Special package for agriculture submitted

As the EU accession talks focus on the most sensitive issues, Foreign Minister Joe Borg says that the perception in Brussels is that the Maltese government is driving a very hard bargain.

Dr Borg insists that the government is taking the time it needs to present a solid position on the pending issues. The government is leaving no stone unturned in order to ensure that it will achieve a good package for Malta.

Malta is eight months away from concluding its negotiations. Could you make a stock take of the situation?

We have so far concluded negotiations on 21 chapters and achieved important arrangements. I would highlight in particular the success that we achieved with regard to the free movement of persons. This is significant because we have managed to achieve something which is quite unique.

Malta obtained a transitional period of seven years with regard to the movement of workers to Malta. And if, after those seven years, because our labour market is so small, problems would be caused because of the free movement of workers to Malta, we would seek to resolve them through talks with the EU.

On the other crucial issue of secondary residences, we are the only country to have negotiated a permanent arrangement instead of a transitional period - and we have got the EU to agree that this will be included in our accession treaty to make sure that even a court will not be able to overturn it.

The EU has only granted other candidate countries like Poland a transitional period in this area. For instance, Poland has managed to get a transitional period of 12 years but once this period is over, property in Poland could be speculated upon without any control. In our case we have managed to get a permanent derogation. Our arrangement is tailor made for us.

I am stressing this to rebut allegations made by the opposition that Poland obtained a better deal. This is completely false. There is no doubt that the agreement we managed to get is the best deal.

We also obtained transition periods with regard to transport and the free movement of goods since we considered it would be appropriate to have a phasing in period.

During the first months of negotiations, it seemed that Malta was moving ahead at a very fast pace. Now, Malta is at the low end of the grid if one were to focus on the number of chapters closed compared with what the other nine candidate countries aspiring for the next enlargement. What is the situation?

We started negotiations with the second group of applicant countries so there were already six candidate countries which had started negotiations a year before we did and therefore we had a handicap. At first, the chapters that were opened were fairly easy for us either because we were already in line with EU regulations or because our legislation was already modelled on that of the EU.

In other areas, the changes needed were small and could be carried out upon accession. In other areas such as education, training, research and development, it is in our interest to benefit from such initiatives as soon as possible. So we stared to close chapters at a very fast pace because there was no need for hard negotiations.

At that time, the criticism that used to be made was that we were accepting everything without querying it. This was completely false because those were chapters which did not pose any difficulties. When the chapters which required significant negotiations started to be discussed, we started negotiating hard and going into all the details, demanding transitional periods for specific sectors.

We negotiated hard and so far we have managed to get what we were seeking. This meant, however, that since we were not accepting matters as they came, negotiations started to drag. Today, it is true that of the 10 applicant countries aiming to make it in the next enlargement Malta is at the bottom of the list of chapters concluded. However this is not worrying because what matters is not how many chapters an applicant country has closed but to end the talks on time.

Furthermore, there may be applicant countries that for their own reasons, have taken a political decision to accept matters without making a strong case for specific areas.

We are working hard on two counts: to get the results we want in the areas where we need special arrangements or transitional periods and to close negotiations by the end of the year. These are not impossible tasks and we are working in the direction of achieving both.

You are saying that the pace of negotiations has slowed down because the government is being a hard negotiator?

Definitely. The perception in Brussels about Malta`s negotiating process is that we are driving a very hard bargain. We are taking our time in presenting our position. However, our position would then be practically foolproof, with justification being given for the requests that we make. The EU does not consider this attitude negative and we are perceived as professional in our approach and that we know what we are after.

What are the major pending issues?

The chapters which do not have a direct financial dimension and have not yet been closed are those on the customs union, fisheries, competition, taxation and the environment.

Then there are three chapters which have a direct financial dimension: the agriculture, regional policy and budgetary chapters. There are two other chapters dealing with the institutions and the last one known as `the others` which deals with anything which would have not been dealt with already in one way or another.

