A comprehensive free trade agreement, with zero tariffs and zero quotas, between the United Kingdom and the European Union is in the best interests of Maltese businesses, the British High Commissioner, Stuart Gill, said, stressing that the transition period will not be extended beyond 2020 if this agreement fails to be secured.
In comments to The Malta Business Observer, Mr Gill pointed to the healthy trading relationship tying Malta and the UK together, saying “we want that to continue”, even after the transition period, and this can be achieved through a free trade agreement, a so-called Canada-style relationship with the bloc.
Yet, he urged “continuous dialogue”, asserting that if local firms or industry stakeholders have any concerns, they should “raise them with the Maltese Government” since “this is a negotiation which takes place with the European Commission”, with which the local authorities are liaising.
The UK officially left the bloc on 31st January, but still trades as a full member during a transition period, which kicked off on 1st February and ends on 31st December 2020, when the UK will leave both the single market and the customs union.
Over these next 10 months, both parties expect to negotiate the details of their future relationship across various areas including trade, law enforcement, data sharing, security, aviation, fishing, and pharmaceuticals.
The British Government has said it aims to finalise a free trade agreement with the Union – in which no tariffs or quotas will be applied, without the need to commit to staying aligned with EU rules – within this time period, though both Michel Barnier, the EU’s chief Brexit negotiator, and the European Commission President, Ursula von der Leyen, have expressed doubts that this is possible within such a tight timeframe.
More recently, the French foreign minister, Jean-Yves Le Drian, even went so far as to say that Britain and the European Union are going to rip each other apart during trade talks since their differences were wide.
However, Mr Gill stressed that the parties were “at the starting point of these negotiations”, though he did underline that the British position was unequivocal.
“We are very clear. We have set out our position. Zero tariffs, zero quotas, like the Canada-style [agreement]. Michel Barnier has done the same, and, of course, there will be discussions about it. We see ourselves, on 1st January 2021, as a separate, sovereign nation, and without jurisdiction of the European Court of Justice, and that’s a key point,” Mr Gill stated.
Indeed, he underlined that while Brexit is “now done” there needs to be a focus on “the future relationships” with member states, throughout the bloc. Yet, should the free trade agreement not be secured, the UK will not ask for an extension, but will operate “on the basis of the agreement reached in October 2019, including the Northern Ireland protocol”, he explained.
Mr Gill continued: “there’s been much talk of aligning our laws [with the EU’s]. The Prime Minister made it very clear that that’s not what we are seeking to do as a sovereign nation. We want to have control over our own laws,” he affirmed, stating that “it is our right to do that as a sovereign nation – to get back control of our economic and political.
However, he also stressed that this does not mean the UK would renege on any of its deals. Indeed, Mr Gill highlighted Britain’s aim to be “a champion of free trade” globally, saying that the upcoming negotiations were not only about “our relationship with the EU but our relationship with the rest of the world”.
Whatever the outcome of the negotiations, the High Commissioner stressed that Malta and the UK will remain close.
“This is about a friendly relationship we want to keep in place, in a way that facilitates trade,” he said, going on to say that he was “incredibly positive about the UK-Malta relationship. The future bilateral relationship is a serious, mature one, but, yes, based on the history.
And within that business relationships will be able to thrive,” he underlined. He said this was not only determined by the countries’ historical ties but it was actually based on “the things we do from now on”, in terms of working together on global issues, such as financial crime and cybersecurity.
He points to the recent Bank of Valletta hacking case as an example of fruitful collaboration, saying that the criminals were apprehended thanks to the joint effort of the UK and Malta. To ensure these positive relationships are sustained, Mr Gill has also been meeting with Maltese businesses.
When asked by this newspaper if Maltese businesses expressed concern during this meeting, on what would happen should the zero tariffs and zero quota agreement not be reached by the end of the transition period, Mr Gill said concerns had not yet been expressed, insisting that the meeting was “a first discussion” which outlined the British Government’s position.
But he also referred to other interactions he has had with local businesses in the run up to Britain’s exit from the EU, saying that, despite a feeling of uncertainty, the communication has been “heartening”, and forward-looking.
“Businesses are saying ‘yes, we don’t really know where it’s going to end up, but we are going to – and want to – continue working and doing trade with each other’. So, there’s a positivity about it. It’s not complacency.
“I think that would be a mistake, and it is accepted that there will be challenges,” he explained.
Moreover, he underlined that, over the next few months, the British High Commission’s role will be to “keep talking, keep communicating” so that both the Maltese Government and businesses based on the island “understand where we’re coming from” and vice-versa, since “there may be things we may need to pay particular attention to”, he said.
“It’s a dialogue that we need to keep going and we’re very good at that. People talk to us a lot, and we did this all throughout the [negotiations for the] withdrawal agreement, particularly on the citizenship issue.
So, we work very closely with the Maltese Government on this and we will continue doing so with the relevant ministers, including [new Economy Minister] Silvio Schembri,” he states.
The High Commissioner also pointed to a “suite of arrangements”, in addition to the desired comprehensive free trade agreement, which will be put into place to facilitate business between the UK and the EU’s member states.
One of these is the temporary entry scheme for businesses, which will enable people to travel to and from the UK for business purposes. “There are all sorts of ways to facilitate business, but it’s not going to be free movement. We’ll be outside. But there may be a number of different arrangements, though, again, they will not be based on aligning our laws with the EU,” he stated.
Mr Gill continued by pointing to certain administrative tasks Maltese businesses might have to take on, if they want to continue trading with the UK, once the transition period is over.
One of these is registering for an EORI (Economic Operators Registration Identification) number, which allows firms to do business with other entities in non-EU countries. But he also pointed to initiatives being taken to aid businesses adapt, such as the Brexit Support Scheme, being organised through Malta Enterprise.
Ultimately, Mr Gill said, “our business and other relationships are not solely determined by our membership of the EU”. He pointed to the productive connections prior to Malta’s accession saying that “before you joined, we had a business relationship”, going on to assert that these connections will carry on.
This interview appeared in the February edition of The Malta Business Observer.