Three years later, Brexit is an ‘orienting experience’ for Maltese businesses
Brexit was “a horrendous experience for Maltese businesses,” according to the CEO of the Maltese Chamber of SMEs.
Three years have passed since Great Britain left the European Union and “Brexit has affected many countries, but especially Malta,” said Abigail Mamo.
On 31 January 2020, the United Kingdom ceased to be a member of the EU, entering a transition period until the following December.
Times of Malta spoke to key figures in a range of sectors including business, education, tourism, science and technology.
This first article examines the effect of Brexit on Malta’s business community.
“This country has had a close relationship with the United Kingdom for a long time, especially in terms of business,” explained Mamo.
“As a result of Brexit, the ways of doing business had to change, and even for UK brands in Malta, things are not as comfortable as they were before.”
Three years later, “we are still struggling with Brexit,” she said, citing difficulties including an increase in bureaucracy and a less attractive consumer market, both in terms of available products and regulation.
“The market suffered and consumers suffered from a lack of choice.”
Figures from the National Statistics Office (NSO) reveal that following Britain’s departure from the EU, imports of various food products fell in both monetary value and weight in kilos.
The same was true for clothes. In some cases, while the total weight of some classes of imports fell sharply, their value fell more steadily, indicating higher import prices.
Mamo emphasizes that after Brexit, additional documentation is now required for some food products and articles containing leather.
She said that since the UK’s departure from the union, British goods sold to European customers are no longer covered by EU consumer protection laws.
While the UK has its own distance selling regulations in place, the procedures outlined on the UK government website to ensure compliance are at least difficult
The process involves eight separate steps that include, but are not limited to, applying for licenses, registering for an Economic Operators Registration and Identification (EORI) number, which determines whether recipients must make a declaration of ‘ importation, finding the correct commodity code to classify the goods being exported, preparing export documentation and ensuring that the goods are released to UK customs.
For many UK businesses, especially smaller enterprises, this has made exporting their products not only unattractive but virtually impossible.
According to a study published in December last year by the British Chambers of Commerce, “up to 42 percent of product lines previously exported from the UK to the EU were discontinued during the first 15 TCA months’.
The TCA, or Trade and Cooperation Agreement between the EU and the United Kingdom, is a free trade agreement signed by the United Kingdom, the EU and the European Atomic Energy Community on 30 December 2020.
A spokesperson for the Malta Chamber of Commerce reported that the country was negatively affected in sectors including the import of medicines, foodstuffs, used cars and education.
The chamber noted that UK retail franchises and exports from Malta to the UK had also been affected.
“The opportunities we had for Maltese individuals to specialize in various sectors were lost,” they added.
Historically, the United Kingdom has been a strong trading partner for Malta, offering a wide range of products on a large scale with labeling in English, a primary language in Malta.
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