With the customs union, there are two outstanding issues: one is the dismantling of agricultural levies. Our position is that this should be tackled in the chapter dealing with agriculture. If this principle is accepted, that item would be shifted to the other chapter and then there is a pending issue related to the duty relief with regard to textile imports, where we are requesting a transitional period. The EU is going through our request and we hope we would be able to close this chapter by June.

With regard to fisheries, we are seeking a 25 mile fisheries conservation zone around Malta and Gozo. We are very advanced here and I am very hopeful that an agreement would be reached very soon and the chapter will be closed in the coming weeks.

Will the government be getting what it has asked for so far as fisheries is concerned?

It seems that we will be getting a good deal, very much in line with what we have requested.

As for the taxation chapter, the only outstanding point relates to VAT on food and medicines. We have asked to retain zero VAT rating on food and medicines for as long as the UK and Ireland retain it. However, in this regard, Cyprus has just accepted a transitional period of five years and that has made our case much more difficult because the EU may argue that since Cyprus has accepted a transitional period of five years, Malta should accept a similar arrangement. We are discussing this and we would be arguing that we should be given the same treatment as two member states.

With regard to the environment, we have advanced considerably. There are four areas where at first we were seeking transitional periods but which we will be doing otherwise - following talks at Meusac level - because we have come to the conclusion that we do not need them. For instance, one of the transitional periods was related to leaded petrol, where the government took the necessary measures and another related to a specific directive which states that you cannot have establishments which would be dangerous within inhabited areas. In our case this relates to the gas bottling plant where we will relocate by the date of accession.

On the other requests related to the environment, the indications are that we will be achieving what we are aiming for. We are still negotiating with regard to the waste packaging directive and hopefully we would be able to conclude this item in the short term.

But if you had to exclude the issue of hunting and trapping, what is the most sensitive issue so far as the environment is concerned?

The area which we need to negotiate in more detail is that on the use of glass bottles instead of plastic ones. Then there is the hunting and trapping issue, where we are working with the EU in order to find the right formula which would put the hunters` mind at rest that hunting will be able to continue in spring with regard to turtledoves and quails.

With regard to the competition chapter there are two main issues: One relates to the transitional period of seven years we are requesting on state aid for the shipyards. We are working on the final justification of this issue which, I hope, will be submitted to Brussels very shortly. The other pending issue is the phasing out of the assistance given to industries in terms of the Industrial Development Act and the phasing in of new assistance under the Business Promotion Act.

I hope we will be able to conclude this chapter in the early part of the Danish presidency.

Do you believe the transitional period for the shipyards will be granted?

That very much depends on how convincing we are on the new restructuring programme for the shipyards. I am very hopeful that we will be able to obtain what we are after.

In a nutshell what are the chapters which will be closed by the end of the Spanish presidency in June?

I would say customs union, fisheries, taxation, depending on whether we reach a solution on the VAT issue, and the environment could be concluded by June, the latest would be the very first part of the Danish presidency. I would say that the competition chapter would go into the Danish presidency, that is the second half of this year.

However, with regard to the other three chapters dealing with financial provisions, there is a good possibility that the chapter dealing with regional policy will be closed by the end of June.

Could you elaborate on the three chapters which deal with the financial aspects of accession?

The budgetary chapter relates to the contributions Malta has to make as a member state to the EU budget. The regional policy chapter is to a large extent the other side of the coin, that is, what Malta will be entitled in the form of structural and cohesion assistance. Obviously, both chapters are linked and we are making progress in negotiations on both chapters. Our bottom line is that Malta will receive a package of financial assistance during the first three years of membership from 2004 to 2006 which would make Malta a net beneficiary and the amount we will be getting would be reasonable.

In a nutshell we are working hard to strike a deal which would ensure that upon accession and for the first three years of accession we would be receiving in funds significantly more than what we would be contributing. Post 2006, Malta and the other new members would be in a better position as they would be treated on the same basis as existing member states and would be able to benefit more.

