OPENING ADDRESS BY PROF. JOSEF BONNICI, MINISTER FOR ECONOMIC SERVICES

Ladies and gentlemen,

It is a great pleasure for me to open this three-day seminar, organised by the World Trade Organisation in collaboration with the Ministry of Foreign Affairs.

Malta has one of the most open economies anywhere and our economic well being is very much dependent upon our ability to participate actively and successfully in trading activity within our region and beyond.

Nevertheless, there was a time, right up to the mid-eighties, when our country sought to implement a policy of import substitution based upon widespread import controls. However it soon became evident that such an option was nothing less than a dead-end, effectively shackling the growth potential of our economy. Import controls started to be dismantled after 1987 but it was only last year that we published a detailed schedule for the removal of the remaining import levies on industrial products. These will have been phased out by the first January 2003. This is now an irrevocable path and there can be no turning back, independently of which political party is in power.

Trade liberalisation is undoubtedly one of the great stimuli to economic growth. It is also the prime catalyst in raising productivity, which is a precondition for the achievement of a higher standard of living.

The concept of liberalisation is most often associated with trade in manufactured goods. However the present emphasis is to extend liberalisation to other areas of economic activity as well, in particular to service operations. Liberalisation is expected to lead to intensified competition that generally translates into lower costs and an increased demand. In Malta we have already opened our financial sector to the forces of competition and we have recently announced a timetable for the liberalisation of telecommunications. This has been a very complex exercise since it requires the withdrawal of monopoly rights enjoyed by existing operators and the identification of a clear but viable path that will allow the entry of additional players in the near future.

It is our intention to follow a similar strategy in other sectors of our economy. One of them is the energy sector where we expect to have established a Resources Authority by the end of this year, which will be entrusted with the task of acting as a regulator for the eventual participation of other operators, besides Enemalta, especially in the importation and distribution of petroleum products. No change comes without some element of pain and possibly also some risk. However, refusing to acknowledge change is not a recipe for survival but an invitation to extinction.

Trade development requires active efforts to facilitate international contacts and to promote economic links. Effective trade liberalisation requires the removal of tariff and other barriers to trade and of all other impediments to the free exchange of goods and services. Free trade has become a battle cry but we must be aware that the benefits to be reaped from the flow of trade across borders does not preclude the need to impose controls and even restrictions in the case of trade in particular types of goods and services. Trade in armaments and in dangerous drugs are two of the examples that come most readily to mind but there are other product families for which it is also necessary to envisage the retention of import and export control procedures.

Environmental protection considerations is one such factor that might require the retention of specific import control regulations and hence the wilful curtailment of the free movement of certain goods and services. This will be one of the underlying themes of your seminar. The challenge is how to implement measures for the regulation of trade in certain goods without allowing such regulations to become a premeditated barrier to legitimate trade.

Adequate trade control procedures will need to be applied to secure a number of diverse environmental objectives, such as the protection of wildlife and biodiversity, the control of dangerous chemicals and effective waste management.

The rationale for such action can vary considerably. In the case of dangerous chemicals it is a question of controlling directly their importation and export so as to curtail their misuse and their indiscriminate application. In the case of wildlife and related products such as ivory, the objective is to reduce the pressures on such species by banning trade in them, or at least by restricting it along pre-established criteria. For example, measures that distinguish between farm bred specimens and animals caught in the wild.

A very interesting subject for discussion is the question of waste management. Regulations and import / export control procedures are necessary to prevent the illegal dumping of waste under the guise of permissible exports. At the same time, such regulations must also allow the bona-fide import / export of identified waste categories for recycling, reprocessing or treatment. The all-important consideration is to keep one's objectives clearly in mind. Regulations and control procedures are a means to an end and should never be perceived as an end in themselves.

Finally it must be clearly understood that it is very difficult to implement any kind of regulations unless there is sufficient awareness regarding their purpose and a reasonable agreement on the desirability and relevance of the objectives that they are meant to address. Awareness building and public education are essential pre-requisites to the successful implementation of any set of procedures, especially where these concern a large number of people. Enforcement may be at times necessary but compliance is the key factor and should be the principal goal, at all times.

I am sure that these and many other topics will be discussed in much greater detail during the forthcoming three days. I wish you all an interesting and successful seminar.