Maltese consumers are being forced to pay a “Brexit tax” due to the EU’s complex import rules, Alex Agius Saliba has said.
The Labour MEP has now asked the European Commission to look into the problem, which specifically impacts Malta, and mitigate price increases caused by it.
Agius Saliba made the call in a statement issued on Saturday and after holding talks with local importers and consumers.
Prices, especially of foodstuffs, have spiked considerably over the past year and show little sign of abating, despite inflation moderating across the EU. Surveys suggest cost of living concerns are at the top of locals’ list of worries.
Stakeholders have flagged a variety of reasons why prices have remained high locally, from high shipping costs to Malta’s remote geographic location.
Agius Saliba has now flagged another concern: products getting caught up in the EU’s complex rules of origin procedures.
Local importers must often pay a 16.9 per cent import tariff on items imported from the UK, the MEP said, even if those items were originally made in the EU, exported to the UK and then imported to Malta.
That is because goods must satisfy rules of origin criteria to qualify for a tariff waiver, by proving that a substantial portion of the item was made in the EU or a country with a free trade deal with the EU.
“Manufacturers may sometimes deem that the added bureaucracy required to prove that their products are eligible for tariff waiver is not worth the hassle,” Agius Saliba said. “This is especially the case for manufacturers without a broad export clientele across the EU. Malta may be the sole export client in some cases, particularly foodstuffs.”
The UK is one of Malta’s largest trading partners, with the two countries having historic ties and sharing a common language in English. Importers often prefer to source products from the UK as having English-language labels makes it easier for local consumers to identify and understand a product.
The result is what Agius Saliba has termed a “Brexit tax” for Maltese consumers, who must pay higher prices for goods, even if these should, in theory, qualify for a tariff waiver.
And the problem is likely to be exacerbated in the near future, the MEP noted: electric cars will, as of next year, need to have been 45 per cent manufactured in the EU to qualify for the tariff waiver.
A significant portion of local vehicles are imported from the UK rather than EU countries, because both countries operate a left-hand driving system.
Agius Saliba said he has asked the European Commission to find a just solution for the unique circumstances faced by Malta “to ensure that Brexit does not become a burden on Maltese consumers.”