World Trade Institute report says Malta only EU state to reduce growth after TTIP because of exports to China
Malta does not have a very strong economic relationship with the US. Nonetheless, TTIP would contribute to higher wages for both low- and high-skilled workers and lower consumer prices, but Maltese GDP is expected to decline by 0.3 percent. Exports to the US are expected to increase by 23 percent and consumer prices will go down by 0.2 percent
This is the result of a study TTIP and the EU Member States published by the World Trade Institute..
This study concludes that TTIP could be a game changer and represents a strategic opportunity for the EU and the US.
The study explains that the reason for the national income decline for Malta is that it is situated along the Chinese-Western European trade route and trades more with China and Canada. As such, some small trade diversion effects away from China and Canada - who are not in TTIP - could explain this decline.
The changes in income levels are especially encouraging for recent crisis-hit countries including Ireland (+1.3 percent), Cyprus (+0.6 percent), Italy (+0.5 percent) and Greece (+0.4 percent).
For Malta, by reducing tariff and non-tariff measures in TTIP, without lowering standards:
- The manufactures sector, financial and insurance services sectors are expected to grow most, but the motor vehicles industry may decline;
- TTIP could facilitate a significant increase in production of manufactures (+2.6 percent), and insurance services (+2.5 percent). Electrical machinery is poised to see the largest export increase (+€38 m);
• For Maltese consumers, the price for cars could go down by 0.7 percent because of TTIP, and the price for chemicals by 0.6 percent.
Malta and the US
The current situation
Malta is predominantly a services economy but also has a significant manufacturing base. Around 2.000 jobs in Malta come from US controlled firms active in Malta. The US is the 2nd most important (extraEU) goods export destination (12 percent of goods exports, after China with 36 percent) and also the second most important (extra-EU) services export destination (14 percent, after Canada with 15 percent) for Malta. The main export sectors for Malta to the US are office machinery, financial services, and machinery