Term Paper, 2010
17 Pages, Grade: A
B. Internal Market
B. 1 The Evolution of the Internal Market
B. 2 Barriers to Trade
C. Old Approach (Harmonization)
C... 1 Product Standards
C. 2 CE Marking
D. New Approach (Harmonization & Mutual Recognition)
D. 1 Mutual Recognition
D... 2 Harmonization Vs Mutual Recognition
D. 3 Regulations after
The European Community from its establishment attempted to enhance the economic integration and also to complete it with a political one. In European Union, as we know today, there are plenty of institutions and organs that serve this aim. Common Market-and its part of Internal Market- is the main tasks of European Union and the four fundamental freedoms of goods, persons, services and capital are to be ensured and encouraged within the European area.
From the creation of European Community the removal of tariff barriers was essential for further integration, which easily came into force, by establishing Customs Union. The European Union in order to enhance the trade between the Member States and also to promote deeper integration adopted the harmonization policy, which simply means the approximation of all national laws that implies and confirms the supranational character that EU has (at least in some areas).
Although, the harmonization policy is more secure for a supranational body, as EU is, has also disadvantages that mostly came into light from the practical experience. The New Approach Directives and the principle of Mutual recognition were adopted by the EU not only due to the weaknesses of the harmonization policy but more to eliminate these weaknesses. Following there is an attempt to examine the Old in comparison with New Approach and particularly to observe the Mutual Recognition principle and the new regulations that are being into force.
One of the main tasks of the European Community is the establishment of a Common Market in order to provide and to ensure common policies and activities within the area of European Union, which potentially will accommodate the prosperity and welfare states. This is mentioned even from the second article of the establishing Treaty of European Community. Among the numerous policies and activities that shall be included under the umbrella of Common Market (trade, competition, agriculture, transport ext.), important role has the Internal Market. An Internal Market is characterized by the abolition, as between the Member States, of obstacles to the free movement of goods, persons, services and capital. 1 The Internal Market (or Single Market) is viewed as the cornerstone of the European Integration because it ensures the fundamental four freedoms (goods, persons, services and capital) in a european market without frontiers and barriers to trade. The single market is all about bringing down barriers and simplifying existing rules to enable everyone in the EU - individuals, consumers and businesses - to make the most of the opportunities offered to them by having direct access to 27 countries and 480 million people.2
From the establishment of the former European Economic Community (EEC) in 1958 there had been a long term procedure of completing its main aim of the Internal Market. Initially the establishment of Customs Union in 1968 and the sequential abolishment of customs duties between the six Member States typify the first steps of completing Internal Market. In 1985 the so called “White Paper” consists one of the main programme that made the Internal Market achievable and noted its first priority ‘the action to achieve a single large market by 1992 by creating more favourable environment for stimulating enterprise, competition and trade’  . This strategic programme even though did not bring institutional reforms did succeed to make Internal Market feasible first of all by proposing the removal of physical, technical and fiscal barriers. Moreover a key event for the EEC and for the EU, as we consider nowadays, was the signing in 1986 of the Single European Act (SEA) and the introduction of European Monetary System (EMS), which accelerated the process of Single European Market (SEM) and defined the 31st of December in 1992 as the date of its completeness. Today Internal Market is a reality in which movement of goods, persons, services and capital can freely take place within the European area.
There are two main categories that can be obstacles to free trade in European Union, the tariff and non-tariff barriers. Concerning the first category EEC succeeded the abolishment of fiscal barriers, namely customs duties and national taxation by establishing Customs Union (1958-1970). On the other side, non-tariff barriers are more difficult not only to observe but rather to deal with since many times there are adopted by the Member States in order to favour their local industries. Non-tariff barriers are mainly technical barriers, which are rules and measures that lay down to certain requirements of goods (such as size, weight, form, designation, labelling, composition and packaging) and they are different from country to country. It is salient then in the Single European Market that fair competition should be ensured and free movements of goods should be encouraged to eliminate these kinds of barriers that restrict imports and at lastly do not serve the aim of the Community. For this purpose EU started a long term process, which is still in progress that with plenty of regulations and laws tries to eliminate if not to abolish these kinds of means that hinder actually and potentially free trade within the Single European Market.
