The Gazette 1989

FEBRUARY

1989

GAZETTE

The common customers regime applies throughout the EEC for trade with non-EEC countries (subject to a few remaining derogations for Spain and Portugal). No duties are payable on trade within the EEC. The simplified customs form ("single administrative document") introduced on 1st January and replacing hundreds of docu- ments previously used in differ- ent countries has further helped to ease the flow of goods. The Sixth VAT Directive has gone some way towards har- monising internal taxation. Harmonising directives have ironed out distortions in trade created by differing technical, composition, purity and other regulations. The "Cassis de Dijon" case confirmed a basic tenet of EEC law: once a product is lawfully marketed in one country, its sale must not be restricted in other countries. Only very narrow health and safety exceptions are allowed. This principle was recently confirmed by the European Court in a case where German laws which effectively kept out all imported beer were condemned. But despite these achievements, progress towards the completion of the Internal Market was slowing down. The 1985 White Paper set out the Commission's proposals for completing the Internal Market by 1992. It lists detailed proposals for the removal of physical, technical and fiscal barriers faced by goods, persons, services and capital. Fourteen European 1992 Information Leaflets have been issued by the European Bureau outlining the Commissions proposals set out in the 1985 White Paper. Subjects covered include Insurance, Company Law, Consumer Protection, Social Dimension of the Single Market, Public Pro- curement, etc. They may be obtained from the Bureau. Tel. 01-601992. The Commission's 1985 White Paper

1992 - Completing the Internal Market 1 9 92 has been much discussed in the press of late. What has happened to make the EEC suddenly so important? What momen t ous event takes place on 1st January 1 9 92 - or is it 31st December 1992? This erticle outlines whe t 1 9 92 is all about and discusses a f ew areas of particular relevance t o bus inessmen and lawyers.

EEC). In the same period of Ireland's imports came from the EEC. But the costs of doing business with eleven other Member States, each of which still maintain restrictive national laws and practices, are immense. The Com- mission has carried out a detailed study of the costs of "non-Europe". These include: -administrative costs incurred in dealing with different national bureaucratic requirements: -higher transport costs due to border formalities;

What is the internal market? One of the principal aims of the EEC Treaty, as amended by the Single European Act, is to create within Europe: "An area without internal frontiers in which the freedom of movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty." This aim is to be achieved "progressively . . . . over a period expiring on 31st December 1992". As the EC Commissioner in charge of completing the Internal Market, Lord Cockfield has pointed out, the aims are ambitious; it is not merely a question of simplifying frontier controls but of creating an area "without internal frontiers". The freedoms to be ensured are not just for the benefit of individuals, but also for "goods, services and capital." Why is an internal market important? The creation of the internal market is vital for the success of the Community: it is only by enabling commerce and industry to make full use of the vast single market which the twelve Member States constitute that the Community can continue to compete with its main competitors, particularly from North America and the Far East. The opportunities of the internal market and the costs of main- taining the present divided status ("non-Europe") are immense: the European Community has over 320 million inhabitants, nearly as many as the population of the USA and Japan combined. More than half of most EEC countries' imports and exports are from or to the rest of the EEC. For example, in the 11 months January - November 1988 74% of Ireland's exports, amounting to £11.2 billion went to other EEC countries (38.5% to the UK and 35.5% to the rest of the

by Michael Hutchings, Solicitor, Lovell White Durant *

-increased costs as a result of having to apply different national standards; -duplication of costs in separate research and development; - t he high costs of heavily regulatedpublic supply policies; -failure to capitalise on the market potential of a much larger "home" market. Aside from direct additional costs, it is estimated that the cost to industry of being denied the economies of scale of a unified internal market is as much as 20-30% of unit costs. Furthermore, the creation of the internal market could, it is estimated, lead to the creation of 1.8 million further jobs and an increase in economic activ- ity throughout the Community. How complete is the Internet Merket elreedy? Even before the publication of the Commission's White Paper pro- posing the target of 1992 for completion of the Internal Market, considerable progress has been made in removing barriers to trade:

Goods - Physical Barriers Internal border controls will largely become unnecessary by 1992.

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