4 - The Mechanics

Summary

General Observations

The creation of a single market where goods, services, capital, and persons can move freely without meeting any obstacles happens in two steps.

The first one may encounter political and administrative difficulties, but is conceptually fairly easy: removal of tangible barriers for movement of goods, services, capital, and persons across frontiers. Such obstacles take the form of customs duties, excise duties discriminating between domestic and foreign products, and other forms of restrictions that try to protect the domestic producer. For the European Union, these obstacles were removed in the 1970s.

The second one is more difficult and much trickier. It aims at removing rules and regulations, which in practice — without necessarily being introduced to do so — discriminate between domestic and foreign products, and hence serve as barriers to trade between member states in the European Union. Until the 1970s very little had been done to remove such differences in rules, regulations, and legislation.

Many of these rules were implemented by member states without considering the effect on international trade. The purpose was to protect public health, improve labour conditions, safeguard the right of consumers, and ensure technical efficiency and reliability. Many of them had origins going back even to medieval times.

Trade vocabulary classified them as technical standards and/or non-tariff barriers. The challenge for the European Union embarking on their removal was to find the narrow path between, on the one hand, accepting the genuine goals of these rules (i.e. public health), and on the other hand, fulfilling them without also letting them constitute barriers to trade. The member states should consent not only in name, but also in practice, to free trade and implement domestic administrative rules to ensure this. It was not sufficient to agree on declarations and/or political will. EU legislation, which the Court of Justice could enforce in the same way as measures under the first step (removal of tangible barriers), would have to be invented and put in place.

The European Union took a major step forward in this respect with the Single Act coming into force in 1987. The two key instruments were Article 100A and Article 100B.