“Trade is not just about the physical movement of goods – it is also about services – and it is therefore equally important that progress is made in the liberalisation of trade in services – so often the last bastion of protection for vested interests. Economic experts believe that the liberalisation of the services sector will contribute to closing the economic gap between the North – South divide.”

This was stated by Roderick Chalmers, chairman of Bank of Valletta during his address last week at an international conference organised by EMCS Ltd to discuss developments and opportunities of the Euro-Mediterranean Free Trade Area.

The two-day international conference at the Malta Hilton was entitled “Trade Finance in the Mediterranean: Towards the 2010 Euro-Med Free Trade Area” and had Bank of Valletta as its lead sponsor.

Addressing over 120 delegates from Malta and other neighbouring Mediterranean and European countries, Mr Chalmers explained that the Euro-Med process is not only about building improved trade relationships between the European Union and the individual Mediterranean countries “but also about strengthening the multilateral trading ties between the Mediterranean countries themselves – the so called – South-South dimension. The expansion of South-South trade links in the region is regarded as being of vital economic interest for the Mediterranean countries, both for inter-regional trade and for improving prospects for foreign direct investment into the region”.

“The small size of a number of banks in the Euro-Med region – which again points to the urgent need for the liberalisation of trade and services – calls for this liberalisation that would enable the necessary South-South cross border consolidation to take place enabling financial institutions to ‘bulk up’ in a manner that would enable them to support growing international and inter-regional trade,” he said.

Liberalisation of banking and financial services would have to be accompanied by a strong component of regulatory convergence between the EU single market rules and those in the partner countries, and substantial benefits could flow from such convergence.

“From Malta’s and BOV’s experience, we have, in the relatively short period since Malta joined the EU, already seen some evidence of financial services capital flows into Malta – and this resulting directly from the liberalisation of the market, and the convergence of our regulatory regime with that of the EU,” Mr Chalmers added

The two-day conference attracted the participation of advisers, traders and importers to and from countries in the Mediterranean, trade financing specialists, manufacturers and exporters, bankers and insurance institutions and professionals from financial and legal institutions, public sector officials, audit firms and business advisory firms.