Furthermore, the CET is foregone in the case of all those non-EU countries which benefit from preferential access of the EU market, especially in the case of raw materials. This means that imports can be purchased from alternative sources, possibly from the enlarged EU market, or from non-EU countries which enjoy access to the EU market. Finally, the CET is also suspended when the imported raw material is re-exported outside the EU as a finished 19 product . So while the costs of production for some sectors of the economy may increase, and this in turn could have implications for inflation, at least in the short-run, this impact is likely to be minimal in practice. As a member Malta would also assume the EU’s commitments under the non-reciprocal agreements with developing countries. Whereas this could have negative implications for specific sectors, for the economy as a whole these effects are unlikely to be significant or enduring. This is because the proportion of imports from these countries in Malta’s import bill is marginal. Second, the Cotonou Agreement, which is the EU’s most relevant agreement in this regard, will expire in 2008, by which 20 time it is expected to be superseded by Economic Partnership Agreements based on reciprocity. If anything, therefore, the EU network of reciprocal trade agreements will increase. Within a few years importers and consumers should thus have more and not less access to duty-free imports, and any short-run increases in inflation should be more than neutralised.
In addition, although the EU has not yet reached all the objectives of the 1999 Financial Services Action Plan, there is evidence that they will be met on schedule, not least because the euro will provide the market with the necessary impetus to identify the remaining obstacles to the completion of the single market. A clear example of this is provided by the regulation on cross-border payments in euro which seeks to eliminate unjustifiable differences between charges on cross-border transfers and  24  On the same reasoning Malta should withdraw from international financial institutions such as the World Bank and the European Bank for Reconstruction and Development since it is no longer entitled to financing from these institutions. This, however, has not occurred because it is recognised that membership in these institutions yields more than monetary benefits. BIS Review 69/2002  7  those on transfers within Member States. Another consists of the initiatives underway to extend the single passport beyond the banking sector to investment services, insurance intermediaries and securities markets. This will have at least two implications. First, a financial product licensed in one Member State would automatically be recognised in all others without the need for the service provider to go through licensing and listing procedures afresh. For financial service providers this is an opportunity to by-pass the regulatory and other barriers that would otherwise render them uncompetitive.