Enhanced opportunities

Malta tried for long to gain access to the EU market for its processed agricultural products. However, talks on this matter never got anywhere until the successful completion of negotiations to join the EU. Now, through a new arrangement, the EU market will be opened up for our biscuits, pasta, jellies, drinks and soups as from May.

This is very different from what domestic companies have to face now. Our exporters confront EU tariffs of over 24 per cent on some of these products. In fact, some companies chose to sell in those markets but at very low or even negative margins, in order to establish a presence in these countries.

In return for the EU's concessions, Malta will further liberalise the domestic market in the same sectors. This liberalisation will be discussed with the business sector, ensuring a correct implementation that will control pre-membership competition in local markets.

It was only the prospect of EU membership that provided the spur in negotiations on such pre-membership access to EU markets. The opportunity created by the new agreement will accelerate sales growth for local companies.

Casualty

Having witnessed the Labour Party sow panic in workplace after workplace, trying to scare away the pro-EU vote, we were told on Wednesday by one higher-up that, actually, Labour was not telling employees that they will be losing their jobs. Replying to the accusation that Labour had used scare tactics, Leo Brincat had the gall to claim that the MLP had only told the employees to go to their employers, asking them whether they were going to get fired after Malta joins the EU.

Apparently, Labour's leaders feel that they need little or no justification before they go about unnerving a firm's employees or before they unleash their terror on a firm and its sources of supplies and finance. Labour sees no shame in playing rough with people's livelihoods.

On this Sunday morning, a retrospective on the referendum is premature. What is already known is the identity of one important casualty of the No campaign. Political dishonesty sank to a new low. An especially ugly precedent was set in the last several weeks with the Labour Party's contemptible fear-mongering and panic-peddling. Don't expect any straight shooting from a Labour Party that seems to return to its dark past.

Stoking fear at the individual and personal level was complemented by paranoiac misrepresentations of facts at the national level. Anything and everything that would carry a negative message, and distract from the fundamentally positive aspects of EU membership.

The last booklet

As a showpiece of shallowness, it is instructive to take a look at the latest Labour anti-EU pamphlet, the one regarding the expected impact of EU membership on food prices. The report contains a very dubious comparison of Malta's food prices with those in three European countries. Amusingly, the MLP felt the need to shield the identity of the authors of this publication, even though the party's leaders entertained no similar scruples as they came out with the name of business after business that allegedly would have problems with EU membership, always according to Labour.

Labour's so-called study has technical problems, uses a flawed method, and resorts to some equally flawed numbers. Of course, no reference is made to the exact source of the published figures, even though transparency requires otherwise and even though quotable sources are available in the countries concerned. We expect better from a Labour Party whose Alfred Mifsud joined the pre-referendum final rant in Thursday's maltastar.com, calling for a "full disclosure of studies". Mr Mifsud must be aghast at the non-disclosure in his party's booklet.

Labour's allegations are best seen in the light of figures published in The Grocer, a reputable UK publication that studies the retail sector. The Grocer's numbers fully contradict the findings of Labour's "scientific study", and lead to the opposite conclusions. Yet the deception was also closer to home.

Even in the case of local products, the prices reported in the MLP report are inconsistent with those actually paid by Maltese consumers. That's not all. Very conveniently, Labour's pamphlet excludes certain products, like fresh vegetables. Complete and correct numbers do not show higher food prices in the EU, despite higher transport and distribution costs.

Worse than the cooked numbers, there is the atrocity of the logic of the comparison, The Labour Party's authors simply took the prices allegedly found in supermarkets in Holland, France and the UK and assumed that these prices will prevail in Malta when we join the EU.

To start with, prices vary not only between one member state and the next, but also within the member states themselves. However, the anonymous authors were not about to study such dispersion. Costs as well as the structure of the value chain (particularly variation in transportation and distribution costs), and demand factors, differ so much between countries that a simple comparison of retail prices says nothing about the impact on Malta of joining the economic union.

Carrying Labour's absurd logic one step further, it would be equally legitimate to claim that if Malta remains out of the EU and signs up a free trade agreement, the prices of such non-member states as Norway, Iceland and Switzerland will prevail in Malta as well!

The authors have to be commended for a major breakthrough in the study of relative prices. They managed to compare the price of pastizzi with those prevailing abroad. An explanation of just how they pulled such a feat will brighten the outlook of those who search for the culinary delicacy beyond our shores.

The clearest proof of the booklet's dishonesty lies in its inconsistency with Dr Sant's declarations concerning the companies that (he claims) will be negatively affected by EU membership. While the report concludes that the prices of chicken, ham and eggs will rise with membership, these very products come from three sectors that Dr Sant identified as potentially threatened by membership.

Here is a question for Dr Sant to ponder: Where does the threat to these firms come from? Is it from higher prices, or is it from lower prices? Perhaps we should not have expected the MLP to make up its mind on this issue before the referendum!

The report should also have incorporated the new subsidies. These will cushion the impact of the Common Customs Tariff (CCT) on products that we shall continue to import from outside the EU and they will also offset the removal of export refunds. For most cases, the price changes anticipated in the report are the same both when these subsidies are accounted for and where they are not. Could the anti-EU campaign have sunk any deeper?

The truth about food

Levies will be eliminated on a range of products that include meat, dairy items, fresh fruit and vegetables, oil and margarine, as well as pasta. For these items, consumers will pay lower, not higher prices.

As already noted, there are products that will have the CCT imposed on them when imported from outside the EU, as well as products that will lose the EU's export refunds. A subsidy, partly financed by the EU, will offset the effect on price. Thus we expect no price rises for these products either.

The subsidy will be phased out over a number of years, but this is likely to be overtaken by likely developments at the WTO, reducing export refunds and customs tariffs. The likely long-stretch result is a smooth transition and a zero net impact.

There are also other products that are completely unaffected by EU membership.

The reasonable conclusion is that food prices will fall, not rise. However, on this as on so many other matters, the No forces did not let the truth get in their way.