain VAT exemptions on certain sensitive items as a number of Member States.

In the Environment chapter we have registered significant progress. With the enactment of a new Environment Protection Act last year, we have consolidated the legislative basis for the adoption of the acquis. Since then over thirty pieces of subsidiary legislation have been issued to cater for specific areas within this policy and more will be following in the weeks to come.

Moreover, on 1 March 2002, the Malta Environment and Planning Authority was designated as the permanent competent authority in terms of the Environment Protection Act. Important aspects of this development are the streamlining of the enforcement capacity and the strengthening of administrative structures. This restructuring, which includes a shift of ministerial responsibility, introduced a distinction between the operational and the regulatory aspects of environmental management.

The discussions on Competition issues have focused on state aid, including aid provided as part of the restructuring process underway in Malta’s shipyards. Apart from being a complex issue, it is also rather sensitive given the need to ensure a truly viable future for Malta’s shipyards.

I have deliberately drawn a distinction between these chapters and the three chapters with a strong financial element: Agriculture, Regional Policy and Financial and Budgetary Provisions. These include issues that require some more time for both the Union and the candidate countries to reach definite positions.

The chapter on Agriculture is not only vast in content, but it is also sensitive and complex. While the statistics may show this activity to be a low contributor to Malta’s GDP (2.3 percent), it nevertheless has major social, economic and environmental implications.

This is combined with the inherent constraints experienced by the Maltese agricultural sector, including not just the small amount of land still under cultivation (10,000 hectares), but also the small-scale nature of the farming activity that is practised. This has led to a number of requests for special arrangements in this area.

Moreover, we are proposing a Special Market Policy Programme for Maltese Agriculture. This includes assistance for the cultivation of certain products as part of the programme for the dismantling of existing protection. It also covers rural development and proposals for special supply measures.

In the Regional Policy chapter, the remaining substantive issue that can be tackled at this stage concerns the need to cater for the special handicaps experienced by the island of Gozo as a result of its double insularity.

The chapter on Financial and Budgetary Provisions concerns the mechanisms that need to be put in place to establish Malta’s status as a net beneficiary state upon accession reflecting its level of economic development, currently 55 percent of the EU average in terms of GDP per capita.

Malta is also about to open negotiations on one of the so-called residual chapters, that dealing with Institutional Matters. In this respect the Treaty of Nice set out what is expected to be the Union’s position. One issue concerns the number of Maltese MEPs. The European Parliament has itself expressed its position on the need to increase the number of seats that will be allocated to Malta, the Czech Republic and Hungary.

Although the remaining negotiation issues are among the most complex, I am convinced that we can complete negotiations by the end of this year. I have no doubt that the co-operation that has been forthcoming from the Commission, the Member States and successive Presidencies will help to ensure this.

The European Parliament, through this Committee in particular, has also been a consistent partner through this process. I would like to take this opportunity to thank you on behalf of your colleagues for this support.

Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
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