29 MAY 2002

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Labour Party shoots itself in the foot over ‘partnership’

By Kurt Sansone

The Labour Party’s scare mongering tactics over the implications of EU membership were given a severe blow on Monday by none other than deputy leader George Vella confirming that the ‘partnership’ his party is seeking with the EU is similar to the European Economic Area arrangement for Iceland and Norway.

And as this newspaper revealed in July last year, the EEA arrangement means that Malta would have to grant workers and self employed from the EU the right to come and work in the country without restrictions.

In an interview he gave The Times on Monday Dr Vella said that the agreement the Labour Party had signed in 1998 with the European Union was "similar to what is known as the European Economic Area (EEA)." When asked by the interviewer whether that is what the Labour Party wanted, Dr Vella confirmed, "Yes. Definitely."

The EEA is the closest possible relationship that any European country can have with the EU short of membership.

And despite the criticism the Labour Party has been leveling toward government over the right of European self-employed persons to open shop in Malta, nowhere is the MLP saying that in its ‘partnership’ deal, Malta would still have to open its doors for self-employed persons.

The EEA agreement states, ‘Within the framework of the provisions of this Agreement, there shall be no restrictions on the freedom of establishment of nationals of an EC Member State or an EFTA State in the territory of any other of these States.’

It also specifies that freedom of establishment includes ‘the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms’.

The same holds water for the free movement of workers. Article 28 under part three of the agreement dealing with the free movement of persons, services and capital explicitly states, ‘Freedom of movement for workers shall be secured among EC Member States and EFTA States.’

The same article says that ‘Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of EC Member States and EFTA States as regards employment, remuneration and other conditions of work and employment.’

Another of the Labour Party’s pet subjects, the removal of levies, also features prominently in the EEA agreement.

Article 14, in Part two of the EEA talks about the free movement of goods and makes specific reference to the removal of levies and trade barriers. ‘No Contracting Party shall impose, directly or indirectly, on the products of other Contracting Parties any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. Furthermore, no Contracting Party shall impose on the products of other Contracting Parties any internal taxation of such a nature as to afford indirect protection to other products.’

In addition, this proviso indirectly points towards the retention of the VAT tax regime.

To the Labour Party’s credit, Malta may get some reprieve in the agricultural and fisheries sector as it is considered to be a sensitive issue given the importance of fishing in the economies of Iceland and Norway. However, Article 19 of the EEA states that the countries involved have to continue working to achieve ‘progressive liberalisation of agricultural trade.’

The EEA was agreed to in 1992 and implemented in 1994. Initially the agreement also covered Austria, Finland and Sweden, which have since become EU member states. The EEA superseded the previous European Free Trade Agreement (EFTA). Switzerland decided not to participate in the EEA and its relations with the EU are based on the free trade agreement reached with the European Community in the 1970s.

Malta’s participation in the EEA would mean that the EU Commission would consult Malta during the formulation of Community legislation. However, Malta would not have the right to participate in the decision-making process of the EU. If the Labour Party gets its way the island may end up mopping up EU legislation without having the least say in its drafting.

It would also mean that most of the changes that have already been made locally because of EU exigencies would be retained.

 

 



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