One of the major advantages of EU membership is undoubtedly the practice of free trade in a single market that no longer recognises political borders in the sale and purchase of goods and services. This is the theory. But, as rightly pointed out by the Central Bank Governor, in a small market like Malta competitive forces are at times distorted.
While most traders and consumers would readily agree with the principle of the free market, disputes often arise as to whether the benefits of a free market are indeed accruing to those who sell and buy goods and services.
Representatives of the Chamber of Commerce, Enterprise and Industry recently met the Parliamentary Committee for Economic and Financial Affairs and claimed that “they are deeply concerned by the creation of an uneven playing field arising from abuse of import regulations by Sicilians”. They say that the problem “is particularly noticeable but not restricted to the furniture industry” where Maltese consumers were receiving “inferior service”.
The chamber also alleged that the catamaran service operating between Sicily and Malta is adding to the problem of unfair competition as “what came off the catamaran was not adequately inspected and submitted to Customs intelligence”. Virtu Ferries, which operates this service, strongly objected to this allegation and insisted that “the chamber need not be so overprotective in preventing Maltese customers from getting an inferior service” adding that “it is kind of (the chamber) that they are, even if it is totally unnecessary”.
After the din of the not unusual sabre rattling by representatives of traders and consumers, it is time to put the whole issue in perspective. Hopefully, no one will consider resolving this issue by restricting free trade both because such a measure would be illegal and also because it is against the interest of the majority of consumers.
The chamber came up with a dubious solution that would consist of the “setting up of a market surveillance authority to provide a multi-departmental approach to information gathering and dissemination”. This sounds very much like a proposal that promotes even more bureaucracy and waste of taxpayers’ money in the setting up of yet another authority.
The interest of local traders should also be protected as they should not be the only ones to be subjected to the observance of local regulations relating to the payment of taxes and the observance of Customs’ procedures.
If it results that Sicilian or any other foreign supplier of goods and services is being subjected to less stringent import regulations, then the relevant government authorities should ensure that this anomaly is corrected.
Even if these principles of fair trading are put in practice, the problem of distortions created by the size of the Maltese market will remain a challenge for local suppliers of goods and services.
Economies of scale are a reality of life that enable large suppliers to promote their products at more advantageous prices to consumers.
For consumers this is a blessing they should not be deprived of, especially at a time when families have to cope with increased financial stress as a result of a tough economic environment.
Many local businesses need to become smarter by luring consumers through an enhanced quality of service that foreign suppliers may well find difficult to emulate.
Ultimately, in a free market economy, ‘the customer is always right’.