The Evolution of the Single Market – Harmonisation or Liberalisation
| Author | Andrew McGee,Stephen Weatherill |
| DOI | http://doi.org/10.1111/j.1468-2230.1990.tb01826.x |
| Date | 01 September 1990 |
| Published date | 01 September 1990 |
The Evolution
of
the Single Market
-
Harmonisation or Liberalisation
Andrew McGee
and
Stephen Weatherill”
Introduction
The evolution of the Single Market is both a legal process and a political process. The
concept of a Single Market requires the elimination of all barriers to inter-state trade and
all national prohibitions on establishment and the ultimate harmonisation of laws and
regulations throughout the Community. The political reality is that vested interests, both
of national governments’ and of trade and professional organisations,* seek to delay the
creation of this kind
of
Single Market. In these circumstances the choice facing the
Community may be seen as being that between delaying the Single Market process until
these obstacles can be overcome or reaching a pragmatic compromise by allowing the
retention, at least temporarily, of some of the existing
barrier^.^
If it is accepted that
some barriers can be retained, the next problem is to identify which these are. Some barriers
must be seen as entirely incompatible with the Single Market, whilst others may be regarded
as tolerable. In the first instance the European Court of Justice may be called upon to
decide which barriers fall into which ~ategory.~ It is, though, far from clear that the
Court is the appropriate institution to develop an internal EEC Commercial Policy in this
way. Fundamentally the task is one which ought to be performed at a political rather than
a judicial level. Even if ‘legitimate’ trade barriers can be identified, there is the further
issue
of
deciding whether these are to be imposed at Community level or whether the
decision-making authority is to be delegated to individual Member States, with the inevitable
consequence that there will be different regimes in different Member States. This article
looks at the ways in which these problems are being approached in a number of different
areas of activity and considers whether any pattern can be seen to be emerging in the
development of the Single Market. An important theme in this examination is the relative
effectiveness of different interest groups in securing the recognition of particular trade
barriers as legitimate and in obtaining for themselves the power to determine the content
of those barriers. This point
is
related to the crucial distinction between changes which
are intended to make it easier to conduct business on a Community-wide basis (referred
to here as ‘facilitative legislation’), and changes which are designed to regulate business
activity, usually in the interests of protecting groups such as consumers and employees
(referred to here as ‘protective legislation’). This article proceeds by examining the
distinction between lawful and unlawful trade barriers, before considering the ways in
which lawful barriers are being treated in the run up to
1992.
It will be seen that the
interaction of the various interest groups is leading
to
the adoption of a number of different
approaches to these problems.
*Centre for Law and Business, University of Manchester.
1
The problems of tax harmonisation, discussed at p 591 below, are a
good
example
of
this.
2 This problem arises especially in the context of protective legislation, considered at p 595 below.
3
It
should not be overlooked that the Community may wish to retain at
least
some of these barriers
permanently.
4
see
p
579 below.
578
The
Modem
Law
Review
535
September
1990
0026-7961
September
19901
The Evolution
of
the Single
Market
Lawful and Unlawful Trade Barriers
The Rules
of
the Treaty
of
Rome
The Treaty of Rome contains a range of provisions designed to remove barriers to trade
between Member States. Customs duties on imports are outlawed by Article
12
and this
prohibition on fiscal barriers is complemented by Article 95, which forbids systems
of
internal taxation which discriminate against imported goods. Article
30
outlaws quota
systems and measures having equivalent effect and constitutes the heart of the Treaty rules
designed to secure the free movement of goods. Workers are entitled to the freedom of
movement between Member States by virtue of Article
48
of the Treaty of Rome, and
this right is extended beyond the individual worker to the self-employed and the provider
of services by Articles 52 and 59 respectively. Companies, as well as individuals, are
beneficiaries of these provisions.
Several of these fundamental Treaty provisions, which serve to open up the common
market, contain derogations which in certain circumstances permit Member States to retain
barriers to trade. Thus, the free movement of goods, of persons and of services are all
subject to derogations on grounds on public policy, public security and public health.5
These derogations run contrary to the basic objective of establishing free trade within the
common market and are consequently subject to a restrictive interpretation.6
This brief survey of the Treaty is in no sense exhaustive. However, a reading of the
relevant provisions reveals a unifying theme. The basic structure of prohibition of trade
barriers coupled to narrowly defined exception runs through the Treaty. Nonetheless, the
specific provisions remain exiguous. The drafting
of
the Treaty was accomplished using
a broad brush to sketch general policy. Precise definition is quite deliberately neglected.
It has therefore been for the European Court to apply the aspirations of the Treaty to
particular circumstances which have arisen through the accidents of litigation. In some
areas Community legislation has pointed the way.’ Generally, however, the European
Court has been supplied with unusual power to shape the development of Community law.
The Judicial Role
Brief examples of the judicial role must suffice and Article
30
EEC provides the most
fertile source.* The Court has interpreted the gnomic Treaty prohibition on ‘quantitative
restrictions on imports and all measures having equivalent effect’ in the light of the under-
lying policy objective of removing the wide range of obstacles to trade which Member
States are capable of devising and has consistently adopted a strikingly broad judicial
definition of the scope of the Article
30
prohibition. That definition, first employed in
D~ssonville,~
declares that Article
30
outlaws ‘all trading rules enacted by Member States
which are capable of hindering, directly or indirectly, actually or potentially, intra-
Community trade.’ In tune with this broad effects-based approach, the Court has held
contrary to Article
30
quality campaigns to promote domestic goods” and bans
5
Art 36, Art 48(3), Art 56(1), Art
66.
6
This is apparent from the provisions themselves (see eg the second sentence of Art 36) and from the
approach
of
the European Court.
7
For
example, Directive 70/50 amplifies the meaning of Art
30.
However,
it
has long been overtaken
by the Court’s jurisprudence as a dynamic means
of
advancing the cause
of
economic integration.
8
See further, Oliver,
Free Movement
of
Goods
in
the
EEC
(London: European Law Centre 1988); Wyatt
and Dashwood,
The Substanrive
Law
of
the
EEC
(London: Sweet and Maxwell, 2nd ed, 1987) Ch 6;
Burrows,
Free
Movemenr in
EC
Law
(Oxford: Clarendon Press 1987) Ch 2.
9 Case 8/74 [1974] ECR 837, [1974]
2
CMLR 436.
10
Case 53/76
Bouhelier
[I9771 ECR 197, [1977]
1
CMLR 436 (the case in fact involved exports,
to
which
Art 34 applies a parallel regime).
11
Case 249181
Commission
v
Ireland
[1982] ECR
4005,
[I9831 2 CMLR 99.
579
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