A blueprint for Malta’s trade policy

Abstract

Purpose – This dissertation seeks to lay the research foundations for the development of Malta’s trade policy by identifying the core policy, economic and institutional elements it should include. It also assesses the available policy space Malta has within the EU framework, whilst also identifying which sectors Malta should prioritise to enhance its trade performance and economic upgrading. Design – The study adopts a mixed-methods approach, combining a documentation analysis of national trade policies and investment strategies from countries that have overlapping contexts to Malta such as the need for industrial upgrading, working within EU frameworks or geographical size, with a set of semi-structured interviews with Maltese Public Officials working in areas touching upon trade policy. These are then complemented by a quantitative analysis of productivity and wage data across NACE sectors. Findings – The findings show that effective strategies share common features, including institutional coordination frameworks, export market diversification and market access, capacity building and targeted trade promotion. Malta has policy space within the EU to influence trade outcomes, but it is underutilised due to limited institutional capacity and administrative inefficiencies. Sectoral data suggests that Malta should prioritise investment in high-end service industries and reduce reliance on tourism related services whilst upgrading Malta’s manufacturing base through innovation to increase productivity. Research Limitations – The study’s qualitative elements are subjective and may affect reproducibility. Practical Implications – The study offers concrete recommendations on how trade policy can act as an enable for economic upgrading.