The old approach was introduced at the early 70s and recommended the harmonization of the national laws of all Member States. The approximation of all national laws( as it is also known) and the sequential harmonization of product standards in every single Member State was identified as an essential step for the way to the complete free movement of goods on the markets of all the Member States of the EU. That simply implies that agreements by all Member States for common rules and common standards were lawfully introduced and are directly applicable to all Member States. Moreover technical harmonisation at European level guarantees both genuine free movement of industrial products and a high level of safety for consumers and users of these products . Additionally the supranational character of EU (in some areas) makes the ‘harmonization’ process achievable in an easier way at least concerning the institutional and formal aspect. Namely the European Court of Justice and the European Commission as well, but also the European Parliament into some extend, with the new regulations, decisions and directives lead the national governments to reconstruct their national laws to the EU direction so as all Member States have the same policies and activities in the fields that they give up their competences. The article 28 of EC Treaty mentions that quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States. Additionally, EC Treaty gives the exception to Article 28 introducing Article 30 in order to include cases that there not covered by the general rule (Article 28). However, this exception shall not hinder the main aim, which is the adoption of common policies and activities by all Member States, that’s why should be always narrowly interpreted. As we can observe from the Treaty, EU attempted to create the ‘ground’ of a common policy in order to ensure the approximation of all national laws in order to encourage by all legal means the free movement of economic activities in the European area.
At this point it is essential to refer to the free movements of goods (that it is believed as the most important taking place in the European area) and the potential obstacles which are indirectly capable to hinder this fundamental freedom.
A standard is defined as a specification or set of specifications that relates to some characteristics of a product or its manufacture. It may relate to its size, its dimensions, its weight, its design, its functions, its ingredients, or any number of other product attributes . According to the International Standards Organization standards are documented agreements containing technical specifications or other precise criteria to be used consistently, as rules guidelines or definitions of characteristics to ensure that materials, products, processes and services are fit for their purpose11. The aim of adopting product standards is to guarantee the consumer’s protection, safety and health but often they are used as mechanisms of impeding the access of foreign products in the market. Usually, government sponsored groups and private institutions set up plenty of regulations concerning product standards in favor of domestic industries so as the domestic products meet a priori these standards and the foreign products are not competitive with them. It is clear that it is very costly in money and time for a foreign product to meet different national standards. International trade is totally affected by this variety of national standards so that many products are being indirectly excluded from the market, which is against the notion of free trade without frontiers especially in the EU. ISO (International Standards Organization) and GATT (General Agreement on Tariffs and Trade) - also known as World Trade Organization-are some of the international organizations that attempt to adopt common international product standards.
 Article 3(c), EC Treaty.
 European Commission, The EU Single Market,http://ec.europa.eu/internal market/top layer/index 1 en.htm., 27/07/09.
 Niamh Nic Shuibhne, Regulating Internal Market, pp.20, 2006, Edward Elgar Publishing.
 Article 25 EC Treaty:” Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.”
 Article 90 EC Treaty:”No Member State shall impose, directly or indirectly, on the products of other Member State any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. Furthermore, no Member State shall impose on the products of the other Member States any internal taxation of such a nature as to afford indirectly protection to other products.”
 Ministry of Industry and Trade: http://www.mpo.cz/dokument13127.html. 25/10/09.
 Europa: Internal
Market : http://europa.eu/legislation summaries/internal market/single market for goods/technical harmonisati on/index en.htm. 25/10/09.
 Dassonville Formula: All tradings enacted by Member States, which are capable of hindering directly or indirectly actually or potentially intra-Community trade are to be considered as measure shaving equivalent effect.
 Article 30 EC Treaty: “The provisions of Articles 28 and 29 shall preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised on between Member States.”
 A.O.Sykes, Product standards of internationally integrated good markets, pp. 2, 1995, R.R Donnelley.
 Hanson David, CE Marking, Product Standards and world trade, pp.5, 2005, Edward Elgar Publishing.
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