With regard to the first three years, the EU had decided what amount would be forked out for enlargement when the date for enlargement was still very vague. It was thought at that time that the enlargement would include six countries but now it could include up to 10 countries. It is one thing dividing that amount between six and another between 10. But this would be the situation only for three years and then the new member states would be on equal footing with the current member states.

So what is Malta`s position in this scenario?

We have to work out a sum which would be reasonable in the sense that we would be receiving around the average of what the new member states would be receiving based on their GDP per capita.

Do you have a sum in your mind?

It is premature to go into specifics.

But could you give an indication?

It would be a significant net amount, in the scenario and parameters that I have explained. What is paramount is that we would be treated fairly. It is true that we are on the high side of the GDP per capita of the applicant countries. Notwithstanding that, we maintain that we should be given around the average entitlement for the new member states.

Then there is the other delicate chapter dealing with agriculture. Could you elaborate?

We have just submitted to the EU our special package for agriculture which is made up of a programme for the dismantling of levies on imported agricultural products and income support to be given to Maltese farmers to become more competitive by being in the position to reduce the prices of various products while becoming more efficient.

This is a package that would be negotiated with the EU. It will not be an easy task. I must confess that certain requests that we are making go against the Common Agricultural Policy and the acquis. It will be an uphill process but we are hopeful that we will manage to negotiate a deal which will be very acceptable for the local agricultural community.

Could you single out which are the most pending problematic areas in the chapters which are still being negotiated?

The negotiations on the special package for agriculture are going to be very difficult. Another area which is difficult is the transitional period for the shipyards although we will be negotiating very strongly. The third is possibly our request to retain zero VAT rating on food and medicines, especially given the new scenario, as Cyprus has accepted just such a transitional period.

Then there is the chapter dealing with the institutions. Are there any significant issues to be dealt with under this chapter?

Negotiations on this chapter are expected to start very soon. The indications are that with regard to the language issue, Malta is expected to be treated like other countries, and the Maltese language will be treated as an official EU language.

With regard to the institutions, the opening of negotiations will be on the basis of the Nice Treaty, the package is acceptable to us however if there will be a reopening of this package with regard to any applicant country, then we would put forward a request with regard to certain items, like the number of members in the European Parliament allocated to Malta.

What is the time frame, post conclusion of negotiations?

We are aiming to conclude negotiations by the end of the year and this means that in effect during next year there has to be the ratification process by the applicant countries and the EU itself. This would entail that in our case, in the early part of next year there will be the drawing up of the accession treaty. The treaty will be signed by us and the representatives of the member states. Once the accession treaty is signed, there has to be adoption of the treaty by the European Parliament which would have to be followed by the ratification by every member state of the EU.

Technically speaking, when is the earliest possible period to hold the referendum?

I would say that technically within this scenario, we would be able to hold the referendum round about spring of next year.

The opposition is saying that the government is seeking membership at all costs and that you said during an internal meeting that we have to join the EU, if needs be on our knees. What are your comments?

Facts speak for themselves. There is no doubt that we have achieved results in certain areas which can be described as unique both with regard to the movement of workers and also with regard to the acquisition of immovable property in Malta. It is a complete lie to say that we want membership at all costs because we are showing that we are negotiating fully and we are managing to achieve a good deal. There is no doubt that statements that we want membership at all costs or that we are willing to go there on our knees are complete false. They have no basis in reality and are a complete fabrication.

I can only describe the position of the Labour Party in this regard as one of panic: they are realising that their initial claims that we would be made to accept everything and that there is nothing which can be negotiated is being dismantled day by day. They are panicking to the extent of resorting to complete falsities.

The Labour Party is panicking because their alternative of Switzerland of the Mediterranean has not been given any credibility by the people. They have not come up with any solid arguments and now they are in a panic as the electorate is giving weight to the negotiating process.

It is a fact that the Labour Party is doing its best to undermine the process and will do anything to do so. They know that we are a proud country and that the Maltese would hate to think that their government is not sticking up for them in the negotiations; therefore they have deliberately sought to portray the negotiations in this light with little or no regard for the truth. This is the unscrupulous strategy of the Labour Party.