The development of local industry and exports following Malta's EU membership

Abstract

This dissertation deals with Malta's trade performance after EU Membership with particular reference to the fisheries and the iGaming sector. Data for the fisheries sector also included data on aquacultural produce. Data on the Alis, Entertainment and Recreation sector as well as the entire services sector are also produced and analysed since it was not always possible to give separate statistics for the iGaming industry. The study starts with a brief summary of developments that led to the creation of the European Union (EU). It is followed by a brief chronological account of Malta's relationship with the EU and the resulting general implications on Malta's foreign trade during the various stages of this relationship. The Literature Review chapter gives an account of the EU' s Single Market and the EU's Common Commercial Policy. It goes on to explain - the various trade theories of international trade, including the Ricardian Theory of Comparative Advantage and the Heckscher-Ohlin model which focuses on the factor endowments of different countries. The Krugman new trade theory which focuses mainly on economies of scale and network effects is also reviewed. A section in the Litertaure review is dedicated to fisheries while another section is devoted to the iGaming industry. This chapter ends with some extracts from some studies cmTied out locally on the impact of EU membership on Malta's economy. The Methodology chapter describes the scope of the study and the research design together with an explanation of the trade theories' formulas and some trade terminologies that have been used in the analysis chapter. This third chapter also explains how the two specific sectors of fisheres and iGaming have been analysed. The Analysis chapter starts with a general account of Malta's trade in 2003 and 2012 both as regards its geographical distribution and commodity groupings. This fomih chapter then goes on to analyse in detail the two sectors of Fisheries and iGaming following Malta's accession to the EU and also offers some analysis on the services sector since EU membership. The Conclusion Chapter summarises the main findings of the study. It specifies that it is difficult to explicitly assess to what extent, any changes in Malta's foreign trade strncture are a direct consequence of its EU accession or to the progressive globalisation of the world's economy and international trade liberalisation or to other special factors. It clearly states that while EU Membership provided a stimulus to Malta's economic operators to grow and internationalise, it is up to local businesses to rise to this challenge through increased efficiency, high productivity levels and improved quality products to exploit the arising opportunities.