Importers of goods in Malta have started to source products from the EU or Asian markets rather than the UK because of delays and bureaucracy brought about by Brexit, the Chamber of Commerce has said.
Recent figures showed there was a €1 billion drop in imports from the UK to Malta last year, indicating shifting trends in the market after Britain’s exit from the European Union.
A spokesperson for the chamber said the figures need to be looked at as part of a wider trend.
He pointed out that in 2019, there had been “a major hike in imports from the UK, amounting to approximately €1.36 billion” as the island prepared itself for the impact of Brexit.
“More specifically, 2019 saw a major increase of importation of ships, boats and other floating structures,” the spokesperson added.
A look at NSO data from previous years indicates that 2016 saw UK imports to the tune of €347.8 million, with €395.1 million in 2017 and €512.7 million in 2018.
“If one compares the 2020 import statistics with 2018 and previous years, one can immediately notice that the change has not been as drastic as initially thought,” the spokesperson claimed.
Local importers, the spokesman said, were reacting to added tariffs and burdens placed on UK imports that are not UK-made.
According to the EU-UK trade deal, no tariffs will be slapped on UK exports if they are made in the UK, meaning UK exporters stand to lose a chunk of their profits from reselling products made in other countries.
The trade agreement also sees quotas being put in place on such goods, meaning it is more difficult to trade with UK exporters who do not trade in UK products.
Furthermore, the process to verify the origin of goods as well as their quality by parties on either side of the agreement is set to add more expensive delays as well as bureaucratic checks and balances to ensure both the EU and the UK are sticking to their commitments.
“Local importers have immediately started to source their goods from other markets on mainland Europe or alternatively, sourcing directly from producers in Asian markets wherever possible,” the spokesman said.
The same set of NSO data reveals that overall trade volume with other member states in the EU has also seen a drop, from €3.56 billion in 2019 to €2.82 billion in 2020.
Imports from China and India, on the other hand, have increased from 2019 to 2020.
The total volume of imported Chinese goods increased from €270.2 million in 2019 to €371.9 in 2020.
As for India, imported goods amounted to a total of €157.1 million in 2019, increasing to €180.5 million in 2020.